Ethics and Social Responsibility in Marketing: Hapter

CHAPTER
ETHICS AND
SOCIAL
RESPONSIBILITY
IN MARKETING
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-1
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
1. Explain the differences between legal and

ethical behavior in marketing.
2. Identify factors that influence ethical and

unethical marketing decisions.
3. Describe the different concepts of social

responsibility.
4. Recognize unethical and socially irresponsible

consumer behavior.
THERE IS MORE BREWING AT
ANHEUSER-BUSCH THAN BEER
NATURE AND SIGNIFICANCE OF
MARKETING ETHICS
• Ethics
• Ethical/Legal Framework in Marketing
 Laws
• Current Perceptions of Ethical Behavior
Concept Check
1. What are ethics?
A: Ethics are the moral principles and

values that govern the actions and
decisions of an individual or group.
They serve as guidelines on how to
act rightly and justly when faced with
moral dilemmas.
Concept Check
2. What are three possible reasons for

the present state of ethical conduct in
the United States?
A: (1) Pressure on businesspeople to make decisions

in a society with diverse value systems. (2)
Business decisions being judged publicly by
groups with different values and interests. (3)
Ethical business conduct may have declined.
UNDERSTANDING ETHICAL
MARKETING BEHAVIOR
• Societal Culture and Norms
 Culture
FIGURE 4-1 A framework for understanding
ethical behavior
MARKETING BEHAVIOR
• Business Culture and Industry Practices
 Business Cultures
 Ethics of Exchange
• Caveat Emptor
• Consumer Bill of Rights

• U.S. Consumer Product Safety Commission
• Federal Trade Commission (FTC)
Federal Trade Commission
Is your online privacy protected?
MARKETING BEHAVIOR
• Business Culture and Industry Practices
 Ethics of Competition
• Economic Espionage
• Bribes
• Kickbacks
MARKETING BEHAVIOR
• Corporate Culture and Expectations
 Corporate Culture
 Code of Ethics
 Ethical Behavior of Top Management and
Co-workers
• Whistle-blowers
MARKETING BEHAVIOR
• Personal Moral Philosophy and Ethical

Behavior
 Moral Idealism
 Utilitarianism
FIGURE 4-A Personal moral philosophies
3M Scotchgard
Which moral philosophy did 3M use and why?
Concept Check
1. What rights are included in the

Consumer Bill of Rights?
A: The rights to safety, to be informed, to
choose, and to be heard.
Concept Check
2. What is meant by moral idealism?
A: Moral idealism is a personal moral

philosophy that considers certain
individual rights or duties as universal,
regardless of the outcome.
UNDERSTANDING SOCIAL
RESPONSIBILITY IN MARKETING
• Concepts of Social Responsibility
 Profit Responsibility
• Profiteering
 Stakeholder Responsibility
 Societal Responsibility
• Green Marketing
• Cause Marketing
FIGURE 4-2 Three concepts of social
responsibility
Avon
Why do companies engage in cause marketing?
UNDERSTANDING SOCIAL
RESPONSIBILITY IN MARKETING
• The Social Audit: Doing Well by Doing

Good
 Social Audit
 Sustainable Development
• Turning the Table: Consumer Ethics
and Social Responsibility
Ronald McDonald House
How do companies ‘do well by doing good’?
Reebok
Why is sustainable development important?
Concept Check
1. What is meant by social

responsibility?
A: Social responsibility means that
organizations are a part of a larger society
and are accountable to that society for
their actions.
Concept Check
2. Marketing efforts to produce,

promote, and reclaim
environmentally sensitive products
green marketing
are called _____________.
Concept Check
3. What is a social audit?
A: A social audit is a systematic assessment

of a firm’s objectives, strategies, and
performance in the domain of social
responsibility.
GOING ONLINE
DOING WELL BY
DOING GOOD
Going Online
1. Visit the BSR website. Can you

update at least one example in the text
related to your chosen topic?
VIDEO CASE 4
STARBUCKS CORPORATION:
SERVING MORE THAN
COFFEE
VIDEO CASE 4
Starbucks
VIDEO CASE 4
Starbucks
FIGURE 1 Starbucks Mission Statement and

