Though the pursuit of social responsibility and ethical marketing does not automatically translate into

increased profit, it is still the responsibility of the firm to ensure it is responsible for its actions and their
impact on society.

1)  understanding business ethics and socially responsible marketing,

2)  developing and implementing a socially responsible marketing plan,

3)  main aspects of socially responsible marketing,
4)  characteristics of socially responsible marketing,
5) 5 benefits of integrating ethics into your marketing strategy,
6) ethical issues faced in marketing, and
7) summary of unethical marketing practices that ruin companies.

UNDERSTANDING BUSINESS ETHICS AND SOCIALLY RESPONSIBLE MARKETING

Ethical Marketing is a philosophy that focuses on honesty, fairness and responsibility. Though wrong
and right are subjective, a general set of guidelines can be put in place to ensure the company’s intent is
broadcasted and achieved.

Marketing ethics is one of the most important marketing solutions.

It is also one of the most misunderstood and controversial concepts in marketing.
However, marketing ethics is important to promote marketing solutions that are both acceptable to the
company and beneficial to society.
Ethics refers to moral judgment for decisions and actions as right or wrong based on accepted
principles of behavior. It present moral principles that define right and wrong behavior in marketing.
Most major ethical issues are formalized by laws and regulations according to the standards of society.
But marketing ethics exceeds legal issues, which is why ethical marketing solutions encourages mutual
understanding between society and businesses.
Ethics is individual behavior and may differ between people.

Principles of this practice include:

 A shared standard of truth in marketing communications

 A clear distinction between advertising and sensationalism
 Endorsements should be clear and transparent
 Consumers’ privacy should be maintained at all times
 Government standards and regulations must be adhered and practiced by marketers.
Marketers, although in some cases act in their own interest, must comply with the standards of
accepted conduct to guide all marketing decisions. They should be in accordance with moral principles
based on ideals such as honesty, fairness, trust, respect, transparency and citizenship.
There are 6 ethical values that marketers are expected to uphold, and these are:

The American Marketing Association 

Honesty – Be forthright in dealings and offer value and integrity.

Responsibility – Accept consequences of marketing practices and serve the needs of customers of all types,
while being good stewards of the environment.

Fairness – Balance buyer needs and seller interest fairly, and avoid manipulation in all forms while
protecting the information of the consumers.

Respect – Acknowledge basic human dignity of all the people involved through efforts to communicate,
understand and meet needs and appreciate contributions of others.

Transparency – Create a spirit of openness in the practice of marketing through communication,

constructive criticism, action, and disclosure.

Citizenship – Fulfill all legal, economic, philanthropic and societal responsibilities to all stakeholders as well
as giveback to the community and protect the ecological environment.

Canadian Marketing Association 

Truthfulness, which is an accurate representation of products and support of claims, made.

Personal Information protection, which is defined in the Personal Information Protection and Electronics
Documents Act (PIPEDA).

Campaign Limitation covers non-involvement in disparaging or exploitative practices and the protection of

vulnerable consumer groups such as children, teenagers, people with disabilities and the elderly.
Everyone, however, has different ideas about what is ethical and what is unethical depending on
personal ideas and life experience.
Many ethical decisions in marketing are made by groups rather than individuals. These decisions are
based on business goals rather than personal goals.

Making ethical decisions in marketing includes answering questions such as:

 What is deceptive advertising?
 What is bribery in private sale?
 What is a false statement about a product?
 Merging Social Responsibility and Marketing
Companies are aware that consumers are savvy and opinionated. So with this in mind, firms should
create an ethically sound marketing plan and integrate it into all aspects of their marketing mix.

Do good not just to look good – focus on being responsible and how your firm can truly help the
neighborhood or country. It is in doing so that your customers, the press, and all those watching will be
impressed.

Think about long term effects, not short term gains – short sighted companies will undervalue the impact
of responsible marketing for instantly gratifying increase.

Speak up against company policies that do not reflect the ethical profile of the company – as the face of
the company, marketers should voice their concerns when there is a potential for a practice to be seen as
unethical.

