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Chapters 3 & 4: Ethics, Social Responsibility, and the Marketing Environment (Vocabulary)

3-1 Determinants of a Civil Society

  • Social control involves means to maintain behavioral norms and regulate conflict.

  • Key modes of social control in marketing include ethics, laws, formal/informal groups, self-regulation, media, and an active civil society.

3-3 Ethical Behavior in Business

  • Ethical Decision Making: Influencing factors include the extent of ethical problems, top management's actions, potential consequences' magnitude, social consensus, probability of harm, time between decision/consequences, and number of people affected.

  • Ethical Guidelines and Training: A code of ethics guides employees, identifies acceptable practices, acts as an internal control, clarifies decisions, and fosters discussion. Ethics training helps implement good practices.

  • Ethics in Other Countries: Ethical beliefs vary culturally. The Federal Corrupt Practices Act (FCPA) prohibits U.S. corporations from making illegal payments to foreign officials for business.

Figure 3.2: The Pyramid of Corporate Social Responsibility

  • A visual representation of CSR hierarchy.

3-5 Arguments for and Against Social Responsibility

  • Debate: Some believe businesses should focus on profit, while others argue corporations should address societal problems they've caused.

  • Reasons for CSR: Increases customer trust and loyalty, potentially leading to higher profits; can mitigate negative word-of-mouth after bad experiences; and helps avoid government regulation and fines.

Becoming a B Corp and Sustainability

  • B Corps: For-profit companies certified by B Lab for rigorous social and environmental performance, accountability, and transparency.

  • Sustainability: Socially responsible companies outperform peers by addressing social problems as profit opportunities.

    • Environmental sustainability: Minimizing threats to the physical environment.

    • Social sustainability: Developing processes that meet current and future generations' needs.

    • Economic sustainability: Efficient asset use for long-term profitability.

Green Marketing

  • The development and marketing of products that minimize environmental harm or improve the environment.

  • Consumers seek sustainable products, but greenwashing (minimal green attributes for promotion) is a concern, addressed by FTC "green" guides.

Cause-Related Marketing

  • Cooperative efforts between a for-profit firm and a nonprofit organization for mutual benefit (sales for profit, funds/goods for nonprofit).

  • Differs from philanthropy, which is a specific, tax-deductible donation, as cause-related marketing is a marketing relationship.

External Marketing Environment (Chapter 4)

  • Components: Environmentalism, Social, Economic, Political & Legal, Technology & Innovation, Competitive Factors.

  • Focuses on environmental scanning, target market, the 4 Ps (Product, Distribution, Promotion, Price), and the external (uncontrollable) vs. internal (marketing mix) environment. Also includes DEI.

4-3 Diversity, Equity, and Inclusion in Marketing

  • Diversity: Differences in race, religion, gender, ethnicity, nationality, socioeconomic status, age, and abilities.

  • Equity: Fairness in procedures, processes, and resource distribution.

  • Inclusion: The act of including people from diverse backgrounds.

4-4 Economic Factors

  • Purchasing power: Income versus the cost of a standard set of goods/services in different areas (Income - Cost of Living).

  • Inflation: Decrease in money's value (percentage reduction since the previous year).

  • Recession: Economic activity characterized by negative growth, reducing demand.

4-5 Technology and Innovation

  • Research:

    • Basic research: Pure research to confirm theory or learn about concepts.

    • Applied research: Research to develop new or improved products.

  • The U.S. has been a global leader in R&D spending, with funding primarily from business, government, and higher education.