Download - Overview of Socially Responsible Marketing and Selected Issues of Interest to Stakeholders
1
Overview of Socially Responsible Marketingand Selected Issues of Interest to Stakeholders
Emmanuel Chéron, Ph.D.Professor of Marketing
SOPHIA UNIVERSITY
FACULTY OF COMPARATIVE CULTUREInternational Business/Economics
E-mail: [email protected]://www.geocities.com/wallstreet/market/4263
2
Overview of Socially Responsible Marketingand Selected Issues of Interest to Stakeholders
Agenda• Review of social criticisms of marketing• Key socially sensitive areas of consumer behavior• Brief review of some of my previous research in the field
Decision process involved in large corporations to select sponsorship projectsFinancial services needs of low-income individuals: a comparative study in Canada
A Canadian survey on Environmental Marketing Management
• Discussion about the most sensitive social marketing issues in Japan
Social Criticisms of MarketingSocial Criticisms of Marketing
HighPrices
HighPrices
Shoddy or Unsafe
Products
Shoddy or Unsafe
Products
PoorService
PoorService
DeceptivePractices
DeceptivePractices
PlannedObsolescence
PlannedObsolescence
HighPressureSelling
HighPressureSelling
Marketing’s Impact on Individual Consumers
Acquisitionsof
Competitors
Acquisitionsof
Competitors
Marketing Practices
that Create Barriers
to Entry
Marketing Practices
that Create Barriers
to Entry
Unfair CompetitiveMarketing Practices
Unfair CompetitiveMarketing Practices
Critics Charge that a Company’s Marketing Practices Can Harm Other Companies and Reduce
Competition Through:
Marketing’s Impact on Other BusinessesMarketing’s Impact on Other Businesses
ConsumerismConsumerismThe Right to Be Safe The Right to Be Informed
The Right to Be Heard The Right to Choose
Basic Consumer Rights
PracticeProduct
Stewardship
PracticeProduct
Stewardship
PracticePollution
Prevention
PracticePollution
Prevention
Have a Sustainability
Vision
Have a Sustainability
Vision
Adopt Designsfor the
Environment
Adopt Designsfor the
Environment
Plan for New EnvironmentalTechnologies
Plan for New EnvironmentalTechnologies
EnvironmentalismEnvironmentalism
Societal Classification of ProductsSocietal Classification of Products
SalutaryProducts
DeficientProducts
DesirableProducts
PleasingProducts
Lo
ng
-Ru
n C
on
sum
er B
enef
it
Low High
Immediate Satisfaction
High
Low
Marketing Ethics
Marketing Ethics
Customer Service
Customer ServicePricingPricing
DistributorRelations
DistributorRelations
GeneralCode
GeneralCode
Product Development
Product Development
AdvertisingStandards
AdvertisingStandardsCorporate
MarketingEthics
Policies
CorporateMarketing
EthicsPolicies
Principles For Public Policy Toward MarketingPrinciples For Public Policy Toward Marketing
KeyPrinciples
for aPublic Policy
TowardMarketing
KeyPrinciples
for aPublic Policy
TowardMarketing
EconomicEfficiency
EconomicEfficiency
Meeting BasicNeeds
Meeting BasicNeeds
InnovationInnovation
Curbing PotentialHarm
Curbing PotentialHarm
ConsumerEducation
ConsumerEducation
Consumer Protection
Consumer Protection
Consumer andProducer Freedom
Consumer andProducer Freedom
10
Key socially sensitive areas of consumer behavior
Deceptive advertising Children’s ability to
distinguish programs and ads
Improving children’s advertising
Negligent consumer behavior
Product misuse
Drivers of compulsive consumption
Corporate social responsibility
Why firms want to seem responsible
Consumer reactions to product recalls
Corporate rumors
11
Introduction
Firms may engage in unscrupulous behavior.
Consumers also engage in negligent behavior.
Governments regulate buying and selling goods and services to reduce the harmful effects of these behaviors.
12
Major Public Policy Issues
Deceptive advertising Advertising to children Telemarketing and Internet fraud
13
Deceptive Advertising
An advertisement which is potentially misleading or literally false is deceptive.
Potentially misleading ads are difficult to evaluate because miscomprehension may often occur. Miscomprehension is a problem for firms because the
audience does not understand the message being delivered.
The FTC regulates deceptive advertising, but not miscomprehension.
14
Advertising to Children Both policy makers and marketing managers have
reacted to criticism of advertising directed at children.
Some countries have banned advertising to children under 12.
15
Telemarketing/Internet Fraud
The elderly are vulnerable to fraud by telemarketers.