DEVELOPING AND IMPLEMENTING A SOCIALLY RESPONSIBLE MARKETING PLAN

While ethics and social responsibility are sometimes used interchangeably, there is a difference between
the two terms. Ethics tends to focus on the individual or marketing group decision, while social
responsibility takes into consideration the total effect of marketing practices on society. In order to foster
an ethical and socially responsible behavior pattern among marketers while achieving company
objectives, special care must be taken to monitor trends and shifts in society’s values and beliefs. Next,
marketers should forecast the long-term effects of the decisions that pertain to those changes. Bearing in
mind that a company cannot satisfy the needs of an entire society, it best serves marketers to focus their
most costly efforts on their target market, while being aware of the values of society as a whole. Five
simple steps every marketer can take to create a sustainable socially responsible market plan are:

. Define what is ethical marketing for your firm.

. Decide which branch of ethics your marketers will apply.
. Determine how the ethical approach to marketing will be implemented.
. Discuss areas of the firm’s operations that ethical marketing will be included as part of the
program.
. Analyse and assess how much ethical marketing will cost the company and compare this against
the benefits of ethical marketing in the long run.

MAIN ASPECTS OF SOCIALLY RESPONSIBLE MARKETING

Social conscious marketing addresses the shortcomings of traditional marketing practices and follows the
philosophy of mindfulness and responsibility. This philosophy states according to Chron.com, that
company-marketing practices should be based on consumer satisfaction, innovative ideas and offer
society long-term value and benefit.
 Below is the list of main aspects socially responsible marketing practice rely on.

Consumer Orientation
This socially responsible practice teaches that companies should base policies and operations on a
consumer perspective.  Not only will the marketer discover the customers’ needs, they will also, look at
their plans as if they were the users.  As an example, an over crowded website with lots of ads dumped
onto it will be easily spotted if the marketers were to practice this method.

Innovation
Improving products and services in innovative manner improves the experience for users. And improving
marketing strategies, polices, and brand personality, on an ongoing basis will position your company as
an innovative experience to be repeated and passed on.

Value of the product

A company that produces valuable products and focuses on offering the customer great pricing, excellent
experiences and great customer service will not have to resort to pushy sales tactics and gimmicks. Apple
brand is famous for having people happily wait in line overnight to be first to own an upgraded product.

Sense of Mission
A clearly defined corporate mission will help companies be clear about their plans, goals, and practices.
By putting the good of the community and associates over profit, companies will indeed see an increase
in the number of consumers willing to pay premium prices for their products.

Impact On Society
Unlike traditional marketing focus, which was cost reduction and profit increase, socially responsible
marketers are more focused on providing goods and services consumers want, gaining feedback for
improvement and giving back to the communities that helped them become who they are.

CHARACTERISTICS OF SOCIALLY RESPONSIBLE MARKETING

Marketers get the right products to the right people at the right time. Ethical marketers ensure the
products meet and exceed their needs, back up their claims and offer value to the customers over time
while finding opportunities to pay it forward. A company that uses ethical and socially responsible
marketing strategy will gain the respect and trust of the customers they target and interact with. Over
long term, this will translate to greater benefits all round. Today’s firms can make their practices more
ethical and responsible by perfecting the following characteristics.

 Safety: Any product or service that could be hazardous to the health conditions of people, animals
or the environment should have clear advisories and warnings. Once the problem is identified the
company can collect data to help improve the product and reduce or eliminate the danger. An example
would be fast food restaurants eliminating the use of hydrogenated oils even before trans fats were
banned.
 Honesty: Ensuring a product satisfies a need it promises to, or aids in providing a lifestyle it
advertises. Advertising should be transparent about possible side effects and not puff up results, so
clients come to respect the honesty of your advertising.
 Transparency: Any techniques to manipulate and hide facts and information customers need
could harm a company. Just think of the way people regard a company such as Enron that hid information
and was not open to the stakeholders about what was happening.
 Ethical Pricing: Gathering data about your target market will give you information on how much
they are willing to pay for your product. The rest of the pricing strategy, in a simplified manner, should be
based on overhead costs and supply and demand. Creating fake shortages and bad mouthing the
competition are considered unethical marketing practices.
 Respecting Customer Privacy: When customers trust enough to allow you access to their
information, selling it to lead companies or obtaining prospective customers’ information without
permission is unethical and breaks trust. Nobody wants to buy from the creepy guys, no matter how
beautifully packaged their products are.

