ETHICAL ISSUES IN MARKETING PRESENTED BY: RAVI VASANI

AKASH GUPTA

PRESENTATION PLAN

Definition And Meaning Factor Influencing Ethical Decision Making

Process Ethical Issues & The Marketing Mix Current Ethical Issues In Marketing Ethics Compliance Programs Social Responsibility Issues

DEFINITION

Moral principle or values that generally governs the conduct of an individual or a group.

Marketing ethics are principles that defines acceptable conduct in marketing which society expect.

If ethics are not followed then public or customers may strike back.

FACTOR INFLUENCING ETHICAL DECISION MAKING PROCESS

Ethical marketing decision

Individual factor

OpportunityOrganizational

Relationships

INDIVIDUAL FACTORS

Individual make their decision on their own concepts.

They develop these concepts from social groups.

Ethical decision making can be enhanced by identifying these personal concepts.

Utilitarianism: judgment of decision by the consequences upon all the people affected(utilitarian's)

Ethical formalism: develops specific standard of behavior by determining whether an action can be taken as general rule without considering alternative results.

OPPORTUNITIES

It is a favorable set of condition that provide reward and limit barriers.

Ex: deceptive sales presentation and rewarded

larger the rewards, more unethical behavior.

ORGANIZATIONAL RELATIONSHIP

Most marketing decision often made in groups.

Significant others: superiors, peers, subordinates and outsiders affects ethical decision making.

Organizational culture: set of goals, norms that employees of an organization shares.

It suggests rules how to behave and deal with problems in an organization.

Customers

ProductIssues

PricingIssues

PromotionIssues

DistributionIssues

ETHICAL ISSUES & THE MARKETING MIX

PRODUCT ISSUE

Product that is harmful Ex: thalidomide disaster in Germany in 1958.

Fail to disclose informations about product. Ex: Packard Bell

Larger packages are more noticeable on the shelf. Ex: chips

Product quality Adding of carcinogenic substances to make

preparation tasty.

Planned obsolescence: purposely causing existing product out of date by introducing new product

Type: Material Planned Obsolescence Style Planned Obsolescence Material planned obsolescence: company

choose low grade material.Ex: manufacturers of lighter

Style planned obsolescence: firms make minor changes in product within a short period, to attract style conscious people. Ex: fashion items and cars

PRICING ISSUES Bait and switch: advertising one item at

low prize (bait)>>>>customers into stores>>>>>>sale of different product at higher price.(switch). Selling higher priced product is legal but

advertising low priced item is unethical

Price fixing: collaboration of two or more firms in setting prices usually to keep prices high. Two types:

horizontal price fixing vertical price fixing

PRICING ISSUES CONT….. Horizontal price fixing: when competitors

making same product jointly determine the price. Ex: in 1994 six major airlines fix the prices.

Vertical price fixing: manufacturers force retailers to charge high prices. Consumer goods pricing act 1966.

Predatory pricing: company set low price to eliminate competitors>>>>>> monopoly>>>>>increase prices Ex: American airlines in 1990.

PRICING ISSUES CONT…..

Price discrimination: charging different prices to different customers based on their assumed ability or willingness to pay Ex: amazon.com

PROMOTION ISSUES Deceptive advertising: when the consumer is

led to believe something which is not true Ex: gateway computers (1998), full refund and on

site service Puffery: exaggerated claims of a product’s

superiority statements that may not be literally true Ex: movie(Tashan) and novel advertisements

Cookies: small text files that automatically download to a user’s computer whenever that

user visits a Web Site and that is capable of gathering information on the user Bait-and-switch

DISTRIBUTION ISSUES Slotting allowances: fee paid by

manufacturer to retailer in exchange of keeping their product in their shelves.

Grey market goods: foreign made products imported into countries by distributors that are not authorized. Ex: selling electronics items

Exclusive territories: an area assigned by company to distributer in which no other distributer will work.

To get good money from distributer & to create elite image Cadillac motors

CURRENT ETHICAL ISSUES IN MARKETING Tobacco advertising: advertising of tobacco is

not illegal in some country but it is unethical Ex: promotion of ”CAMEL” with a cartoon

joycamel State Govt of Minnesota's billboard

Alcohol advertising: advertisement in the name of mineral water or club soda Ex: bagpiper

Despite the decrease in sales of hard liquor, there is an increase in alcoholic soft drinks.

These taste like colas or fruit juices but may contain more alcohol than beer does.

Advertising Aimed at children Critics say continually bombarding towards

children can alter their motivation and behavior Ex: selling of high calorie & fat containing food

like pasta with offers of free tattoo.

ETHICS COMPLIANCE PROGRAMS Development of code of ethics: guidelines

developed by companies to help employees to make ethical decisions Ex: Dow’s code of business conduct include

ethical principles and policies to deal with various issues

Consumerism: social movements that protect consumers from harmful business practices Establishment of various act and legislations

( cigarette labeling act 1966)

Green marketing: marketing of products and packages that are less toxic and recyclable. Ex: Aveda a skin care product manufacturer

developed products without animal contents and synthetic materials and recyclable packaging material.

Corrective advertising: advertising that clarifies previous deceptive claims Ex: Warner Lamberts corrective advertisement

for LISTERINE mouthwash “would not prevent colds or sore throat”

CORPORATE SOCIAL RESPONSIBILITY

Firms have become viewed as responsible for more than generating profits.

Social responsibility Marketing philosophies, policies, procedures, and actions that have the enhancement of society’s welfare as a primary objective.

Provide future benefits in the form of consumer approval and loyalty.

REFERENCES Marketing by Solomon and Stuart 3rd edition Marketing by Pride and Ferrel 10th edition Marketing by Evans and Berman 8th edition Marketing by Lamb and Hair 6th edition Marketing Management by Kotler and Keller

13th edition

THANK YOU