978-0134149530 Chapter 16 Lecture Note Part 1

Unlock access to all the studying documents.

View Full Document

Chapter 16 Sustainable Marketing: Social Responsibility and Ethics

CHAPTER 16

SUSTAINABLE MARKETING: SOCIAL RESPONSIBILITY AND ETHICS

PREVIEWING THE CONCEPTS: CHAPTER OBJECTIVES

1. Define sustainable marketing and discuss its importance.

2. Identify the major social criticisms of marketing.

3. Define consumerism and environmentalism and explain how they affect marketing strategies.

4. Describe the principles of sustainable marketing.

5. Explain the role of ethics in marketing.

JUST THE BASICS

CHAPTER OVERVIEW

This final chapter focuses on the concepts of sustainable marketing, meeting the needs of

consumers, businesses, and society – now and in the future – through socially and

environmentally responsible marketing actions.

First, the chapter defines sustainable marketing and then looks at some common criticisms of

marketing as it impacts individual consumers and public actions that promote sustainable

marketing.

Finally, we look at how companies can benefit from proactively pursuing sustainable marketing

practices that bring value not just to individual customers but also to society as a whole.

ANNOTATED CHAPTER NOTES/OUTLINE

FIRST STOP

Patagonia: Conscious Consumption – Telling Consumers to Buy Less

Patagonia—the high-end outdoor clothing and gear company—was founded on a mission of

using business to help save the planet.

A for-profit firm telling its customers to buy less? It sounds crazy. But that message is right on

target with Patagonia’s reason for being. Patagonia founder Yvon Chouinard and his company

are calling for conscious consumption, asking customers to think before they buy and to stop

consuming for consumption’s sake.

The purpose was to increase awareness of and participation in the Patagonia Common Threads

16-1

Chapter 16 Sustainable Marketing: Social Responsibility and Ethics

Initiative, which urges customers to take a pledge to work together with the company to consume

more responsibly. Common Threads rests on five Rs of joint action toward sustainability:

Reduce: WE make useful gear that lasts a long time. YOU don’t buy what you don’t need.

Repair: WE help you repair your Patagonia gear. YOU pledge to fix what’s broken.

Reuse: WE help find a home for Patagonia gear you no longer need. YOU sell or pass it on.

Recycle: WE take back your Patagonia gear that is worn out. YOU pledge to keep your stuff

out of the landfill and incinerator.

Reimagine: TOGETHER we reimagine a world where we take only what nature can replace.

Pushing conscious consumption doesn’t mean that Patagonia wants customers to stop buying its

products. To the contrary, like other for-profit brands, Patagonia really does care about doing

well on Black Friday and the rest of the holiday season.

The “Don’t Buy This Jacket” campaign has more than paid for itself with the interest and

involvement it created for the Common Threads Initiative. As an added bonus, however, the

campaign also boosted sales. During the first year of the campaign, Patagonia’s sales surged by

almost a third.

Use Chapter Objective 1 here.

SUSTAINABLE MARKETING

Sustainable marketing calls for socially and environmentally responsible actions that meet the

present needs of consumers and businesses while also preserving or enhancing the ability of

future generations to meet their needs.

Use Key Term Sustainable Marketing here.

Use Figure 16.1 here.

Use Discussion Question 16-1 here.

16-2

Chapter 16 Sustainable Marketing: Social Responsibility and Ethics

The marketing concept recognizes that organizations thrive from day to day by determining the

current needs and wants of target group customers and fulfilling those needs and wants more

effectively and efficiently than competitors do.

However, satisfying immediate needs and desires doesn’t always serve the future best interests of

either customers or the business. Whereas the societal marketing concept considers the future

welfare of consumers and the strategic planning concept considers future company needs, the

sustainable marketing concept considers BOTH.

SOCIAL CRITICISMS OF MARKETING

Marketing’s Impact on Individual Consumers

Use Chapter Objective 2 here.

Consumer advocates, government agencies, and other critics have accused marketing of harming

consumers through high prices, deceptive practices, high-pressure selling, shoddy or unsafe

products, planned obsolescence, and poor service to disadvantaged consumers.

High Prices

Many critics charge that the American marketing system causes prices to be higher than they

would be under more “sensible” systems.

High Costs of Distribution. A long-standing charge is that greedy channel intermediaries mark

up prices beyond the value of their services.

How do resellers answer these charges? They argue that intermediaries do work that would

otherwise have to be done by manufacturers or consumers.

High Advertising and Promotion Costs. Modern marketing is accused of pushing up prices to

finance heavy advertising and sales promotion.

