Why have ethics and social responsibility become so important in recent years? Why is it important that marketing ethics be incorporated into the firm’s strategic plan?
Q1: Why have ethics and social responsibility become so important in recent years? Why is it important that marketing ethics be incorporated into the firm’s strategic
Marketing ethics and social responsibility are considered to be very important and critical in the implementation of strategic planning in any organization. Frequently
issues related to ethics and social responsibility arise in organizations and depending on the weight of such issues some firms have developed a negative public
reputation that eventually affected their profitability with some being destroyed completely. Hence firms are laying more emphasis on ethical conduct as an important
pillar within their strategic market planning with an intention of enhancing the customer relationships through enhanced trust. A firm’s ethics and social
responsibility closely relate to changes in government laws and stakeholder demands. Overall established ethics and social responsibility is a plus for any firm
because it improves profits and the company’s marketing performance. Notably marketing ethics are not attained by employing ethical people but rely on a well-defined
and compliance program that must be initiated and implemented by the firm’s managers.
Hence customer demands and growing regulations in business have necessitated that firms have marketing ethics and social responsibility framework from where they can
operate. This is most suitably integrated into the strategic market planning process. History reveals organizations that were adversely affected because they engaged
in ethical misconduct. Comparatively recovering from poor performance is far easier for any firm than recovering from ethical misconduct. Ethical misconduct has far
reaching consequences that touch on the reputation of the organization. This directly affects the activities of a firm and has adverse effect on its profitability.
Apart from losing out on the direct customers, a firm may also lose out on indirect partners who get a negative perception of the organization through the media and
public opinion. There have been known cases where such issues resulted in aggressive campaigns and product boycotts leading to low sales and earnings.
Q2: Draw, label, and explain the pyramid of social responsibility. What are the requirements for a firm if it truly wants to be ethical and socially responsible?
The social responsibility pyramid consists of four dimensions that include the legal, ethical, economic and philanthropic. The economic dimension suggests that
organizations have a responsibility to their shareholders. These shareholders are particular about the organization’s relationship with its stakeholders and this
affects the firm’s reputation. This is associated with the organization’s earnings that are related to the shareholders investment. Economic responsibility will also
enhance the organization’s environment in terms of increased income and employment whenever the organization operates profitably.
Whereas laws and regulations within an organization’s environment are important and sometimes change so often, marketers are obligated to abide by these regulations
and laws. Generally economic and legal responsibilities are the two basic and most important obligations for any organization. Since they lay the foundation on which
the organization can have a sustainable social responsibility, they must be carefully established so that the organization can grow and also serve the ethical and
Marketing ethics are the principles that a firm puts in place to define acceptable marketing practices as stipulated by other regulators such as government,
competitors, and the public and private interest groups. Marketing ethics are nothing but a set of laws and regulations controlling the way the organization is
expected to carry on its activities according to society’s expectations. Therefore marketing ethics aim at the organization making ethical decisions that go beyond
the legal responsibilities. Such decisions are intended to enhance trust that is important in the establishment of strategic marketing relationships.
According to the philanthropic dimension, the organization focuses on ways of increasing its positive effect to the community, society and environment. This is
intended to enable the firm attain goodwill from the society that also increases the firm’s profitability. Generally organizations align their brand and marketing
image with their philanthropic dimension. Hence it is expected that in times of natural disasters or during economic difficulties such organizations can effectively
display their philanthropic dimension. Because of the power associated with positive social responsibility behavior, a firm’s philanthropic dimension becomes a very
powerful marketing tool. Since this is always visible to the public, it paints the organization in positive light and hence has the capacity to endear the customers,
community and employees to the organization’s products or services.
Q2: Discuss the different views or interpretations of marketing as a function of business, including the AMA’s 2007 change in the definition of marketing. Why do you
think the AMA changed the definition?
To many people marketing is nothing more than a function of business. As such marketing is viewed as a function whose main objective is to connect the business and
its clients. Marketers however have a different perception of marketing and look at it as a management of the flow of products from one point to the other. These
points being invariably the point of origin to that where the product is consumed. Furthermore marketing has also been viewed as a means to satisfy social and human
needs. Based on this understanding marketing can be closely linked to the standard of living because it affects the social well-being through enhanced consumption.
