Overview of Socially Responsible Marketing

and Selected Issues of Interest to Stakeholders

Emmanuel Chéron, Ph.D.

Professor of Marketing

SOPHIA UNIVERSITY

FACULTY OF COMPARATIVE CULTURE

International Business/Economics

E-mail: j-cheron@sophia.ac.jp
http://www.geocities.com/wallstreet/market/4263

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Overview of Socially Responsible Marketing
and Selected Issues of Interest to Stakeholders
Agenda
• Review of social criticisms of marketing
• Key socially sensitive areas of consumer behavior
• Brief review of some of my previous research in the field
Decision process involved in large corporations
to select sponsorship projects
Financial services needs of low-income individuals:
a comparative study in Canada
A Canadian survey on Environmental Marketing
Management
• Discussion about the most sensitive social marketing
issues in Japan
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 Social Criticisms of Marketing
High
Prices

Poor Deceptive
Service Practices
Marketing’s
Impact on
Individual High
Planned Consumers Pressure
Obsolescence Selling
Shoddy or
Unsafe
Products
Marketing’s Impact on Other Businesses
Critics Charge that a Company’s Marketing
Practices Can Harm Other Companies and Reduce
Competition Through:

Marketing
Acquisitions Practices
of that
Competitors Create Barriers
to Entry

Unfair
Competitive
Marketing
Practices
 Consumeris
m
The Right to Be Safe The Right to Be Informed

Basic Consumer Rights

The Right to Be Heard The Right to Choose

 Environmentalism

Practice Practice
Pollution Product
Prevention Stewardship

Have a Adopt
Sustainability Designs
Vision for the
Environment
Plan for New
Environmental
Technologies
 Societal Classification of Products

Immediate Satisfaction
Long-Run Consumer Benefit

Low High

High
Salutary Desirable
Products Products

Low Deficient Pleasing

Products Products
 Marketing
Ethics

Product Distributor Advertising

Development Relations
Corporate Standards
Marketing
Ethics
Policies

Customer
Pricing General Service
Code
Principles For Public Policy Toward Marketing

Consumer and
Producer Freedom

Curbing Potential
Harm

Key Meeting Basic

Principles Needs
for a Economic
Public Policy Efficiency
Toward
Marketing Innovation

Consumer
Education
Consumer
Protection
Key socially sensitive areas of consumer
behavior
 Deceptive advertising  Drivers of compulsive
 Children’s ability to consumption
distinguish programs  Corporate social
and ads responsibility
 Improving children’s  Why firms want to
advertising seem responsible
 Negligent consumer  Consumer reactions to
behavior product recalls
 Product misuse  Corporate rumors

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 Introduction
 Firms may engage in unscrupulous
behavior.
 Consumers also engage in negligent
behavior.
 Governments regulate buying and selling
goods and services to reduce the harmful
effects of these behaviors.

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Major Public Policy Issues
 Deceptive advertising
 Advertising to children
 Telemarketing and Internet fraud

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 Deceptive Advertising
 An advertisement which is potentially misleading
or literally false is deceptive.
 Potentially misleading ads are difficult to evaluate
because miscomprehension may often occur.
 Miscomprehension is a problem for firms because the
audience does not understand the message being
delivered.
 The FTC regulates deceptive advertising, but not
miscomprehension.

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 Advertising to Children
 Both policy makers and marketing managers have
reacted to criticism of advertising directed at
children.
 Some countries have banned advertising to
children under 12.

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 Telemarketing/Internet Fraud
 The elderly are vulnerable
to fraud by telemarketers.
 A program to combat this
fraud is the Know Fraud
Program.
 Organizations that fight
telemarketing fraud are
the AARP, the FBI, the
Post Office, and others.
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 Negligent Consumer Behavior
 Negligent behavior is composed of actions
and inactions that may negatively affect the
long-term quality of life of individuals and
society.
 This type of behavior can occur in two
different contexts:
 Product Misuse
 Consumption of Hazardous Products

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Product Misuse
 Many injuries result from
misuse of a safe product - not
from product defects.
 Using a cell phone while
driving is being outlawed in
some areas.
 “The most dangerous
component is the consumer,
and there’s no way to recall
him.”

