Chapter 16 Marketing and Society Social Responsibility and

Chapter 16 Marketing and Society: Social Responsibility and Marketing Ethics 16 -1

Road Map: Previewing the Concepts Identify the major social criticisms of marketing. Define consumerism and environmentalism and explain how they affect marketing strategies. Describe the principles of socially responsible marketing. Explain the role of ethics in marketing. 2

Marketing’s Impact on Individual Consumers High Prices Criticisms Leveled at the Marketing Function by Consumers, and Others Deceptive Practices High-Pressure Selling Shoddy, Unsafe Products Planned Obsolescence Poor Service to Some 3

Marketing’s Impact on Individual Consumers: High Prices Caused by the Following Factors High Costs of Distribution High Advertising and Promotion Costs Excessive Markups 4

Marketing’s Impact on Individual Consumers: Deceptive Practices Deceptive Pricing Deceptive Promotion Deceptive Packaging Falsely Advertising “Factory” or “Wholesale” Prices, Large Reduction From Phony High List Price Overstating the Product’s Features, Luring Customers to the Store for Out -of-Stock Bargains, etc. Exaggerating Package Contents, Not Filling Package to the Top, Using Misleading Labeling 5

Marketing’s Impact on Individual Consumers High-Pressure Selling Some products – such as cars and jewelry – are said to be sold, not bought. Such tactics damage marketer’s long-run relationship with customers. Shoddy or Unsafe Products Complaint that many products are not made well. Second, many products deliver little benefit. Third, concerns product safety. 6

American Association of Advertising Agencies This ad demonstrates that advertising can’t make consumers buy things that they don’t need despite highpressure selling. 7

Marketing’s Impact on Individual Consumers Planned Obsolescence Change consumer concepts of acceptable styles. Hold back attractive functional features. May break, wear, rust, or rot sooner than should. Poor Service to Disadvantaged Consumers May pay more for inferior goods. “Redlining” may occur where major chain retailers avoid placing stores in disadvantaged neighborhoods. 8

Marketing’s Impact on Society as a Whole False Wants & Too Much Materialism Producing Too Few Social Goods Marketing’s Perceived Negative Impact on Society as a Whole Too Much Political Power Cultural Pollution 9

Marketing’s Impact on Other Businesses Acquisitions of Competitors Marketing Practices Create Barriers to Entry Unfair Competitive Marketing Practices 10

Consumerism is an Organized Movement of Citizens and Government Agencies to Improve the Rights and Power of Buyers in Relation to Sellers. Buyers’ Sellers’ Rights 11

Consumerism – Buyers’ Rights The Right Not to Buy a Product Offe The Right to Expect the Product to b The Right to Expect the Product to P The Right to Be Well Informed Abou The Right to Be Protected Against Q The Right to Be Heard About “Qualit 12

Environmentalism Have a Sustainability Vision Plan for New Environmental Technologies Practice Pollution Prevention Adopt Design for the Environment Practices Practice Product Stewardship 13

Major Legal Issues Facing Marketing Management (Fig. 16 -2) 14

Enlightened Marketing Holds That a Company’s Marketing Should Support the Best Long-Run Performance of the Marketing System. Consumer-Oriented Marketing Innovative Marketing Value Marketing Sense-of-Mission Marketing Societal Marketing 15

Societal Classification of Products (Fig. 16 -3) 16

Compare the marketing concept with the principle of societal marketing. Should all marketers adopt the societal marketing concept? Why or why not? 17

Marketing Ethics Companies Need to Develop Corporate Marketing Ethics Policies – Broad Guidelines That Everyone in the Organization Must Follow and Should Address: § Distributor Relations § Advertising Standards § Customer Service § Pricing § Product Development § General Ethical Standards 18

Marketing Ethics Principles That Should Guide Companies and Marketing Managers On Issues of Ethics and Social Responsibility: Decided by the Free Market and Legal System Responsibility of Individual Companies And Managers 19

Form students into groups of three to five. Each group should focus on the following scenario. You are the marketing manager for a small kitchen appliance firm. While conducting field tests, you discover a design flaw in one of your popular appliances that could potentially be harmful to a small number of your customers. However, a product recall would likely bankrupt your company and cause all of the employees (including yourself) to lose their jobs. What would you do? Explain. 20

Rest Stop: Reviewing the Concepts Identify the major social criticisms of marketing. Define consumerism and environmentalism and explain how they affect marketing strategies. Describe the principles of socially responsible marketing. Explain the role of ethics in marketing. 21