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Marketing Alliances
At the outset, it is critical that we define what we mean by "marketing
alliances." A marketing alliance is a formal or informal arrangement between
organizations where each seeks through marketing activities gains that
would not be available to either without such an alliance. In our view, the
term alliances encompass two of the three types of marketing exchange
characterized by Gundlach and Murphy (1993). Also the concept of ethics
and social responsibility in marketing should be understood by the
institutions in the field of academic as well as industry. These authors
distinguish among transactional, contractual and relational exchanges. A
typical transactional exchange is a one-time event where, for example, A
sells to B. A contractual exchange is where A and B agree to a joint
undertaking for some fixed period of time, for example, where A and B
agree to carry out a six-month promotion of complementary product lines. A
relational exchange is one that theoretically has no limits, as when A and B
conduct a joint venture to market Product Y in Country Z. The last two may
be considered "alliances," differing mainly in their time frame and, by
extension, the attitudes, intentions and behaviors of the parties. In the
commercial sector and academic sector also such alliances may involve
equity investments by one or -- more typically --- all parties (cf. Varadarajan
and Cunningham 1995).
(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, and
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 companys products, promotional efforts, and pricing and
distribution policies but also by its philosophy of social responsibility.
The next important area the marketer need to know about what is the
relevance of Social Marketing in order to protect the environment and to
improve the quality of life and are concerned with issues that include
conservation of natural resources, reducing environmental pollution,
protecting endangered species, and control of land use. The three Rs of
environmentalism are Reduce, Reuse, and Recycle. Many companies are
finding that consumers are willing to pay more for a green product. Toyota
has become quite successful with their hybrid cars. Green marketing refers
to the development and distribution of ecologically-safe products. It refers to
products and packages that have one or more of the following
characteristics: (1) are less toxic, (2) are more durable, (3) contain reusable
materials, or (4) are made of recyclable material. In short, these are products
considered environmentally responsible. To sight an example One
Canadian Executive stated that Any marketing executive who does not put
a green filter on their strategies is looking at losing market share. The
whole idea of disposal is going to become unacceptable. In West Germany
and Canada, Procter & Gamble has found high consumer acceptance of
pouches of liquid detergents and fabric softeners so consumers can refill
rather than discard large plastic bottles.
companies in the country. The next comes in the list are Tata Motors and
Hero Honda. Canara Bank, Indal, Gujarat Ambuja and Wipro are involved in
community development work of building roads, running schools and
hospitals. ACC has been rendering social service for over Five decades.
They are setting up schools, health centers, agro-based industries and
improving the quality of rural life. BHEL is actively involved in the Welfare
of the surrounding communities is helping the organization to earn good will
of the local people BHEL is also providing drinking water facilities,
construction of roads and culverts, provision of health facilities, educational
facilities, and so on companies like ONGCs are encouraging sports by
placing good players on their pay rolls. TISCO, TELCO and HINDALCO
won the award for excelling in CSR, jointly given by FICCI and Business
world for the 2003. ONGC has also committed resources by adopting a few
villages to implement president Dr. Abdul Kalams idea of PURA (Provision
of Urban Amenities in Rural Areas). NTPC has established a trust to work
for the cause of the physically challenged people. Similarly in the private
sectors like Infosys, Wipro and Reliance are believed to be most socially
responsible corporations. In 1999 Kofi Annan of the United Nations invited
corporate leaders for a Global Compact to promote nine principles covering
three areas: human rights, labor rights, and sustainable development. Today,
India can be legitimately proud to have had the second largest number of
companies from any country subscribing to the Global Compact. Several
public sector companies have joined together to form the Global Compact
Society of India.
factory. Similarly, Hindustan Lever which requires good quality water for
the manufacture of its food products has been improving the quality of water
in many communities. Companies like Cadbury India, Glaxo and
Richardson Hindustan are helping farmers to grow crops which serve as raw
materials for them. Lipton in Eath district of Uttar Pradesh has started
veterinary hospitals in the region from where it buys milk. British Gas
(which sells compressed natural gas to India) has recently started teaching
unemployed youngsters how to become mechanics for gas-based autorickshaws in Delhi. In some other organizations the approach has been to
take up such philanthropic activities in which they can make a difference.