5 BENEFITS OF INTEGRATING ETHICS INTO YOUR MARKETING STRATEGY

#1: Moral Marketing Compass: This is especially important in economic downturns, when unethical
practices become tempting.

#2: Win-win Marketing: The focus on customer value will increase company value.

#3: Keeps marketing legal: Reduces the risk of cutting corners and turning a blind eye.

#4: Goodwill: Goodwill and strong reputation among clients and associates are the benefits which
companies cannot afford to overlook. Not only will customers believe that the company cares for them,
but will also associate the brand with pleasant feelings and experiences and spread the word.

#5: Improved quality of recruits and increases retention: A good company attracts good employees,
suppliers, investors, and customers, who will be happy to help the company to achieve its goals. Great
marketing practices make new marketers feel like their time on the job will make a difference and so will
be less likely to change jobs, as will suppliers and other people involved.

ETHICAL ISSUES FACED IN MARKETING

So far we have seen that ethical marketing can guide advertising, research and data use, strategies for
gaining an edge over the competition and company polices. However, there can also be some problems
that arise from trying to employ an ethical marketing strategy.

 Irresponsible Market Research: Improper market research and grouping can lead to

stereotyping that shapes undesirable beliefs and attitudes and consequently affect marketing behavior.
For example, assuming that all women like pink and therefore basing an entire advertising campaign on
that belief could be a costly mistake.
 Selecting Specific Market Audience: According to Boundless.com, the use of selective marketing
practice is to weed out the consumers considered by companies as less than ideal, but often causes social
disparity and unrest. Practices such as Victoria Secrets’ “Perfect Body Campaign,” which came under a lot
of fire from consumers for excluding every woman but those shaped like the long legged, thin and well
endowed supermodels in their ad, can turn people away from a company.
 Unethical Advertising and Promotion: Making false claims about what the product does and its
importance is an unethical way to gain profit.  For many years, Nestlé has been the target of many
boycotts for predatory and aggressively marketing baby foods, especially to women in poorer countries
as a better substitute to breastfeeding. This manipulative marketing technique has caused a lot of damage
and loss to these children and their families.
 Delivery Channel practices: Marketing in ways like cold calling through telemarketing
companies that purchase leads are not only annoying, they are disruptive and untrustworthy. Unsolicited
 approaches are these days almost synonymous with direct marketing and has left the industry with a
tainted reputation. So have television commercials, email spam and direct mail, which people are going to
significant lengths to avoid.
 Dealing with competitors: Many companies advertise cheap prices as a “bait” and then once they
draw in the customers, “switch” them over to a more costly product, because the advertised good was not
available, insufficient or not of any value to the customer. Many online surveys and work at home
opportunities use this unethical marketing technique.
 Pricing strategies: Predatory pricing or pricing beneath the competition so as to cannibalize the
market and restrict the competition is an unethical pricing strategy. And setting up barriers that prevent
smaller companies from entering the market is unethical as well.

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© Shutterstock.com | garagestock

Though the pursuit of social responsibility and ethical marketing does not automatically translate into
increased profit, it is still the responsibility of the firm to ensure it is responsible for its actions and their
impact on society. This article will study, 1) understanding business ethics and socially responsible
marketing, 2) developing and implementing a socially responsible marketing plan, 3) main
aspects of socially responsible marketing, 4) characteristics of socially responsible marketing, 5) 5
benefits of integrating ethics into your marketing strategy, 6) ethical issues faced in marketing,
and 7) summary of unethical marketing practices that ruin companies.

