Transcript Marketing Lecture Presentation - Chapter 16 (Ethics in

Sustainable Marketing
Social Responsibility and Ethics
Bluefield College
November 30, 2010
Sustainable Marketing
Socially and environmentally responsible marketing that
meets the present needs of consumers and businesses
while also preserving or enhancing the ability of future
generations to meet their needs.
Social Criticisms of Marketing
 Marketing’s impact on individual consumers has
been criticized in terms of:
–
–
–
–
High prices.
Deceptive practices.
High-pressure selling.
Shoddy, harmful, or
unsafe products.
– Planned
obsolescence.
– Poor service to
Is Hardee’s being socially irresponsible
disadvantaged
by marketing this big, juicy, calorie
consumers.
and cholesterol laden burger?
Social Criticisms of Marketing
 Three factors are cited as leading to high prices:
– High costs of distribution.
– High advertising and promotion costs.
– Excessive markups.
 Marketers are also accused
of serving disadvantaged
consumers poorly as:
– The poor are forced to shop in
smaller stores where they pay
more for inferior goods.
– National chain stores, insurers,
and health care providers
practice “redlining” and refuse
to open businesses in poor
neighborhoods.
Heavily promoted brands cost
much more than do private labels.
Social Criticisms of Marketing
 Marketers are often accused of deceptive practices such
as:
– Deceptive Pricing: Falsely advertising “factory” or “wholesale”
prices or large reductions from phony high retail list prices.
– Deceptive Promotion: Misrepresenting a product’s features or
performance, or luring consumers to store for out-of-stock item.
– Deceptive Packaging: Exaggerating package contents through
subtle design, using misleading labeling, etc.
 Deceptive practices have led to legislation and other
protective consumer actions.
– FTC governs deceptive practices.
– Use of puffery is legal, but may harm consumers in subtle ways.
– Deceptive practices are not sustainable as they harm a firm’s
business in the long-run.
Social Criticisms of Marketing
 Salespeople are often accused of using high-pressure selling
tactics:
– In persuading people to buy goods they had no intention of buying.
– Because prizes are often given to top sellers.
 Marketers have little to gain from high-pressure tactics.
– Such actions damage relationships with the firm’s customers.
 Shoddy or unsafe product criticisms include complaints that:
– Products are not made well or services are not performed well.
– Products deliver little benefit or are even harmful.
– Products are unsafe due to manufacturer indifference, increased
product complexity, and poor quality control.
 Manufacturers provide desirable, quality goods.
Social Criticisms of Marketing
 Planned obsolescence refers to products needing
replacement before they should because they
are obsolete.
Criticisms of planned
obsolescence include:
– Use of materials and components
that will break, wear, rust, or rot
before they should.
– Continually changing consumer
concepts of acceptable styles.
– Intentionally holding back
attractive functional features,
then introducing them later to
make older models obsolete.
Marketing’s Impact on
Society as a Whole
 Marketing’s impact on society as a whole
has been criticized in terms of:
– Creating false wants and encouraging too
much materialism.
• This criticism overstates the power of business and
ignores consumers ability to defend themselves
against advertising.
– Overselling private goods at the expense of
public (social) goods.
– Creating cultural pollution, stemming from
constant exposure to marketing messages.
Marketing’s Impact on
Other Businesses
 Critics charge that a firm’s marketing
practices can harm other companies and
reduce competition via:
– Acquisitions of competitors.
• Shrinking number of competitors.
– Marketing practices that create barriers to
entry.
• Patents, heavy promotional spending can limit
competition.
– Unfair competitive marketing practices.
• Predatory pricing and other practices.
Marketing in Action
Wal-Mart was accused of predatory pricing practices
by local pharmacists. Wal-Mart countered charges by
noting that their tremendous buying power allows
them to sell at this price and still make a profit.
Consumerism
An organized movement of citizens and government
agencies to improve the rights and power of buyers in
relation to sellers.
 Traditional seller’s rights include the right to:
– Introduce any product in any size and style, provided it is not
hazardous to personal health or safety; or, if it is, to include
proper warnings and controls.
– Charge any price for the product, provided no discrimination
exists among similar kinds of buyers.
– Spend any amount to promote the product, provided it is not
defined as unfair competition.
– Use any product message, provided it is not misleading or
dishonest in content or execution.
– Use any buying incentive schemes, provided they are not unfair or
misleading.
Consumer Actions to Promote
Sustainable Marketing
 Traditional buyers’ rights include the right to:
– Not buy a product that is offered for sale.
– Expect the product to be safe.
– Expect the product to perform as claimed.
 Consumer advocates call for these additional rights to be
added:
– Be well informed about important aspects of the product.
– Be protected against questionable products and marketing
practices.
– Influence products and marketing practices in ways that will
improve “quality of life”.
– Consume now in a way that will preserve the world for future
generations of consumers.
Environmentalism
An organized movement of concerned citizens and
government agencies to protect and improve people’s
living environment.
 Environmentalism:
– Those who subscribe to environmentalism believe that marketing
system’s goal should be to maximize quality of life.
– First wave in the 1960s - 1970s was driven by environmental
groups and concerned consumers.
– Second wave in the 1970s and 1980s was driven by government
and resulted in environmental laws.
– Third wave is occurring now. Firms are accepting more
responsibility and many have adopted a policy of environmental
sustainability.
 Environmental sustainability:
– A management approach that involves developing strategies
that sustain the environment and produce profits.
Environmental Sustainability
Land Rover
Major Marketing Decisions That
May Be Questioned Under the Law
Business Actions Toward
Sustainable Marketing
 Societal marketing:
– A principle of sustainable marketing that holds that a company
makes marketing decisions by considering consumers’ wants and
interests, the company’s requirements, consumers’ long-run
interests, and society’s long-run interests.