Chapter 18Ethical Marketing in a Consumer-Oriented World Appr.docx

Chapter 18
Ethical Marketing in a Consumer-Oriented World: Appraisal
and Challenges
Copyright © 2015 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written
consent of McGraw-Hill Education.
For use only with Perreault/Cannon/McCarthy or
Perreault/McCarthy texts.
© 2014 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin
CHAPTER EIGHTEEN
Lecture Notes for
Essentials of Marketing 14e
Multimedia Lecture Support Package to Accompany Essentials
of Marketing
Lecture Script 20-‹#›
At the end of this presentation, you should be able to:
understand why marketing must be evaluated differently at the
micro and macro levels.
understand why this text argues that micro-marketing costs too
much.
understand why this text argues that macro-marketing does not
cost too much.
understand all of the elements of the marketing strategy
planning process and strategy decisions for the four Ps.
18-‹#›

much.
cost too much.
This slide refers to material on p. 498.
of Marketing
know how to prepare a marketing plan and how it relates to the
marketing strategy planning process.
know some of the challenges marketers face as they work to
develop ethical marketing strategies that serve consumers’
needs.
18-‹#›
develop ethical marketing strategies that serve consumers'

needs.
of Marketing
Ethical Marketing in a Consumer-Oriented World (Exhibit 18-1)
Marketing’s Impact on Society: Micro and Macro Views
Evaluating Marketing
Putting Together Innovative Marketing Plans
Challenges Facing Marketers
18-‹#›
Summary Overview
This chapter concludes Essentials of Marketing by covering
three broad concepts:
Evaluating marketing
As indicated in Chapter 1, there are two levels of marketing:
the micro (managerial) level—concerns the marketing activities
of an individual firm; and
the macro level—concerns how the whole marketing system
works.

2) The key components of an innovative marketing plan.
3) Challenges facing marketers.
of Marketing
How Should Marketing Be Evaluated?
Cost of Marketing
Evaluating
Marketing
Customer Satisfaction
18-‹#›
Summary Overview
This chapter suggests that satisfaction and costs serve as
criteria for evaluating the impact of marketing.
Key Issues
A nation’s objectives affect the evaluation of marketing.
The social and economic objectives of a nation may differ
depending on that nation’s socio-political structure.
Consumer satisfaction is the objective in the United States.
This objective is derived from a market-based economic system,
and it implies that political freedom and economic freedom go
hand in hand.
In the U. S., people have the right to live as they choose and to
satisfy their economic and social needs as they choose.

Discussion Question: How is the marketing concept related to
the marketing objectives and realities that characterize the
United States?
This slide relates to material on p. 498.
of Marketing
Can Consumer Satisfaction Be Measured?
Highly Personal
Depends On Individual Aspirations
A C S I
Key
Issues
Many Measures for Micro-Marketing
18-‹#›
Summary Overview
Since consumer satisfaction is such an important objective,
marketing’s effectiveness must be measured by how well it
satisfies consumers.
Key Issues
One of the measurements is the American Customer Satisfaction
Index (ACSI) done by the University of Michigan.

It is based on regular interviews with tens of thousands of
consumers and covers 230 companies in 43 industries.
This sort of index makes it possible to track changes in
customer satisfaction measures over time and to do comparisons
across countries.
However, there are limits to this type of measure:
To some extent, satisfaction depends on individual aspirations.
A level of performance that is satisfactory today may not be so
in the future.
Consumer satisfaction is also highly personal. Therefore,
looking at the average satisfaction level of a whole society does
not provide a complete picture for evaluating macro-marketing
effectiveness.
On the other hand, there are many measures of micro-marketing
effectiveness.
Firms use attitude research, comment cards, e-mail surveys,
consumer feedback, and other methods. Repeat purchase and
profitability measures also provide some rough indicators of
satisfaction.
Therefore, evaluating micro-marketing effectiveness is difficult,
but not impossible.
Discussion Question: Why would it be wise for a firm to use
several different types of measures to check customer
satisfaction?
This slide refers to material on p. 499-501.
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Micro-Marketing Does Cost Too Much
Inability of Firms to Identify New Target Markets