UNDERSTANDING BUSINESS ETHICS AND SOCIALLY RESPONSIBLE MARKETING

To be socially responsible is when the organization is concerned about people, society and environment
with whom and where it conducts business. In it’s most basic form, socially responsible marketing is
taking moral actions that encourage a positive impact on all the company’s stakeholders, including
employees, community, consumers, and shareholders. The main responsibility of marketers in this aspect
is to package and communicate the organization’s decisions that will impact the various communities
with which they interact. Consumers have the right and power to decide which companies succeed or fail;
so marketers have a major responsibility to ensure their practices are seen as philanthropic without
being phony. BrandKarma is the perfect example of one of the means by which consumers make these
decisions.

Ethical Marketing in General

Ethical Marketing is a philosophy that focus focuses on honesty, fairness and responsibility. Though
wrong and right are subjective, a general set of guidelines can be put in place to ensure the company’s
intent is broadcasted and achieved. Principles of this practice include:

 A shared standard of truth in marketing communications

 A clear distinction between advertising and sensationalism
 Endorsements should be clear and transparent
 Consumers’ privacy should be maintained at all times
 Government standards and regulations must be adhered and practiced by marketers.
 American Ethical Norms and Values for marketers
The American Marketing Association has designed a statement of ethics that governs marketers’
actions. The introduction of the statement reads in summary that values are the representation of the
collective idea of desirable and morally correct conduct. And that the values outlined in the document
serve as the standard by which individuals measure their own actions and those of others including
marketers. These values facilitate best practices when transacting business with the public and all
involved.

There are 6 ethical values that marketers are expected to uphold, and these are:

. Honesty – Be forthright in dealings and offer value and integrity.

. Responsibility – Accept consequences of marketing practices and serve the needs of customers of
all types, while being good stewards of the environment.
. Fairness – Balance buyer needs and seller interest fairly, and avoid manipulation in all forms
while protecting the information of the consumers.
. Respect – Acknowledge basic human dignity of all the people involved through efforts to
communicate, understand and meet needs and appreciate contributions of others.
. Transparency – Create a spirit of openness in the practice of marketing through communication,
constructive criticism, action, and disclosure.
. Citizenship – Fulfill all legal, economic, philanthropic and societal responsibilities to all
stakeholders as well as giveback to the community and protect the ecological environment.

Canadian Marketing Code of Ethics and Standards and Practices

The Canadian Marketing Association also has a code of ethics and standards, which is a self-regulatory
guideline for marketers. Though marketers are responsible for their marketing content, members of the
CMA must abide the code. The principles of this code include:

 Truthfulness, which is an accurate representation of products and support of claims, made.

 Personal Information protection, which is defined in the Personal Information Protection and
Electronics Documents Act (PIPEDA).
 Campaign Limitation covers non-involvement in disparaging or exploitative practices and the
protection of vulnerable consumer groups such as children, teenagers, people with disabilities and the
elderly.

Merging Social Responsibility and Marketing

Companies are aware that consumers are savvy and opinionated. So with this in mind, firms should
create an ethically sound marketing plan and integrate it into all aspects of their marketing mix.

 Do good not just to look good – focus on being responsible and how your firm can truly help the
neighborhood or country. It is in doing so that your customers, the press, and all those watching will be
impressed.
 Think about long term effects, not short term gains – short sighted companies will undervalue the
impact of responsible marketing for instantly gratifying increase.
 Speak up against company policies that do not reflect the ethical profile of the company – as the
face of the company, marketers should voice their concerns when there is a potential for a practice to be
seen as unethical.
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DEVELOPING AND IMPLEMENTING A SOCIALLY RESPONSIBLE MARKETING PLAN

While ethics and social responsibility are sometimes used interchangeably, there is a difference between
the two terms. Ethics tends to focus on the individual or marketing group decision, while social
responsibility takes into consideration the total effect of marketing practices on society. In order to foster
an ethical and socially responsible behavior pattern among marketers while achieving company
objectives, special care must be taken to monitor trends and shifts in society’s values and beliefs. Next,
marketers should forecast the long-term effects of the decisions that pertain to those changes. Bearing in
mind that a company cannot satisfy the needs of an entire society, it best serves marketers to focus their
most costly efforts on their target market, while being aware of the values of society as a whole. Five
simple steps every marketer can take to create a sustainable socially responsible market plan are:

. Define what is ethical marketing for your firm.

