Marketing Ethics & Social

Responsibility

Marketing Ethics
Ethics are moral principles or values that govern the
actions of an individual or a group of individuals.
Marketing ethics include decisions about what is right or
wrong in the organizational context of planning and
implementing marketing activities in a global business
environment to benefit

Organisation Performance

Individual Achievement in a work group

Social Acceptance and advancement in the

organisation

Stakeholders

Social Responsibility
Social Responsibility is a broad concept
that relates to an organization's
obligation to maximize its positive
impacts on society while minimizing its
negative impacts.
Dimensions of Social Responsibility can be
understood by studying the Pyramid of
Corporate Social Responsibility by
Archie Carroll
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Social Responsibility

Social Responsibility
Level 1 Economic Responsibilities

It is important to perform in a manner consistent with

maximising earnings per share for the shareholders
It is important to be committed to being as profitable as
possible. This also helps the community.
It is important to maintain a strong competitive position
It is important to maintain a high level of operational
efficiency
It is important that a successful firm be defined as one
that is consistently profitable.

Social Responsibility
Level 2 Legal Responsibilities

It is important to perform in a manner consistent with

expectations of government and the law.
It is important to comply with various national and
supra-national laws and regulations.
It is important to be a law-abiding corporate citizen.
It is important that a successful firm be defines as one
that fulfils its legal obligations.
It is important to provide goods and services that at
least meet the minimal legal requirements.

Social Responsibility
Level 3 Ethical Responsibilities

It is important to perform in a manner that is consistent

with the expectations of societal mores and ethical
norms.
It is important to recognise and respect new or evolving
ethical/moral norms adopted by society.
It is important to prevent ethical norms from being
compromised in order to achieve corporate goals.
It is important that good corporate citizenship be defined
as doing what is expected morally or ethically.
It is important to recognise that corporate integrity and
ethical behaviour go beyond mere compliance with laws
and regulations.

Social Responsibility
Level 4 Philanthropic Responsibilities

It is important to perform in a manner consistent with

the philanthropic and charitable expectations of society.
It is important to assist the fine and performing arts.
It is important that managers and employees participate
in voluntary and charitable activities within their local
communities.
It is important to provide assistance to public and private
educational institutions.
It is important to assist voluntarily those projects that
enhance a communitys quality of life.

Role of Ethics and Social

Responsibility in Marketing Strategy
Importance of being ethical and socially responsible

Failure to see ethical conduct in the corporate strategy can destroy

trust and customer relationships.
Business are judged based on their actions or the social
responsibilities of the products on sale.
Businesses can recover from poor performance but to recover
from damaged reputation because of ethical misconduct is
difficult.
Philanthropic activities make very good marketing tools
Unethical behavior may attract expensive legal involvements.
Ethical behavior and philanthropic activities enhance a companys
image and actions opposite to these cause a dent to a companys
reputation. Reputation is one of the greatest intangible assets.

Marketing Ethics & Strategy

Potential Ethical Issues in Marketing

Overall

Misrepresenting the Firms Capabilities

Manipulation or misuse of data
or information
Exploitation of children or
disadvantaged groups
Invasion of Privacy
Anticompetitive Activities
Abusive Behavior

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Marketing Ethics & Strategy

Potential Ethical Issues in Marketing

Product Issues

Misrepresentation of goods and services

Failing to disclose product defects
Counterfeit or gray market products
Misleading Warranties
Failure to disclose important product
Information
Reducing package contents without
reducing package size

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Marketing Ethics & Strategy

Potential Ethical Issues in Marketing

Pricing Issues

Price Deception
Reference Pricing Claims
Price discrimination
Price fixing between competitors
Predatory Pricing
Fraudulent Refund Policies

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Marketing Ethics & Strategy

Potential Ethical Issues in Marketing

Distribution Issues

Opportunistic Behavior
Withholding Product Availability
Withholding Product or
Promotional Support

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Marketing Ethics & Strategy

Potential Ethical Issues in Marketing

Promotion Issues

False or misleading Advertising

High Pressure Sales People
False or misleading Selling
Techniques
Entertainment or gift giving
Lying
Fine Prints
Sexual innuendo in Advertising

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Challenges of Being Ethical and

Socially Responsible

Business decisions are complex

processes in which correctness may
not be so clear cut.
Different laws in different countries
about business practices.
Personal and professional ethical
conduct may differ.
Personal values may differ from the
values held by a work group.
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Types of Misconduct

Abusive or intimidating behavior

Lying to employees, customers, vendors or the
public
Violations of safety regulations
Misreporting of actual time worked
Email and internet abuse
Discrimination on the basis of race, color,
gender, age or similar categories
Stealing or theft
Sexual harassment
Misuse of confidential information

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Determinants of Marketing
Ethics and CSR

Corporate Culture Dress codes, employee

handbooks, ceremonies, extra curricular
activities and anecdotes
Ethical Climate Conduct of top managers,
values and moral philosophies of coworkers and
opportunity for misconduct.
Codes of Conduct Formal statements clearly
defining the intention of the senior
management w.r.t ethics and csr and spelling
out clear expectations from the employees
pertaining to such issues.

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