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Responsible Marketing

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Explain how ethical issues influence marketing planning.

Explain how ethical issues influence marketing planning.
Analyse examples of how organisations respond to ethical issues.

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Responsible Marketing Responsible Marketing Presentation Transcript

  • RESPONSIBLE MARKETING
  • Learning Objectives I. Explain how ethical issues influence marketing planning. II. Analyse examples of how organisations respond to ethical issues. © 2014 Berlin Asong. All rights reserved. 2
  • ? ETHICS © 2014 Berlin Asong. All rights reserved. 3 View slide
  • “Ethics are values that an individual uses to interpret whether an action or behaviour is acceptable or appropriate”. Peter Stanwick & Sarah Stanwick (2013), “Understanding Business Ethics”. 2nd edition. Sage publication, p. 3 © 2014 Berlin Asong. All rights reserved. 4 View slide
  • study morality. It is the © 2014 Berlin Asong. All rights reserved. of 5
  • It is the Study of right & wrong © 2014 Berlin Asong. All rights reserved. 6
  • What’s right & wrong is sometimes not clear-cut. For example… © 2014 Berlin Asong. All rights reserved. 7
  • Is it right or wrong for McDonald’s to profit from selling high-carb meals often linked to obesity and heart-related diseases? © 2014 Berlin Asong. All rights reserved. 8
  • Is it right or wrong for companies to use bio-fuel made from corn when 9 million people (5 million are children) die each year of hunger? © 2014 Berlin Asong. All rights reserved. 9
  • Yahoo CEO Scott Thompson stepped down after it was revealed he doesn’t have a computer science degree as stated in his CV. May 2012 Right or Wrong? © 2014 Berlin Asong. All rights reserved. 10
  • It could be argued… He lied to get a job he “canSo what?so well”. do © 2014 Berlin Asong. All rights reserved. 11
  • A counter-argument could be… He has the skills to do his job, but no longer has the trust or integrity of his employees & shareholders. © 2014 Berlin Asong. All rights reserved. 12
  • Sky News admits hacking emails but says it was 'in the public interest' Source: The Independent (2012). Retrieved from www.independent.co.uk/news/uk/crime/sky-news-admitshacking-emails-but-says-it-was-in-the-public-interest-7621831.html © 2014 Berlin Asong. All rights reserved. 13
  • Hacking into someone’s email is a criminal offence. Sky News argues its action is morally right because it helped solve a crime. © 2014 Berlin Asong. All rights reserved. 14
  • Is office romance a good thing or bad thing? © 2014 Berlin Asong. All rights reserved. 15
  • Some ethicists observe that… …what is right and wrong is subjective and not universally binding. © 2014 Berlin Asong. All rights reserved. 16
  • 30 minutes What criticisms do organisations face nowadays? Alternatively, what criticisms do marketers face nowadays? © 2014 Berlin Asong. All rights reserved. 17
  • Product Process Price Marketing Mix Physical Layout Place People © 2014 Berlin Asong. All rights reserved. Promotion 18
  • Providing customers with defective products or poor services. T oyota Recalls, 2010. © 2014 Berlin Asong. All rights reserved. 19
  • February 2013 horsemeat scandal in Europe. Source: gawker.com © 2014 Berlin Asong. All rights reserved. 20
  • © 2014 Berlin Asong. All rights reserved. 21
  • Misleading nutritional labels E.g. falsely claiming a product is an organic or fair-trade product. © 2014 Berlin Asong. All rights reserved. 22
  • Fanciful, expensive packaging © 2014 Berlin Asong. All rights reserved. 23
  • Deceitful packaging © 2014 Berlin Asong. All rights reserved. 24
  • Using excess packaging © 2014 Berlin Asong. All rights reserved. 25
  • Obese society linked to high carb products. © 2014 Berlin Asong. All rights reserved. 26
  • Child obesity often linked to high carb products and pastimes that discourage active lifestyle. © 2014 Berlin Asong. All rights reserved. 27