According to AMA marketing must reflect the competition at the marketplace by focusing on the customer relationships and value. With an emphasis being placed on the
long term relationships this latter view is a departure from the former view that only focused on the transactions.
Q3: Briefly explain and discuss the five types of utility. Which type(s) of utility is(are) the most important and why?
The five types of utility include:
Place: In this type the products are available where the customers want them. Hence the products are available at the right moment and the customer is also available
right there at the place at that moment.
Time: In this type the products are available when the customers want them.
Form: In this type the products possess features that give them a competitive advantage making them stand out against competition.
Psychological: In this type the products are attractive to the customers and are appealing to their realistic expectations. If a product doesn’t have any negative
realistic expectations such is considered to offer exceptional psychological utility
Possession: This type of utility highlights the transfer of ownership between the seller and customer. Since the seller makes it easier for the customer to own the
product, it follows that products with high possession utility are most satisfying.
Generally these five utility types are important in ensuring that a product is well marketed and these in a way supplement each other in ensuring that the product
satisfies a desired market need.
Q4: Describe the role that a code of conduct plays in ensuring ethical compliance within a firm. How should a code of conduct be developed, what should it contain, and
what are the keys to ensuring that the code is successfully implemented?
Many organizations start by developing codes of conduct as an introduction to the process of launching an organizational ethics program. This code of ethics is a
formal documentation that defines what the organization expects its employees to do in certain situations. Most firms have been found to have a formal code of conduct
that may include ethical policy statements, business process guidelines, and code of ethics. These codes cover several areas like financial disclosure practices, sales
presentations and in-house operations of the organization.
Typically the code of ethics will highlight five to seven main areas. These are also called core values that are considered to be important and desirable for
enhancing ethical conduct within any organization. These values will include fairness, responsibility, respect, trustworthiness, caring and citizenship. Management
support in terms of training and distribution are necessary in ensuring that these values are entrenched within the organization’s culture. By using specific example
the management can effectively implement these values within their organizations.
Although an organization may have a perfect code of ethics in place, this is not to say that such an organization will not face any ethical issues arising. However,
the managers in such a situation have a general point of reference in the organization’s code of ethics that can be used to suggest and in certain cases dissuade
certain action. The biggest undoing for most organizations is that their codes of conduct are not effectively communicated to the employees. As such most of the
issues arise out of ill-informed cases. Even where the code of conduct has been made available and accessible by all employees there is a greater need to enforce it so
that the employees have a standardized outlook all matters related to their ethical conduct within the organization. A desirable code of ethics must be one that
enables the employee to shun unethical behavior and improve his or her ethical decision making process. Such a document can provide guidelines that will assist the
employee to attain the ethical objectives of the organization.
Q5: Discuss the challenges and opportunities associated with planning and developing marketing strategy in today’s economy. Why is marketing strategy both exciting and
Change is the most notable challenge as well as opportunity in marketing. The effect of change is such that it affects customers, competitors and even organizations.
Although change is a great challenge it also provides the greatest opportunity for marketing. Change makes marketing most rewarding and fulfilling whenever the
marketer adopts the right marketing strategy. Marketing strategy more so focuses on people (people-driven) where the process looks at ways of delivering unique value
by fulfilling the unique needs of people. In this case the people here may include shareholders, customers, and the society. The strategy must also be capable of
addressing the needs of the organization itself.
Definitely with continual change and the fact that marketing is people driven, there is bound to be a challenge in developing and implementing a market strategy.
Since these factors are often highly unpredictable there is always likelihood that even where the marketing strategy is perfect the process can still fail. Since there
are virtually no rules of marketing in specific situations predictability remains a great challenge. Hence hypothetical scenarios cannot be effectively used to infer
any predictable results. There is no practically way to ascertain the product, price, distribution and promotion given certain factors because the success of such a
marketing approach cannot be guaranteed. Therefore as the development of a marketing strategy focuses on a whole lot of unpredictable issues as mentioned here, it is
an intriguing subject of study.
Q5: What is the relationship among marketing ethics, strategic planning, and organizational performance? How is being market oriented different than having a
The foreseen benefits of including social responsibility and ethics in strategic planning process points to the fact that these aspects are responsible for enhanced
business environment and market performance that involves the stakeholders. As such the demands for a more fulfilling relationship with customers is more felt where
the employees are guided by an ethical code of conduct. Hence positive ethical climate within organizations has been associated with employee’s commitment to quality
and trust. Further social responsibility has been directly associated with customer loyalty, employee commitment and profitability. Therefore it is no wonder that an
ethical climate is responsible for the establishment of a favorable and competitive edge within a firm.
