MKT315 Topic 7 CH 14 3 of 3

.docx

School

Grand Canyon University *

*We aren’t endorsed by this school

Course

315

Subject

Business

Date

Jan 9, 2024

Type

docx

Pages

Uploaded by AdmiralReindeerMaster846 on coursehero.com

Chapt 14: Marketing Ethics and Societal Marketing Introduction  The most basic principle is ethics, and is often discussed in businesses courses across the world.  Ethical questions in marketing can impact a variety of things, including channels of distribution, communications with customers, and employee communications.  Ethics is of particular interest to marketers because marketing is about influence and creating information designed to attract and maintain customers.  Ethics: the principles of right and wrong that are generally accepted by an individual, organization, or industry. The Importance of Marketing Ethics  In marketing, a common practice is to use the concept of puffery.  Puffery: one can exaggerate as long as no reasonable person would take the exaggeration literally.  The Federal Trade Commission essentially said that as long as the truth of a claim cannot be precisely determined, marketers are welcome to exaggerate; “world’s greatest cup of coffee”.  Puffery walks a fine line between creative advertising and false advertising.  While puffery is legal in the US, verbal puffery is illegal in several countries.  Another concept that challenges ethical standards is astroturfing.  Astroturfing: a fake grass roots push to generate buzz or interest in a product, service, or idea.  Often this movement is motivated by a fee or gift to the writer of a post or comment or may be written under a phone pseudonym; posting fake reviews.  There are 2 general moral philosophies that inform marketing decisions: moral idealism and utilitarianism.  Moral idealism views the individual rights as the primary decision factor in a marketing decision.  Utilitarianism views what is best for the majority as the determining factor in a marketing decision. Ethics in Advertising  Marketing ethics are at the heart of the argument within the auto industry; Ford vs Chevy.  These companies were found to include deceptive advertising practices after violating the Federal Trade Commission (FTC). Ethics in Sales Promotion  Sales promotions are rife with ethical grey areas; black Friday limited quantity deals and mail-in rebates that are never redeemed. 1

Chapt 14: Marketing Ethics and Societal Marketing  The concept of caveat emptor, or buyer beware, is important when discussing unethical practices in marketing; used cars sold “as is”. Ethics in Media  Ethical issues in media include distinguishing between an advertisement and editorial content.  The lines between journalism and advertising are growing more and more blurred, as it is becoming increasingly difficult to tell the difference between paid and unpaid content.  Content marketing is driving growth in the digital-marketing space, spawning an entirely new form of advertising called native advertising.  Native advertising: integrates the advertising content in with the rest of the editorial, which makes it even more difficult to differentiate between online content that is written by an objective third party and that which is paid. Legal and Ethical Behavior in Marketing  There is a difference between laws and ethics.  Laws: the rules and regulations established by an authoritative body meant to govern the actions of a particular group of people and are enforced by judicial and civil means.  Ethics are relative standards, laws are established rules.  Where laws and ethics often meet is when ethical standards is made into a law based on violations deemed too frequent or egregious.  Compliance: conforming to or following established rules and regulations.  There are many laws that are now in place because of lapses in ethics related to marketing. What is Legal, and What is Ethical?  There are myriad pressures placed upon marketing decision-makers, which can lead to ethical lapses.  These pressures often fall into 1 of 5 categories: personal standards, organizational standards, societal standards, performance pressures, and market pressures.  Personal standards: are heavily influenced by factors that include religious beliefs, upbringing, and cultural influences.  Organizational standards: exercise influence over marketing decisions. Certain cultural norms exist in all organizations.  Societal standards: the standards set by a collective community to determine what is right and wrong for the long-term well-being of the community.  Performance pressures: often create an environment where ethics can be compromised.  Market pressures: exert significant influence over marketing decision-making. 2

Chapt 14: Marketing Ethics and Societal Marketing  Organizational standards behavior becomes even more prevalent when it is modeled by leadership within the company because they often set the organization’s culture. The Ethical Test  Because ethical standards are relative, it is difficult to create a single, reliable test that measures ethical decisions in any circumstance without being subjective; however, together, the 5 litmus tests can give greater clarity about whether or not a decision is the right thing to do.  The 5 litmus tests are: honesty test, legal test, conscience test, consequences test, and publicity test.  In a highly competitive environment where ethics are called into question on a daily basis, it becomes even more important to develop moral courage.  Moral courage: the ability to make decisions based on principles rather than circumstances, even in the face of competing pressures and consequences.  Moral courage means doing the right thing even when it is hard.  In order to avoid ethical lapses, people and organizations can implement several strategies, starting with the hiring process by incorporating ethical evaluations in the hiring and orientation process.  Corporate social responsibility (CSR) is the making of business decisions that have both positive economic and social consequences.  CSR takes multiple forms in the business world today; however, there are typically 2 common approaches: proactive and reactive.  Proactive CSR: occurs when a firm actively seeks out ways to make positive social contributions.  Reactive CSR: occurs when a firm seeks to make positive social contributions as a way to compensate for previous negative impacts or seeks to do the minimum required by law and society.  Conscious capitalism: businesses that serve the interests of all major stakeholders – customers, employees, investors, communities, suppliers, and the environment.  Conscious capitalism is not an easy task to accomplish, particularly when there are conflicting opinions between customers and investors; however, when accomplished, it can be very successful.  There are 4 principles of conscious capitalism: conscious leaders, stakeholder orientation, conscious culture, and higher purpose.  Whole Foods and Southwest Airlines practice conscious capitalism. Forms of Societal Marketing  Corporate social responsibility is often manifested in cause marketing.  Cause marketing: marketing that leverages a social cause for mutual benefit.  Examples of cause marketing is American Express’s restoration project of the Statue of Liberty and Ellis Island. 3

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version