Sustainable Marketing Social Responsibility and Ethics Bluefield College

Sustainable Marketing Social Responsibility and Ethics Bluefield College November 30, 2010

Sustainable Marketing Socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs.

Social Criticisms of Marketing § Marketing’s impact on individual consumers has been criticized in terms of: – – High prices. Deceptive practices. High-pressure selling. Shoddy, harmful, or unsafe products. – Planned obsolescence. – Poor service to Is Hardee’s being socially irresponsible disadvantaged by marketing this big, juicy, calorie consumers. and cholesterol laden burger?

Social Criticisms of Marketing § Three factors are cited as leading to high prices: – High costs of distribution. – High advertising and promotion costs. – Excessive markups. § Marketers are also accused of serving disadvantaged consumers poorly as: – The poor are forced to shop in smaller stores where they pay more for inferior goods. – National chain stores, insurers, and health care providers practice “redlining” and refuse to open businesses in poor neighborhoods. Heavily promoted brands cost much more than do private labels.

Social Criticisms of Marketing § Marketers are often accused of deceptive practices such as: – Deceptive Pricing: Falsely advertising “factory” or “wholesale” prices or large reductions from phony high retail list prices. – Deceptive Promotion: Misrepresenting a product’s features or performance, or luring consumers to store for out-of-stock item. – Deceptive Packaging: Exaggerating package contents through subtle design, using misleading labeling, etc. § Deceptive practices have led to legislation and other protective consumer actions. – FTC governs deceptive practices. – Use of puffery is legal, but may harm consumers in subtle ways. – Deceptive practices are not sustainable as they harm a firm’s business in the long-run.

Social Criticisms of Marketing § Salespeople are often accused of using high-pressure selling tactics: – In persuading people to buy goods they had no intention of buying. – Because prizes are often given to top sellers. § Marketers have little to gain from high-pressure tactics. – Such actions damage relationships with the firm’s customers. § Shoddy or unsafe product criticisms include complaints that: – Products are not made well or services are not performed well. – Products deliver little benefit or are even harmful. – Products are unsafe due to manufacturer indifference, increased product complexity, and poor quality control. § Manufacturers provide desirable, quality goods.

Social Criticisms of Marketing § Planned obsolescence refers to products needing replacement before they should because they are obsolete. Criticisms of planned obsolescence include: – Use of materials and components that will break, wear, rust, or rot before they should. – Continually changing consumer concepts of acceptable styles. – Intentionally holding back attractive functional features, then introducing them later to make older models obsolete.

Marketing’s Impact on Society as a Whole § Marketing’s impact on society as a whole has been criticized in terms of: – Creating false wants and encouraging too much materialism. • This criticism overstates the power of business and ignores consumers ability to defend themselves against advertising. – Overselling private goods at the expense of public (social) goods. – Creating cultural pollution, stemming from constant exposure to marketing messages.

Marketing’s Impact on Other Businesses § Critics charge that a firm’s marketing practices can harm other companies and reduce competition via: – Acquisitions of competitors. • Shrinking number of competitors. – Marketing practices that create barriers to entry. • Patents, heavy promotional spending can limit competition. – Unfair competitive marketing practices. • Predatory pricing and other practices.

Marketing in Action Wal-Mart was accused of predatory pricing practices by local pharmacists. Wal-Mart countered charges by noting that their tremendous buying power allows them to sell at this price and still make a profit.

Consumerism An organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers. § Traditional seller’s rights include the right to: – Introduce any product in any size and style, provided it is not hazardous to personal health or safety; or, if it is, to include proper warnings and controls. – Charge any price for the product, provided no discrimination exists among similar kinds of buyers. – Spend any amount to promote the product, provided it is not defined as unfair competition. – Use any product message, provided it is not misleading or dishonest in content or execution. – Use any buying incentive schemes, provided they are not unfair or misleading.

Consumer Actions to Promote Sustainable Marketing § Traditional buyers’ rights include the right to: – Not buy a product that is offered for sale. – Expect the product to be safe. – Expect the product to perform as claimed. § Consumer advocates call for these additional rights to be added: – Be well informed about important aspects of the product. – Be protected against questionable products and marketing practices. – Influence products and marketing practices in ways that will improve “quality of life”. – Consume now in a way that will preserve the world for future generations of consumers.

Environmentalism An organized movement of concerned citizens and government agencies to protect and improve people’s living environment. § Environmentalism: – Those who subscribe to environmentalism believe that marketing system’s goal should be to maximize quality of life. – First wave in the 1960 s - 1970 s was driven by environmental groups and concerned consumers. – Second wave in the 1970 s and 1980 s was driven by government and resulted in environmental laws. – Third wave is occurring now. Firms are accepting more responsibility and many have adopted a policy of environmental sustainability. § Environmental sustainability: – A management approach that involves developing strategies that sustain the environment and produce profits.

Environmental Sustainability Land Rover

Major Marketing Decisions That May Be Questioned Under the Law

Business Actions Toward Sustainable Marketing § Societal marketing: – A principle of sustainable marketing that holds that a company makes marketing decisions by considering consumers’ wants and interests, the company’s requirements, consumers’ long-run interests, and society’s long-run interests.