Improper Blending of the 4 Ps
Lack of Interest in Customers
Sources of Marketing Inefficiency
18-‹#›
Summary Overview
Many firms are still too production-oriented and inefficient. As
evidence of this fact, the failure rate is high for new products.
The marketing efforts of inefficient firms can lead to
dissatisfied customers.
Key Issues
Marketing inefficiencies, and the customer dissatisfaction that
results from them, can be linked to one or more of the following
reasons:
Lack of interest in or understanding of the customers.
Improper blending of the 4 Ps.
Lack of understanding or failure to adjust to the marketing
environment.
Even if a firm listens to its customers, there’s no incentive for
the customer to buy if the benefits of the marketing mix do not
exceed the costs.
Discussion Question: What experiences of satisfaction and
dissatisfaction have you had that are linked to micro-marketing
costs?
The high cost of missed opportunities is a factor – too many
companies stifle innovative thinking with layers of bureaucracy
and a rigid mentality.
The inability to identify new target markets and opportunities is

a sign of failure.
For many firms, micro-marketing does cost too much, but things
are changing.
Many companies are becoming more customer-oriented and are
recognizing that they need a diverse set of backgrounds and
talents to meet the varied needs of their increasingly global
customers.
of Marketing
Macro-Marketing Does Not Cost Too Much
Reduces National Income and
Employment
Leads to Higher Prices and Restricted Outlook
Creates Monopolistic Competition
Critique of Macro-Marketing
18-‹#›
Summary Overview
Some critics argue that macro-marketing costs too much. A
common criticism is that the macro-marketing system causes
poor use of resources and leads to an unfair distribution of
income.

Key Issues
Some people feel that marketing contributes to the development
of monopolistic competition.
They contend that marketing leads to higher prices, restricted
output, and reductions in national income and employment.
However, as firms succeed, success attracts competition and
encourages innovation.
Leads to new investments, which contribute to economic growth
and higher levels of national income and employment
of Marketing
Other Criticisms of Macro-Marketing
Advertising Wastes Resources
Consumers Are Too
Easily Controlled
Consumers Are Not Puppets
Needs and Wants Change
18-‹#›
Summary Overview
Marketers should be sensitive to other popular criticisms of
macro-marketing.

Key Issues
Many critics are offended by advertising, the most often
criticized micro-marketing activity. But what about the macro
view of advertising?
Is advertising a waste of resources?
In relation to the volume of products sold, advertising is an
efficient way to communicate product-benefit information.
This efficiency contributes to economies of scale in production,
distribution, and sales.
Others argue that consumers are too easily controlled by
business firms.
But consumers are not puppets—people are not as controllable
as this criticism suggests. Competition offers consumers
different alternatives.
Discussion Question: Who is more qualified than the individual
consumer to determine his/her own requirements for goods and
services?
Needs and wants change.
Marketers work to improve the overall quality of life by making
products that lead to higher levels of need fulfillment.
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Interactive Exercise: Does Marketing Cost Too Much?
18-‹#›

The purpose of this drop and drag exercise is two-fold. First,
the exercise helps students to distinguish between micro and
macro level marketing issues. Second, the exercise seeks to
reinforce the text’s stance pertaining to situations in which
marketing does or does not cost too much. Four scenarios are
described; students must first identify whether the scenario
describes a macro or micro marketing issue. Then students must
determine whether or not the described scenario represents an
example of marketing costing too much, as discussed in Chapter
18.
For complete information and suggestions on using this
Interactive Exercise, please refer to the “Notes on the
Interactive Exercise” section for this chapter in the Multimedia
Lecture Support Package to Accompany Essentials of
Marketing. That same information is available as a Word
document in the assets folder for the PowerPoint file.
of Marketing
Does Marketing Make People Materialistic?
Create
Values?
Does Marketing:
OR
Appeal to Existing Values?
18-‹#›

