MBA – 1 Yr Program

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Applied Marketing,MBA

Learning objectives
1. 2.

Recognize that marketing’s first social responsibility is to be ever more efficient and effective, and understand the charges made against the marketing role in this regard. Understand the marketing’s second social responsibility is to behave ethically and honestly with customers, colleagues, and ourselves as marketers.

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Applied Marketing,MBA

3 Observe how marketers
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must obey the letter of the law and spirit of various laws as a third social responsibility.

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4. Appreciate how marketing exercises its fourth responsibility via cause related marketing.
Applied Marketing,MBA

Criticism on Marketing
In 1957 ,Vance Packard wrote a book “The

hidden persuaders” and criticized modern marketing practices for their unethical behavior and lack of social responsibility. Millions of copies sold and damaged marketing profession. Vance did not offer any proof in his experimental study. He wasn’t being socially responsible? Such views are held by lots of people.

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Applied Marketing,MBA

Industries act as socially irresponsible?
30 years ago cigarette manufactures were

told by their own scientists that tobacco was addictive & causes lungs cancer. Did industry share this knowledge with the consumers/outside? At what age do you think the kids start smoking? Or are attracted by the adverts 8 to 13 !

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Applied Marketing,MBA

Learning objective No.1: First Responsibility;

Be Ever More Efficient & Effective
Marketing’s first responsibility to society is to advance life, liberty, & the general happiness through the creation of exchanges, markets, product innovations, & trading innovations that increase the efficiency & effectiveness of the economic process.  Some claim that marketing is not doing this & is being wasteful.  Some specific criticisms are as follows:

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Criticisms – marketing being wasteful
Too many new unneeded products are marketed that fail – about half the resources assigned for new products are spent on failures (but we learn from them! Why so some reduce the prices drastically?) Too many unneeded products are marketed that succeed: Freedom of choice in products, Development of the company and the society, Planned obsolescence – operating systems (do improve with this), quality always wins when it is desired.
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Market distribution systems are inefficient – very low prices at sources, value adders pocket most of the profits – do they? Each member of the chain deserves the profit it earns? Many intermediaries have disappeared B. A lot of advertising is wasteful expenditure – mass advertising may impact purchase & consumption where it is intrusive, wasteful & even against the values of a society. Who can afford live transmissions - cost of newspaper without advertising. Advertisers should be more socially responsible.
A.
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Marketer's self interested ,Unintended Consequences on Supply: Tragedy of commons: was first described in the context of the common grazing area that villages in England used to make available for local residents to graze their sheep. To each village in household, it did not seem unreasonable to increase its small flock of sheep, but across a hundred households, this pursuit of individual self-interest led to such severe overgrazing that all of the grass on the commons died. Now no one was able to graze sheep on the commons, and everyone's sheep starved and died – overuse of a common good leads to its destruction. In a free market, the individual activities of sellers can have an accumulative effect that is often not intended and can lead to harmful effects on others or society at large – over fishing by one fisherman (supply) leads others to do it & everyone loses.

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Applied Marketing,MBA

F. Marketer's self interested, Unintended consequences on Demand-side :Demand

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for example overuse of supermodels discourages millions of women & turns them against the product so advertised Cumulative effect of marketing practices of thousands of advertising campaigns that has a residual negative impact on the values of buyers and demand of
side market failure:
Applied Marketing,MBA

Learning objective No.2 second social responsibility: BEHAVE ETHICALLY
Responsibility to behave and act honestly while

conducting business.

In USA almost 60% of the companies have written

codes of ethics that all employees agree to abide by. guidelines.

See table 2.2 for IBM & P&G Business conduct

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Applied Marketing,MBA

Issues addressed by company ethics statements

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Applied Marketing,MBA

Learning objective 2 Continue….

