Marketing Ethics (Table 16.1)
Corporate marketing ethics policies are broad guidelines that everyone in the organization must
follow.
What principle should guide companies and marketing managers on issues of ethics and social
responsibility?
One philosophy is that such issues are decided by the free market and legal system.
A second philosophy puts responsibility not on the system but in the hands of individual
companies and managers.
Written codes and ethics programs do not ensure ethical behavior.
Ethics and social responsibility require a total corporate commitment.
Use Chapter Objective 5 here.
Use Tables 16.1 and 16.2 here.
Use Online, Mobile, and Social Media Marketing here.
Use Critical Thinking Exercise 16-9 here.
Use Marketing Ethics here.
The Sustainable Company
Sustainable marketing goes beyond caring for the needs and wants of today’s customers.
Sustainable marketing provides the context in which companies can build profitable customer
relationships by creating value for customers in order to capture value from customers in return,
now and in the future.
Use Marketing by the Numbers here.
Video Case: Honest Tea
Honest Tea, the Coca-Cola brand that produced $130 million in global revenues last year, got its
start because cofounder Seth Goldman didn’t like the options in the beverage coolers at
convenience stores. So with the help of a former professor, he launched Honest Tea—the nation’s
first fully organic bottled tea.
But the company’s drive for success was not based not as much on profits as on a desire to
change the world. With social responsibility steeped deep into its business model, Honest Tea set
out to help develop the economic structure of impoverished nations. Honest Tea purchased raw
ingredients from Native American and South African farmers and invested in its supplier-farmers
to help them become self-reliant. Although Honest Tea has been a wholly owned subsidiary of
the Coca-Cola Company since 2011, it continues to operate on the principles of social
responsibility established by its founders.
After viewing the video featuring Honest Tea, answer the following questions:
16-15. List as many examples as you can showing how Honest Tea defies the
common social criticisms of marketing.
16-16. How does Honest Tea practice sustainable marketing?
16-17. With all its efforts to do good, can Honest Tea continue to do well?
Explain.
Company Cases
16 Adidas/5 Goldieblox
See Appendix 1 for cases appropriate for this chapter.
Case 16, Adidas: Athletic Apparel With Purpose. While it has been fighting for global
dominance in athletic footwear and apparel, adidas has been quietly establishing itself as one of
the most sustainable corporations in the world.
Case 5, GoldieBlox: Swimming Upstream Against Consumer Perceptions. A new toy
company, GoldieBlox is out to change how people think of toys for girls with the message that
success comes not from playing with dollhouses, but from building them.
MyMarketingLab
If assigned by your instructor, complete these writing sections from your Assignments in the
MyLab.
16-18. What is consumerism? What rights do consumers have, and why do some
critics feel buyers need more protection? (AACSB: Communication)
16-19. Discuss the philosophies that might guide marketers facing ethical issues.
(AACSB: Written and Oral Communication)
GREAT IDEAS
Barriers to Effective Learning
1. This chapter may be used to “hammer home” the idea of sustainable marketing. Although
sustainability is a common buzzword today, most students will never have considered the
concept applied to marketing.
2. Most of the concepts in this chapter will be new. Some students cast an uncritical eye on the
opinions of activist groups and think that not a single company can be trusted to “do the right
thing.” The task in this chapter is to present both sides, both good and bad, so that students can
see that although problems do exist, there are solutions, and industry does tend to work toward
reining in those who would create problems for consumers, society as a whole, or other
businesses.
3. Unless the university is in an urban environment, most students will be surprised that many
large retailers stay away from disadvantaged neighborhoods, and that banks and insurance
companies might discriminate against customers living in these areas. Even at urban universities
this could be cause for surprise, because most urban schools are not located in the truly
disadvantaged areas. A discussion on the pros and cons of, say, a Wal-Mart or a major grocery
retailer locating in an inner-city neighborhood can aid in the comprehension of the risks and
rewards for the company, as well as for the consumers.
4. Consumerism and environmentalism are two important concepts for the students to be aware
of. It is unlikely that either of these movements will go away any time soon, and because the
Internet has made so much information available to so many, these issues will likely only
become more in the forefront of consumers’ minds. Product recalls have become commonplace,
but it is worthwhile discussing in class any recalls the students have been affected by. Comparing
the number of recalls today to the number in the 1960s and 1970s will also help. As for
environmentalism, one thing that is useful is to ask how many students have traveled to cities in
other countries where the pollution controls are not as stringent as in the United States. Also,
discuss how your own university recycles, particularly if computers are given to the students
every two years, as many business schools are now doing.
Student Projects
1. Explain how the marketing concept is applicable to marketing ethics and social
responsibility.
2. From a marketing concept point of view, is it wrong to sell alcohol? Defend your
position.
3. What is planned obsolescence? Think about the fashion industry. How (or is) planned
obsolescence employed in this industry? If it is, do you believe its practice to be ethical?