Summary Overview
There is no doubt that marketing caters to materialistic values.
However, people disagree as to whether marketing:
(a) creates these values, or
(b) simply appeals to values that already exist.
Key Issues
Not only do consumers in a free society have choices, but they
have virtually unlimited wants and needs.
Advertising informs people about products that will help fulfill
their wants and needs.
Discussion Question: To what extent can marketers force
consumers to use goods or services? Do marketers really just
provide choices and leave it to consumers to decide if any of the
choices serve their basic needs?
corresponding point (upon mouse click).
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Does Advertising Influence Social Values?
18-‹#›
This video is the U.S version of Dove’s “Evolution” ad. It
shows the transformation of a model’s appearance from the
original image to the image that is posted on a billboard, with

the closing commentary “no wonder our perception of beauty is
distorted.” This ad has been widely viewed across the web.
What do you think of this ad and Dove’s strategy? How does
this campaign relate to Dove’s positioning in the market? Is it
in Dove’s self-interest? Is it helpful to society?
Video Operation:
Use the onscreen player controls to operate the video.
To view the video at Full Screen, right-click the video and
choose Full Screen. To go back to your presentation you can
either hit the Escape key, right-click on the video and uncheck
Full Screen, or type Alt+Enter. You can do this at anytime
during the video playback.
Under certain circumstances, the video may not fill the video
player window. To restore, right-click the video player object
and select Zoom 200%.
The videos will only play in Slide Show View. Macros must be
enabled in order to play the videos from within PowerPoint.
of Marketing
Marketing Reflects Our Own Values
Macro-Marketing Can
Be More Difficult
Not All Needs Are Met
Products Improve
Quality of Life
Macro-Marketing Can’t Eliminate Social Problems

18-‹#›
Summary Overview
Critics suggest that advertising elevates the wrong values, by
overemphasizing sexual appeals and self-gratification.
Key Issues
Products do improve the quality of life, by making it possible to
satisfy higher level needs.
For example the Internet empowers people with information in
ways that could not be imagined a decade ago
In the short run, marketing reflects social values, and then
enhances and reinforces them in the long run.
Not all needs are met.
Even in countries with well-developed macro-marketing
systems, there are homeless people, illiterate adults, people who
suffer discrimination, the sick, and the hungry.
High competition does help drive down prices, stimulate
economic growth, create jobs, and spread income among more
people.
Discussion Question: Is it the macro-marketing system that
creates these problems?
Macro-marketing cannot eliminate all social problems or
guarantee the success of government aid programs.
of Marketing

Elevating the Wrong Values?
18-‹#›
Critics say that advertising elevates the wrong values. Some
commercials allow such arguments—even give the arguments
credibility—especially among certain groups of people. After
viewing this commercial, would you say that it is promoting
something wrong or bad? If not, then is the statement
“Advertising elevates the wrong values” valid?
Video Operation:
of Marketing
Checking Your Knowledge
The Department of Motor Vehicles (DMV) in a large U.S. state
decided to conduct a survey to determine the level of

satisfaction with its services among a random sample of
consumers. The survey cost $25,000, and the results were
positive--in general, people seemed reasonably satisfied with
the DMV’s services. As the agency’s managers were busy
congratulating themselves, one manager remarked, “So much for
how people feel about us now. We’ll have to work even harder
just to maintain the current level of customer satisfaction when
we do the survey next year.” What would best explain this
manager’s observation?
A. Different people might be surveyed next year.
B. Consumer satisfaction can’t be accurately measured.
C. People don’t think of themselves as “consumers” when
they deal with government agencies.
D. Consumer expectations change over time and often
increase.
E. The survey was probably biased this year because of poor
sampling.
18-‹#›
Answer: D
Feedback: The most logical explanation from the given answers
would be that consumer expectations change over time. This
manager is aware that the marketer’s job is to satisfy today’s
consumer wants but also to keep looking for better ways to
serve consumers. The best answer is ‘D’.

