Class 12 Marketing Marketing Ethics and Social Responsibility Notes and Important Questions

Class 12 Marketing Ethics and Social Responsibility Notes (Marketing)

Chapter 7 Marketing Ethics and Social Responsibility NEB Class 12 | Marketing (Mar. 308) | Unit 7 Allotted Teaching Hours: 12 Hours Topics: 7.

Marketing | Class 12 Ch. 7

Chapter 7 Marketing Ethics and Social Responsibility NEB Class 12 | Marketing (Mar. 308) | Unit 7 Allotted Teaching Hours: 12 Hours Topics: 7.1 - 7.4 Why this chapter matters: Marketing has enormous power to influence people's choices - which also means it can be misused. This chapter asks a different kind of question from earlier units: not 'how do we sell more?' but 'what is the right way to sell, and what do we owe to society while doing it?' 7.1 Meaning of Marketing Ethics and Social Responsibility A. Marketing Ethics Marketing ethics refers to the moral principles and standards that guide what is right and wrong in marketing decisions and behaviour - such as honesty in advertising, fairness in pricing, and respect for consumer rights and privacy. B. Social Responsibility Social responsibility is the obligation of a business to act in ways that benefit society at large - employees, customers, the community and the environment - and not just to maximise its own profit. Key difference: Marketing ethics is about doing the right thing in each individual decision (e.g. not lying in an advertisement). Social responsibility is a broader, ongoing obligation of the whole organisation toward all its stakeholders and society. C. Importance of Marketing Ethics

Marketing | Class 12 Ch. 7

- Builds long-term trust and loyalty between the firm and its customers. - Protects the firm from legal action and regulatory penalties. - Improves the firm's reputation and brand image in the market. - Creates a fair and healthy competitive environment for all businesses. - Attracts ethically-minded employees, partners and investors. D. Common Examples of Unethical Marketing Practices - False or exaggerated advertising claims about a product's benefits. - Adulteration - mixing inferior or harmful substances into a product. - Hoarding and black-marketing - creating artificial scarcity to raise prices. - Deceptive packaging - misleading size, weight or content claims. - Price exploitation during emergencies, shortages or disasters. - Violation of consumer privacy - misusing personal data without consent. 7.2 Ethical Behaviour in Marketing A. Morality Morality refers to the personal and organisational sense of right and wrong conduct that shapes marketing decisions. A marketer with strong morality values honesty, integrity, fairness and respect for the customer, even when a dishonest shortcut could bring quicker profit. B. Ethical Decision Making A systematic process helps marketers make ethically sound decisions: - 1. Identify the ethical issue involved in the decision. - 2. Gather the relevant facts about the situation. - 3. Identify the stakeholders who will be affected by the decision. - 4. Evaluate the alternatives against ethical principles and company values. - 5. Choose and implement the most ethical, practical option. - 6. Evaluate the outcome and learn from it for future decisions. C. Ethical Guidelines

Marketing | Class 12 Ch. 7

Firms often set formal codes of conduct to guide employees toward ethical marketing practice. Common guidelines include: - Truthful advertising - not making false or exaggerated claims about a product. - Fair pricing - avoiding price exploitation, especially during shortages or emergencies. - Respecting consumer privacy - protecting customer data and not misusing personal information. - Transparent labeling - disclosing ingredients, risks and terms clearly, without hiding key facts. - Avoiding deceptive practices - such as bait-and-switch selling or hidden charges. - Honouring commitments - delivering the quality, quantity and service that was promised. 7.3 Social Marketing Functions A socially responsible business must balance several functions at once - not just chase profit, but also serve its people and its environment. A. Survival The most basic obligation of any firm is to survive - to remain in operation, provide continued employment, pay its taxes, and keep serving its customers. A firm that collapses cannot fulfil any of its other social obligations. B. Profitability A firm must earn a fair and reasonable profit to stay in business, reinvest in growth, and reward its owners/investors. Social responsibility does not mean rejecting profit - it means earning that profit through honest and responsible means. C. Services to Customers - Providing quality goods/services that genuinely meet customer needs. - Charging a fair price for what is offered. - Giving honest information about the product, without misleading claims.

Marketing | Class 12 Ch. 7

- Offering proper after-sales service and handling complaints fairly. D. Obligations to Employees, Community, Customers and the Public - To employees: fair wages, safe working conditions, training opportunities, and non-discrimination. - To the community: contributing to local development, education and infrastructure. - To customers: honesty, quality and value for money in every transaction. - To the public at large: avoiding harm and contributing positively to society's general well-being. E. Eco-friendly Activities - Using resources sustainably, avoiding wasteful consumption of raw materials. - Minimising pollution from production and distribution activities. - Adopting waste reduction and recycling practices. - Offering eco-friendly products and packaging (biodegradable, reusable materials). 7.4 The Cost of Ignoring Social Responsibility Firms that ignore their ethical and social obligations do not just risk criticism - they face real, measurable business costs: A. Rejection of the Company's Products by Customers and Society When a firm is seen to behave unethically (e.g. selling unsafe products, exploiting workers, polluting the environment), customers may boycott its products, spread negative word-of-mouth, and switch to more responsible competitors - directly cutting sales. B. Damage to Company Goodwill A firm's reputation and goodwill, built over many years, can be seriously damaged by just one unethical incident. Unlike lost sales (which can recover quickly), trust is slow and difficult to rebuild once lost.

Marketing | Class 12 Ch. 7

C. Barriers to Organisational Growth - Legal penalties and fines from regulators for unethical or illegal practices. - Loss of investor confidence, making it harder to raise capital. - Difficulty attracting and retaining talented employees who prefer ethical employers. - Restricted market access - some markets/partners may refuse to deal with an irresponsible firm. - Increased government regulation and scrutiny on the whole industry. Exam tip: When asked about the 'cost of ignoring social responsibility', structure your answer around these three heads - Rejection by customers, Damage to goodwill, and Barriers to growth - examiners look for this structure. Quick Revision - Key Points to Remember - Marketing ethics = right/wrong in individual decisions; Social responsibility = broader obligation to society. - Ethical decision making: Identify issue -> Gather facts -> Identify stakeholders -> Evaluate alternatives -> Choose/Implement -> Evaluate outcome. - Social marketing functions: Survival, Profitability, Services to customers, Obligations to stakeholders, Eco-friendly activities. - Cost of ignoring social responsibility: Rejection of products, Damage to goodwill, Barriers to growth. Possible Exam Questions Short Answer Questions - Define marketing ethics and social responsibility. - What is meant by ethical decision making? Explain its steps. - Mention any four ethical guidelines followed in marketing. Long Answer Questions

Marketing | Class 12 Ch. 7

- Explain the social marketing functions of a business firm. - Discuss the costs a firm may face if it ignores its social responsibility. End of Chapter 7 (12 Hours) | Next -> Chapter 8: Developing Salesmanship Skill (12 Hours)