Market orientation entails developing an organizational culture that promotes value for customers thereby enhancing the organization’s profitability. Marketing ethics
also positively affects market orientation. By placing the customer’s requirements first an ethical climate also ensures that the stakeholders’ interests are also
effectively addressed. A positive market orientation approach is therefore one where the firm sustains a desirable cooperation and shares information that enables it
to have a better view of its customer’s needs.
Stakeholder orientation is the degree to which an organization addresses stakeholders’ demands. Hence the stakeholders’ orientation will include a comprehensive
collection of stakeholder data with the aim of analyzing how the organization affects the stakeholders’ activities, distributing information throughout the
organization and organizing responsiveness in relation to the information gathered.
Stakeholder orientation as a process is accomplished in varying levels for different firms. Whereas the basis is an assessment of the extent to which the organization
responds to after it generates and disperses information related to stakeholders, the degree of such responsiveness may vary between stakeholders based on the amount
of intelligence that has been gathered for every stakeholder. As such a firm can respond more to one stakeholder as compared to another because of the amount of
information it gathers for each stakeholder respectively.
Q1: “Analysis alone is not a solution” is an important piece of advice to keep in mind during a situation analysis. What does this phrase mean? If analysis alone is
not a solution, what other considerations are relevant during a situation analysis?
Although an analysis on its own is not sufficient, comprehensive situational analysis is important for better planning and decision making. Effective strategic
planning will however require more than situational analysis and rely on intuition and appropriate judgment. Therefore situation analysis must supplement the
manager’s decision making process and not act as a replacement of the decision maker. Within this context the situation analysis enables a manager to break down a
complex situation into simple manageable parts. Within the marketing context the breaking down of situations into simple manageable parts will help the marketer to
understand why products, organizations and people perform as they do.
Q2: Identify and explain each element of the 5W model for customer analysis. What role does this analysis play in an overall situation analysis?
The important aspects of a customer environment analysis process include the following:
Current and prospective customers
Needs of both current and potential customers
Competitor features and the products that customers perceive as meeting their needs
Expected changes relating to customer needs
Who are our current and prospective customers?
In order to answer the ‘who’ question there must be an analysis of the target market. Demographic, psychographic and geographic characteristics must be determined.
What do customers do with our products?
Helps to evaluate how the firm’s customers consume and what they do with the company’s products.
Where do customers purchase our products?
Helps the marketer to understand distribution and customer convenience aspects of the product.
When do customers purchase our products?
The seasonality of the firm’s goods or services can be assessed using this question. Hence any influence that affects the customer’s purchasing of the goods will be
identified with this question.
Why (and how) do customers select our products?
Enables the marketer to detect the main need-satisfying benefits associated with the organization’s products.
Q3: Identify and discuss at least five reasons why potential customers do not purchase a firm’s goods or services. For each reason, discuss ways that the firm can
overcome the resistance of noncustomers
There are various reasons why a customer may not purchase an organization’s product.
They may include the following:
Product cannot fulfill the customer’s basic need
Ineffective distribution of the product
The product is not matching the noncustomer’s budget
The product is not matching the noncustomer’s lifestyle
Noncustomers’ misconception about the product
Noncustomers are unaware that the product exists
Q5: Identify and discuss the challenges involved in collecting environmental data and information. How can a marketing manager or analyst overcome these problems?
Various challenges are associated with the data collection process. Among the main challenges include the following:
Inaccurate or inadequate assessment of the situation under study. The area of study must be accurately defined before data collection can commence. Sometimes the
researcher or manager may encounter a situation of excessive information where the area of study has not been clearly defined.
Sometimes the expenses of collecting data can be prohibitive. However the internet has substantially reduced this challenge with the exception for cases that require
primary data sourcing
With regard to primary data collection the time factor may also be a greater challenge. However where the study relies on secondary data sources this can be overcome
by use of readily available and authenticated sources from the internet
Where the manager encounters information overload it may be difficult to effectively categorize such information in order to satisfy the need for the research. A lack
of knowledge on suitable tools like SWOT that the manager can use to effectively classify the data can also pose some challenge during the research process.