Faculty of Economics and Administration

Department of Business Administration

EMBA Program

Business Ethics and Social Responsibility (BUSE-619)

Section JA1

Assignment 2

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Imagine yourself in the following situation:

You work in the marketing department of a large dairy products company. The company has launched a
“revolutionary” yogurt product with ingredients that promote healthy digestion. As a promotion to
launch the new product, the company is offering to donate 10 cents to the American Heart Association
(AHA) for every foil top from the yogurt pots that is returned to the manufacturer. To support this
campaign, the company has invested millions of dollars in a broad “media spend” on television, radio,
Web, and print outlets, as well as the product packaging itself. In very small print on the packaging and
advertising is a clarification sentence that specifies that the maximum donation for the campaign will be
$10,000. Your marketing analyst colleagues have forecast that first-year sales of this new product will
reach 10 million units, with an anticipated participation of 2 million units in the pot-top return campaign
(a potential donation of $200,000 without the $10,000 limit). Focus groups that were tested about the
new product indicated clearly that participants in the pot-top return campaign attach positive feelings
about their purchase to the added bonus of the donation to the AHA.

Answer the following questions:

1. Argue ‘for’ or ‘against’ the above behaviour (‘why you think the company has done right or wrong’)
and provide a solid justification for your choice.

2. In your position as Marketing director, what would you suggest to the CEO in order to ensure a
socially responsible behaviour towards your company’s stakeholders?

Truthfulness in all aspects is the first requirement for ethics and social responsibility in
advertising. However, this requirement is not as straightforward as it may appear. Factual
information can be presented in such a way as to deceive and manipulated the consumer,
while an image can be manipulated yet still create an accurate final impression.
Corporate social responsibility marketing is the practice of combining a company's charitable
activities with its marketing campaigns. Instead of just writing a check to a selected charity,
the company would tie the amount of the donation directly to sales, and would make the
fundraising campaign the focus of its advertising.

Rather, an advertiser presents a product favorably to persuade consumers to make a purchase. On the
other hand, it’s unethical to go so far as to manipulate consumers into buying by depriving them of
information they need to make a good decision.

Ethical marketing refers to the process by which companies market their

goods and services by focusing not only on how their products benefit
customers, but also how they benefit socially responsible or
environmental causes.
It is important to look at how the behaviour of the business affects the
audience’s impression of a good or service. When deciding if conduct is

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 misleading or deceptive, or likely to mislead or deceive, the most important
question to ask is whether the overall impression created by your conduct is
false or inaccurate. While a business is not required to disclose information in
all circumstances, there will be situations where a business must provide
information to avoid engaging in misleading or deceptive conduct

 claims must be substantiated, especially when they concern health, safety, or performance

Disclaimers and disclosures must be clear and conspicuous. That is, consumers must be able to notice,
read or hear, and understand the information. Still, a disclaimer or disclosure alone usually is not enough
to remedy a false or deceptive claim

 mislead consumers and 

 affect consumers' behavior or decisions about the product or service.

1. In my opinion, the company has taken the right decision in keeping the limit of the
donation to $10000. The company is in the business of doing business. It is there to make
profits and provide reasonable returns to the company shareholders and employees. It is not
a charity organisation. Also since this is a new product , the actual sales figures are
uncertain. Still the company is offering a 10 cent per unit sold as donation to AHA as a part
of corporate social responsibility. Also the company has spend a huge sum of money on the
advertisement campaigns for the purpose of making gains from the product. Also the
company is clear about the donation it will make to AHA. It is printed everywhere in the
advertisement campaign. It is for the people to make judgement. Also the people are buying
the product because it is good for health and not merely that 10% of the amount would go to
AHA. Terms and conditions are part of every new product launch. Keeping in mind the
uncertainty of actual sales and huge expenditure on promotion campaign , there is nothing
wrong in limiting the donation amount to $10000.

2. As the Marketing director, I would suggest the CEO to stick to the above view. Later on, if
the sales of the product is handsome and if the company stakeholders agree, an additional
amount may be donated to AHA to ensure a socially responsible behavior towards your
company's stakeholders.

1. The company has done wrong. By widely publicizing the donation campaign with only a small print
informing that there is an upper limit to the donation, the company is playing with the sentiments of
the consumers. If it becomes known to the general public, the company would lose the trust and
reputation it has earned over the years.

2.I would suggest the CEO to remove the upper limit on the donation. If the profits earned from the
sale of yogurt even after donating 10 cents per container is high, then there is no need to have an
upper limit. Since the customers will be buying the product thinking that they are doing charity, it will
be inappropriate to use their sentiments to make profits by donating only a small amount from the
earnings.

Instead, the company can earn valuable goodwill from the donation drive which would help it in
making higher profits in the future by performing its corporate social responsibility with honesty.

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Step 1 of 3 A

The facts of the case are:

1) The company is marketing a "revolutionary" yoghurt product that is supposed assist digestion.

2) It promises in all its advertising to donate 10 cents to the AHA for every tinfoil top that is

returned to them.

3) This promise by the company is viewed very positively by the market.

4) They have a small print on the packaging that limits to total donation to $10,000 only.

Comment

Step 2 of 3 A

The company has complied with the legal requirement of informing the public that they would be

donating a ma $10,000 to AHA. However this was in very small print on the packaging

Therefore this not being illegal, it is a valid action on behalf of the marketing department of the

company. After all they have a prime responsibility to increase the profits of the shareholders in a

legal manner

Comment

Step 3 of 3 A

However, there is no evidence that is fact of the limited donation was ever mentioned in the

millions of dollars of advertising that they spent in promoting this product. This amounts to a

"smoke screen to hide the facts behind this limited donation. While this could not be termed as

illegal, it is definitely unethical as well as immoral.

Therefore one believes that this is not an ethical action on behalf of the company. It would be too

late to withdraw their product with the packaging from the market. Therefore they should not limit

their donations and make the fully donations to the AHA.

In case someone notices the small print and asks why, they can always say theat it was a

misprint on the part of their marketing department.

Comment

https://www.ftc.gov/tips-advice/business-center/guidance/advertising-marketing-internet-rules-road

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https://www.accc.gov.au/accc-book/printer-friendly/29527
https://ssir.org/articles/entry/ethics_and_nonprofits#

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