Case study:
Coca Cola
As one of the largest and most global companies in the world, Coca Cola
took seriously its ability and responsibility to positively affect the
communities in which it operated. The companys mission statement, called
the Coca-Cola Promise, stated: The Coca-Cola Company exists to benefit
and refresh everyone who is touched by our business. The Company has
made efforts towards good citizenship in the areas of community, by
improving the quality of life in the communities in which they operate, and
the environment, by addressing water, climate change and waste
management initiatives. Their activities also included The Coca Cola
Africa Foundation created to combat the spread of HIV / AIDS through
partnership with governments, UNAIDS, and other NGOs, and The Coca
Cola Foundation, focused on higher education as a vehicle to build strong
communities and enhance individual opportunity Coca Colas footprint in
India was significant as well. The Company employed 7000 citizens and
believed that for every direct job, 30 40 more were created in the supply
chain. Like its parent, Coke Indias Corporate Social Responsibility (CSR)
initiatives were both community and environment focused. Priorities
included education, where primary education projects had been set up to
benefit children in slums and villages, water conservation, where the
Company supported community based rainwater harvesting projects to
restore water levels and promote conservation education, and health..
QUESTION:
1. WHAT WAS THE REASON FOR COCA COLA TO TAKE SUCH A
MEASURE?
2. WHAT WAS THE MEASURE TAKEN BY THEM?
3. WHAT WAS THE EFFECTS AFTER ALL THESE MEASURE?
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.
Sellers 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
junk mail (including electronic mail), and the use and exchange of mailing
listsmay also pose ethical questions. In addition to being subject to
consumer-protection laws and regulations, the Direct Marketing Association
provides a list of voluntary ethical guidelines for companies engaged in
direct marketing
A. History of Ethics
Ethics is a branch of philosophy that studies morals and values. Interest in
ethics and ethical codes has been around for a long time. Centuries ago,
Aristotle referred to character, which he called ethos, as the most potent
means of persuasion (Lane Cooper, 1960). He also identified elements of
virtue as justice, courage, temperance, magnificence, magnanimity,
liberality, gentleness, prudence, and wisdom. In Roman times, the emperor
Justinian was the first to incorporate ethics into the legal system and to
establish schools to educate lawyers concerning ethics morality, and law.
Napoleon established a code of thirty-six statutes based on the concept that
all citizens, regardless of circumstances of birth or social stature, should be
treated fairly and equally. Indeed, every civilization has recognized the need
for establishing laws and codes to guide human relationship and behavior
(Metcalfe, 2003: 74).
Ethics studies the differences between right and wrong, and through these
studies philosophers have developed several theories. Some major ethical
theories are egoism, intuitionism, emotivism, rationalism, and utilitarianism.
Egoism is the belief that people should only look at how the consequences
of an action affect them. Intuitionism is the belief in an immediate awareness
of moral value. Emotivism is the belief that ethical decisions are expressions
of emotion. Rationalism focuses on the metaphysical aspects of ethics.
Utilitarianism in ethics considers how moral actions produce the greatest
overall good for everyone (www.questia.com).
1. What Is Culture?
Academics and researchers have never been to agree on a simple definition
of culture. In the 1870s, the anthropologist Edward Taylor defined culture as
that complex whole which includes knowledge, belief, art, morals, law,
custom, and other capabilities acquired by man as a member of society
(Taylor, 1871). As other capabilities, we can include economic and political
philosophy, religion, language and education systems.
Especially, religion is very important in shaping ethical systems refer to a set
of moral principles, values, that are used to guide and shape behavior. Most
of the world`s ethical systems are the product of religions (Hill, ibid: 105).
Dutch Management Professor Geert Hofstede refers to culture as the
software of the mind and argues that it provides a guide for humans on
how to think and behave; it is a problem-solving tool (Hofstede, 1984: 21).