. Decide which branch of ethics your marketers will apply.
. Determine how the ethical approach to marketing will be implemented.
. Discuss areas of the firm’s operations that ethical marketing will be included as part of the
program.
. Analyse and assess how much ethical marketing will cost the company and compare this against
the benefits of ethical marketing in the long run.
[cp_modal
id=”cp_id_75506″] 

[/cp_modal]

MAIN ASPECTS OF SOCIALLY RESPONSIBLE MARKETING

Social conscious marketing addresses the shortcomings of traditional marketing practices and follows the
philosophy of mindfulness and responsibility. This philosophy states according to Chron.com, that
company-marketing practices should be based on consumer satisfaction, innovative ideas and offer
society long-term value and benefit.

Below is the list of main aspects socially responsible marketing practice rely on.

Consumer Orientation
This socially responsible practice teaches that companies should base policies and operations on a
consumer perspective.  Not only will the marketer discover the customers’ needs, they will also, look at
their plans as if they were the users.  As an example, an over crowded website with lots of ads dumped
onto it will be easily spotted if the marketers were to practice this method.

Innovation
Improving products and services in innovative manner improves the experience for users. And improving
marketing strategies, polices, and brand personality, on an ongoing basis will position your company as
an innovative experience to be repeated and passed on.

Value of the product

A company that produces valuable products and focuses on offering the customer great pricing, excellent
experiences and great customer service will not have to resort to pushy sales tactics and gimmicks. Apple
brand is famous for having people happily wait in line overnight to be first to own an upgraded product.

Sense of Mission
A clearly defined corporate mission will help companies be clear about their plans, goals, and practices.
By putting the good of the community and associates over profit, companies will indeed see an increase
in the number of consumers willing to pay premium prices for their products.
 Impact On Society
Unlike traditional marketing focus, which was cost reduction and profit increase, socially responsible
marketers are more focused on providing goods and services consumers want, gaining feedback for
improvement and giving back to the communities that helped them become who they are.

CHARACTERISTICS OF SOCIALLY RESPONSIBLE MARKETING

Marketers get the right products to the right people at the right time. Ethical marketers ensure the
products meet and exceed their needs, back up their claims and offer value to the customers over time
while finding opportunities to pay it forward. A company that uses ethical and socially responsible
marketing strategy will gain the respect and trust of the customers they target and interact with. Over
long term, this will translate to greater benefits all round. Today’s firms can make their practices more
ethical and responsible by perfecting the following characteristics.

 Safety: Any product or service that could be hazardous to the health conditions of people, animals
or the environment should have clear advisories and warnings. Once the problem is identified the
company can collect data to help improve the product and reduce or eliminate the danger. An example
would be fast food restaurants eliminating the use of hydrogenated oils even before trans fats were
banned.
 Honesty: Ensuring a product satisfies a need it promises to, or aids in providing a lifestyle it
advertises. Advertising should be transparent about possible side effects and not puff up results, so
clients come to respect the honesty of your advertising.
 Transparency: Any techniques to manipulate and hide facts and information customers need
could harm a company. Just think of the way people regard a company such as Enron that hid information
and was not open to the stakeholders about what was happening.
 Ethical Pricing: Gathering data about your target market will give you information on how much
they are willing to pay for your product. The rest of the pricing strategy, in a simplified manner, should be
based on overhead costs and supply and demand. Creating fake shortages and bad mouthing the
competition are considered unethical marketing practices.
 Respecting Customer Privacy: When customers trust enough to allow you access to their
information, selling it to lead companies or obtaining prospective customers’ information without
permission is unethical and breaks trust. Nobody wants to buy from the creepy guys, no matter how
beautifully packaged their products are.

5 BENEFITS OF INTEGRATING ETHICS INTO YOUR MARKETING STRATEGY

#1: Moral Marketing Compass: This is especially important in economic downturns, when unethical
practices become tempting.

