stephanegauvin on responsible marketing

8/3/2019 StephaneGauvin on Responsible Marketing

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6me Journes Normandes de Recherche sur la Consommation : Socit et consommations19-20 Mars 2007, Groupe ESC Rouen

ONRESPONSIBLEMARKETING, QUANTUMCONSUMERSANDSOCIALCANARIES

Stphane GauvinProfesseur titulaire

Universit Laval, Dpartement de Marketing,

[email protected]


ABSTRACT: Marketing seeks to create value. Is this wrong? Advocates ofsocietalmarketing express three types of concerns: that organizations should serveconsumers best interests rather than their desires; that material concerns ignoremore important human values; and that marketing engenders negativesexternalities that are neglected. In this paper I argue that a social contractnormative framework is more appropriate and I suggest that we rely on the conceptof responsible marketing instead. When we refer to marketing as a managerial

activity, responsible marketing means managing the tension between proximateand distant stakeholders. When we mean marketing as a set of tools, responsiblemarketing refers to the instrumental responsibility of our discipline, i.e. that thetools do not cause predictable harm in the hands of responsible organizations. I alsoargue that there are reasons to believe that marketing, as an instrument, is flawedbecause even though we are aware of sources of tension, we do not haveappropriate models to manage tension at the consumer level, nor can we managesuch tension at the social level as it is expressed through litigation and socialactivism.

Key words: responsible marketing, societal marketing, models of consumers,model of social activism


RSUM : Le marketing vise crer de la valeur. Est-ce mal ? Les partisans dumarketing socital expriment trois types de proccupations : les organisationsdevraient servir lintrt suprieur des individus plutt que de rpondre leursdsirs ; le marketing sintresse aux valeurs matrielles tout en ngligeant desvaleurs humaines, plus importantes ; et le marketing engendre des retombesngatives qui sont ignors. Jcris que le cadre normatif du contrat social est plusappropri et que nous devrions plutt parler de marketing responsable. Lorsquenous parlons de marketing responsable au sens dactivit de gestion, nous voulonsdire que lentreprise gre les tensions qui existent entre les parties prenantes

proximales et distantes. Lorsque nous parlons de marketing en pensant unensemble doutils, lexpression marketing responsable rfre la responsabilitinstrumentale de notre discipline, i.e. que ces outils ne causent pas de tortsprvisibles lorsque utiliss par des organisations bien intentionnes. Il y a de bonnesraisons de croire que le marketing est dfectueux parce que nous navons pas demodles qui nous permettent de grer la tension qui existe au niveau duconsommateur individuel, pas plus que nous ne savons comment modliser cettetension lorsquelle sexprime devant les tribunaux ou sous la forme dactivismesocial.

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Mots cls : marketing responsable, marketing socital, modles deconsommation, modles dactivisme social

INTRODUCTION

Every semester students ask meabout the nature of marketing. Canmarketing create needs? Is itcontributing to the destruction of our

environment? Every semester I explainthat marketing is value neutral: ourobjective is to provide consumers withvalue consumers decide what hasvalue. I have a slide with the definitionof what marketing is, officially:

Marketing is an organizational function and a set of processesfor creating, communicating and delivering value to customersand for managing customer relationships in ways that benefitthe organization and its stakeholders. (AMA 2004)

I usually add the standardtextbook (e.g. Shapiro et al. 2005)

argument that freedom of choice is abasic value of our society; that wemust not confuse unethical behaviourby rogue organizations who willdefraud, deceive or otherwise sell theillusion of value, with the essence ofmarketing; that we must provide allrelevant information and education toensure that consumers make the bestdecisions possible part of this taskbelongs to marketing organizations,part to society and part to consumers

themselves.

In fact, one can argue thatmarketing provides pragmatic ethicalguidance to organizations that aredriven by their profit obligations.Maximizing profit without themarketing imperative is an invitationto unethical behaviour. Deliveringvalue for a profit, however, is a goodthing for the consumer as anindividual, and assuming that society

has properly arbitraged tensionsbetween individual freedom andcollective well-being, socially desirableas well.

Yet, questions are becomingmore insistent. The explanationoutlined above may not be a properanswer to concerns such as those

raised by the fear of global warming(e.g. Gore 2006) or by the obesity

epidemics (e.g. Flegal et al. 1998) forreasons I will introduce later. Theessential question I consider in thispaper is whether marketing isresponsible or if, instead, there is afundamental flaw in being focused onthe desires of individual consumerswithout explicit care being given toself-destructive behaviours andexternalities.

First, I examine the question of

normative ethics and the ideas thatare behind the concept of societalmarketing. Then I review the meaningsof responsibility. I conclude that theliterature is essentially concerned withnormative issues relevant to the moralresponsibility of actors while givingvery little if any consideration to theinstrumental responsibility ofmarketing as a discipline consisting ofa theoretical body, a set of techniquesand tools, and the role it plays in

shaping the morals of economicagents. I then examine the concept ofvalue and of its problematicdetermination, as it is provided toconsumers and to society. I argue thatmarketing, as a discipline, bears aninstrumental responsibility which mayexplain why a morally responsibleorganization can become a morally


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liable organization nonetheless. Ioutline two ideas: quantumconsumers to underline theconceptual problems surrounding theidea of offering value to a consumer;and social canaries to capture the

process by which a society will impactthe responsibility of an organization.

SHAREHOLDERS, STAKEHOLDERS,CONSUMERSANDSOCIETY

Any consideration of ideas suchas corporate social responsibility(CSR), corporate ethics, societalmarketing and related questions is adifficult undertaking. Innumerable

perspectives can be used to advocateon several disjoint planes. Whilescholars are genuinely concerned bythe welfare of all members of oursocieties they obviously disagree onthe means to achieve this goal. Simplyput, when we hope for responsiblemarketing, we mean responsible towhom and for what?

In their review on pastconceptualizations of CSR, Maignan

and Ferrell (2004) infer fourperspectives: CSR as social obligation,CSR as stakeholder obligation, CSR asethics driven and CSR as a managerialprocess. It is, perhaps, a usefultaxonomy of the extant literature, buta taxonomy does not provide a soundfoundation unto which the normativeethics of CSR can rest. According toHasnas (1998), only three normativeethical frameworks are real contendersfor the attention of business

managers: the shareholder framework,the stakeholder framework and thesocial contract framework.