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Consuming Hazardous Products
 Recently alcohol related accidents have declined.
The methods used to increase consumer awareness
are:
 Informing and Education
 Social Controls
 Economic Incentives
 Economic Disincentives

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 Compulsive Behavior
 Some products are hazardous and consumption can
become compulsive or addictive over time.
 Other behaviors are not harmful in moderation but
become addictive when they become compulsive.
 Smoking
 Compulsive Drinking
 Gambling
 Compulsive Shopping
 Other Compulsions
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 Smoking in the US
 Consumers until the late 1960s were
exposed to nearly 3000 cigarette
commercials per week of 38 different
brands.
 In 1950 there was already concern over the
health hazards of cigarette smoking.
 Smoking declined from the 1960s to 1992
but has held steady since then.

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 Compulsive Drinking
 As mentioned earlier, there has been a decline in
alcohol-related deaths on the road. This suggests a
decline in alcohol consumption.
 Despite the decrease in sales of hard liquor, there
is an increase in alcoholic soft drinks.
 These taste like colas or fruit juices but may contain
more alcohol than beer does.

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 Gambling in the US
 Gambling affects an estimated 8 to 12 million
people.
 Gambling takes place in casinos in Las Vegas,
New Jersey, on river boats and elsewhere.
 State-run lotteries make it easy to gamble by
visiting a convenience store.

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Compulsive Shopping
 Some consumers “shop till
they drop” because shopping
can become an addiction
similar to alcohol or drugs.
 There are drugs available to
help relieve this compulsion.
 Compulsive shopping may be
hereditary.

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Other Compulsions
 Overworking and
overeating are some
other compulsions.
 Research has stressed
sociological and
psychological
influences. Chemical
imbalances may also
be important.
 Multiple compulsions
may occur together.
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 Corporate Social Responsibility
 Firms have become viewed as responsible for
more than generating profits.
 “Corporate social responsibility” refers to the idea
that firms have an obligation to help the larger
society by offering some of their resources.

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 Succeeding in the Long Run
 A business’s self-interest could be advanced if the
business embraced a long-run view.
 This position would permit expenditures in
support of socially responsible activities and
provide future benefits in the form of consumer
approval and loyalty.

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 Acquiring a Positive Public Image
 One way of showing that companies are socially
responsible is by creating a positive public image.
 Another way that firms can show they are socially
responsible is by making speedy product recalls.

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 The Diffusion of Rumors
 Public peace of mind can be corrupted by
diffusion of rumors.
 Rumors often plague both large and small
companies.

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 Types of Rumors
 Pipe dream rumors represent wishful thinking on
the part of the circulators.
 The bogie rumor is a fear rumor that spooks the
market place.
 Self-fulfilling rumors are based on a perception of
what could happen in the future if something else
were to occur.
 In premeditated rumors individuals spread
rumors that may help them financially or
otherwise.
 Spontaneous rumors arise when people seek
explanations for unusual events. 29
 Avoiding Regulation
 A final reason to act in a socially responsible
manner is to avoid government regulation.
 Most of the burden of social responsibility is on
marketers. They can do best by following the
strategies suggested, and maintaining a positive
initial corporate image and responding quickly
when difficulties arise.

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 Managerial Implications
 Positioning. The concept of corporate social
responsibility has direct implications for the
positioning of a company. Efforts to create a
“good-citizen” image help to position a firm as
one that puts customers first.
 Environmental Analysis. A company’s actions
must be in compliance with laws and regulation.
 A firm should be in a position to respond promptly if a
response is warranted: An “early-warning system”
needs to be in place and functioning continuously.

