MKT701_ALP_Team-5_Class 2 Date: 22.09.

2018

ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING

Ethics are an essential consideration of a brand as it allows ‘Honesty’, ‘Fairness’ and

‘Responsibility’ towards its most important stakeholders, i.e. ‘Consumers’. So Ethical

marketing is Practicing Fair standards in the Organization which helps it to perform at its best

of interest.

Doing business in a socially responsible towards society is a very challenging task in today’s

economic scenario. Social responsibility of any organisation is "commitment of business to

contribute of economic development working with the company's all stakeholders' and the

society in both good for business and good for the social development". Until 1960s profit

maximisation was the primary objective or business goal and that time marketing mainly

focused on sales to earn more money. Then the 1970s, 1980s, due to globalisation impact, a

higher level of people's education, IT development, becoming stronger associations for

environment protection and association for human rights protection, there was an increased

pressure on companies to start doing well-being with society and environment.

Companies became interested in social responsibilities, and it seems to have a positive impact

on consumers' emotional and behavioural responses with these four responsibilities;

economic, legal and ethical and humanitarian obligations.

Humanitarian
responsibilities
Ethical
responsibilities
Legal
responsibilities
Economic
responsibilities

M Sameer Kumar – SM15596 Vaikunth Swaminathan – VS15574

Uttam Kumar Sarkar – US15605 Shantanu Ray – SR15600
MKT701_ALP_Team-5_Class 2 Date: 22.09.2018

The first responsibility of an organisation is economic, then legal and later on Ethical and

Humanities responsibilities to the society. When the company is fulfilling the above duties,

the brand also becoming loyal to the customers and slowly customers believe the brand and

build up confidence in the brand.

The company started to do advertisement its brand name to improve marketing. Customer

or consumer should feel the brand is having more value on ethics and social responsibilities.

The customer should feel loyal to that brand. The products quality, value, the price should be

fair, and the consumer should not have any doubts about it.

In media when people see the brand's products, the consumer should feel an emotional

connection with the brand. When people know the brand is ethical about the company's

products, with customers and doing for the society, then the consumer also feels proud to

use that brand's products. Moreover, slowly consumers get an emotional attachment to the

brand.

Marketing is about how customers are created, retained and satisfied by the organisation’s

product and or service. It further helps them develop and sustain huge markets and profits.

In business strategy for marketing, maintaining customers is cheaper than new customers. So

by doing ethical behaviour with all stakeholders and by doing the social activities, companies

are doing sustainable marketing.

The company should take it as a responsibility, and they should act ethically in

marketing and selling their products. It increases the trust, and brand value among the

consumers and gaining markets in such a way increases sustainability, goodwill and prevents

legal issues. Some examples like the following give an idea of the possibility and effects of

Unethical marketing
M Sameer Kumar – SM15596 Vaikunth Swaminathan – VS15574
Uttam Kumar Sarkar – US15605 Shantanu Ray – SR15600
MKT701_ALP_Team-5_Class 2 Date: 22.09.2018

 Claim false attributes on a product (In some cases, may be true in certain test

conditions but fails during actual usage). Volkswagen Diesel scandal is one example of

this along with the ones in the references

 Deliver Claim but have side effects. An excellent example of this is the privacy issues

faced in certain Facebook features where personal information is sold to partner firms

as prospective customers.

 Portraying to a target market as a necessary product or a superior substitute even

though it may be mediocre or rather has adverse effects. The best example is the

Infant Formula Industry promotion and Nestle Boycott

In above cases the companies have either suffered excessive monetary loss or brand value, it

is becoming necessary for the companies to find and avoid any ethical issue in their product

and it is a marketing strategy to survive in the present competition

Possible Recommendations that can be used are for ethical and socially responsible in

marketing:

 Not involved in false advertising to compete with peers

 Including Ethics and Moral Code in Company Values, Mission and Vision Statements

 Researching all the possible environmental impacts, the necessity of the product and

explaining the target customers in B2B marketing

 Including Disclaimers like Harmful effects, Environmental impacts, Carbon footprints

or other industry-specific parameters

Lastly an intention to be associated with a product and brand that is a trustworthy,

transparent and genuine requirement for the betterment of society

M Sameer Kumar – SM15596 Vaikunth Swaminathan – VS15574

Uttam Kumar Sarkar – US15605 Shantanu Ray – SR15600
MKT701_ALP_Team-5_Class 2 Date: 22.09.2018

E.g. 1: TOYOTA:

Toyota Motor Corporation has developed some principle that the company is always looking

to protect and give respect to the human rights. The company is working to protect the

environment, reduce the accidents in the workplace and emphasise on the good health and

safety of every person at Toyota Motor Corporation. Toyota Motor Corporation has so keen

to consider ethical activities in the company that they do not favour to receive unethical

rewards. Transparent competition for the position, employment practices and fair purchase

practices are encouraged at Toyota Motor Corporation. The opinion, ideas from the

stakeholder are keeping open communication with society from the Toyota Motor

Corporation. Non-corrupt, transparent and suitable manners should be used with the public

sectors to reinforce the positive relations with the company. Public safety and environmental

activities are beneficial in the development of the civic organisations that help to contribute

to the communities.

