Chapter 4 & 5 Principles of Marketing

social responsibility
Is an organization’s obligation to maximize its positive impact and minimize its negative impact on society
marketing citizenship
the adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders
marketing ethics
Principles and standards defining acceptable conduct in marketing as determined by various stakeholders including:
The Public
Government regulators
Private interest groups
Consumers
Industry
The organization itself
cause-related marketing
the practice of linking products to a particular social cause on an ongoing or short term basis
strategic philanthropy
the synergistic use of organizational core competencies and resources to address key stakeholders’ interests and achieve both organizational and business
sustainability
Consumers insisting not only on a good quality of life but also on a healthful environment so they can maintain a high standard of living
ethical issue
an identifiable problem, situation or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical
price gouging
when a seller spikes the prices of goods, services or commodities to a level much higher than is considered reasonable or fair, and is considered exploitative, potentially to an unethical extent.
bait and switch
advertising goods that are apparent bargain with the intention of substituting inferior or more expensive goods
organizational culture
a set of values, beliefs, goals, norms and rituals that members of an organization share
Green Washing
when products are promoted as being more environmentally friendly than they really are
Consumer Rights
One way for companies to address the marketing concept (focus on customer satisfaction) is to respect Consumer Bill of Rights and treat customers ethically
Sarbanes-Oxley Act
Act that requires open and honest business accounting and reporting practices
spam
Irrelevant or inappropriate messages sent on the Internet to a large number of recipients
False Advertising
overstating the features and benefits of products or services of making false claims about them
Cyber Bullying
using the Internet to harass or threaten an individual
Phishing
use of fraudulent emails and copies of legit websites to trick people into providing personal financial and other data
Netiquette
is the accepted social and professional guidelines for communicating using the Internet
Customer Relationship Management
is a system to track contact info and other info for current and potential customers
freeware
fully functional software available for forever without purchasing it
Shareware
copyrighted software available for free on trial basis and must be purchased to continue use
Software Piracy
illegal copying or downloading software, includes images and music
Copyright
exclusive right to copy, license, sell, or distribute material
Federal Trade Commission
main federal agency responsible for enforcing advertising laws and regulations
Code of Conduct
list of specific behaviors expected from employees in business situations; can be written or assumed
Code of Ethics
general principles or values, social and moral, that guide and direct the business
Ethics
rules of behavior based on ideas of what is right and wrong
Consumerism
Efforts of independent individuals, groups, and organizations working to protect the rights of consumers
Return on Investment
(Percentage) Used for personal financial decisions
Action Plan
includes detailed timeline, budget, metrics to be used to measure effectiveness of campaign
Marketing Tactic
Specific paths to achieve the final goal
Critical elements to address for a successful marketing plan
Marketing Strategy
drawn from market research and focuses on the right product mix in order to achieve the maximum profit potential and maintain the business
Market Share
Portion of a market controlled by a particular company
Marketing Objective
the goals of a business desires to achieve within a period of time upon implementation of the marking plan usually 1 year time frame
SWOT Analysis
lists company Strengths, Weaknesses, Opportunities, Threats
Market Segmentation
dividing up an entire market into different customer segments
Situation Analysis
snapshot of the business environment in which a company has been operating in during the last 12-16 months; understanding where has the company been helps to determine its direction
Mission Statement
a company’s message to customers concerning business’ reason for existing, describes business, customers, and reflects a business; value-added purpose
Vision Statement
Overall goal for the future of the company
Promotional Mix
combination of all promotional elements used in a promotional campaign
Promotion Strategy
decisions considering advertisement, selling, sales promotions, and public relations (PR) events to be used in promotion mix
Place Strategy
decisions that are made about where and how the products are produced, obtained, shipped, sold
Price Strategy
decisions that are made about the pricing and setting of prices to make profit
Product Strategy
decisions that are made about which products to be sold
Marketing Plan
describes the business and marketing objectives and the strategies and tactics to achieve those objectives
4 Consumer Rights
Safety, be informed, choose, and be heard
Which agencies regulate the safety of most consumer products?
Food and Drug Administration and Consumer Product Safety Commission
Give an example of how ethical issues can affect each component of the marketing mix.
Product – the brand name can be misleading by saying that it contains blueberries in a cereal, but in all actuality it only contains tiny tiny amounts of blueberry. Companies are allowed to get away with this because they only have to put the word “flavored.”

Promotion – False or misleading advertising claims. Mobil agreed to stop claims of biodegradability of its trash bags

Pricing – Inflating prices during peak sales periods and/or manipulating the supply of the product. Nintendo raised prices from 20 to 30% and only gave limited supply of the product.

Place – Distributing counterfeit products such as some record stores distributing bootleg recordings.

Explain the difference between ethics and social responsibility
Ethics refers to doing the right thing while social responsibility deals with the total effect of marketing decisions on society.