The Shareholder Frameworkfor CSR

The shareholder framework isgrounded on the theory of free

markets and mostly concerned withmechanisms by which inefficienciescan be fought in modern economies.

The basic argument revolves aroundthe assumption that central planning isgenerally less efficient than the

allocation of resources relying on pricesignals. Firms compete to create valueat least cost, consumers indicate whatthey want through their purchases,which is assumed to be sociallydesirable. Regulations will setboundaries to the behaviour of profitmaximizing enterprises, making itillegal to use force, deception, exposeconsumers, employees or members ofour society to hazards, etc. and takecare of the negative externalities (i.e.

costs borne by third parties) such asthe cost of pollution control.

The key feature of theshareholder framework is thatmanagements fiduciary obligationsare exclusively towards theshareholders. Management is hired tomaximize shareholders wealth andshould not be concerned with thewelfare of other constituents wheninterests collide, unless the law

imposes a constraint. If and whenmanagement is concerned by thewellbeing of their employees, theircustomers or other constituents, itwould be because they made thedetermination that it was in the bestinterest of their shareholders.

This framework is simple tounderstand but the idea that selfishbehaviour bounded by law contributesto the harmonious development ofsociety is a tough sell in academiccircles. Gaski (1985, 1999) is one ofthe rare examples in our field to makesuch an attempt, which earned himthe adjective startling from Abrattand Sachs (1988) for his first paperand a brutal critique, on his secondattempt, from Smith (2001: 3) It is

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tempting to simply dismiss Gaskisclaims as bizarre or in jest. How couldmarketing ethics possibly be totallyredundant?

However distasteful it may look

on the surface, the shareholder view ofCSR should not be dismissed offhand.It is implicit in the vast majority of thepublished empirical work in marketing,where the impact of whatever tacticalor strategic orientation on financialperformance is modeled, even in CSR

related applications in which theresearchers state their adhesion to acompeting normative framework (e.g.Sen and Bhattacharya 2001). Businessschool students are told countlessnumber of times, in particular by their

professors of finance, that the purposeof the firm is to maximize value to theshareholders. The behaviour ofmanagement is strongly biasedtowards the welfare of theirshareholders via incentive packages(i.e. stock options) and by law:

The Anglo-American {legal] model takes the view that theexclusive focus of corporate governance should be to maximizeshareholder value. To the extent that shareholder wealthmaximization conflicts with the interests of other corporate

constituencies, those other interests should be ignored, unlessmanagement is legally required to take those other interestsinto account. (Macey and OHara 2003: 91)

The Stakeholder Frameworkfor CSR

It is probably fair to say thatacademia is more inclined towards astakeholder model of the firm. Thetradition originates in Freemans

seminal book (1984) which conceivedof the firm as a contractual nexus of avariety of interests shareholders,employees, suppliers, customers, thelocal community and so on. Thisperspective created such anenthusiasm that it the span of adecade it became difficult to tell whatexactly was meant by stakeholderapproach. In 1995, Donaldson andPreston greatly contributed to sharpenthe theory.

An important contribution ofDonaldson and Preston has been tomake the distinction between differentfacets of the stakeholder view of thefirm (descriptive, instrumental,normative, etc.) As a descriptivetheory, the stakeholder approachhighlights the fact that the

corporation is a constellation ofcooperative and competitive interestspossessing intrinsic value (p. 66). Asan instrumental theory, it establishesa framework for examining theconnections, if any, between thepractice of stakeholder managementand the achievement of various

corporate performance goals (p.67). This is how, for instance, academiastarted developing rich models ofcorporate performance as a function ofthe support received from variousstakeholders, and how managementcould influence performance, throughthese stakeholders allegiances, thesebeing influenced by various means andmoderated by the dance of interrelated interests.

More importantly for ourpurposes, Donaldson and Prestonargued quite convincingly that thestakeholders view is on course toovertake the shareowners (sic) view ofthe firm, both because a stakeholdersview has been shown to bedescriptively superior, as it provides a


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richer modeling context, but on moralgrounds as well. The essence of thenormative argument is that allstakeholders contribute their ownresources and have their own vestedinterests in relation to the corporation

such that one could not argueconvincingly that the shareowners

resources and interests dominateothers. If shareowners have propertyrights on the capital they bring, thestakeholder view argues that otherstakeholders also have legitimaterights. Donaldson and Preston show

that this view is having an impact onlegal doctrine:

The relevant portion of [Principles of Corporate Governance,published by the American Law Institute] begins by affirmingthe central corporate objective of "enhancing corporate profitand shareholder gain," but it immediately introducesqualifications: "Even if corporate profit and shareholder gain arenot thereby enhanced." the corporation must abide by law and

may "take into account ethical considerations" and engage inphilanthropy (Sec.2.0l(a)(b); 1992:69). (Donaldson and Preston1995: 82)

This being said, thestakeholders view provides ambiguousguidance. First, one may agree thatstakeholders have rights, but variousstakeholders may well disagree onwhat these rights may be andsomeone has to arbiter these views,eventually. Second, there are no clear

boundaries on the definition ofstakeholders. If the designationbelongs to the stakeholder himself,chaos will follow. If anyone, includingmanagement, may define an arbitraryconsideration set, normativeapplications become suspicious. If theanswer is determined empirically byapplying the rule of power, unfairresolutions are certain to arise.

This is why tenants of thestakeholders view ground theirnormative analysis on more stablefooting. Because the utilitarianapproach is all but fatally wounded bya wide array of criticisms, an extensionof the social contract theory hasemerged as the most promisingavenue.

The Social ContractFramework for CSR

Social contract theory has been

shaped by figures such as Hobbes andRousseau, who considered thequestion of the legitimacy of governments. According to theiranalyses, a social contract had to existbetween the government and citizensin order to determine the rights andduties of both in modern societies.

Donaldson and Dunfee (1999)applied a similar approach, consideringcorporations instead of governments,

and asking the rhetorical question ofwhat are the terms of the socialcontract by which society gives certainrights to corporations in exchange forcertain benefits. The short answer isthat corporations are given the right toexist and prosper in exchange for theadditional welfare that they provide tosociety.

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One crucial difference betweenthe social contract framework and the

stakeholder framework is that therelevant stakeholders are clearlyidentified.