#2: Win-win Marketing: The focus on customer value will increase company value.

#3: Keeps marketing legal: Reduces the risk of cutting corners and turning a blind eye.

#4: Goodwill: Goodwill and strong reputation among clients and associates are the benefits which
companies cannot afford to overlook. Not only will customers believe that the company cares for them,
but will also associate the brand with pleasant feelings and experiences and spread the word.

#5: Improved quality of recruits and increases retention: A good company attracts good employees,
suppliers, investors, and customers, who will be happy to help the company to achieve its goals. Great
marketing practices make new marketers feel like their time on the job will make a difference and so will
be less likely to change jobs, as will suppliers and other people involved.
 ETHICAL ISSUES FACED IN MARKETING
So far we have seen that ethical marketing can guide advertising, research and data use, strategies for
gaining an edge over the competition and company polices. However, there can also be some problems
that arise from trying to employ an ethical marketing strategy.

 Irresponsible Market Research: Improper market research and grouping can lead to

stereotyping that shapes undesirable beliefs and attitudes and consequently affect marketing behavior.
For example, assuming that all women like pink and therefore basing an entire advertising campaign on
that belief could be a costly mistake.
 Selecting Specific Market Audience: According to Boundless.com, the use of selective marketing
practice is to weed out the consumers considered by companies as less than ideal, but often causes social
disparity and unrest. Practices such as Victoria Secrets’ “Perfect Body Campaign,” which came under a lot
of fire from consumers for excluding every woman but those shaped like the long legged, thin and well
endowed supermodels in their ad, can turn people away from a company.
 Unethical Advertising and Promotion: Making false claims about what the product does and its
importance is an unethical way to gain profit.  For many years, Nestlé has been the target of many
boycotts for predatory and aggressively marketing baby foods, especially to women in poorer countries
as a better substitute to breastfeeding. This manipulative marketing technique has caused a lot of damage
and loss to these children and their families.
 Delivery Channel practices: Marketing in ways like cold calling through telemarketing
companies that purchase leads are not only annoying, they are disruptive and untrustworthy. Unsolicited
approaches are these days almost synonymous with direct marketing and has left the industry with a
tainted reputation. So have television commercials, email spam and direct mail, which people are going to
significant lengths to avoid.
 Dealing with competitors: Many companies advertise cheap prices as a “bait” and then once they
draw in the customers, “switch” them over to a more costly product, because the advertised good was not
available, insufficient or not of any value to the customer. Many online surveys and work at home
opportunities use this unethical marketing technique.
 Pricing strategies: Predatory pricing or pricing beneath the competition so as to cannibalize the
market and restrict the competition is an unethical pricing strategy. And setting up barriers that prevent
smaller companies from entering the market is unethical as well.

SUMMARY OF (UN)ETHICAL MARKETING

To sum this all up, in order to be ethical in marketing attempts, businesses should make honest claims,
and excel at satisfying the needs of their customers. This practice over time builds trust and customer
confidence in your brand’s integrity and therefore leads to loyalty, customer and employee retention,
greet public relations and increase in business from customers spreading the word.

Unethical marketing behaviors will achieve the exact opposite and in time could even lead companies
into legal troubles and dissemination of a bad reputation and worse customer experience. Below are
practices of unethical marketing, which you should avoid in order not to ruin your company.

 Exploitation – avoid using scare tactics and hard sell and protect the vulnerable consumer.
 Spam – avoid flooding a customer’s voicemail, mailbox, email or any other means of
communication with unsolicited messages or aggressive advances.
 Bad mouthing Competition – focus on the value and benefit of your product and point out its
unique selling point, the consumers are smart enough to choose the better product.
 Misleading Advertisement and Information –any exaggerated claims or dishonest promises
will cause the customers to mistrust you and even determine the failure of your brand.
 Philanthropic gestures for public relations – giving to charities solely for a tax write off will
make the company appear callous and uncaring and people tend to shy away from these types of
companies and spend money where they feel the leaders and marketers are especially humane and
gracious.

https://www.cleverism.com/social-responsibility-ethics-marketing/

Why Is Social Responsibility Important in Marketing?