Marketers respond that advertising does add to product costs. But it also adds value by informing

potential buyers of the availability and merits of a brand.

Excessive Markups. Critics charge that some companies mark up goods excessively.

Marketers respond that most businesses try to deal fairly with consumers because they want to

build customer relationships and repeat business.

16-3

Chapter 16 Sustainable Marketing: Social Responsibility and Ethics

Deceptive Practices

Deceptive practices fall into three groups:

1. Promotion

2. Packaging

3. Pricing

Deceptive promotion includes practices such as misrepresenting the product’s features or

performance or luring customers to the store for a bargain that is out of stock.

Deceptive packaging includes exaggerating package contents through subtle design, using

misleading labeling, or describing size in misleading terms.



Deceptive pricing includes practices such as falsely advertising “factory” or “wholesale” prices

or a large price reduction from a phony high retail list price.



The Wheeler-Lea Act gives the Federal Trade Commission (FTC) power to regulate

“unfair or deceptive acts or practices.”



Use Critical Thinking Exercise 16-8 here.



“Puffery” is defined as innocent exaggeration for effect.



High-Pressure Selling



Marketers have little to gain from high-pressure selling.



Such tactics may work in one-time selling situations for short-term gain. However, most

selling involves building long-term relationships with valued customers.



16-4

Chapter 16 Sustainable Marketing: Social Responsibility and Ethics

Shoddy, Harmful, or Unsafe Products



There are a number of typical product complaints:



Products are not made well and services are not performed well.

Product safety has been a problem for several reasons, including company indifference,

increased product complexity, and poor quality control.

Many products deliver little benefit, or they might even be harmful.



Planned Obsolescence



Critics also have charged that some companies practice planned obsolescence, causing

their products to become obsolete before they actually should need replacement.



Other companies are charged with perceived obsolescence—continually changing

consumer concepts of acceptable styles to encourage more and earlier buying. An obvious

example is the fast-fashion industry with its constantly changing clothing fashions



Marketers respond that consumers like style changes; they get tired of the old goods and

want a new look in fashion. Or they want the latest high-tech innovations, even if older models

still work.



Use Critical Thinking Exercise 16-7 here.

Use Discussion Question 16-2 here.



Poor Service to Disadvantaged Consumers



The American marketing system has been accused of serving disadvantaged consumers

poorly.



Critics accuse major chain retailers of redlining, drawing a red line around disadvantaged

neighborhoods and avoiding placing stores there.



Clearly, better marketing systems must be built to service disadvantaged consumers.



In cases where marketers do not step in to fill the void, the government likely will.



Use Linking the Concepts here.

16-5

Chapter 16 Sustainable Marketing: Social Responsibility and Ethics



Marketing’s Impact on Society as a Whole



False Wants and Too Much Materialism



Critics have charged that the marketing system urges too much interest in material

possessions.



People are judged by what they own rather than by who they are.



These criticisms overstate the power of business to create needs.



Too Few Social Goods



Business has been accused of overselling private goods at the expense of public goods.



A way must be found to restore a balance between private and public goods.



Some options include:



Making producers bear the full social costs of their operations.

Making consumers pay the social costs.



Cultural Pollution



Critics charge the marketing system with creating cultural pollution. They feel our senses

are being constantly assaulted by marketing and advertising.



Marketers answer the charges of “commercial noise” with these arguments:



1. Because of mass-communication channels, some ads are bound to reach people who have

no interest in the product and are therefore bored or annoyed.

2. Ads make much of television and radio free to users and keep down the costs of

magazines and newspapers.

3. Today’s consumers have alternatives.



Marketing’s Impact on Other Businesses



Critics charge that a company’s marketing practices can harm other companies and reduce

competition.

16-6

Chapter 16 Sustainable Marketing: Social Responsibility and Ethics



Three problems are involved:



1. Acquisitions of competitors

2. Marketing practices that create barriers to entry

3. Unfair competitive marketing practices.



Use Discussion Question 16-4 here.

Use Chapter Objective 3 here.



CONSUMER ACTIONS TO PROMOTE SUSTAINABLE MARKETING



The two major movements have been consumerism and environmentalism.



Consumerism



Use Key Term Consumerism here.

Use Discussion Question 16-3 here.



Consumerism is an organized movement of citizens and government agencies to improve

the rights and power of buyers in relation to sellers.



Traditional sellers’ rights include:



The right to introduce any product in any size and style, provided it is not hazardous

to personal health or safety; or, if it is, to include proper warnings and controls.

