Socially Responsible Marketing

SOCIALLY
MARKETING
RESPONSIBLE

© 2014 Berlin Asong. All rights reserved. 2
I. Whatarefirmsoftencriticisedof?
i. Understandthelinkbetweenthosecriticismsandthesubjectofethics.
II. Howshouldfirmsrespondtothosecriticism?
i. Throughethics?
ii. Understandingthechallenges toethicaldecision-making.
III. WhatisGreenMarketing?
i. Isgreenmarketingafad?
IV. WhatisCorporateSocialResponsibility(CSR)?.
i. UnderstandthedriversofCSR.
ii. DofirmsbenefitfromengaginginCSRactivities?

30minutes
What criticisms do
organisations face nowadays?
Alternatively,what criticismsdo marketersfacenowadays?

1
CorporateTaxEvasion
Picture source: www.ecumenicalnews.com

Picture source: metro.co.uk

STPaul’sCathedral,London
CorporateGreed
2

Source: Northattan (2011). Retrieved from http://northattan.com/wp-content/uploads/2011/11/IMG_93111.jpg

(L-R) Mr. Jeffrey K. Skilling, former President and CEO of Enron Corporation; Dr. Robert Jaedicke,
Board of Directors Chairman of Audit and Compliance Committee of Enron Corporation; and Mr.
Herbert S. Winokur, Jr., Board of Directors Chairman of the Finance Committee of Enron
Corporation, during the Oversight and Investigation Subcommittee hearing.
ENRONGuilty of accounting
embellishment & fraud.
"Rogue" Bosses

WorldCom Accounting Scandal Revealed: 3.8 billion in mislabelled expenses had been used to inflate
cash flow and hide losses in 2001 and early 2002. Shown is former Worldcom CEO Bernard Ebbers,
Worldcom
"Rogue" Bosses

BernardMadoff’s
ponzischeme.
"Rogue" Bosses

Wasthe2008-2009
GlobalFinancialCrisiscaused
bycorporategreed?

ConsumerismAggressivepromotionglamorisesmaterialism.
3

Companies are often criticised for
creating artificial needs.
Doyouactuallyneedanotherpairofshoesorthatexpensiveshoes?

Thrown foods
Source: WRAP (2012). Retrieved from www.wrap.org.uk/content/pictures
Consequences of materialismand artificialneeds:

IntheUK,familyhouseholdthrows
£680offoodayear.
Source: WRAP (2012). Retrieved from www.wrap.org.uk/content/pictures
Source: The Telegraph (2012). Retrieved from
www.telegraph.co.uk/finance/personalfinance/consumertips/household-
bills/9268980/Families-waste-680-of-food-a-year.html

Click slide to watch video.
Internet connection is required.

Click slide to read article.

debts
Consequences of materialism
and artificial needs:

Illnesses

Obesesocietylinked
tohighcarbproducts.

Childobesityoftenlinkedto
highcarbproductsandpastimes
thatdiscourageactivelifestyle.

Source: BBC, 2013

Picture source: http://news.mcdonalds.com/press-releases/mcdonald-s-
launches-new-global-packaging-designs-nyse-mcd-975617
McDonald’s launches new
packaging with QR codes, to
help diners make informed
dieting choices.—Jan. 2013

Depression

Exploitation
of workers.
4

sweatshops

Underpaidworkers

Toyota Recalls, 2010.
Providing customers
with defective products
or poor services.
5

February2013horsemeat
scandal in Europe.
Source: gawker.com

Misleadingnutritionallabels
E.g. falsely claiming a product is
an organic or fair-trade product.

Fanciful,expensivepackaging
6

Deceitful packaging

Usingexcesspackaging

37© 2014 Berlin Asong. All rights reserved.
Highly priced products
and services beyond the
buying reach of many.
7

The poor pay for the same pricey
products and services as the rich.

Barclays fined £290m
for rigging LIBOR rate.Source: www.guardian.co.uk/business/2012/jun/27/barclays-chief-bob-diamond-bonus-fine
FormerBarclaysCEOBobDiamondresignedamidliborscandal
3 July 2012
Source: insurance-center.org
Price-fixing

Deceptive, unethical
& aggressive promotions.
8

Skechers USA Inc. fined
$40 millionformisleadingadvertising claims.

SkechersDeceivedConsumerswithShoeAds
Source: BloombergBusinessweek (2012). Retrieved from www.businessweek.com/ap/2012-05/D9UPVNB00.htm

Source: adpressive.com

Is it insulting?

Unfriend10friends,getafreewhopper

Give up
your friends
for a burger?

Stereotype

body figure & size.
Stereotype

9
Land pollution

Airpollutionfrom
industrialwastelike
carbonemissions.

BPoilspill
intheGulf
ofMexico
of2010.

Depletion
ofnatural
resources.

