DISCUSSION STARTERS
Discussion Starter 1: Corporate Social Responsibility
Project The Pyramid of Corporate Social Responsibility (Figure 4.1) onto a screen. Ask students to talk
about how firms like Altria (formerly Philip Morris) and Walmart do an excellent job of executing the
base level and the top level of the pyramid, while they finesse the middle two pyramid steps (legal and
ethical). Ask for class comments to spark some lively conversation.
Discussion Starter 2: Personal Ethical Issues
Ask students to write about a personal experience they had with an ethical issue related to one of the
elements of the marketing mix (product, distribution, promotion, and price). They can use anecdotes from
work, school, or something that happened to a friend or family member. These can be used as a
discussion starter related to Table 4.3.
Discussion Starter 3: Walmart’s Opening Price Point
Sam Walton, founder of Walmart, had an early strategy for growing his business related to pricing.
The “Opening Price Point” strategy used by Walton involved offering the introductory product in a
product line at the lowest point in the market. For example, a minimally equipped microwave oven
would sell for less than anyone else in town could sell the same unit. The strategy was that if
consumers saw a product, such as the microwave, and saw it as a good value, they would assume that
all the microwaves were good values. Walton also noted that most people don’t buy the entry -level
product; they want more features and capabilities and often trade up.
Ask the students to break up into teams and assign the role of defending this strategy or casting this
strategy as an unethical act. Have the students present their thoughts on either side of the issue.
Discussion Starter 4: Retaliation Against Whistle-Blowers
Project Figure 4.5 Retaliation against Whistle-Blowers onto a screen. It is unacceptable for managers
to punish those who do report ethical misconduct, although retaliation is still fairly prevalent. The
National Business Ethics Survey study stated that 21 percent of respondents who reported
misconduct said they experienced retaliation, from getting the cold shoulder from other employees to
being demoted. Ask the students for ideas on how companies can better avoid retaliation against
whistle blowers. You may want to discuss this article from the New York Times:
Ask the students how they would act in this situation?
CLASS EXERCISES
Class Exercise 1: Dealing with Ethical Issues.
Throughout our lives and careers we must make choices which pose ethical dilemmas. These decisions
are difficult to make and require careful deliberation.
In this exercise you will envision an ethical dilemma. The dilemma can be a situation you have already
encountered or one you learned about from someone else. How would you or did you resolve this
dilemma? Remember ethical dilemmas generally do not have right or wrong answers.
Step 1: Write a brief description of an ethical dilemma about which you have knowledge.
Step 2: What are the key ethical issues in this dilemma?
Step 3: How would you resolve this dilemma? Why would you or did you choose this resolution?
Class Exercise 2: Create a Class Code of Conduct
Recommended as a group activity
Most organizations and associations have codes of conduct or codes of ethics. These codes formalize
rules and standards that the organization expects from its employees or members. In this exercise you will
practice writing a conduct code for your class.
Step 1: Brainstorm a list of issues which arise as a result of student behavior in class, such as texting
during class or talking during lectures.
Step 2: Using Table 4.5 as a guide, outline your own code for the class.
Step 3: Write your own code of conduct for this course.
Step 4: Make recommendations for implementing this code.
Class Exercise 3: Ethical Dimensions of Managing Supply Chain Relationships
Unilever is working toward full sustainability when it comes to palm oil production. The process of
extracting palm oil has gained global attention because of unsustainable practices such as
deforestation. Since Unilever is a large company that works with an extensive supply chain,
maintaining ethical sourcing practices can be extremely hard to manage and track. Yet as a buyer,
Unilever is responsible for any unethical sourcing practices in its supply chain. In order to ensure
responsible practices, Unilever has built a palm oil processing plant in Indonesia. Also, Unilever has
purchased GreenPalm certificates from the roundtable on Sustainable Palm Oil (RSPO) when it
purchases palm oil from other processing plants. However, this method is not entirely dependable
because the processing of all the palm oil is not completely traceable. The following link includes
more information on Unilever’s sustainable palm oil practices and a video:
http://www.unilever.com/sustainable–living–2014/reducing–environmental-impact/sustainable–
sourcing/sustainable-palm–oil/
1. Why is it so difficult for large firms to monitor their supply chain?
2. What are some ways that Unilever is attempting to improve the sustainability of its supply chain?
3. What are some problems with relying on GreenPalm certificates? Do you think Unilever should
do more to ensure the sustainability of its palm oil sourcing?