[W]hen fully specified, the social welfare term of the socialcontract requires that businesses act so as to 1) benefit

consumers by increasing economic efficiency, stabilizing levelsof output and channels of distribution, and increasing liabilityresources; 2) benefit employees by increasing their income

potential, diffusing their personal liability, and facilitating theirincome allocation; while 3) minimizing pollution and depletionof natural resources, the destruction of personal accountability,the misuse of political power, as well as worker alienation, lackof control over working conditions, and dehumanization.(Hasnas 1998: 30)

The social contract framework isbecoming the dominant paradigm

because of its considerable intuitiveappeal, of its grounding in relatedwork, and the real possibility ofunravelling the complexities ofnormative ethics. In addition to thewelfare consideration, Donaldson andDunfee develop the basic ideas of the

fairness model constituted of moral-free spaces where the terms of the

social contract between society andcorporations may be whatever seemsacceptable to the parties, bounded bya thin set of hypernorms that have auniversal scope. Hasnas summarizesthese norms in the following terse set,quoting Donaldson (1982):

[T]here seems to be general agreement that the least theyrequire is that business avoid fraud and deception,...showrespect for their workers as human beings, and... avoid any

practice that systematically worsens the situation of a given

group in society (Hasnas 1998: 31)

I will conclude this section onthree observations. First, it may be ofinterest to note that the regulatoryregime in the Franco-German legaldoctrine is precisely that of the socialcontract theory (i.e. management isliable towards shareholders,employees, customers and the localcommunity, and must work to furthertheir interests).

Second, pragmatically, thesethree frameworks converge. We couldthink of the Anglo-American regulatoryframework as being the incarnation ofa social contract favouring, rightly ornot, the pre-eminence of theshareholders interests and relying on

regulatory safeguards to preventabuses in order to maximize efficiency.In other parts of the world, otherconsensuses have formed. And notingthat the Anglo-American regulatoryframework arguably moves towards anew equilibrium somewhat closer tothe European (Continental) model andvice-versa is a telling sign thatefficiency and fairness concernsactively shape our societies.

Third, these frameworks differmarkedly from the usual discourse onmarketing ethics with the notableexception of Dunfee et al. (1999) whohave introduced the Integrated SocialContract Theory to our discipline. Their


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article provides an excellent review ofthe several ethical frameworks thathave been applied to marketing (e.g.Laczniak and Murphy 1993). Theyconclude that classical normativeethical frameworks offer a useful list of

considerations to diagnose potentialunethical behaviours, but areimpractical, contradict each other attimes, are under attack byphilosophers and therefore providelittle guidance in reaching a decision.

It is nonetheless necessary tobriefly review this literature tounderstand the weaknesses of the ideaof societal marketing and, perhaps,find new ways to address these

concerns.

The societal marketingand the quality-of-life

perspectives

Societal marketing and therelated quality-of-life (QOL) approachdominate the discussion of ethics inthe field of marketing (see Layton andGrosbart 2006 for a review, Jeurissen

and van de Ven 2006 for a review ofrecent books on the subject, Lavidge1970, Fisk 1973, Kotler 1972 and2004, Sirgey and Lee 1996 forrepresentative work). The literaturebuilds on the common ground that thepractice of marketing is problematic(e.g. Farmer 1967). One concern isthat consumers may not make choicesthat are in their best interest (e.g.Kotler 1972, Sirgey and Lee 1996).Another is that rational individual

choices may not be in the best interestof society (e.g. Fisk 1973). A thirdconcern is that marketing is concernedwith a narrow, materialistic,understanding of welfare such thatwhat appears to be in the consumersbest interest is, in fact, potentiallydamaging (e.g. Dawson 1980, Malloy2000).

These issues are fundamental. Ifmarketing is concerned with deliveringvalue to consumers, societalmarketers appropriately question theassumption that consumers alone can

make the determination of what isvaluable. The problem with thisapproach however, is the mistakenconclusion that marketers should fillthe gap. I now briefly examine thethree concerns identified above.

Desires vs interests

Kotler (1972) wrote thatbusiness should focus on consumersinterests rather than on their desires,giving several examples whereimmediate desires presumably runcounter to long run interests (largecars, junk food, over packaging,cigarettes and alcohol). This idea leadsto the Quality of Life (QOL, ex: Sirgeyand Lee 1996) marketing perspectivewhere marketers are encouraged toconsider the wellbeing of theirconsumers rather than their expresseddesires. This view of responsiblemarketing is problematic.

First, it assumes that themarketer would be in a better positionto make an enlightened decision thanthe consumer, but does not provide aconvincing explanation as to why thisshould be the case. A well knownpossibility is that there are informationasymmetries, i.e. the seller knowsmore than the consumer. But onewould assume that a benevolentmarketer would simply provide allrelevant information to consumers, sothe only reasons why a consumerwould engage in self destructivebehaviours would have to be either adeficiency in information processingcapabilities, such that the consumer isunable to make a proper decision, orbecause of a difference in preferences

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such that the marketer disagrees withthe consumer on what is the bestcourse of action.

Recognizing differences inpreferences is an essential feature of

marketing. It is evident that marketerswill often disagree with the choicesmade by their customers, just asconsumers will disagree with choicesmade by other consumers.Disagreements may raise difficultquestions as what is a responsible,healthy and long life for one, may be aboring, empty and wasted life foranother. But who is to decide forwhom? Our society usually considersthat freedom of choice is a

fundamental right and will imposelimits on this freedom only when itimpinges on others or in severe casesof self-destruction. But moreimportantly, and for good reasons, oursociety will not allow one party toimpose his will on another. If aconsumer is seen as being fit to makedecisions, he should be free to choosewithin the confines of socially definedboundaries. If a consumer is unfit (ex:minor, incapacitated adult), formal

procedures have been devised in orderto prevent abuse.

Second, a paternalistic approachwould be impractical in a marketeconomy. If one marketingorganization stops providing forsomething the market wants, demandwill go elsewhere unless all marketingorganizations agree not to provide forthese wants. The decision escapes therealm of a single marketing entity andrequires social consensus.

Business may be justified to notserve a market against its conscience.Business may also voice concern. Butwhether this will or will not be in thebest interests of consumers is a matterthat consumers, as individuals and as

a society, should answer on their own.

