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Western University
Management and Organizational Studies
Management and Organizational Studies 2320A/B
Gail Robertson

Chapter 4: Social Responsibility and Ethics: Sustainable Marketing  Societal Marketing Concept: considers the future welfare of consumers  Strategic Planning Concept: considers future company needs  Marketing Concept: a philosophy of customer value and mutual gain (i.e. McDonalds) o Determine current needs & wants of a target-group customers and meets them better than competitors o Focus on meeting short-term sales, growth and profit by fulfilling customer’s current wants o Doesn’t always serve the future best interest of either customers or business SUSTAINABLE MARKETING:  Sustainable Marketing: marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs o Considers both future company and welfare of consumers o Calls for socially responsible, ethical and environmental responsible actions o Require a smoothly functioning marketing system where all partners work together SOCIAL CRITICISMS OR MARKETING: Marketing’s Impact to Individual Consumers:  Consumers hold mixed and slightly unfavourable attitudes toward marketing practices  High Prices: marketing system causes prices to be higher than they would be under more “sensible systems” due to three factors 1) High Costs of Distribution:  Critics:  Resellers:  Intermediaries mark up prices beyond  Intermediaries do work the value of their services  Markups reflect services that  Intermediaries are abundant, inefficient, consumers themselves want and unnecessary/duplicate services  Intense competition in industries keep  Consumers pay for excessive costs in the margins low form of higher prices 2) High Advertising and Promotion Costs:  Critics:  Resellers:  Marketers push up prices to finance  advertising does add to product cost heavy advertising and sales promotion  adds value to product by informing the  Packaging and promotion adds only availability and merits of the brand psychological value rather than function  Gives assurance of consistent quality value  Consumers want and are willing to pay more for products that provide psychological benefits  Necessary for firm to match competitor’s efforts 3) Excessive Markups:  Critics:  Defence:  Companies mark up goods excessively  Businesses price fairly with consumers to build customer relationship and repeat businesses  Consumers don’t understand reasons for high markups  Deceptive Practices: lead consumers to believe they will get more value than they actually do 1) Deceptive Pricing:  Falsely advertising “factory” or “wholesale” prices  Large price reduction from a phony high retail list price 2) Deceptive Promotion:  Misrepresenting the product’s features or performance  Luring the customers to the store for a bargain that is out of stock 3) Deceptive Packaging:  Exaggerating package contents through subtle design, misleading labelling, or describing size in misleading terms o Competition Bureau: prevent deceptive practices o Fine line between “deceptive” and “non-deceptive practices” (i.e. Puffery seen as both necessary in advertising and harmful to consumers) o Companies avoid deceptive practices because it is unsustainable and causes long-run damage o Profitable customer relationship are built on value and trust  High-Pressure Selling: persuades people to buy goods that they had no intention of buying o Little to gain because it cause serious damage to relationships o Selling involves building long-term relationships with valued customers  Shoddy, Harmful and Unsafe Products: p o products are not made well and services are not performed well o product safety (sleepees) compromised due to:  company indifference  increased product complexity  poor quality control o Consumers Union: the not-for-profit testing and information organization that publishes the Consumer Reports magazine/website reports various hazards in tested products o Most manufacturers want to produce quality products and safety problems damage its reputation  Planned Obsolescence: cause products to become obsolete before they actually need replacement o Producers use materials and components that break/wear/rust/rot sooner than they should o Introduction of planned streams of new products that make older models obsolete (technology) o Marketers assert consumers like style changes o The result of competitive and technologies forces in a free society  Poor Service To Disadvantaged Consumers: serving disadvantaged consumers poorly o Companies draw a red line around disadvantaged neighbourhoods and avoid placing stores there o Companies can profitably target poor consumers with goods and services that create real value Marketing’s Impact on Society as a Whole:  False Wants and Too Much Materialism: marketing urges too much interest in material possession o Material wealth and possession hit new highs in 1980s and 1990s (developed vs. developing world) o Current decade: a relative reaction against the opulence and waste of previous decade  “Buy Nothing for 24 hours”: Stop shopping for 24 hours  Critics:  Defence:  Materialism is unsustainable and not a  Marketers are most effect when natural state of mind but a created want appealing to existing wants that is false  People seek information when making  Benefits industry more than consumers important purchases  Companies cannot control demand – high product failure rates  Values blossom from basic socialization processes, not corporations/marketing  Too Few Social Goods: overselling private goods at the expense of public goods o As private goods increase, results in “social costs” (public goods) that are not forthcoming o Restoring balance of private vs. public goods:  Make producers bear the full social costs of their operations  Make consumers pay the social cost  Cultural Pollution: constantly being assaulted by marketing and advertising  Critics:  Defence:  Pollute people’s mind with messages of  Ads reach primarily target audience materialism, sex, power or status  Make TV and radio free to users and minimize costs of print media  Consumers have choices/alternatives (switch TV channels etc.) Marketing’s Impact on Other Businesses:  A company’s marketing practices can harm other companies and reduce competition: 1) Acquisition of Competitors:  can lead to economics of scale which lower costs and prices  Improve efficiency of poorly managed then-competitor companies  Closely regulated by the government  Harm firms  Reduce competi
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