  • Product Process Price Marketing Mix Physical Layout Place People © 2014 Berlin Asong. All rights reserved. Promotion 28
  • Highly priced products and services beyond the buying reach of many. © 2014 Berlin Asong. All rights reserved. 29
  • The poor pay for the same pricey products and services as the rich. © 2014 Berlin Asong. All rights reserved. 30
  • Price-fixing Barclays fined £290m for rigging LIBOR rate. Source: www.guardian.co.uk/business/2012/jun/27/barclays-chief-bob-diamond-bonus-fine 3 July 2012 Source: insurance-center.org © 2014 Berlin Asong. All rights reserved. Former Barclays CEO Bob Diamond resigned amid libor scandal 31
  • Product Process Price Marketing Mix Physical Layout Place People © 2014 Berlin Asong. All rights reserved. Promotion 32
  • There are unverified claims that… …Apple intentionally limits supplies of the iPhones and iPad to create a perception of high demand. © 2014 Berlin Asong. All rights reserved. 33
  • Product Process Price Marketing Mix Physical Layout Place People © 2014 Berlin Asong. All rights reserved. Promotion 34
  • © 2014 Berlin Asong. All rights reserved. 35
  • Skechers USA Inc. fined $40 million for misleading advertising claims. © 2014 Berlin Asong. All rights reserved. 36
  • © 2014 Berlin Asong. All rights reserved. 37
  • © 2014 Berlin Asong. All rights reserved. 38
  • Source: adpressive.com © 2014 Berlin Asong. All rights reserved. 39
  • Stereotype body figure & size. © 2014 Berlin Asong. All rights reserved. 40
  • Consumerism Aggressive promotion glamorises materialism. © 2014 Berlin Asong. All rights reserved. 41
  • Companies are often criticised for creating artificial needs. Do you actually need another pair of shoes or that expensive shoes? © 2014 Berlin Asong. All rights reserved. 42
  • Consequences of materialism and artificial needs: Thrown foods Source: WRAP (2012). Retrieved from www.wrap.org.uk/content/pictures © 2014 Berlin Asong. All rights reserved. 43
  • In the UK, family household throws £680 of food a year. Source: The Telegraph (2012). Retrieved from www.telegraph.co.uk/finance/personalfinance/consumertips/householdbills/9268980/Families-waste-680-of-food-a-year.html Source: WRAP (2012). Retrieved from www.wrap.org.uk/content/pictures © 2014 Berlin Asong. All rights reserved. 44
  • Consequences of materialism and artificial needs: debts © 2014 Berlin Asong. All rights reserved. 45
  • Cultural imperialism by foreign brands: eroding national and sub-cultures. © 2014 Berlin Asong. All rights reserved. 46
  • © 2014 Berlin Asong. All rights reserved. 47
  • Unauthorised used of consumers’ private details. © 2014 Berlin Asong. All rights reserved. 48
  • Product Process Price Marketing Mix Physical Layout Place People © 2014 Berlin Asong. All rights reserved. Promotion 49
  • Exploitation of workers. © 2014 Berlin Asong. All rights reserved. 50
  • sweatshops © 2014 Berlin Asong. All rights reserved. 51
  • Underpaid workers © 2014 Berlin Asong. All rights reserved. 52
  • “Excessive” executive pay and bonuses. © 2014 Berlin Asong. All rights reserved. 53
  • "Rogue" Bosses ENRON Guilty of accounting embellishment & fraud. (L-R) Mr. Jeffrey K. Skilling, former President and CEO of Enron Corporation; Dr. Robert Jaedicke, Board of Directors Chairman of Audit and Compliance Committee of Enron Corporation; and Mr. Herbert S. Winokur, Jr., Board of Directors Chairman of the Finance Committee of Enron Corporation, during the Oversight and Investigation Subcommittee hearing. © 2014 Berlin Asong. All rights reserved. 54
  • "Rogue" Bosses Worldcom WorldCom Accounting Scandal Revealed: 3.8 billion in mislabelled expenses had been used to inflate cash flow and hide losses in 2001 and early 2002. Shown is former Worldcom CEO Bernard Ebbers, © 2014 Berlin Asong. All rights reserved. 55
  • "Rogue" Bosses Bernard Madoff’s ponzi scheme. © 2014 Berlin Asong. All rights reserved. 56
