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Chapter 04
Ethical and Social Responsibility in Marketing
Test Item Table by Major Section of the Chapter and Level of Learning Major Section of the Chapter and Tracking Studies Level of Learning (LL) Level 1 Knowledge (Knows Basic Terms & Facts) Level 2 Comprehension (Understands Concepts & Principles) Level 3 Application (Applies Principles) Responsibility Matters at Anheuser- Busch (pp. 91)
Nature and Significance of Marketing Ethics (pp. 92-93) 7, 8 (^) 9, 11, 13, 15, 16, 17, 157 , 158 10, 12, 14, 159 Understanding Ethical Marketing Behavior (pp. 93-100) 19, 24, 28, 31, 32, 35, 36, 39, 40, 50, 57, 58, 59, 65, 67, 68, 69, 70, 71, 72, 82, 83, 89, 90, 96, 160 , 162 , 163 18, 20, 21, 22, 29, 30, 37, 38, 41, 43, 47, 51, 52, 53, 54, 55, 56, 62, 63, 64, 75, 76, 77, 78, 79, 84, 87, 88, 91, 97, 98, 161 23, 25, 26, 27, 33, 34, 42, 44, 45, 46, 48, 49, 60, 61, 66, 73, 74, 80, 81, 85, 86, 92, 93, 94, 95, 99, 164 Understanding Social Responsibility in Marketing (pp. 100-105) 100, 101, 105, 106, 112, 113, 115, 116, 118, 119, 123, 124, 125, 126, 127, 136, 137, 140, 141, 147, 148 103, 121, 128, 135, 138, 139, 143, 144, 146, 149, 165 , 166 , 169 , 171 , 172 , 173 102, 104, 107, 108 , 109 , 110 , 111, 114, 117, 120, 122, 129 , 130, 131, 132, 133, 134, 142, 145, 167 , 168 , 170 Video Case: Starbucks Corporation: Serving More than Coffee (pp. 107-109) 150 , 151 , 152 , 153 , 154 , 155 NOTE: Bold numbers indicate short essay questions. Underlined numbers indicate visually enhanced questions.
Test Item Table by Learning Objective and Level of Learning Learning Objective (LO) Level of Learning (LL) Level 1: Knowledge (Knows Basic Terms & Facts) Level 2: Comprehension (Understands Concepts & Principles) Level 3: Application (Applies Principles) LO1 Explain the differences between legal and ethical behavior in marketing. 7, 8 1, 4, 9, 11, 13, 15, 16, 156 , 157 , 158 2, 3, 5, 6, 10, 12, 14, 159 LO2 Identify factors that influence ethical and unethical marketing decisions. 19, 24, 28, 31, 32, 39, 40, 50, 57, 58, 59, 65, 67, 68, 69, 70, 79, 82, 83, 89, 90, 96, 160 , 162 , 163 17, 18, 20, 21, 22, 29, 30, 35, 36, 37, 38, 41, 43, 47, 51, 52, 53, 54, 55, 56, 62, 63, 64, 75, 76, 77, 78, 84, 87, 88, 91, 97, 98, 161 23, 25, 26, 27, 33, 34, 42, 44, 45, 46, 48, 49, 60, 61, 66, 71, 72, 73, 74, 80, 81, 85, 86, 92, 93, 94, 95, 99, 164 LO3 Describe the different concepts of social responsibility. 100, 101, 105, 106, 112, 113, 115, 116, 118, 119, 123, 124, 125, 126, 127, 136, 137, 140, 141 103, 121, 128, 135, 138, 139, 150 , 151 , 152 , 153 , 154 , 155 , 165 , 166 , 169 , 171 , 173 102, 104, 107, 108 , 109 , 110 , 111, 114, 117, 120, 122, 129 , 130, 131, 132, 133, 134, 142, 167 , 168 , 170 LO4 Recognize unethical and socially irresponsible consumer behavior. 147, 148 143, 144, 146, 149, 172 145 NOTE: Bold numbers indicate short essay questions. Underlined numbers indicate visually enhanced questions.
- By preserving the natural environment Anheuser-Busch is appealing to the environmentalists; by its alcohol awareness initiatives it is appealing to people who drink beer and protecting children from thinking drinking beer would make them cool. Anheuser-Busch is exhibiting which of the following? A. Stockholder responsibility B. Profit responsibility C. Utilitarianism D. Social responsibility E. Cause marketing
- The Family Talk About Drinking guidebook developed by Anheuser-Busch serves as a guideline on how to act responsibly when faced with a moral dilemma such as underage drinking and is an example of A. ethical behavior in marketing. B. negative advertising. C. the societal marketing concept. D. consumerism. E. legal responsibility in marketing.
