Good Slide and Books

1. marketing strategy
O. C. Ferrell Michael D. Hartline
Marketing Ethics
and Social
Responsibility in
Strategic Planning
C H A P T E R

2. 3-2
• Car manufacturers have gone to great lengths
to promote hybrid cars.
• These cars are generally much more expensive
to develop and produce. Do corporations have
a social responsibility to develop
environmentally friendly cars? Why or why
not?
The Auto Industry Tries to Go Green
Beyond the Pages 3.1

3. 3-3
The Role of Ethics and Social
Responsibility in Marketing Strategy
• Grown in importance recently
– Due to firms having problems in this area
• Have become necessities due to:
– Stakeholder demands
– Changes in Federal law
• Improve marketing performance and profits
• Are important to development of marketing
strategy

4. 3-4
• 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.
Discussion Question

5. 3-5
Dimensions of
Social Responsibility
• Social Responsibility
– A broad concept that relates to an organization’s
obligation to maximize its positive impacts on
society while minimizing its negative impacts
• Marketing Ethics
– Principles and standards that define acceptable
marketing conduct as determined by the public,
government regulators, private interest groups,
competitors, and the firm itself

6. 3-6
• R.J. Reynolds has been accused by critics of
using its “Joe Camel” cartoon character, 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
Marketing Strategy in Action (1 of 2)

7. 3-7
• Coca-Cola :
– Suggested Burger King to invest & promote frozen
Coke as a kid’s snack
– Inflated sales & misled investors by shipping extra
beverage concentrate to bottlers
– Attempt to steal and sell trade secrets to PepsiCo
• Nike claimed no responsibility for the
subcontractors poor working conditions &
extremely low wages
Marketing Strategy in Action (2 of 2)

8. 3-8
The Pyramid of
Corporate Social Responsibility
Exhibit 3.1

9. 3-9
Social Responsibility
• Includes:
– Economic responsibility of making a profit
– Legal responsibility of obeying laws and
regulations
– Ethical responsibility to uphold principals and
standards
– Philanthropic responsibility to increase the
firm’s positive impact on society
• Wall-Mart during Hurricane Katrina

10. 3-10
Marketing Ethics and Strategy
• Requires that organizations and individuals
accept responsibility
• Can lead to violations of public trust
• Involves complex and detailed decisions in gray
areas
• Deals with experiences and decisions made at
work
• Comes into play anytime individuals feel
manipulated or cheated

11. 3-11
Potential Ethical Issues in Marketing
• Overall Issues
• Product Issues
• Pricing Issues
• Distribution Issues
• Promotion Issues
See Exhibit 3.2 in Text

12. 3-12
Government Regulation of
Marketing Activities
Exhibit 3.3

13. 3-13
The Challenges of Being
Ethical and Socially Responsible
• Business decisions involve complex decisions in
which correctness may not be clear cut
– e.g. Internet privacy, protecting trademarks and brand
names
• Ethical conflict may emerge from an
inconsistency between personal values and the
values held by members of the work group
• Ethical issues can develop into legal problems

14. Types of Misconduct
Observed in Organizations (1 of 3)
3-14Exhibit 3.4
• Abusive or intimidating behavior toward
employees
• Lying to employees, customers, vendors or the
public
• A situation that places employee interests over
organizational interests
• Violation of safety regulation
• Misreporting of actual time worked

15. Types of Misconduct
Observed in Organizations (2 of 3)
3-15Exhibit 3.4
• Email & internet abuse
• Discrimination on the basis of race, color,
gender, age or similar category
• Stealing or theft
• Sexual harassment
• Provision of goods or services that fail to meet
specifications
• Misuse of confidential information

16. 3-16
Types of Misconduct
Observed in Organizations (3 of 3)
Exhibit 3.4
• Alteration of documents
• Falsification or misrepresentation of financial
records or reports
• Improper use of competitors’ inside
information
• Price fixing
• Giving or accepting bribes, kickbacks or
inappropriate gifts

17. 3-17
• Why have we seen 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?
Discussion Question

18. 3-18
Deceptive Practices in Marketing
• Deceptive Communications and Promotion
– Fraud or any false communication
– Exaggerated claims or statements
– Ambiguous statements
– Product labeling issues
– Selling abuses
• Regulating Deceptive Marketing Practices
– Typically regulated by:
• The firms themselves
• Industry and trade associations

19. 3-19
Organizational Determinants of
Marketing Ethics & Social Responsibility
• Ethical Decision Making
– Determined by an individual’s background and
business colleagues
– Affected by personal values, opportunity for unethical
behavior, and exposure to others
– Intricately tied to the firm’s culture and ethical
climate
– Can only be improved by planning and structure
– Likely to occur when modeled by a strong leader

20. 3-20
Ethical Climate
• Part of a corporate culture that relates to an
organization’s expectations about appropriate
conduct
– The character component of an organization
– Sets the tone for ethical decisions
– Determines whether or not an individual perceives an
issue to be an ethical issue

21. 3-21
Codes of Conduct (1 of 2)
• Codes of Conduct (Codes of Ethics)
– Formal statement that describes what an organization
expects of its employees
– Not an effective means of controlling ethical behavior
unless integrated into daily decision making
– Not effective unless the code has support of top
management

22. 3-22
Codes of Conduct (2 of 2)
• Codes must reflect management’s desire for
compliance with values, rules, and policies
• Codes should have six core values:
1. Trustworthiness
2. Respect
3. Responsibility
4. Fairness
5. Caring
6. Citizenship
• Codes will not resolve every issue encountered in daily
operations
• Codes can help managers deal with ethical dilemmas

23. 3-23
Key Considerations in Developing and
Implementing a Code of Ethical Conduct
Exhibit 3.5

24. 3-24
Texas Instruments’
“Ethics Quick Test”
• Is the action legal?
• Does it comply with our values?
• If you do it, will you feel bad?
• How will it look in the newspaper?
• If you know it’s wrong, don’t do it!
• If you’re not sure, ask.
• Keep asking until you get an answer.

25. 3-25
Market Orientation
• Market Orientation
– The development of an organizational culture
that effectively and efficiently promotes the
necessary behaviors for the creation of superior
value for buyers and, thus, continuous superior
performance of the firm.
– Strongly tied to ethics and social responsibility
– Means fostering a sense of cooperation and
information exchange

26. 3-26
Stakeholder Orientation
• Stakeholder Orientation
– The degree to which a firm understands and addresses
stakeholder demands
– Strongly tied to ethics and social responsibility
– Comprised of three activities:
1. Generation of stakeholder groups data and
assessment of firm effects on these groups
2. Distribution of this information throughout the
firm
3. Responsiveness as a whole to this intelligence

27. 3-27
Connecting Ethics & Social Responsibility
to Marketing Performance
• Strong ethics causes employees to be:
– Motivated to serve customers
– Committed to the firm
– Committed to high quality standards
– Satisfied with their job
• Can lead to trust among firm’s stakeholders
• Is so important that it can have major negative
impacts on firms that don’t uphold ethical
standards

28. 3-28
• What is the relationship between marketing ethics
and organizational performance? What are the
elements of a strong ethical compliance program
to support responsible marketing and a successful
marketing strategy?
Discussion Question

29. 3-29
The Connection Between
Ethics and Strategic Planning
• Typically done through ethical compliance
programs or integrity initiatives
• Vested in the marketing plan
• Based on an understanding of:
– 1) Risks associated with misconduct
– 2) Ethical and social consequences of strategy
– 3) Values of organizational members and stakeholders
• Manifested through actions … not just words