Consumerism and Marketing Ethics

CONSUMERISM & MARKETING ETHICS
MADE BY :
PARV SHUKLA
ABDUL REHMAN
SURYA CRUZ
MARKETING ETHICS
Ethics are the moral principles
and
values that govern
the actions and
decisions of
an individual . Corporate marketing
ethics are broad guidelines that
everyone in the organization must
follow that cover distributor
relations, advertising standards,
customer service, pricing, product
development, and general ethical
standards
Philosophies :Issues are decided
by the free market and legal
system.Responsibility is not on the
system but in the hands of the
ROLE OF ETHICS IN MARKETING
Compliance and corporate responsibility

Fairness
Pro-active response to ethical concerns
Reactive response to ethical concerns
Community involvement
CRITICISMS OF MARKETING
High prices
Deceptive practices
High-pressure selling
Shoddy, harmful, or unsafe products
Planned Obsolescence
HIGH COST OF DISTRIBUTION

Complaint:
Intermediaries mark up prices beyond their value due to inefficiencies
and6 nnecessary or duplicative services
Response:
Markups reflect the cost of the services that consumers expect
Convenience
Larger stores and assortments
More service
Return privileges
HIGH ADVERTISING AND PROMOTION

COSTS
Complaint:
Prices are inflated to absorb advertising
and sales promotion costs, and packaging
only adds to the psychological not
functional value of the product.
Response:
Advertising does add to product cost but
also to product value by informing potential
customers of the availability and merits of
the product
DECEPTIVE PRACTICES
Complaint: Companies use deceptive practices that lead

customers to believe they will get more value than they
actually do. These practices fall into three categories:
Deceptive pricing
Deceptive promotion
Deceptive packaging
Deceptive pricing includes practices such as falsely advertising

factory or wholesale prices or a large price reduction from a
phony high retail list price
Deceptive promotion includes practices such as misrepresenting
the products features or performance or luring the customer to
the store for a bargain that is out of stock
Deceptive packaging includes exaggerating packaging contents
through subtle design, using misleading labeling, or describing
size in misleading terms
HIGH PRESSURE SELLING

Complaint:
Sales people use high-pressure selling that persuade
people to buy goods they had no intention of buying.
Response:
Most selling involves building long-term relationships and
valued customers. High-pressure or deceptive selling can
damage these relationships.
SHODDY, HARMFUL, OR UNSAFE

PRODUCTS
Complaint:
Products have poor quality, provide little benefit, and
can be harmful
Response:
Todays marketers know that customer-driven quality
results in customer value and satisfaction that create
profitable customer relationships. There is no value in
marketing shoddy, harmful, or unsafe products.
PLANNED OBSOLESCENCE
Complaint:
Producers follow a program of planned obsolescence, causing their
products to become obsolete before they actually need replacement.
Producers also continually change consumers concepts of acceptable
styles to encourage more and earlier buying.
Response:
Planned obsolescence is really the result of competitive market forces
leading to ever-improving goods and services. Marketers know that
customers like style changes and want the latest innovations even if older
models still work.
MARKETINGS IMPACT ON SOCIETY AS A WHOLE
FALSE WANTS AND TOO MUCH MATERIALISM

Complaint:
The marketing system urges too much interest in material possessions.
People are judged by what they own rather than who they are, creating
false wants that benefit industry more than they benefit consumers.
Response:
People do have strong defenses against advertising and other marketing
tools. Marketers are most effective when they appeal to existing wants
rather than creating new ones. The high failure rate of new products
shows that companies cannot control demand.
MARKETINGS IMPACT ON SOCIETY AS A WHOLE
TOO FEW SOCIAL GOODS

Complaint:
Businesses oversell private goods at
the expense of public goods and require
more public goods to support them
Response:
There needs to be a balance between
private and public goods
Producers should bear full social costs of their
operations
Consumers should pay the social costs of their
purchases
CULTURAL POLLUTION
Complaint:
Marketing and advertising create cultural
pollution
Response:
Marketing and advertising are planned to
reach only a target audience, and advertising
makes radio and television free to users and
helps to keep down the costs of newspapers
and magazines. Todays consumers have
alternatives to avoid marketing and
advertising from technology.
MARKETINGS IMPACT ON OTHER

BUSINESSES
Acquisition of competitors can sometimes be good for society when the
acquiring company gains economies of scale that lead to lower prices
Marketing practices can also bar new competitors from entering an
industry and can create use patents, heavy promotional spending to
drive out existing competitors
Unfair competitive marketing practices such as pricing below cost,
threatening to cut off business with suppliers, or discouraging the
buying of a competitors product can hurt or destroy other firms
CONSUMERISM
It is the organized movement of

citizens and government agencies to
improve the rights and power of
buyers in relation to sellers
Consumerism is the equating of

personal happiness with the
purchasing of material and
consumption of it.
While consumerism is not a new phenomenon, it has only

become widespread over the 20th century and particularly in
recent decades, under the influence of capitalism.
Effects of Consumerism
Consumerism is appreciated in Western economies since a
persons standard of living is valued by his or her material
possessions. There are certain positive effects such as:
POSITIVE CONSUMERISM
EFFECTS
Primary positive consumerism effects are:
More industrial production.

