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Lecture 8

Lecture 8- Chapter 8

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PHIL 2600
Aaron Massecar

Lecture 8: Consumers and Business Ethics Consumers as Stakeholders (I)  Commonplace argument that businesses are best served by treaitng their customers well  So why continued ethical abuses of consumers and poor reputation of marketing and sales professions? ◦ Examples of organizations accused of treating customers in a questionnable manner: ▪ Multinational drug companies ▪ Fast foot and soft drink companies ▪ Banks and credit card companies ▪ Mobile phone companies ▪ Technology schools Consumers as Stkeholders (II)  Consumer Rights can be seen as: ◦ Inalienable entitlements to fair treatment when entering into exchnages with sellers. They rest upon the assumption that consumer dignity should be respeced and that sellers have a duty to treat consumers as ends in themselves, and not only as means to the end of the seller ▪ Debate over what constitutes fair treatment ▪ In the past, consumer rights based on caveatem ptor. But caveat emtpor eroded by changing expectations and consumer laws Ethical Issues in Marketing Management – Product Policy  At the most basic level, consumers have a right to products and servcies which are safe, efficacious, and fit for the purpose for which they are intended  Manufacturers ought to exercise due care in establishing that all reasonable steps are taken to ensure that their products are free from defects and safe to use  Consumers right to a safe product is not an unlimited right  Safety also a function of the consumer and their actions and precautions Ethical Issues in Marketing Management – Marketing Communications (I)  Criticisms of advertising broken down into two levels  Individual ◦ Concerned with misleading or decreptive practices that seek to create false beliefs about specific products or companies in the individuals consumers mind  Social ◦ Concerned with the aggregate social and cultural impacts such as promoting materialism Ethical Issues In Marketing Management – Marketing Communications (II)  Misleading and decreptive practices ◦ Marketing communications aimed to: ▪ Inform consumers about goods and services ▪ Persuade consumers to purchase ◦ Deception occurs when a marketing communication either creates, or takes advantage of a false belief that substantiallu interferes with the ability of people to make rational consumers choices ◦ The UK'sAdvertising Standards Authority says ads should be “legal, decent, honest and truthful” Ethical Issues In Marketing Management – Marketing Communications (III) Social and Cultural impact on society  Objections that marketing communications: ◦ Are intrusive and unavoidable ◦ Create artificial wants ◦ Reinforce consumerism and materialism ◦ Create insecurity and perpetual disssatisfaction ◦ Perpetuate social stereotypes  Such criticisms have been common for at least the last 30 years Ethical Issues In Marketing Management – Pricing  Pricing issues are central to the notion of a fair exchange between the two parties, and the right to a fair price – key rights of consumers as stakeholders  Four types of pricing practices where ethical problems may arise: ◦ Excessive pricing ◦ Price Fixing ◦ Predatory pricing ◦ Deceptive pricing Ethical Issues in Marketing Management – Distribution  Concerned with relations between manufacturers and firms, and firms and market  Primary concern is product supply chain ◦ Example: Retailers demanding “slotting fees” free manufacturers in order to stock their product Ethical Issues in Marketing Strategy – Vulnerable Customers  Criticisms when there is a perceived violation of the consumers right to be treated fairly (duty of care): ◦ Targeting vulnerable consumers ◦ Consumers may be vulnerable because: ▪ Lack sufficient education or information ▪ Easily confused or manipulated due to old age and senility ▪ Are in exceptional physical or emotional need ▪ Lack the necessary income ▪ Too young ◦ Perceived harmfulness of the product ▪ Examples: Cigarettes and alcohol ▪ Here, the focus shifts from rights duties to consequences Ethical Issues in Marketing Strategy – Customer Exclusion  Takes variety of forms: ◦ Access exclusion ◦ Condition exclusion ◦ Price exclusion
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