Ethical behavior: the moral principles or value that generally govern the conduct of an individual or a group Ex. There is no law for cutting in line.
Ethical: the moral principles or value that generally govern the conduct of an individual
Unethical: the rules of people develop as a result of cultural values and norms.
Ethical Development Levels: 3 levels
(More Childlike) Preconvetional Morality
(More mature) Postconvetional Morality
Extent of Problems Top management Action Potential consequences Number Affected
Social Consensus Probability of Harm Time until Consequences
Code of Ethics:
Helps identify acceptable business practices Helps control behavior internally
Avoids confusion in decision making Facilitates discussion about right and wrong
Foreign Corrupt Practices Act (FCPA)
Prohibits Us Corporations from making illegal payments to foreign officials.
Corporate Social Responsibility: Go green, help human resources, can do it because they have money. (Pros, cons)
Socially responsible companies will outperform their peers. It is in business best interest to find ways to attack society’s ills.
The development and marketing of products designed to minimize negative effects on the environment or improve the environment.
Environmentally aware customers pay more for products.
Companies must try to educate customers of environmental benefits.
Cause Related Marketing:
For profit and nonprofit organizations cooperate to generate funds.
Effects of Advertising
In 2009, 30 companies spent more than 1 billion each.
1.4 million People work in various marketing positions including media advertising such as newspapers, magazines, television, radio and internet media.
More than 100 companies spend over 300 million annually on advertising.
Advertising and Market Share
New brands with small market share spend proportionally more for advertising and sales promotion than those with a large market share.
New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits.
The Effect of Advertising on Consumers
Advertising may change a consumer’s negative attitude toward a product, or reinforce a positive attitude.
Advertising can affect consumer ranking of a brands attributes.
Major types of advertising
Institutional Advertising: Enhances a company’s image rather that promote a particular product.
Product advertising: Touts the benefits of a specific good or service.