SOCIAL RESPONSIBILITY AND ETHICS IN MARKETING

*Rajeswari S.P,*Dr Y Poornima and *Adithya. A.A

Abstract

Socially responsible marketing is a marketing philosophy that a company should take into
consideration what is in the best interest of society in the present and long term. Socially responsible
marketing is critical of excessive consumerism and environmental damages caused by corporations.

The objectives of this article:

 It explains the types of social responsibility of marketing and the Social responsibility strategies.
 Socially responsible marketing and ethics, Ethical conflict faced by the marketer.
 Related marketing concepts that fall under the umbrella of socially responsible marketing and
ethics, these include: Natural Environment, social marketing, cause related marketing,
environmental or green marketing.
 Ethical Norms and Values for Marketers and responsibility of the marketer:
 Social responsibility of business by multinational companies in India

Social responsibility in marketing helps to ensure that a company is, in fact, following the rules
and this not only instills faith among the customer base, but also helps to keep the company out of
any kind of trouble in terms of legal problems and also in terms of public relations. Thus socially
responsible marketing makes sense as a business strategy because it not only broadens and expands
the customer base, but increases the likelihood of developing customer loyalty and getting them to
buy their product again in the future.
Key Words: Social Responsibility, Ethics, Social responsibility strategies, Green marketing and
multinational companies.

-------------------------------------------------------------------------------------------------------------------

Research Scholar, Tumkur University, Tumkur, sprajeswarikumar@gmail.com

Professor, Department of Management studies, Ramaiah Institute of Management Studies, No. 193,
New B.EL. Road, M.S.R.I.T Post, M.S. Ramaiah Nagara, Bangalore – 560022, rimsyp09@gmail.com

Adithya. A.A, M.B.A – CSR Student, Pooja Bhagawath Memorial Mahajana PG Center, KRS
Road, Mysore – 5700016
Introduction:

Socially responsible marketing is a marketing philosophy that a company should take into
consideration what is in the best interest of society in the present and long term. Socially
responsible marketing is critical of excessive consumerism and environmental damages caused
by corporations. It is based on the idea that market offerings must not be only profit-driven, but
they must also reinforce social and ethical values for the benefit of citizens.

The idea of socially responsible marketing is sometimes viewed as an extension of the

concept of Corporate Social Responsibility (CSR). CSR is promoted as a business model to help
companies self-regulate, recognizing that their activities impact an assortment of stakeholders,
including the general public. CSR is sometimes described in terms a pyramid, starting with
economic as its base, then legal, ethical and philanthropic actions at the top. It is in the last two
layers of the CSR pyramid, ethical and philanthropic, that socially responsible marketing
opportunities appear the greatest.

Social Responsibility Definition

According to the American Society for Quality, social responsibility is defined as people
and organizations that behave and conduct business in an ethical way. They also suggest the
business in question have sensitivity toward economic, environmental, social and cultural issues.
When organizations follow these guidelines they can improve society as a whole.

There are several related marketing concepts that fall under the umbrella of socially
responsible marketing, these include: social marketing, cause related marketing, environmental
or green marketing, quality of life, and socially responsible buying.

Types of Social Responsibility Marketing:

Enlightened Marketing

The philosophy of enlightened marketing is a concept that falls under the umbrella of
socially responsible marketing. Enlightened marketing states that “a company’s marketing
should support the best long-run performance of the marketing system. This concept contains the
five principles: consumer-oriented marketing, innovative marketing, value marketing, sense-of-
mission marketing and societal marketing.

In consumer-oriented marketing, the company “organizes its marketing activities from the
consumer's point of view.” Marketing activities focus on the needs of a defined user set.

Innovative marketing states that a company must continue to improve its products and
marketing efforts, recognizing that if it doesn’t, it risks losing business to a competitor that does.

The principle of value marketing contends that a company "should put most of its resources into
value-building marketing investments." One criticism of marketing its short term focus in the
sense of promotions and minor improvements. Value marketing seeks to create long term
customer loyalty by adding significant value to the consumer offer.

