CORPORATE SOCIAL RESPONSIBILITY (CSR) AND
ETHICS IN MARKETING
By
Miss. P. PIRAKATHEESWARI, Lecturer in Commerce,
Sri Sarada College for Women (Autonomous), Salem – 16.
Introduction
Kotler and Levy, in their book, Corporate Social Responsibility define corporate social responsibility as “a commitment to improve community well-being through discretionary business practices and contributions of corporate resources”. Some of the benefits of being socially responsible include (a) enhanced company and brand image (b) easier to attract and retain employees (c) increased market share (d) lower operating costs and (e) easier to attract investors. A socially – responsible firm will care about customers, employees, suppliers, the local community, society, and the environment. CSR can be described as an approach by which a company (a) recognizes that its activities have a wide impact on the society and that development in society in turn supports the company to pursue its business successfully and (b) actively manages the economic, social, environmental and human rights. This approach is derived from the principles of sustainable development and good corporate governance. Marketing managers within different firms will see some social issues as more relevant than others. The relevance of a given social issue is determined by the company’s products, promotional efforts, and pricing and distribution policies but also by its philosophy of social responsibility.
Focus entirely in profits (and profitable firms typically serve society well) Explicitly incorporate social responsibility into its day-today marketing decisions to minimize negative effects on society and enhance positive effects Go even further and engage in social projects that are unrelated to the corporate mission and even detrimental to profits ( which could net out to be socially undesirable) The Success strategies of a Business formed out of abundance and grounded in ethics and cooperation are powerful and long-lasting and they help you feel good about yourself even while bringing in profits ( Shel Horowitz) Management must decide which of these three levels of social responsibility to adopt and which social issues are relevant to its business.
Ethical Conflict faced by the Marketers
Marketers must be aware of ethical standards and acceptable behavior. This awareness means that marketers must recognize the viewpoints of three key players: the company, the industry, and society. Since these three groups almost always have different needs and wants, ethical conflicts are likely to arise. Ethical conflicts in marketing arise in two contexts : First, when there is a difference between the needs of the three aforementioned groups ( the company, the industry, and society) a conflict may arise. Second and ethical conflict may arise when one’s personal values conflict with the organization. In either case, a conflict of interest is a possible outcome.
Ethical dilemmas facing marketing professionals today fall into one of three categories: tobacco and alcohol promoting, consumer privacy, and green marketing. Standards for ethical marketing guide business in efforts to do the right thing. Such standards have four functions: to help identify acceptable practices, foster internal control, avoid confusion, and facilitate a basis for discussion.
Consumerism
Consumerism is concerned with broadening the rights of consumers. The concepts of social responsibility and consumerism go hand-in-hand. If every organization practiced a high level of social responsibility the consumer movement might never have begun. Consumerism is a struggle for power between buyers and sellers; specifically, it is a social movement seeking to increase the rights and powers of buyers in relation to sellers.
Seller’s rights and powers are presented in the following list:
To introduce any product in any size and style they wish into the marketplace, so long as it is not hazardous to personal health or safety or if it is hazardous, to introduce it with the proper warnings and controls To price the product at any level they wish, provided there is no discrimination among similar classes of buyers To spend any amount of money they wish to promote the product, so long as the promotion is not defined as unfair competition To formulate any message they wish about the product provided that it is misleading or dishonest in content or execution To introduce any buying – incentive schemes they wish
In contrast, here are buyers’ rights and power:
To refuse to buy a product that is offered to them To except the product to be safe To expect the product to essentially match how the seller represented it To receive adequate information about the product
It is in the best interest of marketers to understand the level of consumer standards and the nature of consumer perceptions, as well as what is required to foster realism and accuracy among consumers.
Marketing and the Natural Environment
Another significant area of social concern is the environment. Marketing is ultimately dependent on the use of scarce resources to fulfill human needs, without harming or unnecessarily using scare resources. Marketing managers should help to determine which products are produced, and which products are indirectly affecting the environment:
The natural resources and materials used The amount of energy required in the production process The residuals (e.g., waste water) that result from production The consumption of resources and energy that is required to use products ( cars, air conditioners) The generation of pollutants (e.g., exhaust fumes) in using products The amount of packaging material that may have to be discarded. (packaging comprises less than 14 percent of collectible solid waste, but consumers often estimate its share of that waste at 40 to 80 percent)
Relationship Marketing and Ethics
Nowadays, most ethicists believe that Relationship Marketing is a reasonable practice leading to positive relationships between buyers and sellers. Relationship marketing requires that rules are not necessarily contractual..
Relationship marketing allows buyers and sellers to work together. However, there are disadvantages to this approach- relationship marketing requires time to develop a list of expected conduct or “rules of behavior.” According to a recently published book on this subject, a shift in emphasis in marketing ethics – towards buyers interests and away from seller’s interests – characterizes the new country.
If this is true, new challenges are presented for marketing ethics and professionals in the field of marketing who want to conduct business in an ethical way.