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 Implications continued…
 Research. Market research should be used to
determine how consumers view the company.
 Market research may also help determine whether
customers are using a firm’s product in a novel manner
that may be unsafe.
 Marketing Mix. Pricing, promotion, product
development, and distribution should be socially
responsible.
 Segmentation. Some population segments are
more concerned with issues of corporate social
responsibility than are other segments.
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 Decision process involved in
corporate sponsorship projects
Study of the Sponsorship Decision Process in 16 large Canadian
Corporations
Method:
• Qualitative and quantitative interviews
• Post validation of the decision process
• Check for convergence of decision processes and synthesis
• Content analysis of annual reports and classification of
sponsorship projects
Industries involved:
3 Oil companies 1 Brewery
1 Steel manufacturer 5 Food retailers
1 Aircraft manufacturer 1 Tobacco company
1 Information systems 2 Banks and 1 Insurance company
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Relative importance of objectives involved
in corporate sponsorship projects
Philanthropic patronage objectives 3.53
• Involvement in the community: 3.85
• To meet our social responsibility: 3.62
• To offer a better quality of life: 3.08
Commercial sponsoring objectives 3.03
• To increase the company’s visibility: 3.83
• A new way of doing promotion: 3.67
• As a supplement to advertising: 3.54
• To improve our corporate image: 3.45 (Degree of agreement
… on a scale of 1 to 4)
• To attract opinion leaders: 2.45
• To entertain our suppliers: 2.30
• To limit government regulation: 2.0
Other objectives 2.86
• Personal motives of top management
• To obtain fiscal benefits: 2.28 34
 Relative importance of criteria for selecting
corporate sponsorship projects
Sources of revenue of the applicant organization 3.75
Relevance of the amount requested 3.72
Previous experience with the applicant organization 3.69
Target market of the applicant organization 3.62
Domain of activities of the applicant organization 3.58
Budget of the project 3.50
(Degree of
Mission of the applicant organization 3.45
agreement
on a scale
Other sources of funding 3.45
of: 1 to 4) Scope of the market of the applicant organization 3.38
Management structure and expertise 3.23
Specific use of requested funds 3.23
Image and visibility of applicant organization 3.17
Expertise of the project manager 3.08
Comments of other donors 3.00
Personal knowledge of applicant 2.83
Importance of the cause promoted 2.72 35
 Roles, steps and activities involved in corporate
sponsorship projects
1

Screening role Written request received Intention

Advising and
bargaining role
Reception of Preliminary screening Decision
requests and Selection
analysis step In depth analysis Refusal Acceptance and
processing
Evaluation step
Receiving Organization
Evaluation of
Costs/Benefits Analysis
requests step
Implementation Feedback
Advising role Recommendation Execution role and
evaluation
Evaluation of activity of donation
Discussion

Average number of participants involved: 3.92

1
Average size of the selection committee if any: 4.60
Average frequency of the committee meetings: once a month
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 Classification of sponsorship projects
Philanthropic Marketing
goal goal

Type Pure Targeted Hybrid Exploratory Pragmatic

philanthropy philanthropy corporate sponsoring sponsoring
citizen

Industries Information Steel Insurance Banks (2) Brewery

systems Aviation Oil (3) Financial Tobacco
Public utilities Food I Institutions Food II
(2)
Unassisted Good corporate Community Social Marketing tool Marketing tool
citizen involvement responsibility Business
objectives
Community Quality of life Image, visibility relationships
involvement of employees Community
involvement
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 Low-Income Individuals:
a Comparative Study in Canada
18-24 yrs old

T enants

Unemployed
Low-income Car loan
Singles

Automatic savings 25-34 yrs

High school Common law
Cre dit line Divorced
Bonds Women Employed
Te rm de posits
College 35-44 yrs
Higher income Men
45-54 yrs University
65 yrs + Mutual funds Married RRSP
Elementary Owners Mortgage
Retired Stocks
55-64 yrs

: Financial products
: Socio-economic and demographic variables
Proportion of variance accounted for by dimension 1: 56.50
%
Proportion of variance accounted for by dimension 2: 29.30
http://www.geocities.com/WallStreet/Market/4263/ijbm98.doc
% 38
 Environmental Marketing Management
1. Environmental
Environmental Environmental Scientific Social and environmental
overview Audit laws knowledge context

2. Review of mission,
culture and values Environmental corporate policy
of company

3. Setting of environmental Environmental objectives

objectives

4. Development of the R&D Production Marketing Environment. Public Relations

environmental plan

Action plan

5. Parties involved
and implementation Employees Suppliers Distributors Governments Pressure Board of
of the action plan groups directors

General public

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 American Council on Consumer
Interests Issues
1. Media issues: lack of factual information, stereotyping
2. Product issues: no international standards for food, product
recalls, warning labels, health claims
3. Financial issues: identity theft, consumer debt, promotion of
credit cards, financial products, online shopping
4. Public policy issues: regulation of products (tobacco, alcohol,
prescription drugs), control of big business
5. Ethical issues: privacy, marketing to vulnerable audiences,
sweatshop labor, effects of technology on
consumers, CSR
6. Counter marketing issues: effectiveness of programs to counter
obesity, alcohol and tobacco usage,
visibility of public services 40