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Ethics, the environment and business
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Customers increasingly care how businesses behave. Doing the right thing can cost money but can also win loyalty.
Ethical considerations
Ethics means doing what is morally right, beyond what the law requires.
Examples: paying suppliers fairly (such as Fairtrade), treating workers well, honest advertising.
Trade-off: ethical choices often raise costs and can reduce profit, but they can improve reputation and sales.
Examples: paying suppliers fairly (such as Fairtrade), treating workers well, honest advertising.
Trade-off: ethical choices often raise costs and can reduce profit, but they can improve reputation and sales.
Environmental considerations
Businesses can cause pollution, waste and carbon emissions.
Sustainability means meeting today's needs without harming the ability of future generations to meet theirs: renewable energy, recycling, less packaging.
Trade-off: greener methods may cost more now, but can save money later and attract customers.
Sustainability means meeting today's needs without harming the ability of future generations to meet theirs: renewable energy, recycling, less packaging.
Trade-off: greener methods may cost more now, but can save money later and attract customers.
Pressure groups
Pressure groups try to change business behaviour, often through campaigns, protests, boycotts and social media.
They can damage reputation, so businesses may change their marketing mix: new products, recyclable packaging, different suppliers, or promotion that highlights ethical changes.
They can damage reputation, so businesses may change their marketing mix: new products, recyclable packaging, different suppliers, or promotion that highlights ethical changes.
A chocolate company switches to Fairtrade cocoa, which costs more. Give one benefit and one drawback.
- Benefit: better reputation and loyal ethical customers.
- Drawback: higher costs, so lower profit or higher prices.
Answer: Better reputation; higher costs.
Ethics is doing the right thing beyond the law. Ethical and environmental choices often cost more (a trade-off with profit) but can build reputation. Pressure groups can force changes to the marketing mix.
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