Topic 10: Sustainable Marketing

Question 1

Sustainable marketing

Answer 1

calls for socially and environmentally responsible actions that meet the present needs of customers while also preserving or enhancing the ability of future generations to meet their needs

Question 2

Social criticisms of marketing

Answer 2

Marketing’s impact on individual customers

• High Price
  - High costs of distributions
  - High advertising and promotion costs
  - Excessive Markups
• Deceptive Practices
• High Pressure Selling
• Shoddy, Harmful or unsafe produce
• Planned Odsolenscence
• Poor service to disdavtanged customers

Question 3

Marketing’s impact on society as a whole

Answer 3

• False wants and too much materialism
• Too few social goods
• Cultural pollution

Question 4

Marketing’s impact on other businesses

Answer 4

Critics also charge that a company’s marketing practices can harm other companies and reduce competition. Three problems are involved: acquisitions of competitors, marketing practices that create barriers to entry, and unfair competitive marketing practices.

Question 5

Deceptive practices fall into three groups:

Answer 5

pricing, promotion and packaging

Question 6

Deceptive pricing

Answer 6

includes such practices as falsely advertising ‘factory’ or ‘wholesale’ prices, or advertising a large price reduction from a phony high retail-price list

Question 7

Deceptive promotion

Answer 7

includes practices such as misrepresenting the product’s features or performance, or luring customers to the store for a bargain that is out of stock.

Question 8

Deceptive packaging

Answer 8

includes exaggerating package contents through subtle design, using misleading labelling or describing size in misleading terms.

Question 9

High-pressure selling

Answer 9

high-pressure selling that persuades people to buy goods they had not thought of buying. It is often said that insurance, real estate and used cars are sold, not bought

Question 10

Shoddy, harmful or unsafe products

Answer 10

Another criticism concerns poor product quality or function. One complaint is that, too often, products are not made well and services are not performed well. A second complaint is that many products deliver little benefit, or that they might even be harmful.A third complaint concerns product safety

Question 11

Planned obsolescence

Answer 11

causing their products to become obsolete before they actually should need replacement.

Question 12

Poor service to disadvantaged consumers

Answer 12

Finally, the marketing system has been accused of poorly serving disadvantaged consumers. For example, critics claim that rural and regional Australia, with disproportionately more low-income families, has the highest rate of service exclusion

Question 13

False wants and too much materialism

Answer 13

Critics have charged that the marketing system urges too much interest in material possessions, and that the Western world’s love affair with worldly possessions is not sustainable. Too often, people are judged by what they own, rather than by who they are

Question 14

Too few social goods

Answer 14

Business has been accused of overselling private goods at the expense of public goods. As private goods increase, they require more public services that are usually not forthcoming. For example, an increase in motor vehicle ownership (private good) requires more highways, traffic control, parking spaces and police services (public goods).

Question 15

Cultural pollution

Answer 15

Critics charge the marketing system with creating cultural pollution. They believe our senses are being constantly assaulted by marketing and advertising. Commercials interrupt serious programs; pages of ads obscure magazine articles; billboards mar beautiful scenery; spam fills our email inboxes.

Question 16

acquisitions of competitors

Answer 16

Critics claim that firms are harmed and competition is reduced when companies expand by acquiring competitors rather than by developing their own new products

Question 17

Barriers to entry

Answer 17

Critics have charged that marketing practices bar new companies from entering an industry. Large marketing companies can use patents and heavy promotion spending, or can bind suppliers or dealers to keep out or drive out competitors

Question 18

unfair competitive marketing practices.

Answer 18

Finally, some firms have, in fact, used unfair competitive marketing practices with the intention of hurting or destroying other firms. They may set their prices below costs, threaten to cut off business with suppliers or discourage the buying of a competitor’s products.

Question 19

companies and professional associations need to develop corporate marketing ethics policies

Answer 19

broad guidelines that everyone in the profession and organisation must follow. These policies should cover distributor relations, advertising standards, customer service, pricing, product development and general ethical standards.

Question 20

But what principle should guide companies and marketing managers on issues of ethics and social responsibility?

Answer 20

One philosophy is that such issues are decided by the free market and legal system. Under this principle, companies and their managers are not responsible for making moral judgments.

A second philosophy puts responsibility not on the system but in the hands of individual companies and managers. This more-enlightened philosophy suggests that a company should have a ‘social conscience’.

Question 21

Legal compliance in marketing

Answer 21

Many examples of unethical marketing also violate the law. In the most serious cases, the breaches have resulted in criminal sanctions and heavy penalties that have caused the entire business to fail. Today’s marketers must be ‘legally literate’. They must realise that almost every decision made in marketing has some legal significance.

Question 22

legal compliance program

Answer 22

is a system designed to identify, manage and reduce the risk of breaking the law. More than that, a compliance program can also be a strategic asset that provides a business with a competitive advantage in the marketplace by ensuring ethical practice, high-quality performance and the positives created by such behaviour. Such a culture can be fostered only by top management commitment and implemented by way of continuing education. A senior manager should be placed in charge of such a program, probably at a level reporting to the CEO.

Question 23

Legal education programs tend to cover four sets of relationships that need to be monitored in a legal compliance program

Answer 23

• Relationships with competitors – to avoid market rigging, group boycotts, price fixing and other uncompetitive practices.
• Relationships with suppliers – to avoid resale price maintenance and such vertical restraints as may serve to reduce competition.
• Relationships with other parties, such as patent licensees – to avoid infringing intellectual property rights, and patents and licence arrangements generally.
• The relationship with the industry itself – to avoid using trade associations or groupings of firms that might violate sections of the legislation prohibiting arrangements or understandings that substantially lessen competition.