Class Exercise 4: Improving Marketing Ethics
Unethical employees, or “bad apples” in the workplace, can be infectious. Bad apples are more
prevalent than employers might think. The impact that bad apples have on employee morale and
productivity can be catastrophic. Employees who cannot deal with bad apples become defensive,
leading to anger, disillusionment, anxiety, and decreased productivity. Dejected employees are also
more likely to commit unethical acts themselves by cutting corners or taking retaliatory action
against the company. Fortunately, many companies have discovered solutions to the bad apple
dilemma. The best way is to spot bad apples before hiring them. To dissuade bad apples, the CEO of
Robert W. Baird & Co. makes it a priority to alert candidates in interviews that they will be fired if
they prove to be bad apples. The company then strictly enforces its policy. Technology firm Pulse
screens candidates by having them work for a few days before hiring to observe their personality. If
bad apples still end up in the company, it is important for employers to have policies to prevent them
from infecting the rest of the barrel. Related to this discussion, ask the students these questions:
1. What are some other ways to deal with employees that are bad apples?
2. Why might bad apples cause other employees to engage in misconduct?
3. Why do you think it might be hard to root out bad apples?
ANSWERS TO DEVELOPING YOUR MARKETING PLAN
The information obtained from these questions should assist students in developing various aspects
1. Determine the level of importance that marketing citizenship holds in your company.
Identify the various stakeholders who would be affected by your strategic decisions.
Students should be able to identify relevant stakeholders who are affected by marketing decisions.
2. Referring to Table 4.2 as a guide, discuss how the negative impact of your product’s production
and use could be minimized.
Students should refer to Table 4.2, which discusses major social responsibility issues, when
answering this question. Again, students are asked to think about their firm’s stakeholders. In this
3. Using Table 4.3, identify additional issues related to your product for each of the 4Ps.
The answer to this question will be highly varied depending on the students’ products. In addition to
ANSWERS TO DISCUSSION AND REVIEW QUESTIONS
1. What is social responsibility? Why is it important?
Social responsibility refers to an organization’s obligation to maximize its positive impact and
minimize its negative impact on society. Ignoring society’s demands for responsible marketing can
2. What are stakeholders? What role do they play in strategic marketing decisions?
Stakeholders include those constituents who have a “stake” or claim in some aspect of a company’s
3. What are four dimensions of social responsibility? What impact do they have on marketing
decisions?
Social responsibility includes economic, legal, ethical, and philanthropic dimensions. Economic and
company, but they promote human welfare and goodwill.
4. What is strategic philanthropy? How does it differ from more traditional philanthropic
efforts?
Strategic philanthropy refers to the synergistic use of organizational core competencies and
5. What are some major social responsibility issues? Give an example of each.
Among major social responsibility issues are the natural environment, consumerism, and
community relations. Students’ responses to the second part of the exercise will vary, but they
should be able to cite appropriate examples for each issue.
6. What is the difference between ethics and social responsibility?
Marketing ethics is a dimension of social responsibility which refers to principles and standards that
define acceptable marketing conduct. Social responsibility is a broader concept which refers to an
7. Why is ethics an important consideration in marketing decisions?
It is important for marketers to go beyond legal issues and work to foster mutual trust among
8. How do the factors that influence ethical or unethical decisions interact?
Individual factors, organizational factors (e.g., organizational culture, organizational relationships,
organizational pressure), and opportunity are the three factors that interact to determine ethical
decisions in marketing. People often base their decisions on their own values and principles of right
9. What ethical conflicts may exist if business employees fly on certain airlines just to receive
benefits for their personal frequent-flyer programs?
The potential for ethical conflicts would depend on the company’s policy. If the company has a
policy which specifies that frequent flyer mileage belongs to the company, then no ethical conflict
10. Give an example of how ethical issues can affect each component of the marketing mix.
Answers for these may vary, but students should be able to cite appropriate examples.
Product: The brand name can be misleading. For example, Citrus Hill Fresh Orange Juice was
changed due to the controversy about it being made from concentrate— not from fresh orange juice.
The product can be dangerous. General Motors mounted the fuel tanks of some pickup trucks
outside the frame, even though they were found to be involved in fiery crashes twice as often as
other trucks.
software.
11. How can the ethical decisions involved in marketing be improved?
Ethical decisions in marketing organizations can be improved by eliminating unethical persons
through screening techniques, by enforcing the firm’s ethical standards, and by improving the
12. How can people with different personal values work together to make ethical decisions in
organizations?
While individuals may define ethics differently and not agree on personal ethical standards, they
should be able to join together and agree on standards of acceptable behavior to guide all marketing
13. What trade-offs might a company have to make to be socially responsible and responsive to
society’s demands?
