chapter 5 ethics

Ethics

is the set of moral principles or values that guides behavior

Norms

are established standards of conduct that are expected and maintained by society and or professional organizations

Values

represent the collective conception of what communities find desirable, important, and morally proper

bribery

Inducing a customer to alter their behavior

Corporate social responsibility

is the ethical behavior of a company toward society

It means acting responsibly toward the stakeholder and shareholders who have legitimate interest ti n the business

Shareholders

own a portion or "share" of a business

Stakeholders

do not own the business but they have some stake or interest in it because they are affected by the business strategies and tactics (employees, suppliers, business partners, and community in which the business operates)

Product liability

is the legal liability a manufacturer or importer/exporter incurs for producing or selling a faulty product

Manufacturing defects

occur while a product is being constructed, produced, or assembled

Marketing defects

result from flaws in the way a product is marketed

failure to warn

Privacy

is the ability of an individual or group to seclude themselves, or information about themselves, and thereby express themselves selectively

Do Not Call Act of 2008

which permits individuals to register their phone number to prevent marketing calls from organizations which they don't have an existing relationship

Canada's anti-spam legislation CASL

covers all commercial messages, not just bulk email. - defines as "any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service

Personal Information Protection and Electronics Document Act PIPEDA

is the federal privacy law for private sector organizations

Fair Information Practice Principles

-Notice

Consumers should be given notice before any personal information is collected

-Choice/Consent

Consumers can control how their data is used

Opt in or opt out

-Access

The consumers ability to view the data collected and also o verify and contest its accuracy

-Security

Information collectors should ensure that the data they collect is accurate and secure

Fraud

is the deliberate deception of someone else with the intent of causing damage

Competition Act

prohibit materially false or misleading representations made knowingly or recklessly, deceptive telemarketing and deceptive prize notices

Federal Trade Commission has determined that a representation, omission, or practice is deceptive if it's likely to:

Mislead consumers and

Affect consumers behavior or decisions about the product, or service

When it comes to marketing fraud the two keywords

deliberate and deceptive

Deception in Product

is the product designed and manufactured as the customer would expect, given the other elements of the mm?

Is the customer warned about product limitations or uses that are not recommended?

Price

Deception in Price

Is the total price of the product fairly presented to the customer?

Is the price charged for the product the same as the price posted or advertised?

Has something been marketed as "free" and if so, does it meet FTC guidelines for the definition of free?

Does the company disclose info about finance charges?

Deception in Promotion

Can claims made to consumers be sustained?

Are disclaimers clear and conspicuous?

For products marketed to children, is extra care taken to accurately represent the product?

Deception in Place

Does the distribution channel deliver the product at the price and quality promised?

Do other companies in the distribution channel (wholesalers/retailers) perform as promised and deliver on expectations set for product price and promotions

Challenges of B2B Ethics

Personal sales are relationship based

B2B sales are often large and complex

Pricing is negotiated

Communication about product and pricing takes place mainly through informal or formal verbal presentation and discussions

Company policies generally define:

The total purchase authority of a single individual or department

The threshold at which a purchase decision must go out for competitive bid

Circumstances under which the company's status as a customer can be disclosed

Dollar threshold for gifts from vendors

Business gifts practiced for the following reasons:

1. In appreciation for past client relationships, placing a new order, referrals to other clients

2 .creating a positive first impression

3. As a quid pro quo

quid pro quo

returning a favor or expecting a favor in return for something

3 dimensions of evaluating gifts

content, contecxt, culture

Standards for business conduct

specific policy that defines appropriate behavior

Policy is intended to set the standards for acceptable behavior; not meant to be an exhaustive list of every type of ethical behavior

Many Standards for business conduct policies do the following

Define the threshold for behavior: companies require their employees to follow the law

Create expectations for behavior: the policies identify common issues that employees may encounter- such as accepting gifts from suppliers- and explain how they should be handled

Set policy: establish company protocols for handling confidential information, including customer data, etc

Give guidance on making judgment calls

Describe reporting and enforcement procedures

Ethics for marketing employees

Demonstrate respect for your target customer

Prepare the sales team to sell effectively and ethically

Demonstrate high personal standards in business relationships

Provide fair value to target customer

Play nicely in competitive environment

Price fixing is unethical and illegal

Be truthful

Executive role in ethics

The overall character of their leaders

How senior managers handle crises

The policies and procedures adopted by senior leaders

Executives

set objectives, policies, and make personnel decisions

Where does social responsibility fit in?

may be a corporate level strategy with specific objectives

may be part of the marketing mix based on the situation analysis

sustainable product

is constantly environmentally friendly during its entire lifetime

5 factors Ethisphere

1. Ethics and compliance program

2. Corporate citizenship and responsibility

3. Culture of ethics

4. Governance

5. Leadership, innovation, and reputation

Environmentally social governance

measures and holds organizations to account for their practices

NGO

is a nonprofit citizen based group that functions independently of government

Social enterprises

are not a formal tax structure but they are different from charities, sustainable revenue

B corps

are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose

Depending on the company, social responsibility fits most comfortably in what are of the marketing planning process

Corporate mission or marketing strategy

One of the main tools a company uses to identify appropriate behaviors and make this understanding accessible throughout the company is a

Policy called the Standards for Business Conduct

There are 3 types of defects that incur product liability. What are those defects?

Design, manufacturing, and marketing defects

regulatory laws: Most of the laws that impact marketers fall into 3 categories

business, consumer, society

3 types of product defects that infer product liability:

design defects,

manufacturing defects,

and defects in marketing

design defects

Exist before product is manufactured

Something in the design of the product that is unsafe