Marketing Chapter 4 terms and concepts

Ethics.
The moral principles and values that govern the actions and decisions of an individual or group.
Laws.
society’s values and standards that are enforceable in the courts.
caveat emptor.
—let the buyer beware—
Consumer Bill of Rights.
codified the ethics of exchange between buyers and sellers.
These were the right
(1) to safety,
(2) to be informed,
(3) to choose, and
(4) to be heard. Consumers expect and often demand that these rights be protected, as have American businesses.
Economic espionage.
the clandestine collection of trade secrets or proprietary information about a company’s competitors.
code of ethics.
a formal statement of ethical principles and rules of conduct.
whistle-blowers.
employees who report unethical or illegal actions of their employers.
Moral philosophies that have direct bearing on market practice
Two prominent personal moral philosophies have direct bearing on marketing practice:
(1) moral idealism and
(2) utilitarianism.
Moral idealism.
a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.
utilitarianism.
a personal moral philosophy that focuses on “the greatest good for the greatest number” by assessing the costs and benefits of the consequences of ethical behavior.
Social responsibility.
that organizations are part of a larger society and are accountable to that society for their actions.
3 concepts of social responsibility.
(1) profit responsibility,
(2) stakeholder responsibility, and
(3) societal responsibility.
Stakeholder responsibility.
focuses on the obligations an organization has to those who can affect achievement of its objectives.
Societal responsibility.
obligations that organizations have
(1) to the preservation of the ecological environment and (2) to the general public.
Profit responsibility.
companies have a simple duty: to maximize profits for their owners or stockholders.
triple-bottom line.
recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth.
Green marketing.
marketing efforts to produce, promote, and reclaim environmentally sensitive products—takes many forms.
cause marketing.
when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products.
social audit.
a systematic assessment of a firm’s objectives, strategies, and performance in terms of social responsibility.
Steps of social audit
1. Recognition of a firm’s social expectations and the rationale for engaging in social responsibility endeavors.

2. Identification of social responsibility causes or programs consistent with the company’s mission.
3. Determination of organizational objectives and priorities for programs and activities it will undertake.
4. Specification of the type and amount of resources necessary to achieve social responsibility objectives.
5. Evaluation of social responsibility programs and activities undertaken and assessment of future involvement.

Sustainable development.
conducting business in a way that protects the natural environment while making economic progress.
greenwashing.
the practice of making an unsubstantiated or misleading claim about the environmental benefits of a product, service, technology, or company practice.
Unethical behavior appears to be influenced by:
(1) a belief that a consumer can get away with the act and it is worth doing and
(2) the rationalization that the act is justified or driven by forces outside the individual—”everybody does it.”
research shows that consumers:
(1) may be unwilling to sacrifice convenience and pay higher prices to protect the environment and
(2) lack the knowledge to make informed decisions dealing with the purchase, use, and disposition of products.