Marketing Chapter 4 Homework A group of students recorded movies at a local theater

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APPLYING MARKETING KNOWLEDGE

1. What concepts of moral philosophy and social responsibility are applicable to the

practices of Anheuser-Busch described in the introduction to this chapter? Why?

2. Five ethical situations were presented in this chapter: (a) a medical society’s decision

to set fee schedules, (b) the use of a computer program by auto dealers to arrange

financing, (c) smoking in China, (d) downloading movies, and (e) the pricing of

Cerdelga for the treatment of a rare genetic illness. Where would each of these

situations fit in Figure 4-1?

Answers: These ethical/legal situations can be assigned in a quadrant of the ethical-legal

continuum framework shown in Figure 4-1:

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3. The American Marketing Association Code of Ethics shown in Figure 4-3 details the

rights and duties of parties in the marketing exchange process. How do these rights

and duties compare with the Consumer Bill of Rights?

Answers: The Consumer Bill of Rights codified the ethics of exchange between buyers and

seller. The four rights advocated are the right to: (1) safety, (2) be informed, (3) choose,

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4. Compare and contrast moral idealism and utilitarianism as alternative personal

moral philosophies.

5. How would you evaluate Milton Friedman’s view of the social responsibility of a

firm?

6. The text lists several unethical practices of consumers. Can you name others?

Why do you think consumers engage in unethical conduct?

Answers: There are numerous unethical practices of consumers. The list below is

suggestive of such behavior:

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7. Cause marketing programs have become popular. Describe two such programs with

which you are familiar.

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BUILDING YOUR MARKETING PLAN

Consider these potential stakeholders that may be affected in some way by the

marketing plan on which you are working: shareholders (if any), suppliers, employees,

customers, and society in general. For each group of stakeholders:

1. Identify what, if any, ethical and social responsibility issues might arise.

2. Describe, in one or two sentences, how your marketing plan addresses each potential

issue.

Not a part of a traditional marketing plan, the “stakeholder analysis” attempts to outline

the potential impact on key stakeholder groups of potential future company actions reflected in

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TEACHING NOTE FOR VIDEO CASE VC-4

Toyota: Building Cleaner, Greener Cars

Synopsis

This case describes Toyota’s initiatives in the realm of societal responsibility and

stakeholder responsibility. Special attention is placed on the Prius, a hybrid vehicle with a

gasoline and an electric motor combination, and efforts to educate people so they can reduce

their environment footprint. A recurrent theme in the case and video is the notion of

sustainable mobility.

[Video 4-4: Toyota Video Case (kerin.tv/14e/v4-4)]

Background

Kiichiro Toyoda began research on gasoline-powered engines in 1930. The Toyota

Corolla was introduced in 1968 and went on to become the best-selling passenger car in the

world, with 27 million purchased in more than 140 countries. In 1998, Toyota launched its

first full-sized pickup, the Toyota Tundra. Toyota also expanded its product line by adding the

Lexus brand, which became known for its exceptional quality and customer service. Toyota

also introduced the Scion brand of moderately priced vehicles for the youth market.

By 2012, Toyota had the capacity to build 2.2 million cars and trucks and 1.45 million

engines in 15 plants across North America. Toyota’s sales and distribution organization

includes 1,500 Toyota, Lexus, and Scion dealers. Today, Toyota is the world’s largest

automobile manufacturer with revenues of $235 billion and 325,000 employees. The company

is ranked the 10th largest corporation by Fortune magazine. The company’s core principle is

“to contribute to society and the economy by producing high–quality products and services.”

Its success is often attributed to a business philosophy referred to as “The Toyota Way.”

There are two values that act as pillars of The Toyota Way: continuous improvement

and respect for people. As the company has grown, it has also sought a larger role in society.

Combining The Toyota Way with its corporate philanthropy has led to an environmental vision

that includes many ideas related to the concept of “sustainable mobility.” One of these ideas

was eventually introduced as the Prius, a hybrid vehicle with a gasoline engine and an electric

motor combination called the Hybrid Synergy Drive.