Business consultant E. Hall gives a better definition for international
marketers: The people we were advising kept bumping their heads against
an invisible barrier...We knew that what they were up against was a
completely different way of organizing life, of thinking and of conceiving
the underlying assumptions about the family and the state, the economic
system, and the man himself (Hofstede, ibid: 21).
Most traditional definitions of culture center around the notion that culture is
the sum of the values, rituals, symbols, beliefs and thought processes that are
learned, shared by a group of people, and transmitted from generation to
generation (Herskovitz,1952: 634). Values mean abstract ideas about what a
group believes to be good, right, and desirable. If we put it differently,
values are shared assumptions about how things ought to be (Mead, 1994:
7). On the other hand, values are rules and guidelines that prescribe
appropriate behavior in particular situations.
the perceived ethical problems. In another study, Armstrong finds out the
most frequently cited problem of Australian International Business
Managers is gifts/favours/entertainment and that this problem may be related
to the culture where the international business is being conducted. And the
most important ethical problem to Australian international managers is largescale bribery (Armstrong, 1992).
Although, different cultural environments result in different ethical
perceptions in international marketing, for the sake of ethical consistency, it
is necessary to generate internationally applicable ethical rules and
regulations. As a matter of fact, a finding of an empirical research conducted
by Armstrong proposes that The Australian general managers disagreed that
it is necessary to compromise one`s ethics to succeed in international
marketing (Armstrong, ibid: 161).
1. Descriptive Approach
Descriptive ethics describe the values and moral reasoning of individuals
and groups and attempt to provide an understanding of the ethical decisionmaking process (Schopenhauer, 1979). It is assumed that the ethical
decision-making process affected by a variety of individual, situational, and
contextual factors such as personal experiences, opportunity, the
organizational environment and the cultural environment (Nill, ibid: 91).
2. Normative Approach
Normative ethics suggest an answer to the general moral question of what
ought to do (Schlegelmilch, 1998; Murphy and Laczniak, 1981, Chonko,
1995). These researchers are concerned with the justification of moral norms
and ethical values. It has been debated for many years whether moral
responsibility can be attributed to business organizations. Some years ago,
ethics have nothing to do with international business; then, normative ethics
cannot be a concern for business corporations. Some scholars discuss that
business organizations cannot assume moral responsibility. Only individuals
acting on behalf of the corporation are morally motivated, have intensions,
and can be held accountable (Ranken, 1987: 633-37).
On the other hand, some scholars argue that some aspects of the organization
are not reconcilable with moral responsibility. Organizations serve a purpose
and in that sense are not entirely autonomous. Organizations can never ends
in themselves; they have been created for a specific purpose. The
organization cannot be held responsible for actions that go beyond or against
that purpose (Wilmot, 2001: 161-169).
Normative approaches can be classified as deontological theories and
teleological theories. One of the purposes of these theories is to develop
guidelines or rules to assist international marketers in their efforts to behave
in an ethical fashion (Hunt and Vitell, 1986: 5-15). Fundamental difference
between these theories is that deontological theories focus on the specific
actions or behaviors of an individual, whereas teleological theories focus on
the consequences of the actions or behaviors.
a. Deontological Evaluations
Deontologists believe that certain features of the act itself other than the
value it brings into existence make an action or rule right (Frankena, 1963).
Deontological views have a rich intellectual history dating back at least as
far as Socrates. For them the problem has been to determine the best set of
rules to live by. Examples proposed have been the golden rule of doing
unto others as you would have them do unto you (Sidgwick, 1907).
According to Laczniak; international marketers have certain duties, under
most circumstances, constitute moral obligations that include the duties of
fidelity, gratitude, justice, beneficence, self-improvement and noninjury.
b. Teleological Evaluation
Teleologists suggest that people ought to determine the results of various
behaviors in a situation and evaluate the goodness or badness of all the
consequences. A behavior is then ethical if it produces a greater balance of
good over evil than any available alternative (Nill, Ibid). Teleology can be
divided into two subcategories as egoism and utilitarianism (Ferrell et al.,
1989: 55-64).
(1). Egoism
Egoism defines rightness in terms of the consequences for the individual
(Meng, 1998: 333-352). It postulates that one should choose actions that
result in the maximum of good for oneself (Rosen, 1978).