- The Consumer Awareness and Education Department was established within Anheuser- Busch to A. counteract negative publicity while promoting the positive aspects moderate beer consumption. B. encourage recycling of both aluminum cans and glass bottles not only by ultimate consumers but by suppliers as well. C. educate employees about the importance of serving as role models for their firm by drinking responsibly themselves. D. promote responsible drinking and deter underage drinking and alcohol abuse. E. Promote Anheuser-Busch as more socially responsible than its competitors, to promote brand loyalty.
- Ethics refers to the A. religious tenets of the country or ethnic region in which you reside. B. social norms of a nation, community, or family. C. laws of society that define a person's beliefs and behaviors. D. moral principles and values that govern the actions and decisions of an individual or group. E. universal laws of man that go beyond individual beliefs of nations or religions.
- Laws refer to A. a specific set of behaviors a given society considers to be ethical. B. society's values and standards that are enforceable in the courts. C. the agreed upon code of behavior for a given nation, community, religious group, or family unit. D. written documentation of a prescribed set of behaviors. E. a legislated code of ethics defining both what may and may not be done in specific circumstances.
- Which of the following statements accurately distinguishes between laws and ethics? A. Laws reflect the beliefs of the majority, and ethics reflect the beliefs of smaller individual segments of society. B. Ethics deal with religious and moral beliefs, and laws deal with social, economic, and environmental behaviors. C. Ethics deal with internal (personal) issues, and laws deal with external (social) issues. D. Ethics deal with personal and moral principles whereas laws are society's values and are enforceable in the courts. E. There is no significant difference; these terms can be used interchangeably.
- China is the world's largest tobacco-producing country and has 300 million smokers. Approximately 700,000 Chinese die annually from smoking-related illnesses. This figure is expected to rise to more than 2 million by 2025. China restricts tobacco imports. U.S. trade negotiators advocate free trade, thus allowing U.S. tobacco companies to market their products in China. The U.S. trade negotiators are acting A. ethically but illegally. B. ethically and legally. C. unethically and illegally. D. unethically but legally. E. in ways that cannot be determined by the information provided.
- Enron's Chief Financial Officer Andrew Fastow was indicted and then pleaded guilty on a charges of securities fraud in the Enron case and was accused of enriching himself and his family at the company's expense. He ordered an employee to fake financing to fool an adviser to the California Public Employees' Retirement System. The employee resisted, but Fastow, in his tenure with Enron, was acting A. ethically but illegally. B. ethically and legally. C. unethically and illegally. D. unethically but legally. E. in none of the above ways.
- The current low perception of ethical business behavior can be explained by a number of reasons including the increased pressure on business people to make decisions in a society with diverse value systems, a growing tendency for business decisions to be judged publicly by groups with different values and interests, an increase in the public's expectations of ethical business behavior, and A. the decline of ethical business behavior. B. a desire to enter the global market at all costs. C. the realization that unless you behave unethically, your business cannot compete. D. the realization that although the government has laws regarding ethical behavior, the laws cannot be enforced. E. a fiscal necessity in times of a stressed economy.
- There has been a public outcry about the ethical practices of businesspeople. Public opinion surveys show that 90 percent of U.S. adults think that white-collar crime A. is extremely uncommon. B. is somewhat uncommon. C. is typical of businesspeople around the world. D. is very or somewhat common. E. is simply a part of American culture.
- Factors influencing personal, moral, philosophy, and ethical behavior include societal culture and norms, business culture and industry practices, and A. religious beliefs and practices. B. corporate culture and expectations. C. national and regional legislation. D. personal moral philosophy and ethical behavior. E. the universal concept of good vs. evil.