Sense-of-mission marketing suggests a company mission be defined in "broad social terms" as

opposed to "narrow product terms." This technique frames the business goal in a way that the
organization can rally behind a deeper sense of purpose.

The principle of societal marketing asks company's to consider the "consumers' wants and long-
run interests, the company's requirements and society's long-run interests."

LITERATURE REVIEW

As Weeden has noted, the relationship for social marketers has shifted from begging to
partnering (Weeden 1998, p. 14). However, this shift is not without its perils for both sides.
Businesses find that venturing into social enterprise can pose important risks to the firm’s
reputation when it is found to step over ethical bounds (Sarner and Anderson 1996). At the same
time, non-profits organizations have found themselves in new partnerships and networks where
the norms of behavior are unclear and the non-profits are at risk of being exploited intentionally
or unintentionally by more powerful and more sophisticated commercial partners. In this
context, we need to identify the need for ethics and social responsibility in the Marketing field.
In this article, the author outlines -- with examples -- the motivations and character of what

Drumwright, Cunningham and Berger (2000) have called "social alliances," partnerships
between for-profit and non-profit organizations and distinguish them from strategic alliances
among purely for-profit organizations. We then discuss ways in which social alliances can
present ethical challenges for one or both partners. Finally, we discuss the alternatives available
to social marketers to both detect and resolve ethical dilemmas in social alliances. Therefore,
social responsibility and ethics in marketing is more relevant with motivations and partnerships.
At the outset, it is critical that we define what we mean by "marketing alliances." A marketing
alliance is a formal or informal arrangement between organizations where each seeks through
marketing activities gains that would not be available to either without such an alliance. In our
view, the term alliances encompass two of the three types of marketing exchange characterized
by Gundlach and Murphy (1993). Also the concept of ethics and social responsibility in
marketing should be understood by the institutions in the field of academic as well as industry.
These authors distinguish among transactional, contractual and relational exchanges. A typical
transactional exchange is a one-time event where, for example, A sells to B. A contractual
exchange is where A and B agree to a joint undertaking for some fixed period of time, for
example, where A and B agree to carry out a six-month promotion of complementary product
lines. A relational exchange is one that theoretically has no limits, as when A and B conduct a
joint venture to market Product Y in Country Z. The last two may be considered "alliances,”
differing mainly in their time frame and, by extension, the attitudes, intentions and behaviors of
the parties. In the commercial sector and academic sector also such alliances may involve equity
investments by one or -- more typically --- all parties (cf. Varadarajan and Cunningham 1995).

SOCIAL RESPONSIBILITY STRATEGIES

Social responsibility is a form of self-regulation that businesses adopt as a part of their

corporate conscience and citizenship. Often referred to as corporate social responsibility or CSR,
this policy spurs businesses to develop means to monitor the public’s social perception of them
as a responsible business. The business goal of social responsibility is to encourage the
company’s actions toward the positive impact of consumer, community and employee
responsibility.

Voluntary Hazard Elimination

Companies involved with social responsibility often take action to voluntarily eliminate
production practices that could cause harm for the public, regardless of whether they are required
by law. For example, a business could institute a hazard control program that includes steps to
protect the public from exposure to hazardous substances through education and awareness. A
plant that uses chemicals could implement a safety inspection checklist to guide staff in best
practices when handling potentially dangerous substances and materials. A business that makes
excessive noise and vibration could analyze the effects its work has on the environment by
surveying local residents. The information received could be used to adjust activities and develop
soundproofing to lessen public exposure to noise pollution.

Community Development
Companies, businesses and corporations concerned with social responsibility align with
appropriate institutions to create a better environment to live and work. For example, a
corporation or business may set up a foundation to assist in learning or education for the public.
This action will be viewed as an asset to all of the communities that it serves, while developing a
positive public profile.

