Social Responsibility and Ethics in Marketing

There is a growing trend among academicians and professionals (Indian Marketers and MNCs operating in India started realizing the importance of CSR and ethics in marketing and their role in conducting the business which takes care of the society’s interest at the same time optimizing the profit of their organizations. Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”.

Here society meaning customers and people at large. It is an expression used to describe what some see as a company’s obligation to be sensitive to the needs of all the stakeholders in its business operations. A company’s stakeholders are all those who are influenced by, or can be influenced by, or can influence, a company’s decisions and actions.

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A variety of terms are used – sometimes interchangeably – to talk about corporate social responsibility (CSR): business ethics, corporate citizenship, corporate accountability, sustainability. In its simplest terms it is: “what you do, how you do it, and when and what you say. Social responsibility and ethics are blended together and applied in various discipline of management such as HR, Finance, computer etc.

Literature Review When we start talking about Social Responsibility or Corporate Social Responsibility (CSR) and Ethics in marketing the marketer needs to know the concepts of Corporate Social Responsibility, how is it applicable in the field of marketing and ethical conflicts faced by the marketers, the concepts of Consumerism, Social responsibility and ethics in Marketing. The Natural Environment, Green Marketing, Cause Related Marketing, Social Marketing, Ethnic Marketing and its relationships in Marketing Ethics. In the following paragraphs the author explains about each aspect in length.

As Weeden has noted, the relationship for social marketers has shifted from begging to partnering (Weeden 1998, p. 14). However, this shift is not without its perils for both sides. Businesses find that venturing into social enterprise can pose important risks to the firm’s reputation when it is found to step over ethical bounds (Sarner and Anderson 1996).

We then discuss ways in which social alliances can present ethical challenges for one or both partners. Finally, we discuss the alternatives available to social marketers to both detect and resolve ethical dilemmas in social alliances. Therefore, social responsibility and ethics in marketing is more relevant with motivations and partnerships.

At the outset, it is critical that we define what we mean by “marketing alliances. A marketing alliance is a formal or informal arrangement between organizations where each seeks through marketing activities gains that would not be available to either without such an alliance. In our view, the term alliances encompass two of the three types of marketing exchange characterized by Gundlach and Murphy (1993).

The issues that represent a company’s CSR focus vary by business, by size, by sector and even by geographic region. In its broadest categories, CSR typically includes issues related to : business ethics, community investment, environment, governances, human rights, market place and workplace . CSR goes beyond charity and requires that a responsible company take into full account of the impact on all stakeholders and on the environment when making decisions. This requires them to balance the needs of all stake holders with their need to make a profit and reward their shareholders adequately.

For the new generation of corporate leaders, optimization of profits is the key, rather than the maximization of profit. Hence, there is a shift from accountability to share holders to social responsibility to customers and other stake holders. In today’s competitive global marketing, ethics play a vital role, because we are dealing with human values and beliefs. Business spreads beyond boundaries. The marketer has to deal with cross country culture. Many MNC’S like Mc Donald and Nestle had faced lot of problems because of neglecting ethical issues in their marketing practices.

They have incurred billions of dollars in monetary values and above all losing thousands of valuable hybrid customers due to the adaptation of unethical advertising & promotional strategies. According to experts, marketing is viewed as human conduct and is subject to academic analysis and public scrutiny. Ethics is the study of the moral principles that guide the conduct. Historically, there have been two points of view on the study on ethics in marketing. The firs 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 points of view, the rights of the seller are central. A company has little regard for customer’s needs and wants. The other point of view is “ let the seller beware”. Here, customer satisfaction is taken to an extreme. No matter what the customer does, it is ok. Which position is correct? How do we resolve the inevitable conflicts brought by these competing viewpoints?

Corporate Social Responsibility (CSR) and Ethics in Marketing: Kotler and Levy, in their book, Corporate Social Responsibility define corporate social responsibility as “a commitment to improve community well-being through discretionary business practices and contributions of corporate resources”. Some of the benefits of being socially responsible include

  • enhanced company and brand image
  • easier to attract and retain employees
  • increased market share
  • lower operating costs
  • easier to attract investors.

A socially – responsible firm will care about customers, employees, suppliers, the local community, society, and the environment. CSR can be described as an approach by which a company

  • 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 within different firms will see some social issues as more relevant than others. The relevance of a given social issue is determined by the company’s products, promotional efforts, and pricing and distribution policies but also by its philosophy of social responsibility.

The Company employed 7000 citizens and believed that for every direct job, 30 – 40 more were created in the supply chain. Like its parent, Coke India’s Corporate Social Responsibility (CSR) initiatives were both community and environment – focused. Priorities included education, where primary education projects had been set up to benefit children in slums and villages, water conservation, where the Company supported community – based rainwater harvesting projects to restore water levels and promote conservation education, and health.. PepsiCo Pepsi Cola is also helping in rural areas in their economic development. It further offered to transfer food-processing, packaging, and water-treatment technology to India.

Pepsi’s bundle of benefits won four Ps for entering a market, Pepsi added two additional Ps, namely, politics and public opinion. Similarly almost all MNCs like Microsoft, Mc Donald, Nokia, Unilever, ITC are also adopting social responsibility of business in order to have sustainable market development and growth not only in their countries but also in the host countries. Conclusion Several forces are driving companies to practice a higher level of corporate social responsibility: rising customer expectations, changing employee expectations, government legislation and pressure, the inclusion of social criteria by investors, and changing business procurement practices.

Companies need to evaluate whether they are truly practicing ethical and socially responsible marketing. Ethics & Marketing marketing conduct. The most admired companies in the world abide by a code of serving people’s interests, not only their own. The following are the suggestions that the society must use the law to define, as clearly as possible, those practices that are illegal, anti-social, or anticompetitive.

Next, companies must adopt and disseminate a written code of ethics, build a company tradition of ethical behavior, and hold its people fully responsible for observing ethical and legal guidelines. And, individual marketers must practice a “social conscience” in their specific dealings with customers and various stakeholders. The future holds a wealth of opportunities for companies. Technological advances in solar energy, online networks, cable and satellite television, biotechnology, and telecommunications promise to change the world as we know it. As the same time, forces in the socioeconomic, cultural, and natural environments will impose new limits on marketing and business practices.

Companies that are able to innovate new solutions and values in a socially responsible way are the most likely to succeed. It is my belief that good marketing is ethical marketing. Good marketing is about satisfying and developing a long-term relationship with our customers. Caring about your customers not only results in profits (or achieving your organization’s objectives if an organization is not-for-profit), it is the ethical thing to do.

Deceiving customers may help a firm’s profits in the short-run, but is not the way to build a successful business. The same goes for social responsibility. A firm has to care about all stakeholders: customers, employees, suppliers and distributors, local communities in which they do business, society, and the environment.

References

  1. 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
  2. Gundlach, Gregory D. and Patrick E. Murphy (1993), “Ethical and Legal Foundations of Relational Marketing Exchanges, “Journal of Marketing, 57 (October), 35-46.

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Social Responsibility and Ethics in Marketing. (2018, Feb 25). Retrieved from https://graduateway.com/marketing-ethics-2/