“Makingmore
beerbutusing
lesswater:we've
setourselvesa
targettoreduce
ouraverage
wateruseper
hectolitreofbeer
by25%by2015”. Picture: cervejaavecesar.blogspot.com
SABMiller

“We are active in
taking steps to discourage
irresponsible drinking”.

Cultural imperialism
by foreign brands:
erodingnationalandsub-cultures.
10

Americanisation of cultures

Unauthorised used
ofconsumers’
privatedetails.
11

Whatarethepossible
impactofthese
criticismsonorganisations(assumingtheywere
aimedatyourfirm)?

Legalfines
Consumerboycotts
Reputationaldamage
Unnecessarydistractions
Lossofshareholderwealth
Unsustainablebusiness
Customerexodus
Lossofjobs
Etc.
AdverseImpact

Howdoyou
respondtothese
criticisms?

ethics.
Organisationsmust
operatewithinacceptable

ETHICS
?

74
Ethics are values that an individual
uses to interpret whether an action or
behaviour is acceptable or appropriate.
© 2014 Berlin Asong. All rights reserved.
Peter Stanwick & Sarah Stanwick (2013), “Understanding Business Ethics”. 2nd edition. Sage publication, p. 3

It is the studyof
morality.

It is the Study of
right&
wrong

What’s right & wrong is
sometimes not clear-cut.
For example…

Is it right or wrong for
McDonald’s to profit from
selling high carb meals
often linked to obesity and
heart-related diseases?

Is it right or wrong for
companies to use bio-fuel
made from corn when 9 million
people (5 million are children)
die each year of hunger?

Yahoo CEO Scott
Thompson stepped
down after it was
revealed he doesn’t
have a computer
science degree as
stated in his CV.
RightorWrong?
May 2012

He lied to get a job
he “can do so well”.
It could be argued…
So what?

Hehastheskillstodo
hisjob,butnolongerhas
thetrustorintegrityofhis
employees&shareholders.
A counter-argument could be…

SkyNewsadmitshackingemails
butsaysitwas'inthepublicinterest'
Source: The Independent (2012). Retrieved from www.independent.co.uk/news/uk/crime/sky-news-admits-
hacking-emails-but-says-it-was-in-the-public-interest-7621831.html

Sky News argues its
action is morally right because
it helped solve a crime.
Hackinginto someone’s emailis a criminaloffence.

Is office
romance a
good thing or
bad thing?

From where does
society get its sense
of right & wrong?

Laws | Policies

Fromwheredolawmakers
orpolicymakersknowwhat
isgood&bad?

Religion

Traditions

Experience

Common sense

Laws
Religion
Traditions
Common
Sense
Experience
Beliefs
EthicsReferenceSet
Peopleturntobeliefs,
religion,laws,experience,
traditions &commonsense
whenmakingethicaldecisions.

Laws
Religion
Traditions
Common
Sense
Experience
Beliefs
EthicsReferenceSet
However,beliefs, religion,
laws,experience,traditions
&commonsense canspur
behaviourswhichcanbe
considered immoral.

What is right and
wrong is subjective.

What is right and wrong
is not universally binding.

Whatisrightandwrong
can be complex.

LEVELS OF ETHICS

InternationalEthics
NationalEthics
OrganisationEthics
Occupational
Ethics
PersonalEthics
Levels of Ethics

InternationalEthics

National Ethics

OrganisationalEthics

Occupational Ethics

Personal Ethics

InternationalEthics
NationalEthics
OrganisationEthics
Occupational
Ethics
PersonalEthics
LevelsofEthics
Sometimes,
makinganethical
decisionwould
requirethe
decision-makerto
considerthe
implicationsof
twoormorelevels
ofethics.

Thepracticesofmyfirm
contradictmypersonal
valuesandbeliefs.

Is your “personal ethics”
aligned with the ethics
of your country?

The practice of
developing & marketing
products or services with
environmental & people
considerations.

MARKETING MIX
Marketing
Mix
Product
Price
Place
Promotion
People
Physical
Layout
Process
Planet

MARKETING MIX
© 2014 Berlin Asong. All rights reserved.
Planetary
Considerations
Product
Price
Place
PromotionPeople
Physical
Layout
Process
112

Is green
marketing
a fad?

It’s likely not a
fad because…

Greenpractices
havebeenaround
forseveralcenturies.
1
Saha, M. & Darnton, G. (2005), “Green Companies or Green Con-panies: Are Companies Really Green, or
Are They Pretending to Be?”, Journal of Business and Society Review, vol. 110, no. 2, pp. 118-157

humansnurtured
theenvironmentto
ensurefoodsupplies.

The size of the
global green consumer
market is growing.
2

Almost 5000organisationspublishedcorporate
responsibilityreportsin2010.
3
Corporate Register (2011), “Corporate Responsibility Reporting Awards ‘11”, Corporate Register, pp. 4-5

Makingmorebeerbutusingless
water:we'vesetourselvesatargetto
reduceouraveragewateruseper
hectolitreofbeerby25%by2015.

In 2008, we achieved a 15.5%
reduction in waste disposed to landfill.