A higher growth rate economy.
More goods and services available.
More advertising since goods manufactured have to be sold.
Increased production will result in more employment
opportunities.
A variety ofchoice for goods and services

More comforts for a better living style.
NEGATIVE CONSUMERISM
EFFECTS
The University of Colorado likened the expansion of human cities to the growth
and spread of cancer, predicting death of the Earth in about 2025. Since the
human population has quadrupled in the past 100 years and at this rate will
reach a size in 2025 that leads to global collapse .
Human naturefollowing the principle of expansion to gain survival.

Material wealth decides whether a society is highly developed or not. Our
ethical and spiritual values have no importance.
Over-dependence on labor saving devices.

A car for each individual would mean gradual erosion of public transport.
Crime rate also increases as wants to possess assests increase leading to
thefts and robberies.
Personal relationships get effected when people try to raise their living
standards.
Cheaper goods are consumed more leading to depleting resources.

Ecological imbalances,destroying natural habitat and increasing industrial
pollution are some of the other effects
CONSUMERISM IN INDIA
It is the process of realizing the rights of the consumer as envisaged

in the Consumer Protection Act (1986) and ensuring right standards
for the goods and services for which one makes a payment.
The transition is from a "sellers market" to a "buyers market" where

the choice exercised by the consumer will be influenced by the level
of consumer awareness achieved.
In our Indian system the consumer has six rights given for his protection
from exploitation from the shopkeepers or sellers.
Consumer exploitation
means mistreatment or cheating withconsumer by adulteration, Thagi or in

any otherunfair form.
To prevent consumer from exploitation, our government have passed

many Acts from time to time.
Some of them are asfollows:1. Drug and Cosmetics Act, 1940 2. Prevention of Food Adulteration Act,
1954 3. Essential Commodity (supply) Act, 1955 4. Monopolies and
Restrictive Trade Practices Act, 1969 5. Standard of Weights and Measures
Act, 1976 6. Consumer Protection Act, 1986
ENVIRONMENTALISM
An organized movement of concerned
citizens and government agencies to
protect and improve peoples living
environment.
People and organizations should

operate with more care for the
environment
The marketing systems goal should
not be to maximize consumption,

consumer choice, or satisfaction, but
rather to maximize life quality.
Environmental costs should be
included in both producer and
consumer decision making.
Environmentalism
ENVIRONMENTAL
SUSTAINABILITY
A management approach that involves developing
strategies that both sustain the environment and produce
profits for the company.
LEVELS OF ENVIRONMENTAL
SUSTAINABILITY
Practice
Pollution
Prevention
Sustainability
Vision
Practice
Product
Stewardship
Plan for New

Environmental
Technologies
Adopt Design
for the
Environment
Practices
16-28
ENLIGHTENED MARKETING
A marketing philosophy holding that a companys marketing
should support the best long-run performance of the
marketing system.
Customer-oriented marketing
Innovative marketing
Customer-value marketing
Sense-of-mission marketing
Societal marketing
Consumer-oriented marketing means that a company should view

and organize its marketing activities from the consumers
perspective.
Customer-value marketing means that the company should put most
of its resources into customer-value-building marketing
investments: long-term customer loyalty and relationships by
continually improving the value consumers receive from the
firms market offerings.
Innovative marketing requires the company to continually seek real
product and marketing improvements.
Sense-of-mission marketing means

the company should define its
mission in broad social terms
rather than narrow product terms
Societal marketing means the
company makes marketing
decisions by considering
consumers wants and interests,
the companys requirements, and
societys long-run interests
Views societal problems as
opportunities
Designs pleasing and beneficial
products
GREEN MARKETING
Green
marketingis the marketing of

products that are presumed to be
environmentally safe. In simple terms
it refers to the process of selling
products and/or services based on
their environmental benefits.
Such
a product may be environment

friendly in itself or produced and/ or
packaged in this way.
ORGANIC FOODS
Organic foods are produced according to certain production standards.