  • © 2014 Berlin Asong. All rights reserved. 57
  • Product Process Price Marketing Mix Physical Layout Place People © 2014 Berlin Asong. All rights reserved. Promotion 58
  • Not adhering to manufacturing, customer care, or quality control procedures. © 2014 Berlin Asong. All rights reserved. 59
  • Air pollution from industrial waste like carbon emissions. © 2014 Berlin Asong. All rights reserved. 60
  • Depletion of natural resources. © 2014 Berlin Asong. All rights reserved. 61
  • …and many more criticisms such as… © 2014 Berlin Asong. All rights reserved. 62
  • Corporate Tax Evasion Picture source: www.ecumenicalnews.com © 2014 Berlin Asong. All rights reserved. 63
  • 64 © 2014 Berlin Asong. All rights reserved. Picture source: metro.co.uk
  • 20 minutes What are the possible effects of these criticisms on organisations? © 2014 Berlin Asong. All rights reserved. 65
  • Effects of "Irresponsible" Marketing on Organisations Damaged reputation/brand. Consumer boycott and activism. Falling sales and profit. Legal fines. Loss of shareholder value. Withdrawal of business license. Unnecessary distractions. Etc. © 2014 Berlin Asong. All rights reserved. 66
  • 20 minutes How should marketing planners and their organisations respond to the criticisms? See slides 17 - 58 © 2014 Berlin Asong. All rights reserved. 67
  • Learning Objective I. Explain how ethical issues influence marketing planning. © 2014 Berlin Asong. All rights reserved. 68
  • A Schematic Outline of the Influence of Ethics on Marketing Planning Ethical gathering and use of data | Focus on customer and societal needs. The 7Ps address legal, societal and environmental concerns. Employee care | Create, encourage, reinforce and reward ethical behaviours. Understand the marketplace & consumer needs. Design suitable marketing strategy. Implement marketing strategy. Measure performance of marketing strategy. Value creation Financial, environmental, societal, customer and employee metrics are used to assess performance of marketing strategies. Shared value; fairer value for the customer, company & society. © 2014 Berlin Asong. All rights reserved. 69
  • 1 A growing number of companies are incorporating social and environmental issues into their planning processes. © 2014 Berlin Asong. All rights reserved. 70
  • 5000 Almost organisations published corporate responsibility reports in 2010. Corporate Register (2011), “Corporate Responsibility Reporting Awards ‘11”, Corporate Register, pp. 4-5 © 2014 Berlin Asong. All rights reserved. 71
  • © 2014 Berlin Asong. All rights reserved. 72
  • Kraft Foods supporting Cocoa farmers in Ghana. © 2014 Berlin Asong. All rights reserved. 73
  • © 2014 Berlin Asong. All rights reserved. 74
  • 2 Product Planet Process Price Marketing Mix Physical Layout Place Promotion People © 2014 Berlin Asong. All rights reserved. Ethical and legal concerns are being considered when formulating marketing strategies (marketing mixes). For example… 75
  • Retailing products that are safe, and help customers lead a healthier lifestyle. © 2014 Berlin Asong. All rights reserved. 76
  • “In April 2008, we were the first retailer to launch 1% fat milk, which retains the same amount of calcium and vitamin B as semi-skimmed milk but has nearly half the fat.” © 2014 Berlin Asong. All rights reserved. 77
  • McDonald’s launches new packaging with QR codes, which provide nutritional info. to help health conscious diners make informed eating decisions. © 2014 Berlin Asong. All rights reserved. Picture source: http://news.mcdonalds.com/press-releases/mcdonald-slaunches-new-global-packaging-designs-nyse-mcd-975617 78
  • © 2014 Berlin Asong. All rights reserved. 79
  • SABMiller “Making more beer but using less water: we've set ourselves a target to reduce our average water use per hectolitre of beer by 25% by 2015”. © 2014 Berlin Asong. All rights reserved. Picture Source: cervejaavecesar.blogspot.com 80