By INVESTOPEDIA
Updated Jul 14, 2020

The concept of social responsibility holds that businesses should be good citizens, balancing their money-
making operations with activities that benefit society, be it on a local, national, or global scale. Social
responsibility in marketing involves focusing efforts on attracting consumers who want to make a
positive difference with their purchases. Many companies have adopted socially responsible elements in
their marketing strategies as a means to help a community via beneficial services and products.

Interestingly, the philanthropic practice can be a good business tool as well. The research is plentiful.
According to a presentation titled "The Power of a Values-Based Strategy" by Forrester Research, a
market research company that advises corporate clients, "some 52% of U.S. consumers factor values into
their purchase choices," seeking brands that proactively promote beliefs and values aligned with their
own.1

In addition, a report by Nielsen that surveyed 30,000 consumers in 60 countries also found that 66% of
consumers were willing to pay more for goods from brands that demonstrated social commitment. 2
Finally, a study by public relations and marketing firm Cone Communications found that 87% of
Americans will purchase a product because its company advocated for an issue they cared about. 3

How Social Responsibility in Marketing Works

Recyclable packaging, promotions that spread awareness of societal issues and problems, and directing
portions of profits toward charitable groups or efforts are examples of social responsibility marketing
strategies. For example, a clothing company's marketing team may launch a campaign that encourages
consumers to buy a bundle of socks versus just one pair. Using this model, the company can donate a
bundle of socks to military personnel overseas or to local homeless shelters for each bundle sold. As a
result of these donations, the company brands itself as socially responsible and charitable, which
ultimately attracts customers who are motivated by socially responsible commitments and who want to
support the welfare of the community.

Corporate responsibility goes hand in hand with socially responsible practices. For example,
administrators, executives, shareholders, and stakeholders must practice ethical behaviors and join the
community in promoting responsible marketing efforts. Solely putting on appearances or greenwashing,
the practice of promoting deceptive environmentally-friendly processes or products, indicates to
customers that the company is not committed to social responsibility. Instead, such behaviors can
ultimately hurt the brand and the company's success. Consumers often can see through gimmicks,
slogans, or efforts that are not genuine or effective. In fact, 65% of the Cone study respondents say they'll
research a company's stand on an issue, to see if it's being authentic. 4

Example of Social Responsibility in Marketing

Some critics question the concept of social responsibility in marketing, noting that these highly-
publicized, expensive campaigns are colorful but highly limited (both in scope and in duration), doing
little to eradicate the root sources of problems. They wonder if it wouldn't be more efficient if companies
—or consumers, for that matter—just contributed funds directly to charities or philanthropic causes.

Certainly, the strategies that seem the most effective are those in which a company finds a way to link its
core product directly to its socially responsible endeavor, and also to broaden its efforts. The popular
TOMS label is a case in point. The shoemaker began in 2006 with its "one for one" campaign: for every
pair of slip-on or boots bought, TOMS donated a pair of shoes to a child in need. Similarly, for every pair
of glasses, it paid for an eye exam and treatment for an impoverished person. 5

Although TOMS has furnished millions with shoes and eye care, and the buy-one-donate-one model has
been adopted by other trendy brands, TOMS' founder Blake Mycoskie received a lot of criticism regarding
the materialistic approach to tackling poverty, and even "dumping shoes" to children who perhaps didn't
need any. As a pivot to address more underlying issues of poverty, Mycoskie committed to manufacturing
shoes in areas around the globe where he donated them. 6 As of 2019, TOMS reports that it has donated
more than 95 million pairs of shoes, aided in 780,000 sight restorations, and provided 722,000 weeks of
safe water.7 The company also has its eye on improving infrastructure: having expanded into coffee,
TOMS donates the proceeds of its sales to building clean-water systems in the communities where the
beans are grown.8

The Bottom Line

Although an initial investment may be involved to share profits or donate to those in need, social
responsibility in marketing promotes an enhanced company image, which can significantly
impact profitability and even productivity favorably.