A program to combat this fraud is the Know Fraud Program.
Organizations that fight telemarketing fraud are the AARP, the FBI, the Post Office, and others.
16
Negligent Consumer Behavior Negligent behavior is composed of actions
and inactions that may negatively affect the long-term quality of life of individuals and society.
This type of behavior can occur in two different contexts: Product Misuse Consumption of Hazardous Products
17
Product Misuse
Many injuries result from misuse of a safe product - not from product defects.
Using a cell phone while driving is being outlawed in some areas.
“The most dangerous component is the consumer, and there’s no way to recall him.”
18
Consuming Hazardous Products Recently alcohol related accidents have declined.
The methods used to increase consumer awareness are: Informing and Education Social Controls Economic Incentives Economic Disincentives
19
Compulsive Behavior
Some products are hazardous and consumption can become compulsive or addictive over time.
Other behaviors are not harmful in moderation but become addictive when they become compulsive. Smoking Compulsive Drinking Gambling Compulsive Shopping Other Compulsions
20
Smoking in the US Consumers until the late 1960s were
exposed to nearly 3000 cigarette commercials per week of 38 different brands.
In 1950 there was already concern over the health hazards of cigarette smoking.
Smoking declined from the 1960s to 1992 but has held steady since then.
21
Compulsive Drinking
As mentioned earlier, there has been a decline in alcohol-related deaths on the road. This suggests a decline in alcohol consumption.
Despite the decrease in sales of hard liquor, there is an increase in alcoholic soft drinks. These taste like colas or fruit juices but may contain
more alcohol than beer does.
22
Gambling in the US
Gambling affects an estimated 8 to 12 million people.
Gambling takes place in casinos in Las Vegas, New Jersey, on river boats and elsewhere.
State-run lotteries make it easy to gamble by visiting a convenience store.
23
Compulsive Shopping
Some consumers “shop till they drop” because shopping can become an addiction similar to alcohol or drugs.
There are drugs available to help relieve this compulsion.
Compulsive shopping may be hereditary.
24
Other Compulsions
Overworking and overeating are some other compulsions.
Research has stressed sociological and psychological influences. Chemical imbalances may also be important.
Multiple compulsions may occur together.
25
Corporate Social Responsibility
Firms have become viewed as responsible for more than generating profits.
“Corporate social responsibility” refers to the idea that firms have an obligation to help the larger society by offering some of their resources.
26
Succeeding in the Long Run
A business’s self-interest could be advanced if the business embraced a long-run view.
This position would permit expenditures in support of socially responsible activities and provide future benefits in the form of consumer approval and loyalty.
27
Acquiring a Positive Public Image
One way of showing that companies are socially responsible is by creating a positive public image.
Another way that firms can show they are socially responsible is by making speedy product recalls.
28
The Diffusion of Rumors Public peace of mind can be corrupted by
diffusion of rumors. Rumors often plague both large and small
companies.
29
Types of Rumors Pipe dream rumors represent wishful thinking on the
part of the circulators. The bogie rumor is a fear rumor that spooks the market
place. Self-fulfilling rumors are based on a perception of what
could happen in the future if something else were to occur.
In premeditated rumors individuals spread rumors that may help them financially or otherwise.
Spontaneous rumors arise when people seek explanations for unusual events.
30
Avoiding Regulation
A final reason to act in a socially responsible manner is to avoid government regulation.
Most of the burden of social responsibility is on marketers. They can do best by following the strategies suggested, and maintaining a positive initial corporate image and responding quickly when difficulties arise.
31
Managerial Implications Positioning. The concept of corporate social
responsibility has direct implications for the positioning of a company. Efforts to create a “good-citizen” image help to position a firm as one that puts customers first.
Environmental Analysis. A company’s actions must be in compliance with laws and regulation. A firm should be in a position to respond promptly if a
response is warranted: An “early-warning system” needs to be in place and functioning continuously.
32
Implications continued… Research. Market research should be used to
determine how consumers view the company. Market research may also help determine whether
customers are using a firm’s product in a novel manner that may be unsafe.
Marketing Mix. Pricing, promotion, product development, and distribution should be socially responsible.
Segmentation. Some population segments are more concerned with issues of corporate social responsibility than are other segments.