Philanthropy
Businesses involved in philanthropy make monetary contributions that provide aid to
local charitable, educational and health-related organizations to assist under-served or
impoverished communities. This action can assist people in acquiring marketable skills to reduce
poverty, provide education and help the environment. For example, the Bill and Melinda Gates
Foundation focuses on global initiatives for education, agriculture and health issues, donating
computers to schools ( example Infosys) and funding work on vaccines to prevent polio and
other diseases.

Creating Shared Value

Corporate responsibility interests are often referred to as creating shared value or CSV,
which is based upon the connection between corporate success and social well-being. Since a
business needs a productive workforce to function, health and education are key components to
that equation. Profitable and successful businesses must thrive so that society may develop and
survive. An example of how CSV works could be a company-sponsored contest involving a
project to improve the management and access of water used by a farming community, to foster
public health.
Social Education and Awareness

Companies that engage in socially responsible investing use positioning to exert pressure
on businesses to adopt socially responsible behavior themselves. To do this, they use media and
Internet distribution to expose the potentially harmful activities of organizations. This creates an
educational dialogue for the public by developing social community awareness. This kind of
collective activism can be affective in reaching social education and awareness goals. Integrating
a social awareness strategy into the business model can also aid companies in monitoring active
compliance with ethical business standards and applicable laws.

Related marketing concepts that fall under the umbrella of socially responsible marketing:

The following are the related marketing concepts that fall under the umbrella of socially
responsible marketing:

Marketing and the Natural Environment

The significant area of social concern is the environment. Marketing is ultimately

dependent on the use of scarce resources to fulfill human needs, without harming or
unnecessarily using scare resources. Marketing managers should help to determine which
products are produced, and which products are indirectly affecting the environment:

The natural resources and materials used

The amount of energy required in the production process

The residuals (e.g., waste water) that result from production

The consumption of resources and energy that is required to use products (cars, air conditioners)

The generation of pollutants (e.g., exhaust fumes) in using products

The amount of packaging material that may have to be discarded. (Packaging comprises less than
14 percent of collectible solid waste, but consumers often estimate its share of that waste at 40 to
80 percent)

Green Marketing and Ethical Issues

 Green marketing refers to the development and distribution of ecologically-safe products.

It refers to products and packages that have one or more of the following characteristics:

(1) Are less toxic,

(2) are more durable,

(3) Contain reusable materials, or

(4) Are made of recyclable material. In short, these are products considered “environmentally
responsible”.

Cause – Related Marketing and Ethics

Cause-related marketing should not be confused with social marketing. A key difference
is that a major purpose of cause-related marketing is to help a business. It might be used to
improve the image of the firm or to increase market share. The technique involves associating a
business with a cause. Social marketing, on the other hand, is generally not associated with any
company and issued solely to help society by dealing with a social problem.

Cause-related marketing has to be done correctly or it can hurt a company. A firm may
look like it is exploiting a charity. It is important for the firm to be transparent and honest about
what it is doing. There should also be a fit between the company and the cause.

Social Marketing and Ethics

Social Marketing is defined as the use of marketing principles and techniques to

influence a target audience to voluntarily accept, reject, modify, or abandon a behavior for the
benefit of individuals, groups or society as a whole. Social marketing is usually done by a non-
profit organization, government, or quasi-government agency. The goal is either to steer the
public away from products that are harmful to them and / or society (e.g., illegal drugs, tobacco,
alcohol, etc.) or to direct them towards behaviors or products that are helpful to them and / or
society (e.g., having family meals, praying together, etc.).
Ethical Norms and Values for Marketers

Values represent the collective conception of what people find desirable, important and
morally proper. Values serve as the criteria for evaluating the actions of others. Marketing
practitioners must recognize that they not only serve their enterprises but also act as stewards of
society in creating, facilitating and executing the efficient and effective transactions that are part
of the greater economy. In this role Marketers should embrace the highest ethical norms of
practicing professionals and the ethical values implied by their responsibility toward
stakeholders (e.g., customers, employees, investors, channel members, regulators and the host
community).