(2). Utilitarianism
In contrast to the egoist,the utilitarian does not minimize bad or maximize
his/her own good in general. Ethical universalism (utilitarianism) holds
that an act is right only if it creates the greatest good for the greatest number.
Hobbes and Nietzsche were ethical egoists but such philosophers as G.E.
Moore and John Stuart Mill were ethical Universalists. If we explain these
theories with an example; deontologists do not tell a lie and they do not
consider the results of the action, on the other hand, teleologists could tell a
lie if they save a life, or when telling the truth hurts another person.
3. Dialogic Approach
CONCLUSION
Because marketing decisions often require specialized knowledge, ethical
issues are often more complicated than those faced in personal life and
effective decision making requires consistency. Because each business
situation is different, and not all decisions are simple, many organizations
have embraced ethical codes of conduct and rules of professional ethics to
guide managers and employees. However, sometimes self-regulation proves
insufficient to protect the interest of customers, organizations, or society. At
that point, pressures for regulation and enactment of legislation to protect the
interests of all parties in the exchange process will likely occur. Several
forces are driving companies to practice a higher level of corporate social
responsibility: rising customer expectations, changing employee
expectations, government legislation and pressure, the inclusion of social
criteria by investors, and changing business procurement practices.
Companies need to evaluate whether they are truly practicing ethical and
socially responsible marketing. Business success and continually satisfying
the customer and other stakeholders are closely tied to adoption and
implementation of high standards of business and marketing conduct. The
most admired companies in the world abide by a code of serving peoples
interests, not only their own. The following are the suggestions that the
society must use the law to define, as clearly as possible, those practices that
are illegal, anti-social, or anticompetitive. Next, companies must adopt and
disseminate a written code of ethics, build a company tradition of ethical
behavior, and hold its people fully responsible for observing ethical and
legal guidelines. And, individual marketers must practice a social
conscience in their specific dealings with customers and various
stakeholders. The future holds a wealth of opportunities for companies.
Technological advances in solar energy, online networks, cable and satellite
television, biotechnology, and telecommunications promise to change the
world as we know it. As the same time, forces in the socioeconomic,
cultural, and natural environments will impose new limits on marketing and
business practices. Companies that are able to innovate new solutions and
values in a socially responsible way are the most likely to succeed. It is my
belief that good marketing is ethical marketing. Good marketing is about
satisfying and developing a long-term relationship with our customers.
Caring about your customers not only results in profits (or achieving your
organizations objectives if an organization is not-for-profit), it is the ethical
thing to do. Deceiving customers may help a firms profits in the short-run,
but is not the way to build a successful business. The same goes for social
responsibility. A firm has to care about all stakeholders: customers,
employees, suppliers and distributors, local communities in which they do
business, society, and the environment.
BIBLIOGRAPHY
The above all the information we got it from:
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Vipul Prakashan
{SEM II}
BUSINESS ENVIRONMENT
PREFACE
WHAT IS ETHICS?
The terms ethics, refers to a code of conduct that guides an individual while
dealing with others. Ethics means the rules or principles that define right and
wrong conduct. It is a study of individual and collective moral awareness,
judgment, character and conduct. It relates to the social rules and cardinal
vales that motivate people to be honest in dealing with others. Such
ethical rules (code of conduct) are determined largely by customs traditions
and prevailing environment. Certain ethical vales such as honesty and
fairness are universal and stable over centuries. Ethical rules of conduct
provide guidelines for human behavior that will preserve a societys, a
groups or an individual persons notion of morality.
Ethics directs human behavior and also differentiates between good and bad,
right and wrong and between fair and unfair human behavior or actions. It
creates decency, decorum and discipline in the behavior of individuals and
also in the society.
The term Ethics is derived from the Greek word ethos which refers to
character. According to Webster dictionary ethical means conforming to
professional standard of conduct. Ethical action means an action which is
socially and morally good. Such actions are fair and not harmful to others.
According to Hurtly, ethics can be defined as a system of moral values. It is
concerned with that branch of philosophy which deals with values relating to
human conduct\behaviour.