- Which of the following is a socializing force that dictates what is morally right and just? A. Federal agencies B. Legislation C. Supreme Court D. Societal culture and norms E. Organizational structures
- In marketing, the set of values, ideas, and attitudes that are learned and shared among members of a group is referred to as _____. A. ideals B. morals C. ethics D. culture E. diversity
- As the use of the Internet grows around the world, understanding between countries must be reached so that there can be as easy an exchange of ideas and information as possible. One important issue is opt-in versus opt-out. In general, European websites have opt-in policies, and U.S. websites have opt-out policies. Opt-in means customers must ask to be involved in data collection and marketing while opt-out companies automatically include customers in data collection unless the customer specifically asks not to be included. Europeans and European businesses believe it is unethical to invade someone's privacy. American businesses do it all the time because Americans are not nearly as protective of their right to privacy. What ethical factor is illustrated by this example? A. Industry practices B. Social legislation C. Societal culture and norms D. Changes it international law E. Organizational culture and expectations
- Culture refers to A. the set of values, ideas, and attitudes that are learned and shared among members of a group. B. the music, art, theater, etc. that reflects the values of an entire nation. C. the learned behaviors of a specific racial, ethnic, or religious group based on ethics and protected by laws. D. the combination of beliefs and behaviors accepted as correct regardless of a person's age, sex, race, or religion. E. the music, art, theater, etc. that expresses the diverse backgrounds of a nation's subcultures.
- Making counterfeit copies of Gucci purses, Hilfiger sportswear, and other international brands is pervasive in China because it is so easy to get away with it. Laws protecting intellectual property are unclear and sporadically enforced. Even when they are applied, sanctions are minimal, typically consisting of confiscation, a warning, a public apology, and perhaps a fine (negotiated, of course). Moreover, copying enjoys a long tradition in China and does not carry a stigma. Copying a masterpiece was historically considered an art form in its own right, and Chinese students have been taught for centuries to copy their teachers as accurately as possible before attempting to create. A business introducing a product into China needs to know that __________ may lead to trademark infringements. A. religious precepts B. antecedent states C. organizational culture and expectations D. societal culture and norms E. global legislation
- The unauthorized use of intellectual property can severely affect the owners of that property; it can also A. level the playing ground for less developing nations by eliminating years of research time. B. accelerate innovation in that industry, as new and improved versions enter the marketplace. C. have a negative impact on the economy through the loss of jobs, wages, or tax revenue. D. have a negative impact on an entire nation's cultural value system. E. enhance a product's legitimate sales by generating unpaid-for public interest.
- The unauthorized use of intellectual property can severely affect the owners of that property; it can also result in lost jobs, royalties, wages, and tax revenue. What percentage of American college students consider these practices to be unethical? A. 15% B. 33% C. 60% D. 90% E. 75% of college students report that the degree of "ethicality" depends upon the size of the firm and the relative cost of the product.
- Caveat emptor refers to A. The marketing concept of "be first or be last" implying that the first company to the marketplace...wins. B. The Latin term meaning all is fair in love and war, an attitude that was held by most marketers prior to the 1990s. C. The legal concept of "let the buyer beware" that was pervasive in the American business culture prior to the 1960's. D. The legal concept "you wash my back; I'll wash yours" which was created many illegal as well as legal but unethical business practices during the 1980s. E. The Latin phrase meaning "empty promises" a charge placed upon many firms during the period after WWII when products failed to meet their marketing claims.
- Investors should understand that when purchasing stock the principle of __________ is in effect. It benefits the investor to do research on the company so that they will make a wise purchase. A. modus operandi B. e pluribus unum C. de facto marketing D. corpus delecti E. caveat emptor
- The Securities and Exchange Commission (SEC) works hard to prevent unscrupulous companies from changing their books to give a better financial picture. Yet, in the end, it is up to the investor to research the company in which they want to invest because __________ is the norm in the stock market. A. modus operandi B. caveat emptor C. de facto marketing D. ab asino lanam E. anguis in herba
- A law that codified the ethics of exchange between buyers and sellers, including the rights to safety, to be informed, to choose, and to be heard is referred to as the A. Lanham Act B. Fair Practices Act C. Caveat Emptor Decree D. Consumer Bill of Rights E. Customer Consent Decree
- The Consumer Bill of Rights refers to A. A law that codified the ethics of exchange between manufacturers, distributors, and suppliers, including the rights to safety, to be informed, and to be heard. B. A law that codified the ethics of exchange between manufacturers, distributors, and suppliers, including the rights to safe working conditions, fair pay, and, a voice in decision making. C. A law that codified the ethics of exchange between buyers and sellers, including the rights to safety, to be informed, to choose, and to be heard. D. A law that guarantees consumers the right to be compensated through replacement, repair, or reimbursement for products that fail to perform as promised by the manufacturer. E. A law that guarantees consumers the right to be compensated through replacement, repair, or reimbursement for products or services that fail to perform or meet the expectations promised by the manufacturer or service provider.