Social Responsibility

By AKHILESH GANTI
 Reviewed By SOMER ANDERSON 
 Updated Dec 22, 2020
What Is Social Responsibility?
Social responsibility means that businesses, in addition to maximizing shareholder value, must act in a
manner that benefits society. Social responsibility has become increasingly important to investors and
consumers who seek investments that are not just profitable but also contribute to the welfare of society
and the environment. However, critics argue that the basic nature of business does not consider society
as a stakeholder.

KEY TAKEAWAYS

 Social responsibility means that businesses, in addition to maximizing shareholder value, should
act in a manner that benefits society.
 Socially responsible companies should adopt policies that promote the well-being of society and
the environment while lessening negative impacts on them.
  Companies can act responsibly in many ways, such as promoting volunteering, making changes
that benefit the environment, and engaging in charitable giving.
 Consumers are more actively looking to buy goods and services from socially responsible
companies, hence impacting their profitability.
 Critics assert that being socially responsible is the opposite of why businesses exist.
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What is Corporate Social Responsibility?

Understanding Social Responsibility

Social responsibility means that individuals and companies have a duty to act in the best interests of their
environment and society as a whole. Social responsibility, as it applies to business, is known as corporate
social responsibility (CSR), and is becoming a more prominent area of focus within businesses due to
shifting social norms.

The crux of this theory is to enact policies that promote an ethical balance between the dual mandates of
striving for profitability and benefiting society as a whole. These policies can be either ones of
commission (philanthropy: donations of money, time, or resources) or omission (e.g., "go green"
initiatives like reducing greenhouse gases or abiding by EPA regulations to limit pollution).

Many companies, such as those with "green" policies, have made social responsibility an integral part of
their business models, and they have done so without compromising profitability. In 2019, Forbes named
the top 100 socially responsible companies in the world. Topping the list is the Lego Group, followed
closely by Natura (NTCO), then technology giants, Microsoft (MSFT) and Google (GOOGL). At the bottom
of the list in spot 100 is Starbucks (SBUX).1

Additionally, more and more investors and consumers are factoring in a company's commitment to
socially responsible practices before making an investment or purchase. As such, embracing social
responsibility can benefit the prime directive: maximization of shareholder value.

There is a moral imperative, as well. Actions, or lack thereof, will affect future generations. Put simply,
being socially responsible is just good business practice, and a failure to do so can have a deleterious
effect on the balance sheet.

In general, social responsibility is more effective when a company takes it on voluntarily, as opposed to
being required by the government to do so through regulation. Social responsibility can boost company
morale, and this is especially true when a company can engage employees with its social causes.

Social Responsibility in Practice

The International Organization for Standardization (ISO) emphasizes that a business's ability to maintain
a balance between pursuing economic performance and adhering to societal and environmental issues is
a critical factor in operating efficiently and effectively. 

Social responsibility takes on different meanings within industries and companies. For example,
Starbucks Corp. and Ben & Jerry's Homemade Holdings Inc. have blended social responsibility into the
core of their operations.

Both companies purchase Fair Trade Certified ingredients to manufacture their products and actively
support sustainable farming in the regions where they source ingredients. Big-box retailer Target Corp.,
also well known for its social responsibility programs, has donated money to communities in which the
stores operate, including education grants. 

The key ways a company embraces social responsibility include philanthropy, promoting
volunteering, and environmental changes. Companies managing their environmental impact might look
to reduce their carbon footprint and limit waste. There's also the social responsibility of ethical practices
for employees, which can mean offering a fair wage, which arises when there are limited employee
protection laws.  

Criticism of Social Responsibility

Not everyone believes that businesses should have a social conscience. Economist Milton
Friedman stated that "social responsibilities of business are notable for their analytical looseness and
lack of rigor." Friedman believed that only individuals can have a sense of social responsibility.
Businesses, by their very nature, cannot. Some experts believe that social responsibility defies the very
point of being in business: profit above all else.

https://www.investopedia.com/terms/s/socialresponsibility.asp