The Guiding Principles at Toyota Motor Corporation are issued in 1992 which was later revised

in 1997. The principles represent the philosophy of the company which also reflects the vision

of the Toyota Motor Corporation. These principles are made to match, share and understand

the fundamental management principles and to contribute to the society. The Toyota Code

of Conduct and the Toyota way are working to realise the guiding principles of Toyota Motor

Corporation in daily operations and these principles are also implemented so that the

company can achieve ethical standards. The Toyota way described the organisation as a global

organisation that share different method and values for the people of the organisation. The

Toyota Code of Conduct is originated in 1998, and it was revised in 2006 which serves the

M Sameer Kumar – SM15596 Vaikunth Swaminathan – VS15574

Uttam Kumar Sarkar – US15605 Shantanu Ray – SR15600
MKT701_ALP_Team-5_Class 2 Date: 22.09.2018

compass and as a model. Actual business activities should carry out to deal with different

actions.

Toyota aims to settle the sudden acceleration which was considered one of the ethical issues

faced by the company back in 2012. The sudden acceleration contains faulty accelerator suits

due to which Toyota has been fined $1.6 billion where they have sold vehicles at a low price

to achieve high sales. The company then paid 30 million dollars for the settlement and 16

million dollars to settle the customer support program that can help to increase the eligibility

of repairing parts till next ten years.

E.g., 2 TATA:

The Story of Tata is exceptional because it was established to be both ethical and socially

responsible towards society. This company has not merely realigned many of the business

principles which have been said for generations. While many of its companies are traded

publicly, the Tata Group has grown from being a family-owned business to becoming one of

the best professionally-managed groups in the world.

TATA Companies uniquely markets itself especially through content marketing by organising

events which are strictly related to some social or ethical cause. For Eg. – TATA Steel organises

“Samvaad” which is Tata Steel's Tribal Cultural Society’s initiative that seeks to revive,

preserve and promote tribal culture. This is Important because as a mining and Industry

major, the establishment of any Plant has a potential to disrupt the location’s Tribal

population which needs enormous efforts for restoration. Organizing mega-events like these

not only has the potential to improve their condition but also creates in mind of people that

M Sameer Kumar – SM15596 Vaikunth Swaminathan – VS15574

Uttam Kumar Sarkar – US15605 Shantanu Ray – SR15600
MKT701_ALP_Team-5_Class 2 Date: 22.09.2018

any new Establishment through this Company will not come at the cost of

communities/villages already present.

TATA’S Business ethics principles are:

 National Interest: By being committed to benefiting the economic development of the

countries in which it operates.

 Competition: To fully support the development of society and the operation of

competitive open markets.

 Quality of products and services: By being committed to supplying goods and services

of world-class quality standards along with after sales services consistent with the

requirements of the customers.

 Moral behaviour: Every employee of a TATA company shall preserve the human rights

of every individual and the community, and shall strive to honour commitments.

Companies need to evaluate whether they are genuinely practising ethical and socially

responsible marketing. Business success and continually satisfying the customer and other

stakeholders are closely tied to acceptance and execution of high standards of business and

marketing conduct. The most esteemed companies in the world stand by a code of serving

people’s interests, not only their own. Ethical marketing is about sustaining and developing a

long-term relationship with our customers. Being concerned about the customer results in

profits (or achieving your organisation’s objectives if an organisation is a not-for-profit), it is

the ethical thing to do. Misleading customers may support the business to grow in the short

term, but that will not help in any way to sustain the business in the long run. It implies social

responsibility also. An organisation has to care about all shareholders: customers, employees,

M Sameer Kumar – SM15596 Vaikunth Swaminathan – VS15574

Uttam Kumar Sarkar – US15605 Shantanu Ray – SR15600
MKT701_ALP_Team-5_Class 2 Date: 22.09.2018

suppliers and distributors, local communities in which they do business, society, and the

environment.

References:

1. Mohamed Labbai, M. (April 2007). Social Responsibility and Ethics in Marketing,

International Marketing Conference on Marketing & Society, 25-26.

2. Marinova, N. (2013). Marketing Ethics and Social Responsibility, Trakia Journal of

Sciences, Vol. 11, Suppl. 1, 535-538.

3. Gundlach, G. T., & Murphy, P. E. (1993). Ethical and Legal Foundations of Relational

Marketing Exchanges. Journal of Marketing, 57(4), 35. doi:10.2307/1252217

4. International Business Ethics Institute | Ethics Training. (n.d.). Retrieved from

http://business-ethics.org/

5. Tata success story is based on humanity, philanthropy and ethics corporate dossier].

(2014, Sep 06). The Economic Times Retrieved from

http://libproxy.globalnxt.edu.my/login?url=https://search.proquest.com/docview/1

560281828?accountid=35207

6. Businesscasestudiesblog. (2016, July 27). How ethics at Toyota created uniqueness.

Retrieved from https://businesscasestudiesblog.wordpress.com/2016/04/22/how-

ethics-at-toyota-created-uniqueness/

7. Boyd, C. (2012). The Nestle infant formula controversy and a strange web of

subsequent business scandals. Journal of Business Ethics, 106(3), 283-293.

M Sameer Kumar – SM15596 Vaikunth Swaminathan – VS15574

Uttam Kumar Sarkar – US15605 Shantanu Ray – SR15600
MKT701_ALP_Team-5_Class 2 Date: 22.09.2018

8. Heilpern, W. (2016, March 31). 18 false advertising scandals that cost some brands

millions. Retrieved from https://www.businessinsider.in/18-false-advertising-

scandals-that-cost-some-brands-millions/articleshow/51630709.cms.

M Sameer Kumar – SM15596 Vaikunth Swaminathan – VS15574

Uttam Kumar Sarkar – US15605 Shantanu Ray – SR15600