- In 1962, President John F. Kennedy outlined a Consumer Bill of Rights that codified the ethics of exchange between buyers and sellers. These were the right (1) to__________, (2) to be informed, (3) to choose, and (4) to be heard. A. to privacy B. to be informed C. to be treated with respect D. be treated without prejudice E. to safety
- Companies need to be vigilant in product quality testing not simply from an ethical perspective but from a financial one as well. Personal claims and property damage from consumer product safety incidents cost companies more than __________ annually. A. $138 million B. $900 million C. $300 billion D. $500 billion E. $700 billion
- Recently a project team for Cosco, the world's largest children's products company, developed a high chair that could be used as an infant feeding seat, a youth chair, a play chair, a booster chair, and it could be reclined to make an infant bed. Its design could be made and sold for $49. The marketing manager in consultation with other middle managers decided to have the prototypes checked out by Cosco employees who had small children. This was the only product testing performed on the product. Before Cosco pulled the unsafe chair from the market, several children were injured and some died as a result of using the chair. Cosco was charged with being unconcerned about consumers' A. right to choose. B. right to be informed. C. right to be treated courteously. D. right to safety. E. right to happiness.
- Dell Inc. learned that the lithium-ion batteries in its notebook computers posed a fire hazard to consumers. The company recalled 2.7 million batteries and gave consumers a replacement before any personal injuries resulted. Dell was most likely concerned with consumers' A. right to choose. B. right to be informed. C. right to be treated courteously. D. right to safety. E. right to happiness.
- When shopping on the Internet, most consumers assume the personal information they give out is confidential. Subscribers to America Online (AOL) were upset when AOL proposed giving member information to partners without telling the subscribers. This is related most directly to the consumer's A. right to choose. B. right to be informed. C. right to be treated courteously. D. right to safety. E. right to happiness.
- When Toysmart.com filed for bankruptcy in June 2000, it listed its customer database as one of its assets even though it had assured its customers it would never disclose their information to any third party. People who had purchased from Toysmart and were a part of its database were upset when they learned that their private information was being treated as property that was for sale. These customers believed that according to the Consumer Bill of Rights they should know how their private information would be used. In other words, Toysmart's former customers had a A. right to choose. B. right to be informed. C. right to be treated courteously. D. right to safety. E. right to happiness.
- The FTC is concerned about the amount of personal information that is collected through websites because the consumer is not made aware of how this information is being used. Over 92 percent of websites polls collect personal information, yet only about__________ make their customer aware of how that information is being used. A. 25% B. 33% C. 50% D. 66% E. 75%
- The right to be heard means that A. the U.S. Department of Commerce has the right to hear consumer complaints. B. the American Advertising Federation has the right to hear both retailer and customer complaints. C. consumers should have access to public-policy makers regarding complaints about products and services. D. companies should have access to public-policy makers regarding complaints about consumers. E. consumers should have access to public-policy makers regarding new product ideas.
- The FTC established to Do Not Call Registry in 2003 for consumers who do not want to receive unsolicited telemarketing calls. Today, a telemarketer can be fined up to __________ for each call made to a telephone number posted on the registry. A. $ B. $ C. $1, D. $8, E. $16,
- Suppose you are a senior executive at Pepsi-Cola and that a Coca-Cola employee offers to sell you the marketing plan and sample for a new Coke product at a modest price. When asked this question __________ percent of marketing and advertising executives said they would buy the plan and product sample if there were no repercussions. A. 15 B. 36 C. 52 D. 67 E. 89
- Why did 33 percent of Pepsi's marketing and advertising executives say they would decline an offer to buy one of Coke's marketing plans and samples? Most said A. they thought they might go to work for Coke one day and didn't want to spoil their chances. B. they would prefer competing ethically and so they could sleep at night. C. they were afraid the media would find out. D. they knew they would get fired. E. they didn't want to disappoint their children.
- What was the consequence to the Coca-Cola employee who tried to sell classified information to Pepsi? A. The employee was fired and no other legal action was taken since the practice is unfortunately too common place. B. The employee was given the choice of quitting or working on the assembly line for a period of three years at minimum wage. C. The employee was arrested for espionage and sentenced to 20 years in a Federal penitentiary housing white collar criminals. D. The employee was sentenced to eight years in prison and ordered to pay $40,000 in restitution. E. The employee was permitted to keep the original job (minus any bonuses), but had to undergo personal psychiatric counseling and attend a seminar on ethical behavior.
- Business culture affects ethical behavior in competition. Two kinds of unethical behavior are most common: A. price fixing and copyright infringement. B. economic espionage and bribery. C. bribery and extortion. D. price fixing and economic espionage. E. economic espionage and anti-trust infractions.