Guiding Principles
VIDEO CASE 4
Starbucks
1. How does Starbucks’ approach to

social responsibility relate to the
three concepts of social responsibility
described in the text?
VIDEO CASE 4
Starbucks
2. What role does sustainable

development play in Starbucks’
approach to social responsibility?
SUPPLEMENTAL
LECTURE NOTE 4-1
THE FIVE MOST COMMON
KINDS OF ECONOMIC
ESPIONAGE
IN-CLASS ACTIVITY 4-1
THE ETHICS OF
COMPETITIVE
INTELLIGENCE
Fuld & Company Brochure
Ethics
Ethics
Ethics are
are the
the moral
moral principles
principles and
and values
values
that
that govern
govern the
the actions
actions and
and decisions
decisions of
of
an
an individual
individual oror group.
group.
Laws
Laws
Laws are
are society’s
society’s values
values and
and standards
standards
that
that are
are enforceable
enforceable in
in the
the courts.
courts.
Consumer Bill of Rights (1962)
The
The Consumer
Consumer BillBill of
of Rights
Rights (1962)
(1962)
is
is aa law
law that
that codified
codified the
the ethics
ethics of
of
exchange
exchange between
between buyers
buyers andand sellers,
sellers,
including
including thethe rights
rights (1)
(1) to
to safety,
safety,
(2)
(2) to
to be
be informed,
informed, (3)
(3) to
to choose,
choose, and
and
(4)
(4) to
to be
be heard.
heard.
Code of Ethics
A
A code
code of
of ethics
ethics is
is aa formal
formal statement
statement of
of
ethical
ethical principles
principles and
and rules
rules of
of conduct.
conduct.
Whistle-blowers
Whistle-blowers
Whistle-blowers areare employees
employees who
who
report
report unethical
unethical or
or illegal
illegal actions
actions of
of their
their
employers.
employers.
Moral Idealism
Moral
Moral idealism
idealism is is aa personal
personal moral
moral
philosophy
philosophy that
that considers
considers certain
certain
individual
individual rights
rights or
or duties
duties as
as universal,
universal,
regardless
regardless of
of the
the outcome.
outcome.
Utilitarianism
Utilitarianism
Utilitarianism isis aa personal
personal moral
moral
philosophy
philosophy that
that focuses
focuses onon “the
“the greatest
greatest
good
good for
for the
the greatest
greatest number,”
number,” byby
assessing
assessing the
the costs
costs and
and benefits
benefits of
of the
the
consequences
consequences of of ethical
ethical behavior.
behavior.
Social Responsibility
Social
Social responsibility
responsibility means
means that
that
organizations
organizations are
are aa part
part of
of aa larger
larger society
society
and
and are
are accountable
accountable toto that
that society
society for
for
their
their actions.
actions.
Green Marketing
Green
Green marketing
marketing consists
consists of
of marketing
marketing
efforts
efforts to
to produce,
produce, promote,
promote, and
and reclaim
reclaim
environmentally
environmentally sensitive
sensitive products.
products.
Cause Marketing
Cause
Cause marketing
marketing occurs
occurs when
when thethe
charitable
charitable contributions
contributions of
of aa firm
firm are
are tied
tied
directly
directly to
to the
the customer
customer revenues
revenues
produced
produced through
through the
the promotion
promotion of of one
one of
of
its
its products.
products.
Social Audit
A
A social
social audit
audit is
is aa systematic
systematic assessment
assessment
of
of aa firm’s
firm’s objectives,
objectives, strategies,
strategies, and
and
performance
performance in in terms
terms ofof social
social
responsibility.
responsibility.

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CHAPTER

1. Explain the differences between legal and

2. Identify factors that influence ethical and

3. Describe the different concepts of social

4. Recognize unethical and socially irresponsible

• Ethical/Legal Framework in Marketing

1. What are ethics?

A: Ethics are the moral principles and

2. What are three possible reasons for

A: (1) Pressure on businesspeople to make decisions

• Societal Culture and Norms

• Business Culture and Industry Practices

• Consumer Bill of Rights

• Business Culture and Industry Practices

• Corporate Culture and Expectations

• Personal Moral Philosophy and Ethical

1. What rights are included in the

2. What is meant by moral idealism?

A: Moral idealism is a personal moral

• Concepts of Social Responsibility

• The Social Audit: Doing Well by Doing

1. What is meant by social

2. Marketing efforts to produce,

3. What is a social audit?

A: A social audit is a systematic assessment

1. Visit the BSR website. Can you

FIGURE 1 Starbucks Mission Statement and

1. How does Starbucks’ approach to

2. What role does sustainable

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