33
Decision process involved in corporate sponsorship projects
Study of the Sponsorship Decision Process in 16 large CanadianCorporationsMethod:• Qualitative and quantitative interviews• Post validation of the decision process• Check for convergence of decision processes and synthesis • Content analysis of annual reports and classification of sponsorship projectsIndustries involved:3 Oil companies 1 Brewery 1 Steel manufacturer 5 Food retailers1 Aircraft manufacturer 1 Tobacco company1 Information systems 2 Banks and 1 Insurance company
34
Relative importance of objectives involved in corporate sponsorship projects
Philanthropic patronage objectives 3.53• Involvement in the community: 3.85• To meet our social responsibility: 3.62 • To offer a better quality of life: 3.08Commercial sponsoring objectives 3.03• To increase the company’s visibility: 3.83• A new way of doing promotion: 3.67• As a supplement to advertising: 3.54• To improve our corporate image: 3.45 …• To attract opinion leaders: 2.45• To entertain our suppliers: 2.30• To limit government regulation: 2.0Other objectives 2.86• Personal motives of top management • To obtain fiscal benefits: 2.28
(Degree of agreement on a scale of 1 to 4)
35
Relative importance of criteria for selecting corporate sponsorship projects
Sources of revenue of the applicant organization 3.75Relevance of the amount requested 3.72Previous experience with the applicant organization 3.69Target market of the applicant organization 3.62Domain of activities of the applicant organization 3.58Budget of the project 3.50Mission of the applicant organization 3.45Other sources of funding 3.45Scope of the market of the applicant organization 3.38Management structure and expertise 3.23Specific use of requested funds 3.23Image and visibility of applicant organization 3.17Expertise of the project manager 3.08Comments of other donors 3.00Personal knowledge of applicant 2.83Importance of the cause promoted 2.72
(Degree of agreement on a scale of: 1 to 4)
36
Roles, steps and activities involved in corporatesponsorship projects
Written request received
Preliminary screening
In depth analysis
Decision
Refusal Acceptance
Receiving Organization
Implementation
Evaluation of activity Discussion
Intention
1
Screening role
Evaluation
Costs/Benefits Analysis
Recommendation
Reception ofrequests andanalysis step
Evaluation of requests step
Advising andbargaining role
Advising role Execution role
1
Selection and
processingstep
Feedback and
evaluationof donation
Average number of participants involved: 3.92Average size of the selection committee if any: 4.60Average frequency of the committee meetings: once a month
37
Classification of sponsorship projects
Philanthropic Philanthropic goalgoal
Marketing Marketing goalgoal
Type Pure philanthropy
Targeted philanthropy
Hybrid corporate citizen
Exploratory sponsoring
Pragmatic sponsoring
Industries Information systems
Public utilities
Steel
Aviation
Insurance
Oil (3)
Food I
Banks (2)
Financial Institutions (2)
Brewery
Tobacco
Food II
Unassisted objectives
Good corporate citizen
Community involvement
Community involvement
Quality of life of employees
Social responsibility
Image, visibility
Marketing tool
Business relationships
Community involvement
Marketing tool
38
Low-Income Individuals:a Comparative Study in Canada
Car loan
Unemployed
25-34 yrs
Common law
Employed35-44 yrs
MortgageStocks
MarriedUniversity
Owners
Men
Singles
WomenCollege
RRSP
Higher income45-54 yrs
Mutual funds
BondsTerm deposits
65 yrs +
RetiredElementary
55-64 yrs
DivorcedHigh school
Credit l ine
Automatic savings
Low-income
Tenants
18-24 yrs old
: Financial products: Socio-economic and demographic variablesProportion of variance accounted for by dimension 1: 56.50 %Proportion of variance accounted for by dimension 2: 29.30 %http://www.geocities.com/WallStreet/Market/4263/ijbm98.doc
39
1. Environmental overview 2. Review of mission, culture and values of company 3. Setting of environmental objectives 4. Development of the environmental plan 5. Parties involved and implementation Employees Suppliers Distributors Governments Pressure Board of
of the action plan groups directors
Environmental Audit
Environmental laws
Scientific knowledge
Social and environmental context
Environmental corporate policy
Environmental objectives
R & D Production Marketing Environment.
Public Relations
Action plan
General public
Environmental Marketing Management
40
American Council on Consumer Interests Issues
1. Media issues: lack of factual information, stereotyping2. Product issues: no international standards for food, product recalls, warning labels, health claims3. Financial issues: identity theft, consumer debt, promotion of credit cards, financial products, online shopping4. Public policy issues: regulation of products (tobacco, alcohol, prescription drugs), control of big business5. Ethical issues: privacy, marketing to vulnerable audiences, sweatshop labor, effects of technology on consumers, CSR6. Counter marketing issues: effectiveness of programs to counter obesity, alcohol and tobacco usage, visibility of public services