chapter  1
19 Pages

Foundational perspectives for ethical and socially responsible marketing decisions

The ethical scandals plaguing business in the twenty-fi rst century have largely been linked to the professions of accounting and fi nance. The worldwide economic recession of 2008-9, and its lingering after effects, have been blamed on convoluted fi nancial instruments and aggressive banking practices. The subprime mortgages aspect of this crisis was seen to be more of a fi nancial failing than a marketing one. However, classic marketing principles such as segmentation, targeting, and positioning were used by banks and other fi nancial institutions to locate and sell mortgages to a mostly unsuspecting target group, who were then assured that there would not be major ramifi cations of taking out high-risk mortgages. Both the overselling of these mortgages and the “packaging” of them with other securities led to a deepening of the fi nancial reversals seen not only in the US and Europe, but throughout the world. We contend that these fi nancial managers were using and misusing marketing techniques to achieve short-term fi nancial gains. As we discuss in this chapter, inappropriate application of marketing strategies and short range thinking often leads not only to ethical problems but fi nancial reversals as well.