MARKETING STRATEGY O C FERRELL MICHAEL D HARTLINE

MARKETING STRATEGY O. C. FERRELL • MICHAEL D. HARTLINE 12 Marketing Ethics and Social Responsibility

The Role of Ethics and Social Responsibility in Marketing Strategy • Dimensions of Social Responsibility – Social responsibility – Marketing ethics • Marketing Ethics and Strategy • The Challenges of Being Ethical and Socially Responsible 2

Marketing Strategy in Action • R. J. Reynolds has been accused by critics of using its “Joe Camel” cartoon character, as shown in this 1988 ad, to target children for cigarette consumption. • How has society acted to protect children from advertising such as this? What obligations do companies have to protect children? 3

The Pyramid of Social Responsibility Exhibit 12. 1 4

Potential Ethical Issues in Marketing Exhibit 12. 2 5

Perceived Values in the Workplace Exhibit 12. 3 6

Discussion Question • Why is marketing ethics a strategic consideration in organizational decisions? Who is most important in managing marketing ethics: the individual or the firm’s leadership? Explain your answer. 7

Deceptive Practices in Marketing • Deceptive Communication and Promotion – False/deceptive statements – Exaggerated claims – Ambiguous statements – Product labeling issues – Fraud • Regulating Deceptive Marketing Practices – Trade associations – Better Business Bureau (BBB) 8

Better Business Bureau 9

Organizational Determinants of Marketing Ethics and Social Responsibility (1 of 2) • Ethical Climate • Codes of Conduct – Six highly desirable core values: • • • 1) Trustworthiness 2) Respect 3) Responsibility 4) Fairness 5) Caring 6) Citizenship 10

Key Considerations in Developing and Implementing a Code of Ethical Conduct Exhibit 12. 4 11

Texas Instruments 12

Discussion Question • Why are we seeing more evidence of widespread ethical marketing dilemmas within firms today? Is it necessary to gain the cooperation of marketing managers to overstate revenue and earnings in a corporation? 13

Organizational Determinants of Marketing Ethics and Social Responsibility (2 of 2) • Marketing Ethics and Leadership – Great leaders: • • • 1) Create a common goal or vision 2) Obtain “buy in” 3) Motivate others to be ethical 4) Use available resources 5) Enjoy their jobs – Ethics training can ensure that everyone: • 1) Recognizes ethical decision making situations • 2) Understands the culture and values of the firm • 3) Is able to evaluate the impact of ethical decisions 14

Ethics, Social Responsibility, and Marketing Performance • Firms that are ethical and socially responsible are rewarded with greater marketing performance. • Having a strong ethical climate: – Increases employee commitment – Is conducive to a strong market orientation – Creates trust among a firm’s stakeholders – Increases customer loyalty 15

Discussion Question • What is the relationship between marketing ethics and organizational performance? What are the elements of a strong compliance program to support responsible marketing and a successful marketing strategy? 16

Incorporating Ethics and Social Responsibility Into Strategic Planning • AMA Code of Ethics • Federal Sentencing Guidelines for Organizations (FSGO) • Marketing strategy and implementation plans should reflect an understanding of: – 1) The ethical and social consequences of strategic choices – 2) The values of organizational members and stakeholders 17

AMA Code of Ethics for the Internet Exhibit 12. 6 18

Frequency of Misconduct and Penalties Under the FSGO Exhibit 12. 7 19