To increase awareness and knowledge of the Prius, Toyota specified the development

of partnerships as a goal. Toyota announced a grant of $5 million and 25 Toyota vehicles in

support of U.S. National Parks. Generally, the goal of the national parks partnership program

is to make a personal connection with park visitors about Toyota’s hybrid vehicles when they

are in a natural setting in which they are receptive to receiving a message about sustainable

mobility. Research by Toyota indicates that the program is working. In the future, all of

Toyota’s marketing activities, including the partnership strategy and the national parks

program, will determine if Toyota can become “the most respected car company in the world.”

Teaching Suggestions

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Most students will be familiar with some Toyota vehicles such as the Corolla, Camry,

RAV4, Tacoma, 4Runner, and possibly the Prius. A good way to start discussion is to:

1. Ask the class to describe their perceptions of the company. Students may mention media

attention about brake problems with some Toyota vehicles. They may also describe some

of their own experiences from owning or driving a Toyota. If it is not mentioned ask for

perceptions of Toyota’s position on environmental issues, which will provide a good

introduction to the case.

2. This case also provides an opportunity for instructors to discuss a wide range of topics

discussed in Chapter 4. In addition to the questions, an instructor can introduce the

“triple bottom line,” the “social audit,” and “sustainable development” to augment

student answers.

Answers to Questions

1. How does Toyota’s approach to social responsibility relate to the three concepts of

social responsibility described in the text (profit responsibility, stakeholder

responsibility, and societal responsibility)?

Answers:

As defined in the Chapter 4, “social responsibility means that organizations are part of a

larger society and are accountable to that society for their actions.” These three concepts of

social responsibility are shown in Figure 4-4 and described in the text:

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2. How does Toyota’s view of sustainable mobility contribute to the company’s overall

mission?

Answer:

3. Has Toyota’s National Parks project been a success? What indicators suggest that the

project has had an impact?

Answers:

4. What future activities would you suggest for Toyota as it strives to improve its

reputation?

Answer:

Figure 1 shows the results of a survey of consumer interests and their response to the

question, “Who should take the lead in addressing environmental issues?” The results suggest

that in the future consumers will expect businesses to be proactive about the environment and

sustainability.

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Epilogue

Auto industry experts predict total sales of 16.4 million vehicles in 2014, which

represents the highest annual sales since consumer purchased 16.5 million new cars in 2006 and

a substantial improvement since sales bottomed during the recession in 2009. Over the past 50

years, Toyota has built more than 25 million cars and trucks in North America, including 2.3

million last year. Approximately 80 percent of the cars sold over the past 20 years are still on the

road today.

Toyota was one of the first automakers to promote sustainable practices related to

automobiles and has developed a variety of recycling technologies to recover materials and the

end of the vehicles’ use. For example, Toyota has announced a motor magnet and battery pack

recycling program for hybrid vehicles, which have a life expectancy of 150,000 to 300,000

miles. Toyota recently received an award for its on-going efforts to reduce, reuse, and recycle

resources. In addition, through its TogetherGreen conservation initiative, Toyota has invested

$23.5 million in community-based conservation projects in 295 cities throughout all 50 states.

Toyota is currently working on a hydrogen fuel-cell car, called the FCV, for introduction in

2015. The fuel cells create electricity by combining hydrogen with oxygen in the atmosphere,

and are viewed as the next generation of technology to help reduce greenhouse gas pollution.

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TEACHING NOTE FOR APPENDIX D CASE D-4

BP’s Deepwater Horizon: Ethics and Environmental Effects

Synopsis

The BP Deepwater Horizon incident is bound to become a classic illustration of corporate

greed and a lack of social responsibility. Building upon a history of safety violations, this

incident represented the culmination of managerial decision-making that placed cost-cutting and

meeting construction deadlines above all other concerns. In addition to the rig employees, the

“casualties” of this incident were far reaching—from the coveted Louisiana coastal marshes and

the wildlife inhabiting them—to the residents themselves (those whose livelihoods depended on

fishing and tourism) and the state’s economy as a whole. Further compounding the situation,

BP’s lack of transparency following the incident (magnitude of the leak) and subsequent public

relations campaign were highly criticized.

Teaching Suggestions

The BP case can be introduced to the class by asking students the following:

1. How familiar were you with the BP Gulf oil spill before reading this case?

2. Did the firm’s disregard for safety and for the environment surprise you? Why or why

not?

Answers to Questions

1. Historically, what moral philosophy has guided decision-making at BP? Following

the Deepwater Horizon disaster, do you expect this to change? Why or why not?

Answers: