There is a growing awareness among Indian marketers and multinational corporations operating in India about the importance of CSR and ethical behavior in marketing. They acknowledge that it is crucial to conduct business in a manner that not only maximizes profits but also benefits society. Corporate social responsibility involves businesses making an ongoing commitment to act ethically and contribute to economic development. This commitment includes enhancing the welfare of employees, their families, the local community, and society at large.
The idea of “society” encompasses both customers and the general public, underscoring the significance for a company to take into account the needs of all stakeholders in its business activities. Stakeholders comprise individuals who are impacted by or have the capacity to influence a company’s choices and behaviors.
The concept of corporate social responsibility (CSR) is commonly known by various names including business ethics, corporate citizenship, corporate accountability, and sustainability. In essence, CSR encompasses actions, methods, and communication practices. Social responsibility and ethics are integrated into several management disciplines such as HR, Finance, and computer.
Understanding Corporate Social Responsibility (CSR) and Ethics in marketing is crucial for marketers. They need to be aware of ethical conflicts and comprehend concepts such as Consumerism, Social responsibility, and ethics in Marketing. It is also important to consider the Natural Environment and its association with Green Marketing, Cause Related Marketing, Social Marketing, Ethnic Marketing, and their connection to Marketing Ethics. The author provides detailed explanations of each aspect in the following paragraphs.
According to Weeden (1998, p. 14), social marketers have transitioned from begging to partnering. Nevertheless, this shift carries risks for both parties involved. Businesses discover that engaging in social enterprise can jeopardize their reputation if they are discovered to cross ethical boundaries (Sarner and Anderson 1996).
In this discussion, we address the potential ethical challenges that social alliances can present for their partners. We also explore the various options that social marketers have to identify and solve these ethical dilemmas in social alliances. Consequently, the relevance of social responsibility and ethics in marketing becomes more pronounced when considering motivations and partnerships.
At the onset, it is crucial to clarify the definition of “marketing alliances.” A marketing alliance is a formal or informal agreement between organizations that aims to achieve marketing benefits that would not be attainable for either party individually. We believe that the term alliances includes two out of the three types of marketing exchange identified by Gundlach and Murphy (1993).
The issues that represent a company’s focus on Corporate Social Responsibility (CSR) differ based on the business, size, sector, and geographic region. In broad terms, CSR encompasses areas like business ethics, community investment, environment, governance, human rights, market place, and workplace. CSR goes beyond mere charity and necessitates that responsible companies fully consider the impact on stakeholders and the environment when making decisions. This entails striking a balance between the needs of all stakeholders, profitability, and adequately rewarding shareholders.
For the new generation of corporate leaders, prioritizing profit optimization over profit maximization is crucial. As a result, there has been a transition from accountability towards shareholders to a focus on social responsibility towards customers and other stakeholders. In the highly competitive global market of today, ethics play a significant role as they involve human values and beliefs. Business operations extend beyond borders, requiring marketers to navigate across various cultural contexts. Several multinational corporations (MNCs) such as McDonald’s and Nestle have encountered significant challenges due to their disregard for ethical considerations in their marketing strategies.
They have suffered significant financial losses and attrition of hybrid customers because of unethical advertising and promotional tactics. Experts consider marketing to be a form of human behavior that is open to academic examination and public scrutiny. Ethics involves studying the moral principles that govern conduct. Throughout history, there have been two main perspectives on the study of ethics in marketing. The first is “International”.
Marketing Conference on Marketing & Society, 8-10 April, 2007, IIMK 19 Part I – Social Responsibility, Ethics & Marketing
Let the buyer beware”. From these perspectives, the seller’s rights are paramount. A company disregards customer needs and wants. The alternative perspective is “let the seller beware”. In this case, customer satisfaction is prioritized above all else. Which viewpoint is correct? How do we reconcile the conflicts that arise from these differing opinions?
In their book, “Corporate Social Responsibility,” Kotler and Levy define corporate social responsibility (CSR) as the commitment to enhance community well-being through discretionary business practices and corporate resource contributions. Being socially responsible offers various advantages.
- enhanced company and brand image
- easier to attract and retain employees
- increased market share
- lower operating costs
- easier to attract investors.
Corporate Social Responsibility (CSR) is when a company prioritizes the well-being of customers, employees, suppliers, the local community, society, and the environment. It’s a way for companies to show their dedication to these stakeholders.
- recognizes that its activities have a wide impact on the society and that development in society, in turn supports the company to pursue its business successfully
- actively manages the economic, social, environmental and human rights. This approach is derived from the principles of sustainable development and good corporate governance.
Marketing managers in different firms may perceive certain social issues as more important than others. The significance of a specific social issue is influenced by factors such as the company’s products, promotional activities, pricing, distribution policies, and its overall philosophy regarding social responsibility.
The Company had a workforce of 7000 individuals and believed that each direct job created 30 – 40 additional positions in the supply chain. Similar to its parent company, Coke India put emphasis on both community and environmental aspects in its Corporate Social Responsibility (CSR) initiatives. Its main priorities included education, with the establishment of primary education projects aimed at benefiting children living in slums and villages. Additionally, the company supported community-based rainwater harvesting projects to restore water levels and promote conservation education, as well as contributed to health initiatives. In parallel, PepsiCo Pepsi Cola also contributed to the economic development of rural areas and offered to transfer food-processing, packaging, and water-treatment technology to India.
Pepsi has identified four Ps as the bundle of benefits for entering a market. In addition, they have added two more Ps, politics and public opinion. This approach is also being adopted by other multinational companies such as Microsoft, McDonald’s, Nokia, Unilever, ITC, who recognize the importance of social responsibility in achieving sustainable market development and growth both in their home countries and in the countries they operate in. In conclusion, there are several driving forces behind the adoption of a higher level of corporate social responsibility, including rising customer and employee expectations, government legislation and pressure, investors considering social criteria, and evolving business procurement practices.
Companies should assess if they are genuinely engaging in ethical and socially responsible marketing practices. Ethics and marketing behavior go hand in hand. The most respected companies globally uphold a set of principles centered around prioritizing the well-being of people, rather than solely focusing on their own interests. It is recommended that society employ legal measures to precisely define practices that are unlawful, detrimental to society, or against fair competition.
Companies need to implement and distribute a written code of ethics, create a company culture that values ethical behavior, and hold individuals accountable for following ethical and legal standards. Additionally, marketers must demonstrate a sense of social responsibility in their interactions with customers and other stakeholders. The future presents numerous possibilities for companies, as advancements in solar energy, online networks, cable and satellite TV, biotechnology, and telecommunications are set to revolutionize the world. However, the socioeconomic, cultural, and natural environments will also introduce new constraints on marketing and business practices.
Successful companies are those that can innovate new solutions and values while also being socially responsible. Ethical marketing, which involves satisfying customers and nurturing long-term relationships with them, is believed to be effective marketing. By prioritizing the well-being of our customers, we not only generate profits but also uphold ethical principles.
While it may be possible to achieve short-term profit gains by deceiving customers, this is not a viable strategy for building a successful business. Furthermore, when it comes to social responsibility, a company should prioritize the well-being of all its stakeholders – including customers, employees, suppliers, distributors, local communities, society as a whole and the environment.
References
- Drumwright, Minette E. , Peggy H. Cummingham, and Ida E. Berger (2000), “Social Alliances: Company/Nonprofit Colloboration, “Marketing Science Institute Working Paper Ethics in Marketing – Shell Horowitz P. 18,19
- Gundlach, Gregory D. and Patrick E. Murphy (1993), “Ethical and Legal Foundations of Relational Marketing Exchanges, “Journal of Marketing, 57 (October), 35-46.