SOCIALLY RESPONSIBILITY OF THE MARKETER:

The following are the socially responsibility of the Marketer:

1. Marketers must accept responsibility for the consequences of their activities and make every
effort to ensure that their decisions, recommendations, and actions function to identify, serve,
and satisfy all relevant publics: customers, organizations and society

2. Honesty, Integrity and Quality are far more important than quick profits (Shel Horowitz)

3. Rights and duties in the marketing exchange process: - Participants should be able to expect
that products and services are safe and fit for intended uses; that communications about offered
products and services are not deceptive; that all parties intend to discharge their obligations,
financial and otherwise, in good faith; and that appropriate internal methods exist for equitable
adjustment and / or redress of grievances concerning purchases

4. Organizational relationships: - Marketers should be aware of how their behavior influences the
behavior of others in organizational relationships. They should not demand, encourage, or apply
coercion to encourage unethical behavior in their relationships with others.

5. Conduct your business so as to build long term loyalty. When you get a customer, you want to
keep that customer and build a sales relationship that can not only last years, but also create a
stream of referral business. (Shel Horowitz)
6. Marketers must do no harm. This means doing work for which they are appropriately trained
or experienced so that they can actively add value to their organizations and customers. It also
means adhering to all applicable laws and regulations and embodying high ethical standards in
the choices they make.

7. Marketers must foster trust in the marketing system. This means that products are appropriate
for their intended and promoted uses. It requires that marketing communications about goods and
services are not intentionally deceptive or misleading. It suggests building relationships that
provide for the equitable adjustment and / or redress of customer grievances. It implies striving
for good faith and fair dealing so as to contribute toward the efficacy of the exchange process.

8. Marketers must embrace, communicate and practice the fundamental ethical values that will
improve consumer confidence in the integrity of the marketing exchange system. These basic
values are intentionally aspiration and include honesty, responsibility, fairness, respect, openness
and citizenship.

SOCIAL RESPONSIBILITY OF BUSINESS BY MULTINATIONAL COMPANIES IN

INDIA

In the last twenty years, MNCs have played a key role in defining markets and
influencing the behavior of a large number of consumers. Globalization and liberalization have
provided a great opportunity for corporations to be globally competitive by expanding their
production base and market share.

Recent years have seen many progressive organizations in our country keenly playing a
social role. In some of these organizations the approach has been to take up only business-centric
activities, i.e., which are directly relevant to their business. The guiding philosophy in these
organizations is that social reasonability is good only if it pays. This approach benefits both the
organization and the stake-holder.

The following are the social responsibility of business by multinational companies in

India:
Coca – Cola

As one of the largest and most global companies in the world, Coca – Cola took seriously
its ability and responsibility to positively affect the communities in which it operated. The
company’s mission statement, called the Coca-Cola Promise, stated: “The Coca-Cola Company
exists to benefit and refresh everyone who is touched by our business.” The Company has made
efforts towards good citizenship in the areas of community, by improving the quality of life in
the communities in which they operate, and the environment, by addressing water, climate
change and waste management initiatives. Their activities also included The Coca – Cola Africa
Foundation created to combat the spread of HIV / AIDS through partnership with governments,
UNAIDS, and other NGOs, and The Coca – Cola Foundation, focused on higher education as a
vehicle to build strong communities and enhance individual opportunity.

Coca – Cola’s footprint in India was significant as well. The Company employed 7000
citizens and believed that for every direct job, 30 – 40 more were created in the supply chain.
Like its parent, Coke India’s Corporate Social Responsibility (CSR) initiatives were both
community and environment – focused. Priorities included education, where primary education
projects had been set up to benefit children in slums and villages, water conservation, where the
Company supported community – based rainwater harvesting projects to restore water levels
and promote conservation education, and health..

