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.