be able to explain marketing’s impact on individual consumers, society as a whole and businesses. ...
TRANSCRIPT
Be able to explain marketing’s impact on individual consumers, society as a whole and businesses.
Be able to recommend actions that promote a socially responsible way of doing business
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Reminder: “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.” (Kotler et al, 2008, p7)
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“Certain marketing practices hurt individual consumers, society as a whole and other business firms.” (Kotler et al, 2008, p67)
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‘To be an ethical business, an organisation must be a business and must conduct its activities ethically. An organisation is a business if its objective is maximising long-term
owner value; a business acts ethically, if its actions are compatible with that aim and with distributive
justice and ordinary decency.’Sternberg, E. (1994), Just Business, London: Warner
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‘Managers seeking to ‘balance’ stakeholder interests will quickly
encounter the very practical problem of how that ‘balance’ should be
defined.’(Fill, 2002:150)
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Positive Increase sales
increase employment Informs individuals on
products & services Publicity better
profile more business Promotes investment in
R&D and social sciences Get a broader market
global expansion, more choice
Negative Offensive Environmental impact Promotes
obsolescence Eliminate businesses Pushing through
unpopular strategies Make us buy things
that we don’t need
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The study of moral principles & how individuals should conduct themselves in social affairs
Ethics are an individual’s personal beliefs about right & wrong behaviour
Ethical considerations in decision taking involve the decision taker’s personal feelings & subjective opinion as to what’s good or bad can vary by individual can vary by culture
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Factors instrumental in formation of ethics family influences peer influences life experiences personal values & morals situational factors
Managerial ethics - standards of behaviour that guide individual managers in their work: Relationship of the firm to its employees e.g. working
conditions, privacy relationship of employees to the firm e.g. conflicts of interest relationship of firm to other economic agents
Negatives High prices to cover the cost of:
▪ Distribution▪ Advertising & Promotion▪ Excessive mark-ups
Deceptive practices High-pressure selling Shoddy, harmful or unsafe products Poor service to disadvantaged customers
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•Planned obsolescence
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False wants and too much materialism
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Too few social goods
Cultural pollution
Excessive political power
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Acquisition of competitors
Marketing practices that create barriers to entry
Unfair competitive practices
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“Former employees have alleged the company induced doctors to use Infuse and other spine products by sending them on lavish trips to resorts, paying them undeserved royalties, and handing out lucrative consulting contracts that required little work.”
(David Armstrong, Wall Street Journal, Oct. 3, 2008) 15
The company’s ethics policy is supposed to keep vendors from using fancy gifts to win favor with CVS execs. But the rules don’t apply to the company’s annual charity golf tournament, where vendors pay big bucks for trips with key CVS executives,
Greg Norman, left, talks with CVS President Tom Ryan, second from right, as others look on during the 6th Annual CVS Charity Classic in 2004.
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WorkplaceCo-workersManagers
Ethical Policies
CommunityEthical norms
Culture
Profession
Family
Religion
Legal System
Law Punishment
Self
Influences in Ethical Decision Making
Cron and Decarlo, 2010
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1. Get support from top management showing that they expect you to follow the spirit and letter of the law.
2. Develop and distribute a sales ethics policy.
3. Establish the proper moral climate. If the bosses follow the rules, then the troops are apt to do likewise.
4. Assign realistic sales goals. People who try to meet an unfair quota are more likely to rationalize their way to a kickback scheme.
5. Set up controls when needed. Watch people who live above their income.
6. Suggest that salespeople call for help when they face unethical demands.
7. Get together with your competition if payoffs are an industry problem.
8. Blow the whistle if necessary.
Cron and Decarlo, 201018
Enlightened marketing – “holds that a company’s marketing should support the best long-run performance of the marketing system. It consists of five principles.” (Kotler et al, 2008, p96) Consumer-oriented marketing Value marketing Sense-of-mission marketing – mission
should be defined in broad social terms rather than narrow product terms
Societal marketing Innovative marketing – real improvements
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You have a chance to win a big account that will mean a lot to you and your company. The purchasing agent hints that a ‘gift’ would influence the decision. Your assistant recommends sending a colour TV set to the buyer’s home. What would you do?
You have heard that a competitor has a new product feature that will make a big difference in sales. The competitor will demonstrate the feature in a private dealer meeting at the annual trade show. You can easily send a snooper to this meeting to learn about the new feature. What would you do?
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Kotler, P., Armstrong, G., Wong, V. and Saunders, J. (2008), Principles of Marketing, Fifth European Edition, Pearson; chapter 2
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