Social Responsibility in Marketing

Keywords: csr sustainability, marketing critiques

Abstract

Today, marketing has to face a lot of criticism by social critics, who argue that marketing practices are spoiling the society as whole. This paper will point out the reasons of being criticized by critics as because it is claimed that intentionally and consciously, these practices give incomplete facts about goods and services and develop the gaps between persons’ reality and their expectations. Marketing is criticized as people feel deficient and incomplete in either self-esteem or possession and they feel compelled to cover this gap by unnecessary spending. This paper will also discuss the importance of social responsibility and how a company can attain sustainability in social responsibility. Corporate social responsibility is getting increased consideration and attention due to the changes in business environment. These changes are more prominent from past half century. This paper argues that sustainability of social responsibility can be ensured by incorporating it as an important element of firm’s business strategy.

Introduction

Individual consumers have many concerns how well marketing system is fulfilling their desires and interests. Many critics whether they belong to consumers themselves, they belong to any welfare organization or part of any government agencies are pointing their fingers at the marketing practices, as it is harming end users by;

• High prices (These practices increase the total cost of product as a result they have to increase their selling price to meet the expenditures like distribution expenses, advertising and promotion expenses etc).
• Misleading and deceptive practices which lead consumers to believe that they will get ore value than they actually do.
• These practices highly pressurize the consumers and influence them to buy goods they had not thought of buying.
• Inferior, poor and unsafe products which do not have needed quality.
• Planned obsolescence and poor services to disadvantaged consumers by placing major chain retailers instead of placing stores in disadvantaged neighborhoods.

After looking into how marketing serves the interests of individual consumers, now have a look on how these practices affect and influence the society as a whole. The main objection, the marketing critics have regarding the practices of marketing, is that because of these marketing practices society judges people on the basis of what they hold. Society has no concern regarding the moral values of a human being. They only started to give importance to materialistic things Marketing is creating;

• Fake wants in the world
• Greed and hunger for materialistic things
• Cultural pollution and too much political power.

Critics suggest that by extensively using the mass media, businesses wield too much political power in society. Critics also point out that companies are overselling their products at the cost of goods owned by public. For example, increase in automobile sales means you require more highways, traffic control etc.

Now we will see how marketing activities negatively influence other businesses. When a company uses high prices, deceptive practices, planned obsolescence and mass media in form of political power, they are harming other companies and reducing competition. Marketing can be used by businesses to acquire competitors instead of developing their own new products. Companies can also use marketing for stopping new companies entering into the same industry. Large companies can do so by using patents and spending heavy amount on promotion because as established companies they have enough resources as compared to new companies. Companies also uses unfair marketing practices to with the intention of destroying other firms. For example, now days we can see the marketing companies of telecommunication companies in Pakistan, how their marketing campaigns are focused to destroy the image of their competitors.

Market activities should focuses on principles and standards that describe satisfactory marketing behavior, as determined by different associations and organization responsible for these activities. It is important to perform in a manner consistent with expectations of society and its ethical norms without having any negative impact on individual consumers, society and other businesses.

Now have a look on social responsibility, its importance and sustainability. Due to the change in business context, corporate social responsibility has been receiving increasing attention. Many changes like regulatory systems and ever-increasing pressure of society have forced and influenced the organizations’ marketing practices in a way that give advantages and provide benefits to society overall and to themselves(Lambin, 1997). Big changes in business context like shrinkage of whole world into a village and changes in economic policies, which refer to fewer government regulations and fewer restrictions in the economy in exchange of goods and services, influence the organizations to change their behaviour (Change 2001) and adopt the social responsibility in their practices (Carroll, 2000). Due to this reason, many firms are embracing a range of voluntary programs and give importance to social responsibility to improve their image in front of society (Utting, 2005).

It is noted that 90% of fortune 500 companies are explicitly involved themselves in social responsibility programs (Kotler and Lee 2004; Lichtenstein Drumwright, and Bridgette 2004) and there are many firms who make separate departments and positions who are accountable for these activities (Pearce 11.J.A, and Doh.J .P, 2005). The firms have to ensure two main objectives; first to treat stakeholders in a moral and responsible way and second are to maintain the profitability of organization (Snider, et. al., 2003). Most of the firms engaged in corporate social responsibility activities admit that these adopt these activities for increasing their revenue as these activities help in increasing the customer loyalty by building a positive corporate image (Business and Sustainable Development, 2001). For example, the large food retailers (UK) who have increased their market share by adopting social responsibility practices as marketing and communication tool (Jones.P, et al; 2005).

Sustainability means durability or longer existence. The sustainability of corporate social responsibility is dependent on financial sustainability of firms. A recent study has shown a positive relationship between financial performance and corporate social responsibility. Social responsibility activities create a positive corporate image in society (Orlitzky.M et al, 2003) which ultimately increases the financial performance of a company.

Companies can maximize the benefits of corporate social responsibility actions when they treat it at strategic level. This phenomenon was referred to at the recent World Economic Forum gathering, Davos, Switzerland;

” We see corporate social responsibility as part and parcel of doing business, part of our core skills,” ( Antony Burgmans,Chairman of consumer products ,Uniliver NV cited at Lazarus S.et al 2005).

Companies can be involved in three types of social responsibility activities by using two dimensions, sustainability and benefits. The below mentioned figure shows that by adapting Type III, a firm can attain sustainability in their social activities and also direct financial benefits.

As above figure show that;

In type 1, firms who adopt social activities not as necessary part of business strategy but only on voluntary basis are in low level of sustainability and indirect benefits.

In type 2, firms who involved themselves in specific promotional activities and associate their brands and products with social welfare activities have low level of sustainability and direct benefits.

While in type 3, firms engaging in corporate social responsibility treating it as a necessary and indispensable component of marketing strategy have high level of sustainability and direct benefits. This can offer firms a win-win situation.

In this competitive world, firms’ main objective is to ensure the higher market share for their products and if corporate social responsibility actions help companies in attaining greater profits, then they should surely adopt these activities to achieve their financial targets.

Conclusion:

The firms, consumers, shareholders, and all the other community members belong to one social system and thus their actions affect one another, both in negative and positive way. So everyone should accept his social responsibility and plays its positive role. What is good for business should be good for society and what is good for society should be good for business.

Corporate social responsibility has thus become inevitable in present environment. Sustainability of corporate social responsibility is dependent on the sustainability of business organizations and vice versa. Therefore, there should be a link between corporate social responsibility and business performance. By incorporating social performance of a business in to its core business operations, this link can well be established.