This is not to say that businesscan therefore act carelessly, as failingto disclose negative long run effectsand even not researching enough such

possibility would be construed asnegligence. But these obligations arespelled out by regulations and do notrequire the conceptual platform ofsocietal marketing.

Individual vs collectivewelfare

A widely held concern is thatmarketing engenders negative

externalities, such as pollution, thatare detrimental to society. Theproblem has several variants that I willsummarize later. For the moment I willonly point out that since business doesnot serve society as such, but servesindividual people or organizations, theproblems of paternalism would applyhere as well.

There is one obvious differencehowever in providing consumers with

value, an organisation may have anadverse impact on third parties whocannot simply put a stop to theexchange relationship as if they werecustomers. In the context of thenormative frameworks outlined above,aggrieved third parties will have to relyon the safeguards of law, socialactivism and/or alignment of interestswith influential stakeholders in order towin the day.

This concern of societalmarketers appears to be valid andmay or may not require that we makea formal difference between marketing(providing value to consumers in a waythat benefits stakeholders) andsocietal marketing, based on whichstakeholders we believed to becovered in the formal definition of


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marketing. Under closer examinationhowever, this claim seems to havevery limited application because itcould hardly mean that marketingorganizations should think of themselves as being endowed with the

power of arbitrating conflictinginterests. If, for instance, a gasolinelawnmower is perceived as aconvenient way of taking care of alawn by some and as an obnoxioussource of pollution by others, who willresolve the dilemma?

There could be, however, astrong case for an enlightenedmarketing practice in which the scopeof market is broad enough so as to

include concerned third parties. Ratherthan myopically create value as it ismeasured in the eyes of the consumer,the focus should be to create value tosociety as a whole. The idea is simple if a business organization destroysmore value amongst third parties thanit creates in the target market,regulation and litigation are likely toput an end to such practice anyway.

Just as the marketing concept is sayingthat the pursuit of profit is sustainable

only if consumers perceive value inwhat is offered, the societal marketingconcept is saying that consumer valueis sustainable only if society as awhole is gaining. It is in theconsumers interest that theirconsumption be socially sustainable,and therefore in the business interest.

This logic may seem trivial, butbecause it offers pragmatic guidance

to management and may not beobvious from the standard marketingpoint of view, it is arguably animportant idea.

A different kind of society

The third type of concern ismuch broader in scope. In essence,authors such as Dawson (1980) saythat marketing is fundamentallyflawed because it focuses myopicallyon one class of needs, material needs,neglecting human values.

It is fair to argue that materialgoods make a limited contribution towellbeing. It is also quite remarkablethat the argument is so oftenmisconstrued. As a case in point, KarlPolanyis Great Transformationchronicles how society hastransformed itself, in the wake of theIndustrial Revolution, from a societygoverned by tradition to a societygoverned by prices. The key insightgenerally attributed to Polanyi is thatmarkets became disembedded fromsociety. His work is generally used toillustrate why and how socialinstitutions interfere with the utopia ofa free market. For instance, Stiglitzsforewords to the 2001 edition (Polanyi2001) state clearly that moderneconomics has taken such argumentsinto consideration:

Today there is no respectable intellectual support for theproposition that markets, by themselves, lead to efficient, letalone equitable outcomes. Whenever information is imperfector markets are incomplete that is, essentially always interventions exist that in principle [emphasis in the original]could improve the efficiency of resource allocation. We havemoved, by and large, to a more balanced position, one thatrecognizes both the power and the limitations of markets, andthe necessity that government play a large role in the

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economy, though the bounds of that role remain in dispute. (p.viii)

Arguably, most economists haveinterpreted Polanyis work in this way

social institutions will resist marketforces whenever they threaten theinterests of a significant fraction oftheir constituents. In a broadcastprepared by Cayley (2005), Fred Block,a respected economist who wasPolanyis graduate student, says thatin his view Polanyi was arguing forstrong social regulations that wouldrestrict the utopian view of a selfregulated free market, and that

ultimately, this means that individualsmust act responsibly to send the

proper signal to regulating bodies. Butquite interestingly, Kari Polanyi-Levitt,an economist, director of the KarlPolanyi Institute and the daughter ofPolanyi, says that her father meantsomething more radical, i.e. that amarket society is irremediablydifferent from what we had seenbefore and that no amount of regulation could change that:

The radical edge, ultimately, is that there has never beforebeen an economic organization of society which is based onindividual gain, or the fear of individual hunger, as wasinstituted in the 19th century, () people are socialized andforced and molded into having to act as producers andconsumers within the market system and we are victim of this,but that does not mean to say that there is anything naturalabout this or that indeed this can continue. (Cayley 2005,episode 5: 48:00-48:46)

What is striking is that tworespected intellectuals very close toPolanyi interpret his work differently,one as to mean that market societiesmust be regulated, the other as tomean that market societies havetransformed humankind in a negativemanner. A thoughtful discussion of thisquestion is without question beyondthe scope of this paper. Suffice it tosay that the notion that there is acontinuum between free-market andsocialism is nave and that there arenumerous alternative ways in whichsocieties can, and maybe should,organize themselves.

I do not wish to dismiss thesocietal marketing perspective,because the concerns that are

addressed by this school are very real.Yet, if we hope to make progress, wemust recognize the fact that marketingis practiced in regulated marketeconomies. Ignoring this reality makesit easier to dismiss the whole idea ofresponsible marketing. In the nextsection I use two well known examplesto identify what may be valid flaws inthe responsible practice of marketing.

Obesity and Global warming anything different?

Quantum consumers

Marketing has often beenaccused of being manipulative. Thishas been at the center of the legalbattle against the tobacco industry,


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where it was argued that targetingminors is unfair, that advertisingtobacco in general is deceptive, thatthe product had been deliberatelydesigned to be addictive, etc. (e.g.Rabin 1992). Similar observations are

made today about the fast foodindustry (e.g. McCann and Haltom2004, Munger 2004, Rotgeld 2005,Weber 2006).

This, in and of itself, is not acondemnation of marketing as anorganizing principle, but an illustrationof the fact that means can be used toachieve a variety of ends.