There are costs associated with many of society’s demands and satisfying these demands often
involves tradeoffs. For example, society has expressed a demand for a cleaner environment and the
14. What evidence exists that being socially responsible and ethical is worthwhile?
Research has shown that companies that do not develop strategies and programs to incorporate
ethics and social responsibility into their organizational cultures may suffer poor marketing
reputation among consumers, which may lead to increased sales.
COMMENTS ON THE CASES
VIDEO CASE 4.1: TOMS SHOES EXPANDS ONE-TO-ONE MODEL TO
EYEWEAR
Summary
TOMS is known for their for-profit philanthropic business model, which allows the company to
donate one pair of shoes to a child for every pair of shoes purchased. TOMS is now applying that
model to eyewear. For every pair of sunglasses TOMS sells, a person with vision problems in a
developing nation receives surgery, prescription glasses, or medical treatment to help restore his or
her sight. TOMS takes its obligations for social responsibility seriously by working closely with local
humanitarian organizations and striving for a responsible supply chain. Even though they pay higher
prices, TOMS’ customers feel committed to the company because they know that their purchases are
going toward a good cause.
Questions for Discussion
1. Do you think TOMS is successful because of its unique products, or is it the firm’s
approach to social responsibility?
Students’ opinions will vary. Some people really like TOMS for its products, regardless of the
company’s activities. Some of TOMS’ products are stylish and have not been replicated at lower
2. How does TOMS manage its supply chain in order to ensure ethical and socially responsible
conduct?
TOMS uses factories in China, Argentina, and Ethiopia for manufacturing, which creates
complex supply chain relationships that must be carefully managed. TOMS created a set of
3. How does TOMS’ business model relate to the understanding of stakeholders and strategic
philanthropy?
Strategic philanthropy is the synergistic use of organizational core competencies and resources to
address key stakeholders’ interests and achieve both organizational and social benefits. TOMS
CASE 4.2: ETHICS DRIVES BARRETT-JACKSON AUTO AUCTION
COMPANY TO SUCCESS
Summary
Classic and vintage car auction company Barrett–Jackson has created an ethical culture that considers
the needs of buyers, sellers, and the community. The company strives to maintain the rights of all
stakeholders involved in the auction, so they instituted a number of programs to ensure that the
auction process between buyer and seller remains fair. Barrett–Jackson anticipates the concerns
associated with auctions by providing security cameras to monitor auctions, providing access to
insurance, and investigating the authenticity of automobiles. The company also participates in
philanthropic activities.
Questions for Discussion
1. Why is ethical behavior so important for an auction company such as Barrett-Jackson?
Auctions are associated with a lot of customer concerns. Consumers might not know the value of
2. In what ways does Barrett-Jackson protect the rights of its buyers and sellers?
Barret-Jackson recognizes the inherent rights of the stakeholders involved in auctions transactions. It
protects buyers’ rights by working to prevent false bids and ensuring accurate documentation. The
3. How do solid community relations help Barrett–Jackson succeed?
Barrett-Jackson’s emphasis on community relations and customer satisfaction has helped secure its
STRATEGIC CASE 2: REI: AN ETHICAL CONSUMER COOPERATIVE
Summary
Recreational Equipment Incorporated (REI) is a national retail cooperative famous for its outdoor
apparel and equipment. REI maintains a strong focus on all stakeholders, an emphasis that has
encouraged the organization to offer superior goods and services in areas such as mountain climbing,
camping, and other outdoor activities. REI’s values include authenticity, quality, service, respect,
integrity, decency, and balance. Ethical conduct is at the core of its culture. This case discusses REI’s
challenges to maintain customer satisfaction while maintaining fairness to all stakeholders. Also
discussed is how REI uses social media outlets to gauge and address the sociocultural environment.
Finally, REI’s dedication to environmental stewardship is discussed. The marketing citizenship that
REI embraces has proven to be a strong force in garnering stakeholder attention, generating profits,
and advancing a stakeholder orientation.
Questions for Discussion
1. Describe stakeholder orientation at REI.
REI embraces a stakeholder orientation by considering the importance of all relevant
stakeholders. Some major stakeholders that REI considers include customers, communities, and
the environment. REI meets customer needs by offering quality products with a 100%
2. How does REI implement social responsibility?
Students might choose to list a variety of ways that REI implements social responsibility. For
instance, it demonstrates social responsibility by supporting local programs to further
conservation and outdoor recreation. Its PEAK program introduces youth to the wonders of the
3. How do REI’s values relate to the development of an ethical culture?
REI’s values include authenticity, quality, service, respect, integrity, decency, and balance. These
values are at the heart of the company’s work environment and are reflected in their activities.