Transcript What is Marketing?

Marketing: An Introduction
Second Canadian Edition
Armstrong, Kotler, Cunningham, Mitchell and Buchwitz
Chapter Three
Marketing and Society: Social
Responsibility and Marketing Ethics
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Looking Ahead
• Identify the major social criticisms of
marketing.
• Define consumerism and
environmentalism and explain how
they affect marketing strategies.
• Describe the principles of socially
responsible marketing.
• Explain the role of ethics in marketing.
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Marketing and Consumers
• Negative impact on individual
consumer welfare:
– High prices due to costs of distribution,
advertising and excessive markups.
– Deceptive practices: pricing, promotion.
– High-pressure selling.
– Shoddy or unsafe products.
– Planned obsolescence.
– Poor service to disadvantaged customers.
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High Prices
• Critics and consumers claim that high
prices are the result of
• Expensive advertising
• Excessive distribution margins
• Outrageous markups
• Marketers answer charge by carefully
delivering value to consumers rather
than reducing prices and profits
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High-Pressure Selling
• Salespeople are trained to deliver
smooth, canned talks to entice purchase.
• Hard sales can occur because of prizes
going to top sellers.
• High-pressure selling not good for longterm relationships.
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Deceptive Practices
• Deceptive pricing:
– Falsely advertising “factory” or “wholesale” prices or
large reductions from phony high retail list prices.
• Deceptive promotion:
– Overstating a product’s features or performance,
running rigged contests.
• Deceptive packaging:
– Exaggerating package contents through subtle
design, using misleading labelling, etc.
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Shoddy or Unsafe Products
• Products not made well or service not
performed well.
• Products deliver little benefit or can be
harmful.
• Unsafe products due to manufacturer
indifference, increased production
complexity, poorly trained labor and poor
quality control.
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Planned Obsolescence
• Products needing replacement before
they should be obsolete.
• Producers change consumer concepts of
acceptable styles.
• Intentionally holding back attractive
functional features, then introducing them
later to make old model obsolete.
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Poor Service to Disadvantaged
Consumers
• Poor may pay more for inferior goods.
• “Redlining” may occur in disadvantaged
neighborhoods.
• Higher insurance premiums to people
with poor credit ratings.
• “Weblining” can occur.
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Marketing Ethics and Society
• Negative impact on society:
– Creating false wants.
– Too few social goods.
– Cultural pollution.
– Too much political power.
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Creating False Wants
• Charges that we suffer from materialism
and over-concern with status.
• Creates an acquisitive society.
• Criticisms overstate the power of
business to create needs.
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Too Few Social Goods
• Private goods create social ills.
– Automobiles create need for more
highways, create pollution.
• Possible ways to create balance.
– Make producers pay for social costs such
as emission control systems in cars.
– Make consumers pay costs such as toll
roads or health care premiums for
smokers.
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Cultural Pollution
• Constant assault of advertising and
promotion on the senses.
• Average Canadian is exposed to 3000
marketing messages a day.
• Vicious circle: the more advertising, the
more advertise must find ways to
capture our attention.
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Too Much Political Power
• Industries lobby government to promote
interests against public good.
• Advertising spending in the media
prevents media from honest journalism
about products.
• Canada has put controls in place to help
curb powerful business interests.
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Marketing Ethics and Business
• Negative impact on other businesses:
– Harming competitors.
– Reducing competition through acquisitions.
– Practices that create barriers to entry.
– Unfair competitive marketing practices.
• All can harm other businesses and
reduce competitiveness.
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Consumerism
• An organized movement of citizens and
government agencies to protect the
rights of buyers.
– The right to safety.
– The right to be informed.
– The right to choose.
– The right to be heard.
– The right to redress against damage.
– The right to consumer education.
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Seller’s Rights
• These rights depend on fair and safe
practices:
– The right to introduce any product in any style
and size.
– The right to charge any price for the product.
– The right to spend any amount to promote the
product.
– The right to use any product message.
– The right to use any buying incentive scheme.
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Environmentalism
• An organized movement of citizens,
businesses and government
agencies.
– Protect and improve the living environment.
– Maximize life quality, rather than
consumption, choice or satisfaction.
– Strive for environmental sustainability.
– Government regulation to support these
goals.
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Environmental Sustainability
• Developing strategies that both sustain
the environment and produce profits for
the company.
– Current capabilities:
• Pollution prevention.
• Product stewardship.
– Tomorrow’s goals:
• New environmental technologies.
• Sustainability vision.
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Socially Responsible Marketing
•
Five principles of enlightened
marketing:
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Consumer-oriented marketing.
Innovative marketing.
Value marketing.
Sense-of-mission marketing.
Societal marketing.
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Legal Marketing Decisions
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Selling decisions.
Advertising decisions.
Channel decisions.
Product/packaging decisions.
Pricing decisions.
Competitive management decisions.
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Enlightened Marketing
• A marketing philosophy holding that a
company’s marketing should support the
best long-run performance of the
marketing system.
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Enlightened Marketing
• Consumer-oriented marketing:
– The philosophy of enlightened marketing
that holds that the company should view
and organize its marketing activities from
the consumer’s point of view.
• Innovative marketing:
– A principle of enlightened marketing that
requires that a company seek real product
and marketing improvements.
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Enlightened Marketing
• Value marketing:
– A principle of enlightened marketing that holds
that a company should put most of its
resources into value-building marketing
investments.
• Sense-of-mission marketing:
– A principle of enlightened marketing that holds
that a company should define its mission in
broad social terms rather than narrow product
terms.
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Enlightened Marketing
• Societal marketing:
– A principle of enlightened marketing that holds
that a company should make marketing
decisions by considering consumers’ wants, the
company’s requirements, consumers’ long-run
interests and society’s long-run interests.
– Similar to the societal marketing concept.
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Societal Classification
of Products
Immediate Satisfaction
High
Long-run
Benefit
Low
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Low
High
Salutary
Products
Desirable
Products
Deficient
Products
Pleasing
Products
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Marketing Ethics
• Corporate marketing ethics policies:
– Broad guidelines that everyone in the
organization must follow.
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Distributor relations.
Advertising standards.
Customer service.
Pricing.
Product development.
General ethical standards.
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Marketing Ethics
• What principle should guide companies
and marketing managers on issues of
ethics and social responsibility?
– Free market and legal system on the one
hand.
– Responsibility falls to individual companies
and managers on the other.
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Ethics Programs
• Canadian Marketing Association has a
code of ethics to help govern marketing
decisions.
• Many companies now appoint executives
to oversee ethics and ethical corporate
behaviour.
• Being aware of ethics in international
business dealings a particular issue.
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Looking Back
•
Identify the major social criticisms of
marketing.
Define consumerism and
environmentalism and explain how
they affect marketing strategies.
Describe the principles of socially
responsible marketing.
Explain the role of ethics in marketing.
•
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•
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