But what if the question wereframed differently? What if it we wereasking whether the obesity pandemicsis a predictable consequence of themarketing principle? What if we askourselves if a benevolent, sociallyresponsible, organization operatingunder the marketing principle ofdelivering value to customers willinadvertently harm them in apredictable manner? We must not hold

the marketing principle liable forunforeseen side-effects, but we shouldcertainly reflect on the possibility thatthe marketing principle is irremediablyflawed.

The general scenario could besomething like this: the food industry,when it researches consumerspreferences, identifies strong demandfor tasty food (i.e. high salt, sugar, fatcontents). It develops a portfolio ofofferings that are well received. Aneffective marketing mix is designed toraise awareness to the fact that a

satisfying solution to consumerspreferences exists. And if the industrydoes its job well, undesirable sideeffects occur. Stated more generally,what if marketing techniques used tosatisfy a specific need predictably

disrupt consumers equilibrium in away that requires significant efforts torestore it?

In a sense, McDonalds is notcontributing more to the obesitypandemics than generations ofgrandmothers baking scrumptiousdesserts. To be sure, there aredifferences: grandmothers are seekingsmiles of approval and affection, whileMcDonalds seeks money and brand

loyalty; grandmothers work on a smallscale, McDonalds on a global scale,etc. Yet, it can be said that both worktowards providing satisfaction. Bothare hugely successful (albeitgrandmothers success is not visibleon the stock exchange). Arguably,McDonalds and other industrialparticipants in the food industry are infact more successful because largeorganizations work systematically,scientifically, at improving their ways

of producing satisfied customers forthe benefit of their stakeholders.

A parallel might be drawnbetween the dark side of success inmarketing and what happens in thefield of medicine. The medicalprofession is undoubtedly concernedwith the wellbeing of patients, yet theinstruments at the disposal ofcaregivers have become sosophisticated in a limited scope as to,perhaps, cause more suffering thanwellbeing. In a disturbing paper,Solomon et al (1993) concluded that:

Almost half (47%) of all respondents and fully 70% of the houseofficersreported that they had acted against their conscience in

providing care to the terminally ill. [ M]any physicians andnurses were disturbed by the degree to which technological

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solutions influence care during the final days of a terminalillness and by the undertreatment of pain.

A shift in attitude has arguablyoccurred as pain management is nowa leading concern of caregivers,

patients and family (Steinhauser2000), which does not mean that end-of-life decisions are easy, as moral

judgements may conflict amongconcerned parties or with regulations(Meisel 2000, Annas 2005).

This illustration shows howeverthat it is certainly conceivable thatmarketing could be detrimental toconsumers interests in the hands ofethically responsible organizations, but

one more idea must be addressed. Ifconsumers voice their dissatisfaction,there should be no ethical problem asit would be clear to marketers thatconsumers are in pain. The problemis that marketers may not listen to theproper signals.

A food company focuses(appropriately) its efforts on deliveringsatisfaction on the food-relateddimensions. In doing so it ignores the

fact that consumers are multi-dimensional beings riddled withconflicting goals and desires. Eating asatisfying amount of tasty food mayconflict with the goal of living a longand healthy life, the goal of lookinggood in a world where thin is in, etc.If a marketer focuses on maximizingsatisfaction on the quantity and tastedimensions of a food product, it willpressure the consumer along the linesof his conflicting goals in a wayreminiscent of caregivers trying asbest as they can to prolong life.

The problem is complicated bythe fact that while we generallyassume a rational decision maker whowill resolve conflict in a desirablemanner, it could be more appropriate

to assume what I like to call aquantum consumer. A quantumconsumer is animated with dynamic,

conflicting preferences such that aneffective marketing organization mayend-up energizing a particular desireover and above a critical level that willtrigger action, but at the price ofaccumulating tension in theconsumers value system.

Social canaries

The global warming exampleraises another set of questions.Examples of unsustainabledevelopment are often met with theaphorism that what is unsustainablewill not be sustained. The general ideainvolves rising prices as a resourcesuch as oil becomes scarcer, which willtend to curb demand on the one handand provide incentives for alternativeresources on the other and a newequilibrium will be reached. One couldhear about Malthus prediction offamine on a massive scale as heforecasted population growth thatcould not possibly be matched with the18th century food productiontechnology. These predictions nevermaterialized. Quite the oppositehappened in fact: not only didtechnological advances improve thesupply of food in the developed world,but the demographic expansion is alsoslowing to such an extent as to raiseconcern over the shrinking base of theage pyramid.

While it is certainly true that thepredictions of large scale catastrophes


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are often so alarmist as to discredittheir authors, there is room forgenuine concern as saying that a newpoint along the equilibrium curve doesnot mean that it will be desirable, nordoes it mean that reaching this new

point will not be painful. I suppose thata fairly convincing argument can bemade that society will naturallygravitate towards socially moredesirable outcomes as social forcesexpress themselves, but just assomeone who has learned that he isvictim of cancer cannot turn the clockbackwards to amend his lifestyle,society must deal with the fact thatsome technologies may cause terminaldamage, such as nuclear weapons.

What is unclear is whether society cansuccessfully regulate terminaltechnologies as in both cases (nuclearproliferation and global warming)solutions arguably exist (e.g. Bunn2003, Keith 2000).

The proper question would thereforeseem to be whether or not marketingcan be conceived as having thecharacter of a terminal technology,whose effects are either undetectable

until it is too late, or obvious yet sopowerful as to be irremediablydestructive when unleashed.

While I certainly agree thatmarketing can be used in destructiveways by malevolent individuals ororganizations, I would tend to assumethat society has strong safeguards andthat reasonable vigilance, inducingresponsible behaviour, should beexpected. Allowing for the occasionaldeviant causing circumscribeddamage, it seems ridiculous toconceive of a wanton CEO who wouldrely on marketing to suddenly destroythe world as we know it.

It also seems preposterous toargue that, surreptitiously, marketing

will consume society irreversibly butsince everything is surreptitious to thecareless, responsible marketing shouldpay attention to social canaries.Canary, the bird, was used in coalmines as an early warning system for

the presence of inappropriate levels ofmethane. When the chirping stopped,miners knew that there was a high riskof explosion. Canary, the socialactivist, may be used as an earlywarning system for the presence ofinappropriate levels of marketing.Unlike the bird, social activists makemore noise as the level of inappropriate marketing is increasingand the challenge is to identify thereasonable course of action as

activists have the unfortunatetendency to frequently voice concern.

