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Marketing:RealPeople,RealDecisionsDecisionMakingintheNewEraofMarketingChapter3LectureSlidesSolomon,Stuart,Carson,&SmithYournamehereCoursetitle/numberDateMarketing:RealPeople,RealDecisions3-2ChapterLearningObjectivesWhenyouhavecompletedyourstudyofthischapter,youshouldbeableto:•ExplainwhyorganizationshaveadoptedaNewEramarketingfocusonethicsandsocialresponsibility•DescribetheNewEraemphasisonquality•Discusssomeoftheimportantaspectsofanorganization’sinternalenvironment.•Explainwhymarketersscananorganization’sexternalbusinessenvironment.Marketing:RealPeople,RealDecisions3-3IntroductiontotheTopic•Socialprofit:thebenefitanorganizationandsocietyreceivefromtheorganization’sethicalpractices,communityservice,effortstopromoteculturaldiversity,andconcernforthenaturalenvironment.•Manyorganizationshavecometorecognizethatthevalueofdoingtherightthinggoesbeyondtheshorttermpublicrelationsbenefitsthatmaybegained.•Butwhatdoes“doingtherightthing”meaninanorganizationalcontext?Figure3.1Marketing:RealPeople,RealDecisions3-4EthicalBehaviourintheMarketplace•Businessethics:rulesofconductforanorganization.Thesearethebasicvaluesthatguideafirm’sbehaviour.•Thedifferencebetweenwhatisrightandwrongisaverysubjectivething,whichiswhythereissomuchvariationinthisarea.•Codeofethics:writtenstandardsofbehaviortowhicheveryoneintheorganizationmustsubscribe.•“Thefishstinksfromthehead”wouldsuggestthatemployeestaketheirdirectionfromseniormanagerswhenconsideringethicalissues.•Shareholder’srights,andthebehaviourofseniormanagementhascomeunderintensemediascrutinyinearly2002,forgoodreason.Marketing:RealPeople,RealDecisions3-5AMACodeofEthics•TheAmericanMarketingAssociation(AMA)publishesacodeofethicsformarketersonitswebsite,whichconsistsoffourdifferentcategoriesofresponsibilities.•Toacceptresponsibilityfortheconsequencesoftheiractivities•Tonotknowinglydoharm•Toadheretoallapplicablelawsandregulations•Behonestandfairinalldealingswithconsumers,clients,employees,suppliers,distributors,andthepublic.•Avoidparticipationinconflictofinterestsituationswithoutpriornoticetoallpartiesinvolved.Marketing:RealPeople,RealDecisions3-6Consumerism:FightingBack•Consumerism:asocialmovementthatattemptstoprotectconsumersfromharmfulbusinesspractices.•TheConsumers’AssociationofCanada(CAC)wascreatedtoinform,educate,andadvocateonbehalfofconsumers.•Theirseven(plusone)consumerrightsare:–Therighttosafety–Therighttobeinformed–Therighttobeheard–Therighttoredress–Therighttochoose–Therighttoahealthyenvironment–Therighttoaconsumereducation–TherighttoprivacyMarketing:RealPeople,RealDecisions3-7EthicsintheMarketingMix•Productsafetyisanimportantissuetoprotectconsumersfromharmorlossduetodefectiveordangerousproducts.SafetystandardsforproductsareestablishedandmonitoredbyindependentorganizationssuchastheCanadianStandardsAssociation(CSA).•Pricefixing:anillegalbusinesspracticeinwhichfirmsdecideinadvanceonacommonpricefortheirproduct.•Pricediscrimination:charginglowerpricestolargercustomers.Thisislegalwhenitcanbeshownthatcostsavingsareavailabletothemanufactureroritisnecessarytomeetcompetitors’pricing.•Pricegouging:chargingexcessivepricesinresponsetoahighdemand/lowsupplysituation.Marketing:RealPeople,RealDecisions3-8EthicsintheMarketingMix(continued)•Productpromotioncanbeaproblemintermsofmisleadingorfalseadvertising.TheadvertisingindustryinCanadaisself-regulatingthroughtheAdvertisingStandardsCanada(ASC).•Advertisingtochildrenandgenderstereotypingaretwoareasofconcern•Slottingallowance:afeepaidbyamanufacturertoaretailerinexchangeforagreeingtoplaceproductsontheretailer’sshelves.•Thisisstandardpracticeinthegrocerytrade,whichhasbeenaidedbythewidespreaduseofprivatelabelbrands.•Thedangeristhatconsumersmaynothaveaccesstotheproductsofsmallermanufacturerswhocannotaffordtopaythesefees.Marketing:RealPeople,RealDecisions3-9AFocusonSocialResponsibility•Socialresponsibility:amanagementpracticeinwhichorganizationsseektoengageinactivitiesthathaveapositiveeffectonsocietyandpromotethepublicgood.•Environmentalstewardship:apositiontakenbyanorganizationtoprotectorenhancethenaturalenvironmentasitconductsitsbusinessactivities.•Greenmarketing:amarketingstrategythatsupportsenvironmentalstewardshipbycreatinganenvironmentallyfoundeddifferentialbenefitinthemindsofconsumers.•Thisefforthasbeenhamperedbyalackofconsensusonwhatitmeanstobe“green”Marketing:RealPeople,RealDecisions3-10ServingSocietyandCommunity•Causemarketing:amarketingstrategyinwhichanorganizationservesitscommunitybypromotingandsupportingaworthycauseorbyallyingitselfwithanot-for-profitorganizationtotackleasocialproblem.•Consumerswillrespondtothisiftheybelievetheorganizationtobesincere.•Culturaldiversity:amanagementpracticethatactivelyseekstoincludepeopleofdifferentsexes,races,ethnicgroups,andreligionsinorganization’semployees,customers,suppliers,anddistributionchannelpartners.Marketing:RealPeople,RealDecisions3-11AFocusonQuality•Quality:Thelevelofperformance,reliability,features,safety,cost,orotherproductcharacteristicsthatconsumersexpecttosatisfytheirneedsandwants.•TheNational