The right to charge any price for the product, provided no discrimination exists

among similar kinds of buyers.

The right to spend any amount to promote the product, provided it is not defined as

unfair competition.

The right to use any product message, provided it is not misleading or dishonest in

content or execution.

The right to use any buying incentive programs, provided they are not unfair or

misleading.



Traditional buyers’ rights include:



The right not to buy a product that is offered for sale.

The right to expect the product to be safe.

16-7

Chapter 16 Sustainable Marketing: Social Responsibility and Ethics

The right to expect the product to perform as claimed.



Consumer advocates call for the following additional consumer rights:



The right to be well informed about important aspects of the product.

The right to be protected against questionable products and marketing practices.

The right to influence products and marketing practices in ways that will improve the

“quality of life.”

The right to consume now in a way that will preserve the world for future generations

of consumers.



Consumers have not only the right but also the responsibility to protect themselves instead of

leaving this function to someone else.



Use Discussion Question 16-5 here.

Use Key Term Environmentalism here.



Environmentalism



Environmentalism is an organized movement of concerned citizens, businesses, and

government agencies to protect and improve people’s living environment.



Environmentalism is concerned with damage to the ecosystem caused by global warming,

resource depletion, toxic and solid wastes, litter, and other problems.



In recent years, most companies have accepted responsibility for doing no harm to the

environment.



Use Key Term Environmental Sustainability here.

Use Figure 16.2 here.



Environmental sustainability – Environmental sustainability is about generating profits

while helping to save the planet.



16-8

Figure 16.2 shows a grid that companies can use to gauge their progress toward

environmental sustainability.



The greening activities pay off for the firm in the short run.



Pollution prevention – Eliminating or minimizing waste before it is created.



Product stewardship – Minimizing not just pollution from production and product design but

all environmental impacts throughout the full product life cycle, and all the while reducing costs.



Design for environment (DFE) and cradle-to-cradle practices involve thinking ahead to

design products that are easier to recover, reuse, or recycle and developing programs to reclaim

products at the end of their lives.



The beyond greening activities identified in Figure 16.2 look to the future.



New clean technology. Many organizations that have made good sustainability headway are

still limited by existing technologies. To create fully sustainable strategies, they will need to

develop innovative new technologies.



Sustainability vision. Serves as a guide to the future. It shows how the company’s

products and services, processes, and policies must evolve and what new technologies must be

developed to get there.



Use Discussion Question 16-6 here.

Use Marketing at Work 16.1 here.



Public Actions to Regulate Marketing



Use Figure 16.3 here.



Many of the laws that affect marketing are listed in Chapter 3.



The task is to translate these laws into the language that marketing executives understand

as they make decisions.



BUSINESS ACTIONS TOWARD SUSTAINABLE MARKETING



Sustainable Marketing Principles

Use Chapter Objective 4 here.



Under the sustainable marketing concept, a company’s marketing should support the best

long-run performance of the marketing system.



Enlightened marketing consists of five principles.

1. Consumer-Oriented Marketing



Consumer-oriented marketing means that the company should view and organize its

marketing activities from the consumer’s point of view.



Only by seeing the world through its customers’ eyes can the company build lasting and

profitable customer relationships.



2. Customer-Value Marketing



Customer-value marketing means the company should put most of its resources into

customer value-building marketing investments.



By creating value for consumers, the company can capture value from consumers in

return.



3. Innovative Marketing



Innovative marketing requires that the company continuously seek real product and

marketing improvements.



4. Sense-of-Mission Marketing



Sense-of-mission marketing means that the company should define its mission in broad

social terms rather than narrow product terms.



Use Marketing at Work 16.2 here.



5. Societal Marketing



Societal marketing means an enlightened company makes marketing decisions by

considering consumers’ wants and interests, the company’s requirements, and society’s long-run

interests.



Products can be classified according to their degree of immediate consumer satisfaction

and long-run consumer benefit. (Figure 16.4)



Deficient products have neither immediate appeal nor long-run benefits.

Pleasing products give high immediate satisfaction but may hurt consumers in the

long run.

Salutary products have low appeal but may benefit consumers in the long run.

Desirable products give both high immediate satisfaction and high long-run benefits.



Use Key Terms Consumer-Oriented Marketing, Customer-Value Marketing, Innovative

Marketing, Sense-of-Mission Marketing, Societal Marketing, Deficient Products,

Pleasing Products, Salutary Products, and Desirable Products here.

Use Figure 16.4 here.