THEMEANINGSOFRESPONSIBILITY

There are several meanings tothe word responsibility. Goodpasterand Matthews (1982) suggest threemeanings (causal, rule following anddecision-making). Williams (2006)observes that there is no consensus onways to apprehend the question ofresponsibility, and that relevant areasof inquiry include moral agency,retrospective responsibility,prospective responsibility, and virtue. Ithink that a useful way to proceed is toconsider the elements of Figure 1.

The first meaning of responsibility is that of causation, as inthe sun and the moon are responsiblefor the tides. There is no implication ofright or wrong. There is no intent. It

just is. This is not to say that there isneither good nor bad. The sun makesplants grow (good) and provokessunburns (bad). This is what I couldhave in mind when I consider themeaning of responsible marketing,

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using the word marketing as a noun, athing that is responsible for causingeffects.

We, scholars, professors,businesspersons and consumers, have

a role to play in the design of marketing as a tool, and therefore maybear responsibility in another sense:

responsibility as liability. Just as amanufacturer may be held responsiblefor selling hazardous products toconsumers, scholars could be heldliable for putting a defective theory inthe hands of well intentioned users.

This would be marketingsinstrumental responsibility.

Figure n.1 Elements of responsibility

Causation

Liability

(retrospective)

Agency

(prospective)

Liability

(retrospective)

Agency

(prospective)

Instrumental

individual

collective

individual

collective

social

legal

moral

social

legal

moral

Control

Virtue

The second type of responsibility refers to the control an

agent has over some outcome.Whereas the sun has no control overthe tides and its side effects, a personis thought to have some degree of freewill, and it is the careful exercise ofthis free will that is at the heart ofCSR. That is what we mean when wesay responsible marketing wheremarketing is a verb. An important ideahere is that freedom and responsibilitygo hand in hand, and in exchanges, ifone party takes full responsibility it will

be at the expense of the othersfreedom. This is why we usuallyconsider two aspects of responsibility.

At the risk of oversimplifying, wecan consider one perspective where

the rule is to do no harm (liability), andanother where we mean to act in the

best interest of the principal (agency).Bearing responsibility in a car accidentrefers to the liability that one party hastowards the other, either throughmalevolent intent, negligence or, insome cases, strict responsibility (i.e. aparty is held liable for damagestowards another even in the absenceof negligence or intent). On the otherhand, bearing responsibility, say, as animpresario or as a physician, refers tothe agency that one party must

carefully exert on behalf of others,generally acting in the best interest ofthe principal.

Responsibility, as it supposesfree will, is generally assigned to theindividual person and whether acorporation is, philosophically, a


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potentially responsible moral person iscontroversial (see Risser 2006).Goodpaster and Mathews (1982) arguethat corporations must be held morallyresponsible because individuals, evenif they retain some responsibility, are

not entirely free to exert control.French (1984) applies the criterion ofCorporate Internal Decision Structure(CIDS). When such structure exists,responsibility can be assigned to thecorporation itself. These structures aredesigned to make good on corporateintent, and moral judgments can bemade on corporate virtues, such asintegrity (French 1996). Alternateviews would claim that the presence ofCIDS is not necessary as its absence

could be interpreted as negligence.

Individuals within organizationsand CIDS are informed on the ethics oftheir actions by three sources: the law,social judgment and morals. Moral,social and legal considerations areonly partially related, and certainly notto be ordered on a scale ranging fromthe minimum you should do (ex: legalconsiderations) to the best you coulddo (ex: moral considerations). Laws

are nothing more than the expressionof the intent of a state legislature, at

some point in time. Laws can beutterly immoral; they can go expresslyagainst social judgment visionarieswill vote for laws that eventuallybecome recognized as desirable bysociety (e.g. abolishing slavery),

utopians will vote for laws that willultimately fail (e.g. imposingprohibition) and tyrants will legalizewhatever injustice and it would beirresponsible on two counts (social andmoral) to obey them. The legal systemmay also be used to shape social

judgment inadvertently (i.e. socialactivists use existing laws in new,unintended, ways) (McCann andHaltom 2004).

Finally, responsibility can referto the nature of a person, as in this isa responsible person (e.g. Williams andMurphy 1990). This is to make adistinction between a person whowould be accidentally liable despitebenevolence and due diligence andanother who might be accidentally notliable despite malevolence ornegligence.

At this point it is useful to

summarize what has been said in afew compact propositions:

Proposition 1a: Marketing is a set of managerial tools. In this sense, responsiblemarketing means that instruments work as intended and will notcause undesirable, predictable, side-effects.

Proposition 1b: As there is no corporate decision structure to shape theseinstruments, marketing scholars bear individual moral responsibilityin order to search for the possible existence of such flaws and toinform society of their existence if they come to be known. Areasonable argument can be made that such flaws exist.

Proposition 1c: One such flaw is the way in which consumer decision making ismodeled. Marketing, because it advocates the creation of value, is

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unlikely to lead to its destruction at the individual level. However,because it pursues the narrowly defined goal of maximizingcustomer value under the simplifying assumption that needs areindependent, just like the practice of medicine by well intentionedcaregivers can harm patients, the practice marketing by wellintentioned business organizations may harm consumers.

Proposition 1d: Marketing focuses on the needs of an organizations proximate

stakeholders. A valid definition of societal marketing would includemore distant stakeholders in the analysis, in such a way as to insurethat offering value to a subset of society leads to the net creation ofvalue rather than to a transfer from distant to the benefit ofproximate stakeholders.

Proposition 2: Organizations use marketing to further their interests. In this sense,socially responsible organization means that the organization hastaken formal steps within its CIDS to make sure that it complies withthe obligations of the social contract to which it gave its implicitconsent.

Proposition 2b: An organization should always practice marketing responsibly.Therefore, a claim that it practices responsible marketing should beconstrued as to mean that it practices en enlightened kind ofmarketing, i.e. societal marketing, as otherwise it would be apointless declaration.

VALUETOME, VALUETOTHEM, VALUETOALLOFUS

The preceding sections havehighlighted the importance of a properunderstanding of the notion of value.Successful societies try to organize

themselves in such a way as to reducethe destruction of value. Differentclasses of problems arise at theindividual as well as the societal level.In an attempt to clarify these matters

Table 1 identifies several scenarioswhere value is destroyed.