4. Examine the urban area of your town. Do you find examples of what you would consider
redlining? Explain.
5. Discuss the statement “Marketing creates false wants and too much materialism.”
Small Group Assignments
Form students into groups of three to five. Each group should read the opening vignette to the chapter on
Patagonia. Each group should then answer the following questions:
1. Describe the culture of Patagonia.
2. Do you believe companies have a basic responsibility to preserve the environment around
the globe? Or is their responsibility to their owners, employees, and shareholders? Are
the two mutually exclusive?
3. Describe the “Don’t Buy This Jacket” campaign. Do you really believe it is a good idea
for a company to come out and literally say to their potential customers to consider not
buying their products?
4. Do you think that customers really care about Patagonia’s social responsibility beliefs?
Defend your position.
Each group should share its findings with the class.
Individual Assignment
Traditional buyers’ rights include the following three items.
1. The right not to buy a product that is offered for sale.
2. The right to expect the product to be safe.
3. The right to expect the product to perform as claimed.
Do you believe these rights are sufficient to adequately protect consumers? Defend your answer.
If you do not believe the rights are sufficient, what additional rights would you suggest and why?
Think-Pair-Share
Consider the following questions, formulate answers, pair with the student on your right, share your
thoughts with one another, and respond the questions from the instructor.
1. How would you define consumerism?
2. What is planned obsolescence? Do you believe marketers make a habit of using this
concept?
3. Do you believe marketers should be responsible to their shareholders or to
environmentalists? Why?
4. Define environmentalism.
5. Explain the role of ethics in marketing.
Classroom Exercise/Homework Assignment
People for the Ethical Treatment of Animals, known as PETA, claims that animals have rights,
and humans have no right to eat them, use them to produce clothing (leather goods and furs, for
example), or for testing purposes. They are against practices they say are cruel and barbaric,
including everything from corporate animal farming to breeding dogs and cats to supply our
nation’s pet supply.
The organization targets high profile companies and their practices, recently targeting Perdue
Farms and KFC for cruelty to chickens. Their activists have been known to break into test labs
and release the animals there. Others have released dogs that were with their owners at dog
shows.
Some have decried PETA as the lunatic fringe, while others praise their efforts to force us all to
treat animals humanely.
Read about PETA (www.peta.org). What do you think about the organization, their goals and
methods?
Classroom Management Strategies
Although there are several Key Terms in this section that should be defined for the students, this
is that rare chapter that could be more easily learned in a discussion format than a lecture.
Drawing out student opinions on the topics in this chapter will make the material come alive.
1. Take the time to fully discuss the concept of sustainability. It is important for students to
realize that businesses today must be focused on more than just the bottom line.
2. You can spend a full 30 minutes on the next section. Discussing actual situations that
could cause critics to make these charges would be helpful. If Christmas is near, a good
discussion can also ensue about the onslaught of advertising, both on television and in
newspapers. Debate whether this is the cause of materialism, or a reaction to it. An
interesting debate can also be held regarding cigarettes and alcohol – is it ethical to
market these products when we know they can be harmful? Have students take sides to
fully discuss the pros and cons.
3. The section on citizen and public actions should take 15 minutes. A brief history of both
consumerism and environmentalism is generally helpful. If you have an activist
university, and Earth Day is near, perhaps you could organize a group to participate
through increasing your own recycling and studying the history of the environmental
movement in the United States.
4. Finally, take 15 minutes to discuss sustainable marketing principles and marketing ethics.
PROFESSORS ON THE GO
Sustainable Marketing: Social Responsibility and Ethics
Key Concepts
Sustainable marketing and its importance
The impact of marketing on individuals, society, and business
What is sustainable marketing and how does it differ from the marketing concept and
the societal marketing concept?
Review the claims made by consumers, consumer advocates, public policy makers,
and others that the marketers are harming consumers through planned obsolescence,
shoddy or unsafe products, and poor service to disadvantaged consumers. Do you
agree with these claims?
Review the responses offered by marketers to claims that high distribution costs, high
advertising and promotional costs, and excessive markups lead to high prices that are
harmful to the consumer. Do you agree with the marketers’ responses?
Bring an example of a firm to class that you do not think is being
socially-responsible. How did you determine this? What were the firm’s negative
actions? What could the firm do to remove the negative social image?
Key Concepts
Consumerism
Environmentalism
Can an organization be focused on both consumerism and environmentalism at the
same time? Explain.
Find five examples of products or marketer practices that you perceive to be
environmentally-sensitive. How can you tell that this is a policy that is being
stressed?
What is environmental sustainability? List and describe the four parts of Figure 16.2.
Key Concepts
Societal marketing
Marketing ethics
Find an example of a company that you perceive is practicing the concepts of societal
marketing. Describe why you feel the company qualifies. Is its practice publicized?
Should it be?
List and describe the forms of products shown in Figure 16.4. Which of these are
desirable, and which are not?
How do firms meet their social responsibility function?