of Marketing
Overview of Marketing Strategy Planning Process (Exhibit 18-
2)
TARGET
MARKET
Segmentation and Targeting
Differentiation and Positioning
External Market Environment
Customers
Company
Competitors
S.
W.
O.
T.
18-‹#›
Summary Overview
Marketers have to make many decisions in developing a
marketing mix that will satisfy their target customers. All of the
variables comprising the marketing mix can be reduced to four
basic categories.
Key Issues
The four Ps make up a marketing mix
The “four Ps” are combined in differing ways to match the

needs and wants of different target markets.
Product: concerned with developing the right product for the
target market.
Place: concerned with all the decisions involved in getting the
right product to the target market’s place.
Promotion: concerned with telling the target market or others in
the channel of distribution about the right product.
Price: concerned with the kind of competition in the target
market and the cost of the whole marketing mix.
A marketing strategy is the 4 P’s and a particular target market.
Marketing managers must first assess the factors beyond their
immediate control: customer’s behavior, competitors, or the
external market environment. The company can not be changed
in the short run.
This analysis is summarized in the SWOT – which identifies a
company’s strengths and weaknesses and the market’s
opportunities and threats.
Together this information helps the manager identify market
segments and choose a particular segment to target – as well as
decisions about differentiation and positioning.
Discussion Question: How does segmentation and targeting
affect the marketing mix? How does a firm’s decision about
how to differentiate or position affect the marketing strategy?
This slide relates to material on p. 506
of Marketing
Developing Different Marketing Mixes

18-‹#›
Marketing planning involves finding a marketing mix that will
meet the needs of some target market(s) very well. Ideally, the
strategy should take advantage of trends in the external
market—not buck them or try to radically alter them. In this
commercial, E-Trade attempts to differentiate itself from other
online brokers, given the trend toward self-service electronic
investing.
Video Operation:
of Marketing
Which of the following would a S.W.O.T. analysis classify as
an “opportunity” for Microsoft:

A. Microsoft has a great deal of cash available for
marketing strategies.
B. Microsoft develops new patented technology that makes
its software run faster.
C. European trade regulators consider rulings that would
require Microsoft to develop a new version of Windows for
its market.
D. Emerging markets in Asia and Africa show increased
demand for computers and software.
E. The company hires an expert in online advertising.
18-‹#›
Answer: D
Feedback: S.W.O.T. analysis looks at a firm’s (internal)
strengths and weaknesses as well as opportunities and threats in
the external market environment. Opportunities are external to
the company and provide a favorable advantage. Only answer
‘D’ fits these criteria.
of Marketing
Strategy Decisions Areas Organized by the Four Ps (Exhibit 18-
3)

18-‹#›
Summary Overview
Ideally, the four Ps must be creatively blended—so the firm
develops the best mix for its target market. In other words, each
decision must work well with all of the others to make a logical
whole.
Key Issues
All the aspects of the product area, such as the product’s
benefits, its quality, and its service dimensions, must match
customer needs.
The marketing manager has the job of integrating the four Ps
strategy decisions – it is easy for specialists to focus on their
own areas and expect the rest of the company to work for or
around them.
The ideas of the product manager, the advertising manager, the
sales manager, the logistics manager, and whoever makes
pricing decisions may have to be adjusted to improve the whole
mix.
Discussion Question: How would marketing mixes differ for
convenience, shopping, and specialty products?
of Marketing
The Marketing Plan Brings
All the Details Together
Types of
Demand-Oriented
Pricing

Key Parts
of a
Marketing Plan
Name of Product-Market
Special Implementation
Customer Analysis
Competitor Analysis
Company Analysis
Marketing Environment
Product
Place
Promotion
Price
Marketing Information
Needs
Forecasts and Timing
Control
18-‹#›
Summary Overview
Once the manager has selected the target market, decided on the
marketing mix, and developed estimates of the costs and
revenue for that strategy, the marketing plan provides a
blueprint for implementation.
Key Issues
This slide shows the major sections of the marketing plan.
Individual chapters and Exhibit 18-4 provide more details on
each topic area.
The marketing plan spells out the timing of the strategy.
The plan should include a time frame for each element of the
plan and expected estimates of sales and profit, so that the plan
can be compared with actual performance in the future.
Discussion Question: What is the marketing term that compares