Table n.1 Value DestructionIndividual level Societal level

Extortion

Fraud / deception

Inefficiencies

Systemic

Conflicting values

Public Goods

(1) Tragedy of the commons

(2) Drama of the commons

(3) Sustainable development

The destruction of value at

the individual level

It is easy to think of severalsituations in which there isunquestionable destruction of value.

The worst, ethically, are probablythose involving extortion or fraud,where an organization does notprovide positive value to a consumer

but will instead extract value eitherthrough brute force or intentional anddeceitful pretence. Writers in the fieldof societal marketing are critical ofmarketing practices whose purpose issaid to create the illusion of value,such as puffery or celebrityendorsement (ex. Dawson 1980,Sirgey and Lee 1996). But the fact thatvalue is intangible should not be


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preference for a product or servicewith negative externalities, amarketing organization is likely toengender negative actions on the partof those who experience the negativeside effects that are not obvious prior

to the introduction of new products.For instance, the development of leafblowers has lead to widespreadactivism resulting on the ban for suchdevices in many jurisdictions(Cameron 2000). If a marketingorganization today were to considerthe development of such a product, itwould be aware of the regulation andother social prescriptions against sucha device and could come up withsocially acceptable solutions. But in

the 1960s, when the first patents wereissued for such a contraption, no suchregulation or prescription existed andintuition could have suggested thatblowers would be considered on thesame plane as lawnmowers.

As far as marketing isconcerned, I am not aware of any newproduct design methodology thatwould advocate a careful evaluation ofthe costs and benefits of an innovation

in adverse segments.

Another type of problem occursfor what we call public goods. It iscustomary to make a distinctionbetween rivalrous and non rivalrousgoods, i.e. goods that are consideredto be in finite supply (ex: fish stocks)vs. those that are infinite (ex: digitalassets) such that consumers competeagainst each other or not; andbetween excludable goods (mostphysical goods, possibly digital assets)and those that are not (ex: fish stocks)such that a seller can prevent or not aconsumer from having access to theproduct.

Public goods are inefficientlymanaged under a market economy

because free riding on the part ofconsumers provide inadequateincentives for their private supply(Samuelson 1954). This is why socialinstitutions must regulate againstpollution, enforce intellectual property

rights and so forth.

These questions, at first glance,lie completely outside of the realm ofmarketing and belong to welfareeconomics, social studies and politics.On the other hand, the current debateon digital media shows how businessdecisions that are very closely relatedto marketing will have a highlysignificant impact along those lines.For instance, if the music industry fails

in its efforts to implement a strongdigital rights management to provideexcludability for digital media, it couldbe argued that the supply of digitalmedia will decline to socially sub-optimal levels. But the flipside is thatdigital assets are no real substitute foreach others such that a strongintellectual property regime confersmonopoly power resulting in sociallyinefficient pricing.

The problem of public goods canalso be considered under the threefollowing headings: sustainabledevelopment, the drama of thecommons and the tragedy of thecommons. Sustainable development isdefined as development that meetsthe needs of the present withoutcompromising the ability of futuregenerations to meet their own needs.(Brundtland 1987: 54) As I discussed insection 2.5.2, sustainability will alwaysbe resolved one way or another andthe relevant issue is the managementof the transitional process consideringthe very real difficulty of dealing withinter-generational conflicts of interestsand technological uncertainties. Inmost cases, sustainability issues canbe reasonably expected to be resolved


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through progressive adjustments ofthe soft landing type. But in tragedyof the commons, the outlook is bleak.

The problem of the commons isthe traditional way in which we

describe individually rational butcollectively destructive consumptionlevels (see Hardin 1968 for the seminalarticle). I think it is useful todistinguish between two type ofproblems of the commons reversible(dramatic) and irreversible (tragic)collective abuse. The oft citedenclosure movement of the 18th

century (see Boyle 2003 for a recentanalysis) refers to a collectivedecision to privatize land in England in

order to deal with the problem ofovergrazing of the public land.Privatization succeeded in restoringproductive pastures. In other cases,because privatizing is impractical andthe number of agents makescollaboration less likely (see Schuster2005 for a short synopsis), prospectsare bleak. Global warming is such aproblem where consequences maywell be highly undesirable andirreversible.

Discussions on tragedies of thecommon are difficult because therational strategy is not obvious since,as Hardin noted, nice guys end uplosing. This may explain why the Kyotoaccord is not working as majorcontributors to the emission ofgreenhouse gas are playing a chickengame. For instance, the oft vilified USadministration has not ratified Kyoto inpart because developing countrieswere unwilling to negotiate reasonablereciprocal commitments (Schelling2002). Whether this is irresponsibleselfishness or an adequate strategy tohopefully find a solution is debatable,but what is clear is that social tensionis mounting (ex: Athanasiou and Baer2002).

This discussion seemingly leadsto a dead-end as if it is clear thatmarketing organizations are part ofthe problem of sustainabledevelopment, the solution goes

beyond the realm of individualdecisions because of free-riding.Providing value to the customer is stilla valid normative basis for action, butwe can expect that the determinationof value will be increasingly dynamicas society comes to grips with themany ramifications of sustainabilityand third parties activism raise tounprecedented levels.

QUANTUMCONSUMER, SOCIALCANARIES:PAYINGATTENTIONTOTENSION

When business takes thedefinition of marketing as a startingpoint, it is immediately confronted tothe problem of building operationalmodels of customer value. Thisgenerally takes the form of modelswhere products are conceived asbundles of attributes. The task boilsdown to the identification of relevant

attributes, the measure of theimportance consumers place on suchattributes and the optimal design ofoffers that will account for differencesin valuation (i.e. segments),competition and the cost of production. The predictive accuracy ofthese models is very good (see forinstance Urban and Katz 1983) suchthat they are used both in theclassroom in order to explain theworkings of markets and in business to

support the value creation process.

A marketing orientedorganisation is riveted to thesatisfaction of its customers because itleads to customer loyalty, and loyaltymakes it easier to achieve profitability(Anderson, Fornell and Lehman, 1994).Satisfaction is frequently expressed as

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the difference between experienced vsexpected quality levels (ex:Parasuraman, Zeithmal and Berry1985). Focusing on satisfactiontherefore provides an implicitmotivation to push for more value in

order to surpass markets raisingexpectations.

