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Chapter 04 - Ethical and Social Responsibility for Sustainable Marketing
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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:
