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Sustainable Marketing Social Responsibility and Ethics

Chapter 16

Rest Stop: Previewing the Concepts

Define sustainable marketing and discuss its importance Identify the major social criticisms of marketing Define consumerism and environmentalism and explain how they affect marketing strategies

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Rest Stop: Previewing the Concepts

Describe the principles of sustainable marketing Explain the role of ethics in marketing

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First Stop: Sustainability at Unilever

Under its Sustainable Living Plan, Unilever has set out to create a better future every day for people around the world
Sustainability efforts span the entire value chain Works with final consumers to improve the social and environmental impact of its products in use Fuels innovation, resulting in new eco-friendly products and new customer benefits

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Sustainable Marketing
Socially and environmentally responsible marketing that:
Meets the present needs of consumers and businesses Preserves or enhances the ability of future generations to meet their needs

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Figure 16.1 - Sustainable Marketing

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Sustainable Marketing
McDonalds Plan to Win addresses issues related to:
Food-supply sustainability Sustainable packaging Reuse and recycling Responsible store designs

Plan to Win strategy has both created sustainable value for customers and positioned the company for a profitable future

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Social Criticisms of Marketing

Marketings impact on individual consumers has been criticized in terms of:
High prices Deceptive practices High-pressure selling Shoddy, harmful or unsafe products Planned obsolescence Poor service to disadvantaged consumers
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High Prices
Three factors are cited as leading to high prices:
High costs of distribution High advertising and promotion costs Excessive markups

Heavily promoted brands cost much more than private labels virtually identical nonbranded or store-branded product

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Deceptive Practices
Deceptive pricing - Falsely advertising factory or wholesale prices or large reductions from a phony high retail list price Deceptive promotion - Misrepresenting a products features or performance, or luring consumers to store for out-of-stock item Deceptive packaging - Exaggerating package contents, using misleading labeling, etc.
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Deceptive Practices
Deceptive practices have led to legislation and other protective consumer actions
FTC governs deceptive practices Use of puffery is legal, but may harm consumers in subtle ways Deceptive practices are not sustainable as they harm a firms business in the long-run

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High-Pressure Selling Tactics

Salespeople are often accused of using highpressure selling tactics:
In persuading people to buy goods they had no intention of buying Because prizes are often given to top sellers

Marketers have little to gain from highpressure tactics

Such actions damage relationships with the firms customers
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Shoddy or Unsafe Products

Products are not made well or services are not performed well Products are unsafe due to manufacturer indifference, increased product complexity, and poor quality control Products deliver little benefit or are even harmful

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Planned Obsolescence
Causing products to become obsolete before they actually need to be replaced
Using materials and components that will break, wear, rust, or rot sooner than they should

Holding back functional features, and introducing them later to make older models obsolete

Perceived obsolescence - continually changing consumer concepts of acceptable styles to encourage more and earlier buying
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Poor Service to Disadvantaged Consumers

They are forced to shop in small stores where they pay more for inferior goods National chain retailers practice redlining and refuse to open businesses in poor neighborhoods

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Underserved Consumers

Lack of supermarkets in low income areas, have left many disadvantaged consumers with little or no access to healthy, affordable fresh foods
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Marketings Impact on Society as a Whole

Marketings impact on society as a whole has been criticized in terms of:
Creating false wants and encouraging materialism Overselling private goods at the expense of public (social) goods Creating cultural pollution, stemming from constant exposure to marketing messages

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Fuel for Thought

Marketing messages are prevalent throughout the United States, and critics contend that this causes cultural pollution Do you agree? Why or why not?

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Marketings Impact on Other Businesses

Critics charge that a firms marketing practices can harm other companies and reduce competition through:
Acquisitions of competitors Marketing practices that create barriers to entry Unfair competitive marketing practices

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Marketings Impact on Other Businesses

Walmart was accused of predatory pricing practices by local pharmacists Wal-Mart countered charges by noting that their tremendous buying power allows them to sell at this price and still make a profit

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An organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers

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Traditional Sellers Rights

Introduce any product in any size and style, provided it is not hazardous to safety; or, if it is, to include proper warnings and controls Charge any price for the product, provided no discrimination exists among similar kinds of buyers Spend any amount to promote the product, provided it is not defined as unfair competition
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Traditional Sellers Rights

Use any product message, provided it is not misleading or dishonest in content or execution Use any buying incentive schemes, provided they are not unfair or misleading

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Traditional Buyers Rights

To not buy a product that is offered for sale To expect the product to be safe To expect the product to perform as claimed

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Proposed Consumer Rights

Consumer advocates call for additional rights:

To be protected against questionable products and marketing practices

To influence products and marketing practices in ways that will improve quality of life To consume now in a way that will preserve the world for future generations of consumers

To be informed about important aspects of the product

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Consumers Right to Information

Product labels contain information about ingredients, nutrition facts, recycling, country of origin
Jones Soda even puts customer submitted photos on its labels

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An organized movement of concerned citizens and government agencies to protect and improve peoples living environment

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Those who subscribe to environmentalism believe that marketing systems goal should be to maximize quality of life
Life quality includes the quantity and quality of consumer goods and services and quality of the environment

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Is concerned with damage to the ecosystem caused by global warming, resource depletion, toxic and solid wastes, litter, etc. Over the past several decades, such concerns have resulted in federal and state laws and regulations In recent years, however, firms have accepted more responsibility and many have adopted a policy of environmental sustainability
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Environmental sustainability
Management approach that involves developing strategies that both sustain the environment and produce profits for the company

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Figure 16.2 - The Environmental Sustainability Portfolio

Sustainability EffortsPollution Prevention

Subaru of Indiana claims that it now sends less trash to the landfill each year than the average American family

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New Clean Technology

Many companies are adopting design for environment (DFE) and cradle-to-cradle practices
Design products that are easier to recover, reuse, recycle, or safely return to nature after usage

Coke is researching and testing new bottles made from aluminum, corn, or bioplastics

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Marketing at Work
Sustainability means:
Driving out hidden costs Conserving natural resources Providing sustainable and affordable products so customers can save money and live better

Figure 16.3 - Marketing Decision Areas That May be Called into Question Under the Law

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Consumer-oriented marketing
A principle of sustainable marketing that holds a company should view and organize its marketing activities from the consumers point of view

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Customer-value marketing
A principle of sustainable marketing that holds a company should put most of its resources into customer-value-building marketing investments

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Innovative marketing
A principle of sustainable marketing that requires a company to seek real product and marketing improvements

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Sense-of-Mission Marketing
A principle of sustainable marketing that holds that a company should define its mission in broad social terms rather than narrow product terms

Sense-of-mission marketing has made Pedigree the worlds number one dog food brand
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Marketing at Work
Ben & Jerrys, The Body Shop, Burts Bees, Stonyfield Farms, Patagonia, Timberland, and TOMS Shoes pioneered the concept of valuesled

Methods mission is to inspire a happy, healthy home revolution

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Societal marketing
A company makes marketing decisions by considering consumers wants, the companys requirements, consumers long-run interests, and societys long-run interests

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Figure 16.4 - Societal Classification of Products

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Deficient Products that have neither immediate products appeal nor long-run benefits Pleasing products Salutary products
Products that give high immediate satisfaction but may hurt consumers in the long run Products that have low immediate appeal but may benefit consumers in the long run

Desirable Products that give both high immediate products satisfaction and high long-run benefits

Desirable Products

PepsiCo has hired a team of scientists to help it develop a larger portfolio of healthy product options, such as the Trop50 brand

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Business Actions Toward Sustainable Marketing

Firms need to develop corporate marketing ethics policies to serve as broad guidelines that everyone in the organization must follow

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Business Actions Toward Sustainable Marketing

Ethics policies should cover:
Distributor relations Advertising standards Customer service Pricing Product development General ethical standards

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Business Actions Toward Sustainable Marketing

In solving issues on ethics and social responsibility, companies and marketing managers can rely on principles of:
The free market and legal system Letting responsibility fall to individual companies and managers to develop a social conscience

International marketers face the challenge of varying business practices and standards across countries
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Rest Stop: Previewing the Concepts

Define sustainable marketing and discuss its importance Identify the major social criticisms of marketing Define consumerism and environmentalism and explain how they affect marketing strategies

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Rest Stop: Previewing the Concepts

Describe the principles of sustainable marketing Explain the role of ethics in marketing

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Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

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