PepsiCo

Pepsi Cola is also helping in rural areas in their economic development. It further offered
to transfer food-processing, packaging, and water-treatment technology to India. Pepsi’s bundle
of benefits won four Ps for entering a market, Pepsi added two additional Ps, namely, politics
and public opinion.

Similarly almost all MNCs like Microsoft, Mc Donald, Nokia, Unilever, ITC are also
adopting social responsibility of business in order to have sustainable market development and
growth not only in their countries but also in the host countries.
Tata Group

Tata Group in India has a range of CSR projects, most of which are community
improvement programs. For example, it is a leading provider of maternal and child health
services, family planning, and has provided 98 percent immunization in Jamshedpur. The
company also endorses sports as a way of life. It has established a football academy, archery
academy, and promotes sports among employees. It offers healthcare services all over the
country with programs like rural health development.

Tata Group also has an organized relief program in case of natural disasters, including long-
term treatment and rebuilding efforts. It did laudable work during the Gujarat earthquakes and
Orissa floods. It also supports education, with over 500 schools, and also is a benefactor of the
arts and culture. It has done abundant work in improving the environment and local populations
around its industries

Infosys

Infosys is aggressively involved in a variety of community growth programs. The Infosys

promotes primary education among underprivileged children through global partnership. The
Infosys partners with schools in rural India to enhance education and library facilities.

- Under the library for every rural school project, Infosys established more than 50,000
school libraries across Karnataka. More than 50,000 sets of books were donated in the
Indian states of Karnataka, AndraPradesh, Orissa and Kerala.
- Set up than 10,150 libraries in rural government schools.
- Donated funds for reconstruction of old school buildings. 14 government schools in slum
areas of Hyderabad in the southern Indian state of AndraPradesh have been
reconstructed.
- Worked with Various organizations in Maharashtra, Tamilnadu and Orissa to educate
slum children.
- Donated Personal computers to school and to the Delhi library.
- Constructed toilets at a school in Pune and Maharashtra.
 In 1996, the company created the Infosys Foundation as a not-for-profit trust to which it
contributes up to 1 percent of profits after tax every year. Moreover, the Education and Research
Department at Infosys also works with employee volunteers on community development
projects.

The management team at Infosys continues to set examples in the area of corporate
citizenship and has involved itself vigorously in key national bodies. They have taken initiatives
to work in the areas of research and education, community service, rural outreach programs,
employment, healthcare for the poor, education, arts and culture, and welfare activities
undertaken by the Infosys Foundation.

Mahindra & Mahindra

At Mahindra & Mahindra, The K. C. Mahindra Education Trust was established in 1953
with the purpose of promoting education. Its vision is to renovate the lives of people in India
through education and financial assistance across age groups and across income strata. The K. C.
Mahindra Education Trust undertakes a number of education plans, which make a difference to
the lives of worthy students. The Trust has provided more than Rs. 7.5 crore in the form of
grants, scholarships and loans. It promotes education mostly by the way of scholarships. The
Nanhi Kali (children) project has over 3,300 children under it and the company aims to increase
the number to 10,000 in the next two years by reaching out to the underprivileged children,
especially in rural areas.

CONCLUSION:

Social responsibility in marketing helps to ensure that a company is, in fact, following the
rules and this not only instills faith among the customer base, but also helps to keep the company
out of any kind of trouble in terms of legal problems and also in terms of public relations.

Customers also appreciate social responsibility and as a result, companies can gain
business and maintain it with more ease. For example, if a company can certify their product as
"green," they gain a certain degree of competitive advantage over competition and many
customers will be more willing to buy their product than one that has not been certified as
"green," because they perceive the value of the product to be higher than others. Further, these
types of things can instill a sense of faith and goodwill in customers and cause the consumers not
only to feel better about buying the product in the first place, but also feel better about buying it
again. Socially responsible marketing makes sense as a business strategy because it not only
broadens and expands the customer base, but increases the likelihood of developing customer
loyalty and getting them to buy their product again in the future.

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