Chapter 3 Marketing by Greval, Lewy

MARKETING ETHICS y

31/01/2012 16:46:00

Learning Objectives. y Why do marketers have to worry about ethics? y What does it take for a firm to be considered socially responsible? y How should a firm make ethically responsible decisions? y How can ethics and social responsibility be integrated into a firms marketing strategy? Which is more important corporate objective: Making a profit or obtaining and keeping costumers? Although firms cannot stay in business without earning a profit, using profit as the sole guiding light for corporate action can lead to short-term decisions that may in fact cause the firm to lose customers in the long run. When customers believe they can no longer trust a company or that the company is not acting responsibly, they will no longer support that company by purchasing its products or services or investing in stocks. Business ethics is the moral or ethical dilemmas that might arise in a business setting. Marketing Ethics examines those ethical problems that are specific to the domain of marketing. Creating an ethical climate that establishes the health and well-being of consumers as the firms number one priority just makes good business sense. The process of creating a strong ethical climate within a marketing firm includes having a set of values that guides decision making and behavior. The J&J (Johnson & Johnson) Credo: We are responsible to our employees. We must respect their dignity and recognize their merit. Compensation must be fair and adequate and working conditions clean, orderly and safe. We are responsible to the communities in which we live and work and to the world community as well. Our final responsibility is to our stockholders. When we operate according to these principles, the stockholders should realize a fair return.

y y

y y y

Everyone within a firm must share the same understanding of its ethical values and how they translate into the business activities of the firm and must share a consistent language to discuss them. Six Ethical Values: y Honesty. y Responsibility. y Fairness. y Respect. y Openness. y Citizenship. y Why people act unethically: People must choose between desirable outcomes. Sometimes the unethical decision brings better benefits for the person which makes the decision. To avoid dire consequences, the short-term goals of each employee must be aligned with the long-term goals of the firm. Corporate social responsibility refers to the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders. For a company to act in a socially responsible manner, the employees of the company must also first maintain high ethical standards and recognize how their individual decisions lead Consumers and investors increasingly appear to want to purchase products and services from and invest in companies that act in socially responsible ways. A Framework for Ethical Decision Making Steps: 1. Identify issues. 2. Gather information and identify stakeholders: Gather information that are important to the ethical issue. Analyze the needs of the industry and the global community, as well as stakeholders.

y y

y y y

y y

3. Brainstorm and evaluate alternatives: After the marketing firm has identified the stakeholders and their issues and gathered the available data, all parties relevant to the decision should come together to brainstorm any alternative courses of action. 4. Choose a course of action. y Integrating Ethics Into Marketing Strategy y >Does the firm want to include a commitment to ethics in its mission or vision statement? Define the mission and/or vision

Planning Phase

y y

>Is the firm prepared to support the development of an ethical climate that Perform a situation analysis. would maintain a strong ethical position?

>Should the firm be targeting this market with this product? >Should the Firm be relocating its production to another country? >Should the firm be advertising its product in this market or in this manner? >Should the firm be selling its product in this market or in this manner? >Did any of the firms actions have a negative impact on any stakeholder group? Implement marketing mix and resources Identify and evaluate opportunities (Segmentation, targeting & positioning)

Implementation Phase

Control Phase

>Are there any new circumstances that require a change in strategy to avoid an ethical issue? >Is the firm prepared in the event of a potential ethical lapse?

Evaluate Performance

Chapter 4 Marketing by Greval, Lewy

31/01/2012 16:46:00

Learning Objectives y How do customers, the company, competitors, and corporate partners affect marketing strategy? y Why do marketers have to think about their macroenvironment when they make decisions? y How do corporate social responsibility programs help various stakeholders? Consumers may be influenced directly by the immediate actions of the focal company, the companys competitors , ant the corporate partners that work with the firm to make and supply products and services to consumers. The Firm, and therefore consumers indirectly, is influenced by the macro environment, which includes various influences from culture and demographics, social, etc.

y y

y y Baby Boomers (1946 1964) Diversity as a cause Idealistic Mass movement Conform the rules Killer job Became institutions TV Have Technology Task-Technology y y y Generation X (1965 1976) Accept diversity Pragmatic/cynical Selfreliant/individualistic Reject rules Killer life Mistrust institutions PC Use technology Multitask Generation Y (1977 now) Celebrate diversity Optimistic/realistic Individualistic Rewrite the rules Killer lifestyle Irrelevance of institutions Internet Assume technology Multitask fast

Everything a firm does should revolve around the customer. Firms must discover their customers wants and needs and then be able to provide a valuable product or service that will satisfy those. Good marketing firms or departments work closely with suppliers, marketing research firms, consultants and transportation firms to coordinate the extensive process of discovering what customers want and finally getting it to them how, when and where they want it. Each of these activities discovering customers needs, studying competitors actions, and working with corporate partners- helps add value to firms products and services. To be successful, marketers must understand fully what is going on outside their firm. Marketers must be sensitive to cultural issues to be successful, and then they must also consider costumer demographics age, income, market size, education, gender, and ethnicity. Technological advances help marketers provide consumers with more products and services more quickly and efficiently.

Corporate Social Responsibility Programs benefits

Customers: Customers feel better about buying from a company that engages in responsible practices, which provides them with the additional value of feeling good about buying from that company Employees: For most employees working in a responsible firm would be ethical to their own morals and values. Stockholders: Some investors choose which stocks to buy on the basis of the companys responsible stances. When CSR initiative, a company is more efficient. Community: Cleaner air and water, aid to the underprivileged, and healthier product options

1/31/2012 4:46:00 PM y