Leads to increased
sales and earnings.
4

Toyota’sPriushasbeenasuccesswithover
3 millionunitssoldworldwidesinceitwentonsalesin1997.

KraftFoodshas
cutitsannualuseof
fuelto680,000litres.

5
Improved
corporate
image.

Source:McDonald’s(2008)

Somearesceptical
aboutthebenefitsof
greenmarketing.
Why?

Green products and
services are expensive than
theirnon-greencounterparts.
1

Few shoppers
make buying decisions
on green credentials.
2

Productsorservices
that carry false
eco-friendly claims.
3

Limited evidence
supporting eco products or
services sell more than non-
eco products or services.
4

CorporateSocialResponsibility

Afirmoughttoachieve
social goalsbeside
itsprofit-makinggoal.

Whatarethese
social goals?

Consumers
Employees Investors
Suppliers/distributors
Communities
Government/Regulators
Organisation

Why firms
tend to aim for
financial profit?

Profit is a measure of
shareholders’ wealth.
1
Howwellshareholders’cashisused.

2
It’s a measure
of managerial
competence.

The firm needs
to stay solvent.
3

Whyaskfirmstoadoptsocialgoals?
what led to this
idea of CSR?

Negative consequences
of globalisation.
1

STPaul’sCathedral,London
Globalactivism
aimedatcorporate
establishmentfuelledby…
2

“Excessive”
executive pay.

Eventslikethe2008-2009
GlobalFinancialCrisis.

(L-R) Mr. Jeffrey K. Skilling, former President and CEO of Enron Corporation; Dr. Robert Jaedicke, Board of Directors
Chairman of Audit and Compliance Committee of Enron Corporation; and Mr. Herbert S. Winokur, Jr., Board of Directors
Chairman of the Finance Committee of Enron Corporation, during the Oversight and Investigation Subcommittee hearing.
ENRONGuiltyofaccounting
embellishment&fraud.
Corporate crimes

WorldCom Accounting Scandal Revealed: 3.8 billion in mislabeled expenses had been used to inflate
cash flow and hide losses in 2001 and early 2002. Shown is former Worldcom CEO Bernard Ebbers,
Worldcom

Americanisation of cultures

Carbon emissions

BPoilspill
intheGulf
ofMexico
of2010.

Wideninggap
betweenthe
poorandrich.
Source: asiantrendsmonitoring.com
Slums and luxury apartments exist side by side in Downtown Dhaka.

Depletion
ofnatural
resources.

Laws have failed to
provide satisfactory guide
to moral behaviour.
3

So, the firm benefits
from incorporating
social goals?

CSR
CASE for

SustainabilityArgument
Meetingtheneedsofpresentgeneration
withoutcompromisingtheabilityoffuture
generationstomeettheirownneeds.
— Norwegian Prime Minister Gro Harlem Brundtland, 1980s

Does your firm act
in ways that undermine
the capacity of people to
survive in the future?

Does the firm act in
ways that hinder its capacity
to survive in the future?

How do we
ensure the firm survives
in the future?

Kraft Foods supporting cocoa farmers in
Ghana through training and equipment provision.

ReputationalArgument
Toattracttalentedpeopleforwork

Tobuycustomerloyalty
Source: Bonini, McKillop, & Mendonca 2007

Almost 5000organisationspublishedcorporate
responsibilityreportsin2010.
Corporate Register (2011), “Corporate Responsibility Reporting Awards ‘11”, Corporate Register, pp. 4-5
AreasonwhyfirmshaveembracedCSRis
becauseofthepositiveimpactoncorporateimage.

However,theveracity
oftheclaimsinCSRreports
hasbeenquestioned.

License-to-operateArgument
Through CRS, the
firm obtains& renews its
permission to operate.

MoralArgument
It’s simply the
right thing to do.

New-marketopportunityArgument
CSR can present
opportunities for new ideas
(newproducts,services,orbusinesses).

“CSRcanbeasourceofopportunity,
innovation,andcompetitiveadvantage.”
— Porter & Kramer (2006) Strategy & Society, HBR

Toyota’sPriushasbeenasuccesswithover
3 millionunitssoldworldwidesinceitwentonsalesin1997.

CSR
CASE against

Afirmisaprofit-makingunit;
CSRderailsthefirm
fromitsgoaltomake
moneyforitsowners.
1

...goesagainstthis.

managersareeconomicagents.

Socialgoals
aretheprovince
ofgovernments,
notfirms.
2
Source: rnw.nl
Former US President Bill Clinton in Haiti following the 2010 catastrophic earthquake.

Byachievingeconomic
goals,thefirmindirectlyhelps
societyachievesocialgoals.
3
Throughtaxationrevenue;staffemployment;&
productsorservicesthatimpactconsumerlives.

CSRisexpensive;bad
useofshareholder’smoney.
4

Dofirmsthatengage
inCSRactivitiesoutperform
thosethatdon’t?
5

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