Chp 18: Ethics & Socially Responsible Marketing Flashcards
define business ethics
refers to the moral or ethical dilemmas that might arise in a business setting
define marketing ethics
ethical problems specific to marketing
define locational privacy
person’s ability to move about in public spaces with the expectation that the location will not be recorded for future use
why do marketers need to be concerned about ethics?
Unethical marketing practices may mean consumers can no longer trust a brand
lecture: 3 levels of marketing responsibility
1) legal
2) ethical
3) socially responsible
LO1: what good opportunity does marketing give?
Marketing functions interact with entities outside the firm regularly, it is a good opportunity to build the public’s trust
LO1: creating ethical climate in workplace: define ethical climate
set of values within marketing firm/division that guides decision making and behaviour
LO1: creating ethical climate in workplace: what must firm do - 3 points
1) Everyone within the firm must share the same understanding of values and how they translate into business activities
2) Firms must develop rules that govern firm’s transactions
3) There must be a system of controls to reward behaviour consistent with firm’s values.
LO1: influence of personal ethics: how does personal ethics come into workplace?
Each firm is made up of individuals each with his own needs/desires
LO1: influence of personal ethics: why do we act unethically and an example
1) All of us vary in the way we view situations depending on our own level of understanding about ethical behaviours
2) Example: A child may not know that hitting is wrong
LO1: influence of personal ethics: how to avoid employees acting unethically and example
1) short term goals of each employee must be aligned with the long term goals of the firm
2) example: Managers short term goal of receiving a bonus cannot conflict with long term firm’s goal of providing safe products
LO1: influence of personal ethics: how to align personal and corporate goals
firms need to have strong ethical climate, explicit rules governing transactions including a code of ethics and a system for rewarding/punishing behaviour
LO2: define corporate social responsibility (CSR)
voluntary activities undertaken by a company to operate in an economically, socially, and environmentally sustainable manner
LO2: what should firm do to act in socially responsible manner?
1) the employees must also maintain high ethical standards and understand how individual decisions lead to collective actions of firms.
2) Firms must implement programs that are socially responsible
LO2: high ethics, high social responsibility
both ethical and socially responsible
LO2: high ethics, low social responsibility
ethical firm not involved with larger community
LO2: low ethics, high social responsibility
questionable firm practices but donates a lot to community
LO2: low ethics, low social responsibility
neither ethical nor socially responsible
LO2: what does being socially responsible mean?
going above and beyond norms of corporate ethical behaviour
LO2: example of socially responsible but low ethics firm
a company can have deceptive advertising so it is not ethical but donates a lot to charities so it is socially responsible
LO2: who is affected by firm’s social responsibility?
A firm’s social responsibility influences how consumers make their purchase decisions and how investors make investing decisions
LO3: 4 ways to implement social responsibility initiatives?
1) charitable donations
2) diversity
3) fuel conservation
4) volunteerism
LO3: 5 stakeholders impacted by CSR
1) shareholders
2) employees
3) consumers
4) marketplace
5) society
LO3: explain CSR for employees - 3 points
1) ensure safe working environment, equality of treatment and fairness in compensation
2) By doing so, they increase reputation as a good place to work and increase the talent pool of people who apply there
3) The happy employee also provides better service to consumers.
LO3: explain CSR for customers - 2 points
1) Firms must consider effect on current and future customers
2) includes respecting and protecting customers digital privacy, health effects of products
LO3: explain CSR for marketplace
When firm leads CSR efforts, partners and competitors have to follow or run the risk of falling behind and getting a bad reputation
LO3: explain CSR for society
Firms should expend time and energy engaging in activities to improve community and physical environment otherwise this can damage reputation and profits
LO3: how do consumers foster socially responsibly and ethical decision making?
Consumers can place pressures on businesses to practice ethical and socially responsible behaviour in a number of ways: protect, boycott, generating negative publicity
LO3: define consumerism
a social movement aimed at protecting consumers from business practices that infringe upon their rights
LO4: 4 steps in ethical decision making
1) identify issues
2) gather info and identify stakeholders
3) brainstorm and evaluate alternatives
4) choose course of action
LO4: example for step 1) identify issues
issues in how consumer data is collected and stored to ensure privacy
LO4: what happens in step 2) gather info and identify stakeholders - 2 points
1) gather facts important to ethical issue and all relevant legal info
2) Firm must identify and have discussions with individuals and groups that have a stake in how issue is resolved
LO4: explain and example of step 3) brainstorm and evaluate alternatives to digital privacy example for consumers
1) making responses anonymous, giving employees ethics training
2) bring together all stakeholders impacted and brainstorm and evaluate alternatives
LO4: step 4) choosing course of action - 3 things
1) Choose course of action that generates the best solution for stakeholders by using ethical practices
2) List advantages/disadvantages and legal issues associated with each alternative
3) To ensure firm has applied all relevant decision making criteria, they can use an ethical decision making metric
LO4: 6 tests in ethical decision making metric
1) publicity test
2) moral mentor test
3) admired observer test
4) transparency test
5) person in mirror test
6) golden rule test
LO4: explain publicity test
would i want to see the action described on national newspaper
LO4: explain moral mentor test
would person i admire most do this action
LO4: explain admired observer test
would i want person i admire most to see me do this
LO4: explain transparency test
can i give a clear explanation for the action that would satisfy a fair and dispassionate moral judge
LO4: explain person in mirror test
would i be able to respect myself doing this
LO4: explain golden rule test
would i like to be on receiving end of action and its consequences?
LO5: how ethics/CSR can be implemented in planning phase of marketing strategy
Can introduce ethics by including ethical statements in firm’s mission statement or providing a statement of values that defines priority of org
LO5: how ethics/CSR can be implemented in implementation phase of marketing strategy - 4 points
1) Sometimes a firms choice of target market and how it pursues it can lead to charges of unethical behaviour (ie targeting alcohol to high school students)
2) Implement ethics in identifying potential markets and ways to deliver the 4 Ps to them
3) Example: sourcing decisions, whether a company wants to source from slave labour in asia or ethically in north america
4) Develop safe products, price products fairly, promote products truthfully, distribute products without undue discrimination
LO5: how ethics/CSR can be implemented in control phase of marketing strategy - 2 points
1) Marketers must determine whether firm has acted in ethical and socially responsible manner, if not, they should correct the situation quickly
2) Systems should determine whether ethical issue raised in planning process was successfully implemented and systems should be able to react to changes in ethics in society (Example: competitor has been found to not handling customer data properly, so you need to make sure you look good)
Lecture: Example: ethics/CSR implication for market research
The info social media gathers, Example: apps track personal data
Lecture: Example: ethics/CSR implication for consumer targeting
Predatory lending
Lecture: Example: ethics/CSR implication for implications for product design
Example: heart attack grill. A food place that is about being as unhealthy as possible.
Lecture: Example: ethics/CSR implication for implications for pricing
Pricing at big box stores - sales to price hikes. Before they put items on sale, they hike the regular prices of the products so the sale price brings the price of the item down to regular price.
Lecture: Example: ethics/CSR implication for implications for distribution
Underpaying workers from sweatshops that they get their supply of clothes from
Lecture: Example: ethics/CSR implication for implications for selling
Firms are trying to sell you more products (example: apple selling warranty with products)
LO4: what does high score mean in ethical decision making metric
means answered no for a lot of question - situation is ethically troubling
