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International Islamic University Islamabad
Subject: Submitted by: Submitted to: MBA 19(B) Date: 24-03-2008
Marketing Theory and Practice Muhammad Khalil Hussain Sir. Syed Adnan Shabir
Social Responsibility in Marketing
Social responsibility means that organizations are the part of a larger society and are accountable to that society for their actions. Like Ethics, agreement on the nature and scope of social responsibility is often difficult to come by, given the diversity of values present in different societal, business, and organizational cultures.
Social responsibility demands that marketers accept an obligation to give equal weight to profit, consumer satisfaction, and social well being in evaluating their firm’s performance. They must recognize the importance of relatively qualitative consumer and social benefits as well as the quantitative measures of sale, revenue, and profit by which firms have traditionally measured marketing performance. Social responsibility Marketing philosophies, policies, procedures and actions that have the enhancement of society’s welfare as a primary objective. Social responsibility allows for easier measurement than marketing ethics. Government legislation can mandate socially responsible actions. Consumer activism can also promote Social responsibility by business. Actions alone determine social responsibility and firm can behave responsibly, even under coercion. Government requirements may force firms to take socially responsible actions in matter of environmental policy, deceptive product claims, and other areas. Also, consumer, through their power to repeat or withhold purchases, may force marketers to provide honest and relevant information and fair prices. Ethically responsible behavior, on the other hand, requires more than appropriate actions; ethical intentions must also motivate those actions.
The Societal Marketing Concept: Marketing can be described as a "social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others". 4 Concepts of social responsibility: There are three concepts of social responsibility. (1) Profit responsibility (2) Stake responsibility (3) Societal responsibility
Profit responsibility: Profit responsibility holds that companies have a simple duty to maximize profits for their owner and stockholder. Nobel Laureate Milton Friedman, who said, “there is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profits so long as it stays within the rules in the game, which is to stay, engage in open and free competition without deception or fraud.” Stakeholder responsibility: Stakeholder responsibility focuses on the obligations an organization has to those who can effect achievement of its objectives. These constituencies include customers, employees, suppliers and distributors. Societal Responsibility: Societal responsibility refers to obligations that organizations have to the (1) preservation of the ecological and (2) general public. Concerns about the environment and public welfare are presented by interest and advocacy groups such as Greenpeace, an international environmental organization.
Corporate Social Responsibility (CSR) means firm’s obligation to protect and improve welfare of the society and its organization, now as well as in future, through its various business and social actions, and ensures that it generates equitable and sustainable benefits for the various stakeholders. As such CSR can serve as an effective marketing tool to compete and maintain competitive advantage in the present fast changing, hyper competitive environment. Generally, CSR is considered as firm’s obligation to protect and improve welfare of the society and its organization, now as well as in future, through various business and social actions and ensures that it generates equitable and sustainable benefits on the various stakeholders. Chakaraborty have viewed CSR as a mean of achieving commercial success in ways that honors ethical values, respect people, communities and natural environment, and encompasses all those actions of the organizations which affect the society and its well being. The main fundamental embedded in CSR, according to them, is that no business corporate can act as isolated from broader issues of society. CSR has been considered as one of the antecedents for economic performance and also as a measure of proactive social responsive view.
Social responsibilities in marketing have recently come under sharp criticism for undermining the democratic process, since "marketers do not have the right to decide what is in the public interest". This article investigates whether "the social responsibility of marketing is to forget about social responsibility", and in so doing addresses the question of whether the societal marketing concept can, is and should be included into the traditional marketing concept. Thus with the ultimate goal of evaluating businesses and specifically marketing's response to the increasing societal demands being placed on it. The objectives of this article are: (1) To investigate whether societal marketing is regarded as a lawful and necessary aspect of marketing in the tobacco and liquor(juice) industries in South Africa and the extent to which it is in fact practiced by them, and (2) To explore the societal marketing concept as a possible response by business to the increasing social demands with which it is being confronted. This research focuses on two industries in particular the liquor and tobacco industries which were chosen because they have been catapulted into the forefront of the societal marketing ground as a result of the widespread agreement that the consumption of their products can cause serious damage to personal and social welfare. There were several similarities in the response and situations of the two industries. Politics play an extremely important role in both industries, determining to a large extent not only government action, but also industry attitudes. Since both industries are economically highly concentrated, the few giant companies which dominate the market in each case have considerable economic and political muscle. The power of each industry is further well-established by government reliance on the huge contributions by each. Both industries are very well aware of their economic and political influence, and do not hesitate to use it to protect their interests. These factors have enabled both industries to be less sensitive to public opinion than their overseas counterparts, and explain their relative protection from regulation in the social sphere, as well as the slow response of government to increasing public discontent. Thus any actions by or against the industries must take into account the political complexities of the situation and the political and economic ramifications of any changes to the status. Since it is not the purpose here to discuss the merits of the arguments raised by the tobacco industry, but rather the approach it has taken, it must be pointed out that the tobacco companies' denial of any conflict between their marketing goals and the goals of society in the face of rising evidence to the different reveals a disturbing aspect of the tobacco industry's approach. It is following a strategy of survival at all costs whether these are in the form of its own moral integrity or in the form of societal well-being. For both of these must be sacrificed if the industry puts forward viewpoints or arguments which it knows to be specious (even if not scientifically provable as such) and makes statements without any real conviction as to their truth.
The social responsibility and ethics of businessmen have been much studied. Although it has been criticized for lacking a theoretical basis, research on social responsibility and ethics in the area of marketing has become a popular area of study in the last thirty years. The majority of marketing scholars in
Korea might have opted to look at marketing practices from the point of view of the seller rather than from that of the buyer. On the bases of limited research findings and loose definitions of social responsibility and ethics in marketing practices, this article discusses the reasonable causes of the existing incongruence between the superficial awareness (or principles) and the original purpose (or actual judgment) of Korean managers. From the survey conducted for this study in 1996, it was found that Korean managers have a rather positive awareness of social responsibility and ethics. The survey was conducted for the participants of top management development programs of five universities in Seoul and one in Taejon, Korea. The survey showed that the majority of the respondents either agreed or strongly agreed that they would bear responsibility, except on the question of hiring a manager from competitors. Little difference in the distribution was found among different groups of respondents, such as owners versus professional managers or managers of small versus large firms. Various reasonable explanations are presented in this paper of the incongruence between the apparent awareness and the actual practices of Korean marketing managers. First, there is incongruence between awareness and practices on the part of Korean marketing managers with respect to fulfilling social responsibility. Second, one reasonable explanation for the existing incongruence may be found in the characteristics of the Korean cultural tradition. Third, cultural doctrines, such as kindness and mercifulness, have often served rather positively, but some other traditional heritage, such as hierarchical dictatorship, has had a negative effect on social responsibility in marketing. Fourth, for Korean managers, particularly those in marketing, it is vital to be aware of the obligations rather than rights and authorities. It could be argued that in the modern era business has begun to be more accountable to a greater number of constituencies than ever before. The thinking of the stakeholder has become to be drawn much wider than before. Social responsibility, once decried as being irrelevant in the early 1950s and 60s is now at the forefront of business relationships. Of course there are firms that take this concept lightly, there are others who adopt such notions, but are seen to be lacking in the finer points when under examination. It is often argued that business will always be responsible only to itself. 1. It is important to perform in a manner consistent with the generous and charitable expectations of society. 2. It is important to assist the fine and performing arts.
3. It is important that managers and employees participate in voluntary and charitable activities within their local communities. 4. It is important to provide assistance to private and public educational institutions. 5. It is important to assist voluntarily those projects that enhance a community’s “quality of life."
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