Business Explain: Ethics and Social Responsibility

What can be ethical issues of place/distribution?

1. Discriminatory distribution

2. Demanding unfair benefits/kickbacks/advances from retailers or suppliers

What can be ethical issues of promotion?

1. Claiming inaccurate product benefits through advertising

2. Not informing the customer fully through different communication

3. Using inappropriate language in advertising

4. Using discriminatory or degrading slogans

5. Advertising directed towards younger children

6. Paying illegal kickbacks to promote the product

What can be ethical issues of price?

1. Two or more competitors fix a price that is higher than competitive pricing

2. Charging discriminatory prices without any extra value provided

3. Transfer pricing; over/underpricing internal invoices for taxation purposes

4. Charging high monopolistic prices

5. Pay bribery/illegal payments or gifts to acquire sales

What can be ethical issues of product?

1. Product that can harm customers/users and/or cause health problems

2. Products that pose a safety risk for the users

3. When customers are not fully informed about product content

4. Use of environment-friendly packaging

What can be ethical issues of positioning?

1. Positioning a low-quality product as a high-quality product.

2. Product positioned to perform a function that is not true.

3. Blackmailing customers that failure to use the product will harm them in some way.

What can be used as guidelines for making ethical business decisions?

Transparency
Determine how you feel about others knowing what you have done

Effect
Determine who gets affected by your decision

Fairness
Consider if others would find your decision fair

Check
Consider if your decision affects the public/customer

What are the implications of ethics and social responsibility for the marketing mix of a company?

Ethics and social responsibility become particularly important for marketers as they are the ones who have to convey this to the market. Moreover, it is quite often the marketing function that has to take the major responsibility, at least towards the customers, and to ensure the positive performance of the company.

Product safety, packaging and labeling have to be undertaken in a responsible way. The marketing message, such as advertising, has to be honest and clean, and not manipulative or deceptive. The same is true for pricing; customers should be able to compare prices with competing products. Finally, the company has to participate in the community's social programmed such as education and equality.

What are the three levels of social responsibility? How can society evaluate whether a company is behaving in a responsible manner or not?

1. Absolute minimum responsibility
Perform efficiently economic functions such as products, job creation and growth.

2. Awareness
Be aware of changing social values and priorities with regard to the environment, safety of employees and customers, and relationships with employees.

3. Emerging priorities
Improving the life of local communities and helping them solve problems such as poverty reduction and injustice. Companies can make a considerable contribution in this respect.

What is meant by Green marketing? How is it enforced?

The twenty-first century has been dubbed "the century of environmental awareness". Consumers, business people and public administrators must now demonstrate a sense of "Green" responsibility by integrating environmental habits into individual behavior, also known as green marketing. Several instruments are used to enforce green marketing, with some of them being through green movements; political/consumer movements favoring environmentalist friendly approaches. Eco-labels are another enforcement mechanism which is a label or logo placed on a product to show that a company is socially responsible.

Can a company behave legally and still be unethical?

Social responsibility refers to voluntary responsibilities that go beyond the purely economic and legal responsibilities of a firm. This means that the firm is willing to sacrifice part of its profit for the benefit of its stakeholders. In other words, yes a firm can behave according to law, but still act in an unethical manner.