actual and expected performance?
A complete plan spells out the reasons for decisions about the
marketing mix, by including information about customers,
competitors, the environment, the company’s objectives, and its
resources.
The plan should be routinely checked and updated.
As some elements of the plan or the marketing environment
change, the whole plan may need a fresh approach.
of Marketing
Communication Technologies
Role of Computerization
Marketing Research
Demographic Patterns
Business & Organizational Customers
Product
Channels and Logistics
Sales Promotion

Personal and Mass Selling
Pricing
International Marketing
General
Changes/Trends
Affecting
Marketing Strategy
Planning
Some Important Changes and Trends Affecting Marketing
Strategy Planning
(Exhibit 18-5)
18-‹#›
Summary Overview
What types of challenges do marketers face in the future? What
do consumers need from marketers?
Key Issues
Marketers must focus on providing value to consumers and
adjusting their internal operations toward that end.
Change is the only thing that’s constant.
We need better marketing performance at the firm level.
A commitment to continuous improvement links needed changes
in marketing strategies to specific changes in the environment.
This exhibit summarizes some of the changes and trends
marketers have to deal with in the coming years. As you can
see, many of them focus on technological improvements.
Marketers must constantly evaluate their strategies to make sure
they are not outpaced by the competition.
A twist on the old adage now says, “If it ain’t broke, improve
it.”
Marketing managers who take the lead in finding innovative

new markets and approaches get a competitive advantage.
Discussion Question: Which of these changes is most likely to
affect a retail store chain like Macy’s? Why? Which of these
changes and trends are most important for Apple? Why?
of Marketing
Technology, Globalism, and Social Responsibility
We Need To Use
Technology Wisely
We Need To Welcome
International Competition
We Need More
Social Responsibility
18-‹#›
Summary Overview
What does the increased consumer interest in globalism,
technology, and social responsibility mean for marketers?
Key Issues
We need to welcome international competition, because it is not
a temporary phenomenon.

Instead of viewing international competition as a threat,
marketers must realize that as macro-marketing systems
improve worldwide, more consumers will have income to buy
products—from wherever in the world those products come.
We need to use technology wisely.
Technological improvements force marketers to learn more, to
be more flexible, to innovative in meeting consumer needs, and
to take the time to consider the ethical implications of new
technologies.
Technology gives the consumer power to expose unethical
practices.
We may need more social responsibility.
Marketing managers need to learn how to interpret marketing
activities from the consumer’s point of view. Long-run
consumer welfare must be considered.
“Do unto others as you would have others do unto you” is a
useful rule.
Discussion Question: Are there any limits to the marketer’s
horizon when it comes to social responsibility? At what point in
time does the marketer’s responsibility to a consumer end?
When does the marketer’s responsibility to society in general
end?
of Marketing
The Environment Is Everyone’s Need
18-‹#›

Summary Overview
Marketers need to work harder and smarter at finding ways to
satisfy consumer needs without sacrificing the current or future
environment. Companies that produce products with
environmental benefits will find greater success when those
products deliver other benefits as well
Key Issues
This ad showcases a campaign by Owens Illinois that points out
all the benefits of glass.
It stresses that besides being endlessly recyclable, things taste
better in glass.
Products packaged in glass are healthier and higher in quality
Discussion Question: What are the benefits of being a firm that
is widely recognized as “eco-friendly”?
We need the truth. Promotion provides powerful ways to
communicate with customers.
This slide relates to material on p. 514-515.
of Marketing
Legal and Ethical Concerns
Enactment and Enforcement
Consumer Privacy
Key
Issues
Legal vs. Ethical
Impact on Top Managers

18-‹#›
Summary Overview
Various legal and ethical concerns will continue to challenge
marketers in the years ahead.
Key Issues
As information technology helps marketers identify and serve
target markets better, there is always the concern that very
sensitive information, such as credit information, can be
inaccurate and/or misused.
There is increasing pressure to enact more laws protecting
consumer privacy.
In the area of privacy, and in other areas, we may need to
change laws and how they are enforced.
Laws must protect consumers and enforcement should consider
this a priority.
However, before enacting new laws, government decision-
makers should evaluate the adequacy of laws that already exist.
Laws should also affect top managers. For example, prosecution
of the top managers who set harmful policies would be more
effective than going after lower-level operatives.
Laws merely define minimal ethical standards.
Other formal and informal codes of ethics exist that provide
greater detail about what is acceptable and unacceptable
behavior.
Discussion Question: Who bears the ultimate responsibility for
making sure that marketing practices conform to reasonable
ethical standards?

of Marketing
Responsibilities of Consumers and Marketers
How Far Does the
Marketing Concept Go?
Socially Responsible Consumers
Consumer-Citizens Should Vote on Changes
18-‹#›
Summary Overview
Achieving a better macro-marketing system is certainly a
desirable objective. But what part should a marketer play in
deciding what products to offer?
Key Issues
We need socially responsible consumers.
Some consumers abuse return policies in retail stores, change
price tags in self-service stores, shoplift, and expect stellar
customer service.
Honest consumers pay higher prices because of these abuses.
Consumers need to accept their share of the responsibility for
preserving an effective macro-marketing system.
Consumers can take advantage of the information available from
government and private sources that can help them to be more
intelligent buyers.
Should marketing managers limit consumers’ freedom of
choice?
Some things marketing managers do benefit both the firm and
consumers. But other decisions reduce consumer choice and
conflict with a desire to improve the effectiveness of our macro-

marketing system.
Discussion Question: Should marketing managers limit
consumers’ freedom of choice by not offering products that
carry some risk to the consumer, even though consumers want
them? Should they add costly safety devices to products if
consumers go out of their way to disable the devices once they
own the products?
Marketing managers should be expected to increase consumer
choices, but consumer-citizens should vote on the changes—
either through their purchase behavior or their involvement with
government.
of Marketing
Which of the following statements indicates that a marketing
manager is about to make a serious mistake?
A. “Competitors? I don’t worry about them. If we do our job,
we’ll be OK regardless of what anyone else does.”
B. “I never thought I’d be leading our company into the
international market, but there are simply too many
opportunities there to ignore.”
C. “I don’t write the paychecks for my customer service
staff—the customers do.”
D. “We’ve learned that good selling is really all about
helping consumers solve their problems.”
E. “I welcome consumer complaints, because they let us

know what we need to do to improve our service.”
18-‹#›
Answer: A
Feedback: Throughout Chapter 18, evidence is presented that
options B-E are legitimate comments for a marketing manager.
Choice ‘A’ however, indicates that the marketing manager is
about to make a serious mistake. It is never a wise decision to
ignore the competition and, instead, have a tunnel-vision focus
on the job. The best answer selection for this statement is ‘A’.
of Marketing
Which of the following marketing trends would you LEAST
expect to see in the future?
A. Increased use of Web logs (blogs) by marketers.
B. More emphasis on product placement in movies and TV
shows as a means of promotion.
C. More Spanish-language advertising in the U.S.
D. Increased share of market for online retailing compared to
traditional retailing.
E. Less attention to distribution customer service.
18-‹#›

Answer: E
Feedback: We have discussed changes in the market that
support (are consistent with) options A-D. There is no mention
in the chapter that less attention to distribution customer service
will occur in the future. In fact, there is little reason to expect
that consumers would be satisfied with backsliding by marketers
on the service levels that they have come to expect. Also,
competitive pressure will hasten improved service levels. The
best answer selection is ‘E’.
of Marketing
You should now be able to:
much.
cost too much.
18-‹#›
You should now:

much.
cost too much.
of Marketing
You should now be able to:
develop ethical marketing strategies that serve consumers’
needs.
18-‹#›
You should now:
develop ethical marketing strategies that serve consumers'
needs.

of Marketing

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