These are grown without the use of conventional pesticides, artificial
fertilizers, human waste, or sewage sludge and that they were processed
without ionizing radiation or food additives. For animals, they were reared
without the routine use of antibiotics and without the use of growth
hormone
Currently, the United States, the European Union, Japan and many other
countries require producers to obtain organic certification in order to
market food as organic
Definition
Corporate Social Responsibility

Definition
A voluntary initiative on the part of a business to contribute to a

better society and a greener and cleaner environment.
The responsibility of business towards the society
Corporate Social Responsibility is the continuing commitment by business to behave

ethically and contribute to economic development while improving the quality of life of the
workforce and their families as well as of the local community and society at large.
World Business Council For Sustainable Development
Benefits of CSR

Legislative Framework
Enhanced
Relationship with
stakeholders
Saving money
on energy and
operating cost
Benefits
of CSR
Differentiating
yourself from the
competitor
Enhancing our
influence in the
industry
Attracting,
Retaining and
Maintaining a happy
workforce
Media interest
and good
reputation
Access to funding
opportunities
Increase in
customer retention
Be
ne
fit
Be
ne
fit
Winning new
businesses
CSR Initiatives
Guiding Principles for CSR Projects
CSR is about corporate citizenship

It is about giving back to the society
It is about business sustainability
It is about thriving in a competitive business environment
CSR Initiatives
CSR Projects for Businesses

Market focused
initiative
Employee
focused initiative
Society focused
initiative
Result - Driven
CSR
= Benefits
Environmentally
focused initiative
Product focused
initiative
Practical Application of CSR
Guidelines
A good CSR Policy must be result-driven

Business assessment is important.
You need to evaluate various aspects of your business and
operations,
Analyse the impact our business will have on our stakeholders.

Set realistic targets on how to improve our business operations
and processes.
Draw up a result- driven CSR Policy.

Embed our CSR into your business strategy.
Practical Application of CSR
Guidelines
Appoint a driver for your CSR initiative

Communicate your CSR efforts to all your stakeholders clearly and
boldly.
Make your CSR initiative part of your business culture

Set up CSR measuring indicators to monitor progress and possible
deviations.
Be enthusiastic about your CSR initiative; be committed to it.

Report on your initiatives and measure progress/ impact made.
THANK YOU FOR YOUR TIME AND

ALWAYS PRACTICE

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CONSUMERISM & MARKETING ETHICS

ROLE OF ETHICS IN MARKETING

Compliance and corporate responsibility

HIGH COST OF DISTRIBUTION

HIGH ADVERTISING AND PROMOTION

Complaint: Companies use deceptive practices that lead

Deceptive pricing includes practices such as falsely advertising

HIGH PRESSURE SELLING

SHODDY, HARMFUL, OR UNSAFE

MARKETINGS IMPACT ON SOCIETY AS A WHOLE

FALSE WANTS AND TOO MUCH MATERIALISM

MARKETINGS IMPACT ON SOCIETY AS A WHOLE

TOO FEW SOCIAL GOODS

MARKETINGS IMPACT ON OTHER

It is the organized movement of

Consumerism is the equating of

While consumerism is not a new phenomenon, it has only

Primary positive consumerism effects are:

More industrial production.

A variety ofchoice for goods and services

Human naturefollowing the principle of expansion to gain survival.

Over-dependence on labor saving devices.

Cheaper goods are consumed more leading to depleting resources.

It is the process of realizing the rights of the consumer as envisaged

The transition is from a "sellers market" to a "buyers market" where

means mistreatment or cheating withconsumer by adulteration, Thagi or in

To prevent consumer from exploitation, our government have passed

People and organizations should

The marketing systems goal should

not be to maximize consumption,

Plan for New

Consumer-oriented marketing means that a company should view

Sense-of-mission marketing means

marketingis the marketing of

a product may be environment

Organic foods are produced according to certain production standards.

Corporate Social Responsibility

A voluntary initiative on the part of a business to contribute to a

The responsibility of business towards the society

Corporate Social Responsibility is the continuing commitment by business to behave

Corporate Social Responsibility

Corporate Social Responsibility

Guiding Principles for CSR Projects

CSR is about corporate citizenship

Corporate Social Responsibility

CSR Projects for Businesses

Practical Application of CSR

Corporate Social Responsibility

A good CSR Policy must be result-driven

Analyse the impact our business will have on our stakeholders.

Draw up a result- driven CSR Policy.

Practical Application of CSR

Corporate Social Responsibility

Appoint a driver for your CSR initiative

Make your CSR initiative part of your business culture

Be enthusiastic about your CSR initiative; be committed to it.

THANK YOU FOR YOUR TIME AND

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