  • “We are active in taking steps to discourage irresponsible drinking”. © 2014 Berlin Asong. All rights reserved. 81
  • 3 Planners are increasingly seeing… …ethical issues as sources for new products, new markets, brand differentiation, new revenue streams and cost reduction. For example… © 2014 Berlin Asong. All rights reserved. 82
  • Toyota’s Prius has been a success with over 3 million units sold worldwide since it went on sales in1997. © 2014 Berlin Asong. All rights reserved. 83
  • Kraft Foods has cut its annual use of fuel to 680,000 litres. Source: Kraft annual report 2011 © 2014 Berlin Asong. All rights reserved. 84
  • RESPONDING TO ETHICAL ISSUES
  • Learning Objective I. Analyse examples of how organisations respond to ethical issues. © 2014 Berlin Asong. All rights reserved. 86
  • Chosen Organisations © 2014 Berlin Asong. All rights reserved. 87
  • 20 minutes What issues is McDonald’s often criticised of? © 2014 Berlin Asong. All rights reserved. 88
  • Criticisms of McDonald's Food provisions linked to obesity. Provision of high-carb & fatty foods. Marketing "unhealthy" meals to children. Less attractive jobs (McJob). Cultural imperialism. Etc. © 2014 Berlin Asong. All rights reserved. 89
  • 20 minutes How is McDonald’s responding to the top-three criticisms? See slide 6 © 2014 Berlin Asong. All rights reserved. 90
  • 1 © 2014 Berlin Asong. All rights reserved. 91
  • © 2014 Berlin Asong. All rights reserved. 92
  • 2 © 2014 Berlin Asong. All rights reserved. 93
  • McDonald’s launches new packaging with QR codes, to help diners make informed dieting choices.—Jan. 2013 © 2014 Berlin Asong. All rights reserved. Picture source: http://news.mcdonalds.com/press-releases/mcdonald-slaunches-new-global-packaging-designs-nyse-mcd-975617 94
  • © 2014 Berlin Asong. All rights reserved. 95
  • 3 © 2014 Berlin Asong. All rights reserved. 96
  • Picture source: www.wdexpo.org "One of McDonald’s Europe’s new principles states that all Happy Meal advertising that features food will include fruit or vegetables and drinks with only naturally occurring or no sugar". McDonald’s (2013), “Leading by Examples”. [Online] Available from www.aboutmcdonalds.com/mcd/sustainability/library/best_practices/nutritio n_and_well_being/leading_by_example.html [accessed 18 October 2013] © 2014 Berlin Asong. All rights reserved. 97
  • 4 © 2014 Berlin Asong. All rights reserved. 98
  • Source: McDonald’s (2013) © 2014 Berlin Asong. All rights reserved. 99
  • The company is criticised for hiking energy prices at a time many households are financially tight. © 2014 Berlin Asong. All rights reserved. 100
  • © 2014 Berlin Asong. All rights reserved. 101
  • 20 minutes How is British Gas responding to the public uproar? © 2014 Berlin Asong. All rights reserved. 102
  • 1 British Gas Managing Director Ian Peters in media interview, explaining the reasons of raising energy prices. © 2014 Berlin Asong. All rights reserved. 103
  • 2 The company uses Twitter to respond to customer grievances. © 2014 Berlin Asong. All rights reserved. 104
  • 3 British Gas is rolling out smart energy metres to help customer manage energy usage and bills. Picture source: moneysupermarket.com © 2014 Berlin Asong. All rights reserved. 105
  • The Cooperative Group is one of the world’s most ethical companies, according to the Ethisphere Institute’s 2013 study. © 2014 Berlin Asong. All rights reserved. 106
  • T appreciate why the Cooperative Group o is one of the world’s most ethical organisation, one has understand its business model. © 2014 Berlin Asong. All rights reserved. 107
  • The company strives… “…to be the most socially responsible business in the UK”. The company is delivering on its ethical goal. © 2014 Berlin Asong. All rights reserved. 108
  • The company is delivering on its ethical goal. © 2014 Berlin Asong. All rights reserved. 109
  • © 2014 Berlin Asong. All rights reserved. 110
  • © 2014 Berlin Asong. All rights reserved. 111