But what is an accurate modelof aggregate behaviour may not beappropriate at the micro level, just asNewtonian physics is a usefulrepresentation of human-scalephenomena in the material world thatis inappropriate for what is happeninginside atoms. If this multi-attributemodeling arguably dominates

marketing practice, it is certainly notthe only conceptual model of consumer decision making processes(see Jackson 2005 for a review ofseveral alternative models of

consumer behaviour, and Kahneman2003 for a survey in the field ofeconomics). For instance, Max-Neef(1991) identifies a finite number ofconflicting needs and suggests that inproviding satisfaction for one need, (a

marketing organization) may actuallyreduce satisfaction of another. Yetconcepts such as guilt, shame, regretor frustration are certainly not studiedwith as much zeal as satisfaction, inour discipline. A search for the wordsatisfaction in five leading marketing

journals in the Web of Sciencedatabase for the years 1974-2006finds 295 entries. A similar search forthe words frustration or guiltor regretor shame only yields 43 entries. More

significantly perhaps, research onfrustrated consumption is practicallyabsent from the Journal of Marketingas can be seen in table 2.

Table n.2 Publications using satisfaction related words*, 1974-2006, by leadingjournal

JournalSatisfaction

Frustration, guilt,regret or shame

Ratio of (1)

to (2)

Journal of ConsumerResearch

50 21 2.38

Journal of Marketing 123 261.50

Journal of MarketingResearch

66 5 13.20

ManagementScience

31 12 2.58

Marketing Science 25 38.33

Total 295 43* The search words had to appear in the title, abstract or keywords of the article


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The literature on frustration was

practically non-existent prior to 1990and even today papers are published

only sporadically, while the study of

satisfaction, always present, has takenoff in the early 1990s (see figure 2)

Figure n.2 Publications using satisfaction related words*, 1974-2006, by year

0

5

10

15

20

25

1975 1980 1985 1990 1995 2000 2005

Satisfaction Frustration, guilt, regret or shame

* The search words had to appear in the title, abstract or keywords of the article

Assuming stable preferencesand ignoring side-effects greatlysimplifies what is already a demandingexercise. Yet, important work hasalready shown that preferences areevolving (e.g. Bettman, Luce andPayne 1998) and exciting ideas havebeen explored in the field of

economics (e.g. Benabou and Tirole2003) and cognitive sciences (e.g.Ainslie 2005) such that we may believethat more realistic models willeventually be used.

In the meantime, crudeapproximations will have to do. Navemodels where management tries tosatisfy a targeted need should beaugmented by analyses of tension atthe consumer level that is expressed

in a various ways, some of which mayaccumulate and eventually come backto haunt the marketing organization byfuelling activism and litigation.

The story is more complex whenwe consider social tensions. Thedominant paradigm, law andeconomics (see Shavell 2004 for an

excellent introduction), considers howrational lawmakers should shaperegulations in such a way as toimprove social welfare, but it does notconsider the influence of socialactivism in the genesis of theregulatory body. It does not evenformally consider the role that social

norms do play, even in the absence offormal regulation. (Ellickson 1998).What we can find are numerous essayson how marketing can sustain activism(ex: Varadarajan and Menon 1988),but no model of activism thatmarketing organizations could use inorder to act responsibly.

SUMMARYANDCONCLUSION

The purpose of this paper was to

explore the concept of responsiblemarketing, a popular term in thecorporate world but without muchtheoretical substance. After reviewingthe literature on normative ethicalframeworks for business and on theconcept of responsibility, I suggest twocomplementary meanings forresponsible marketing.

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First, marketing is a set ofmanagerial tools and is an instrumentused by organizations in the pursuit oftheir objectives. As such, responsiblemarketing refers to the fact that the

instrument is not defective, i.e. that itwill not cause predictable harm to theorganizations stakeholders. Marketingacademics, organizations andconsumers are all responsible andshould investigate the existence ofpotential flaws, conceptual oroperational.

We can make a credibleargument to the effect that such flawsexist. Drawing a parallel with

medicine, a discipline devoted to thewellbeing of its patients yet adiscipline that has been accused ofbeing too focussed on prolonging lifeat any cost, I argue that marketingmay be a discipline devoted to thewellbeing of consumers, yet theemphasis on consumer satisfaction ona targeted need is likely to createtension, both at the individual and atthe societal levels, by ignoringconflicting interests in the mind of the

quantum consumer, and failing toaccount for the negative externalitiesthat it may create.

Second, I argue that themarketing concept could beenlightened by the adjective societal ifit is meant to incorporate distantstakeholders in the value equation, butthat other meanings of societalmarketing, i.e. a tendency towards apaternalistic attitude or a rejection ofcurrent societal values, are unjustified,as we must respect the preferences ofothers and the implied contract towhich social participants haveconsented.

It is therefore in this narrowsense that an organization could state

that it is committed to responsiblemarketing. Such organization would ineffect be warning its proximatestakeholders that it will assess theimpact of its actions on distantstakeholders. This is equivalent to

saying to shareholders that it is in theirbest interest to focus on the needs ofconsumers; similarly it is in theinterests of proximate stakeholdersthat the organization makesresponsible efforts to align theirinterests with those of society at large.

This exercise has beenconducted for my personal benefit as Iwanted to be able to get a better

understanding of issues that werebrought to my attention by acolleague. Space limitations made itimpossible to better explain manyideas that are coming from diversefields and would have required a morecomprehensive treatment. I apologizefor any oversimplification.

This question of what do wemean when we say responsiblemarketing? opens interesting doors. By

asking ourselves what practices can beharmful in the hands of a sociallyresponsible organization, we bringfresh air in a room filled with questionsabout what can go wrong in the handsof a malevolent organization. Insteadof focussing on what is wrong withthem, we ask the more responsiblequestion of what might be wrong withus. There is also a very rich field ofinquiry behind the question of how togo about modeling tension, both at theindividual and societal levels. Gaininga better understanding of the genesisof tension, of the ways in which it ismanaged by consumers and society, ofthe ways in which businessorganizations may measure andmanaged it promises an excitingresearch agenda.


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