• • •

Ethical dilemmas I was only following the orders: ? We are all responsible for the lawfulness & decency of our trading decisions & behavior Subordinators are responsible for their own behavior, even if following orders or under the threat of dismissal. Advertising companies are accountable for the honesty of the messages they create for their clients. American Marketing Association Code of Ethics – Figure 2.3
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Theories of Marketing Ethics:

When ethical codes break down, societies cease to function & ultimately collapse from within – same is true for the companies. If you want to be part of a society, you obey the rules. Companies have a moral & social obligation to accept the general ethical rules of the society, & not undermine them with unacceptable trading practices. Some of the general rules are as follows: Applied Marketing,MBA

 
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Choose to do the Most Good for the Most

people: David Hume, Jeremy Bentham, and J.S. Mill developed the principle of utility: that “ethical behavior” is the behavior that produces the most good for the most people in a specific situation. How to calculate the most good (or bad) for the most (some) people?
What if everyone did it? Immanuel Kant’s

categorical imperative offers an alternative by saying that whether the proposed action would be right if everyone did it. If all advertisers lie, Applied Marketing,MBA 15 should it be credible. If all start stealing !!!!

c) Where do our basic values come from?
Basic decency & morality are taught on or

across a father or mother’s knee, with the extended family chipping in ( including religious education) --- & taught as children, by teachers and others. and reached adulthood without having the basic traits of decency, honesty, and considerations for others. the shortcoming and how?

Some of us may have missed these lessons

Can or should companies try to make up for 9/11, war on terror etc. Applied Marketing,MBA

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d. Recognizing the ethical issues:
 The least a society should demand from marketers is to

ask such questions

 Ethical vigilance means asking hard questions - to

confront excuses and reasons for violating personal ethics. least two codes of ethics:

 Such questions point to the fact that most of us have at

(1) the set we advocate & want others to apply in their behavior towards us and , (2) the code of ethics that, for whatever rationalizations, we actually live up to. The gap between the two shows the amount of difference between what we talk about ethics and what Applied Marketing,MBA 17 we actually practice.

Table 2.3 A Personal Ethics Checklist for Marketers
Am I violating the law? If yes, why? Are the values and ethics that I am applying in

business lower than those I use to guide my personal life? If yes, why? me? If not, why not?

Am I doing to others as I would have them do to Would it be wrong if everyone did what I

propose to do? Why?

Am I willfully risking the life & limb of
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consumers & others by my action. If yes, why?

Table 2.3 – Checklist Contd.
Am I willfully exploiting or putting at risk

children, the elderly, the illiterate, the mentally incompetent, the naïve, the poor or the environment? If yes, why?
Am I keeping my promises? If not? Why not? Am I telling the truth? If not? Why not? Am I exploiting a confidence or a trust? If yes,

why?

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Applied Marketing,MBA

Table 2.3 – Checklist Contd.
Am I misrepresenting my true intentions to others?

If yes, why? Am I loyal to those who have been loyal to me? If not, why? Have I setup others to take responsibility for any negative consequences of my actions? If yes, why? Am I prepared to redress wrong and fairly compensate for damages? If not, why not?

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Applied Marketing,MBA

Checklist Contd. Are my values and ethics as expressed in my Am I being as efficient in my use of scarce

strategy offensive to certain groups? If yes, why? resources as I can be? If not, why not?

This set of questions can be used as the basis for a team’s or an individual’s mental model to perceive and recognize an ethical issue associated with a proposed goal, strategy, program, or tactic.

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Applied Marketing,MBA

Learning objective 3:Marketers third social responsibility; Obey the law

Marketers must be aware of & conform to all laws affecting their business; home of foreign markets – same as we do as individuals (ignorance of law is not an excuse) Professional codes of ethics Major Laws that protect consumers: Child protection act Environment policy Fair packaging and labeling etc Laws that encourages competition:
Applied Marketing,MBA

 

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Learning objective 4:Marketer’s Fourth Social responsibility: Help Market Good Causes
Marketing should be proactive in the

promotion of worthy public causes like those activities that government, public service organization, companies and individuals undertake in an effort to encourage target customers participation in socially redeeming programs.
Plant the trees camping (PTC), Polio, PSO

education primary right for children ,Anti smoke campaign by Ministry of Health
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PROTECT BLIND INDUS DOLPHINS
• There are fewer than 600 blind river dolphins left in Pakistan, and the number is fast decreasing. The blind Indus dolphin is the only river dolphin found in Pakistan and is now seriously threatened in its only habitat.

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