ETHICAL ISSUES IN MARKETING

Introduction:

Marketing, in contemporary times, has seen a tumultuous change in the way it's

conducted in developing countries. The oft cited dictum that only change is constant

in the marketing genre is an apposite one. Just as the media of social communication

themselves have enormous influence everywhere, so advertising and marketing, using

media as their vehicles, are pervasive, powerful forces shaping attitudes and behavior

in today's world. Four reasons are attributed to the fugacious nature of the way

marketing practices are being carried out in developing countries 1. The role of

Information and Communication technologies: As ICTs evolve so do marketing

practices. If yesterday it was television that revolutionized the way advertisements

could create a lasting impact on the consumer, then today the internet and phone text

messages are doing just that. 2. The world today is an increasingly global village:

Social and ethnic boundaries are fast falling in the wake of cable television and the

like. 3. Rapid economic expansions in countries like China and India have meant that

marketers have to quickly respond to the changing socio-economic scenarios.

Millions of people have entered the middle class and millions more are poised to do

so. For marketers, the consequences can be mind boggling-as incomes and spending

powers rise, marketers have to respond to increasing demands from consumers. 4.

Better and improved marketing research has meant that the entire populace is not seen

in totality but rather as a congeries of different types of consumers.

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THE UPSHOT:

But the outcome of such developments is that a number of ethical issues have arisen.

While the globe is indeed becoming a smaller place, marketers have to bear in mind

national, local and cultural sensitivities. Very often, in the hope of tapping a larger

consumer base, marketers jump headlong in new markets without keeping in mind

ethnic and social issues typical to certain areas. While marketers do have to act with

celerity in gaining footholds in emerging markets such as China and India, care has to

be taken in ensuring that the mores, etiquettes of the land are not encroached upon.

The incorporation of newer technologies has meant that a number of issues such as

invasion of privacy and credibility have arisen. Ergo, in these rapidly changing

circumstances, marketers and consumers alike face a nimiety of ethical issues that

have to be addressed. This paper looks at some of the ethical issues in the developing

countries context.

EXPLOITING SOCIAL PARADIGMS

In the hopes of making a fast buck, marketers often resort to exploiting social

paradigms typical to certain areas. In India, for example, a large multinational

corporation ran an ad campaign that depicted a young woman who because of her

dark facial complexion was unable to find jobs. But as the ad showed, as soon as the

woman started using the facial whiteness cream manufactured by the corporation, she

got the job of her choice. Needless to say, there was a big backlash against it and the

ad campaign had to be scrapped. On an ethical standpoint, marketers have to exercise

restraint in exploiting such social paradigms to their commercial advantage.

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SURROGATE ADVERTISEMENTS

In India alcohol and cigarette advertisements were banned outright some years back.

However, alcohol and cigarette companies alike are using the avenue of surrogate

advertisements to press forward their case. For the viewer though, the 'subtle' pointer

towards the real deal is enough as the surrogate advertisements leave no ambiguity in

their minds.

SUBLIMINAL ADVERTISEMENTS

One of the most controversial and ethical issues in advertising is regarding subliminal

advertisements. Inserting subliminal messages in an advertisement is an inherently

misleading action. It is an attempt to manipulate a person's thinking without the

person realizing that any such manipulation is occurring. The west has had its fair

share of subliminal advertisements related hullabaloos primarily because the

advertisement, marketing and regulating media themselves have been quite active in

raising such issues. During the US Presidential elections of 2000, it came to light that

a political advertisement for George W. Bush subliminally flashed the word 'RATS'

when criticizing Al Gore's prescription medicine plan. While the ad maker denied that

the quickly flashed word was a subliminal message designed to surreptitiously sling

mud at Gore, many others, however, concluded that 'RATS' was indeed inserted with

the intention of secretly causing viewers' to associate vermin with Al Gore. In line

with the techniques of subliminal messaging, the questionable word appeared on the

screen for only a microsecond (1/30th of a second), passing by so fast that it was

almost unrecognizable to the conscious mind-especially when passively lulled by

television. According to the theory of subliminal advertising the image would, indeed,

register in a viewer's subconscious mind, thereby causing the viewer to negatively

associate Al Gore with a rodent. The effects of subliminal advertisements are real and

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financially significant. Each year, consumers spend roughly $US50 million for self-

help tapes embedded with subliminal messages that are supposed to teach a person a

foreign language while they sleep, or help them lose weight, or quit smoking.

Additionally, some stores embed subliminal messages in their background music in an

effort to discourage shoplifting. Time magazine reported in 1979 that messages such

as 'I am an honest person' and 'Stealing is dishonest' were being utilized in over fifty

department stores. One department store utilizing the hidden messages reported a

savings of $US600, 000 by reducing theft 37 percent during a nine month period. So,

if subliminal messages evidently work in self-help tapes and embedded in department

store music, it certainly seams reasonable that they would also work and perhaps even

work better in a visual medium such as television. In developing countries the

regulating watchdogs and related establishments are still in stages of latency so that

the possibility that viewers who would be subject to such measures would probably

never ever know that they were the focus of such procedures. The Ethical Issue of

'Creating Demand' In the words of Pope John Paul II, advertising also can be, and

often is, a tool of the phenomenon of consumerism. Sometimes advertisers speak of it

as part of their task to 'create' needs for products and services - that is, to cause people

to feel and act upon desires for items and services they would ordinarily not need. A

piquant issue arises when consumerist attitudes and values are transmitted by

communications media and advertising to developing countries, where they

exacerbate socio-economic problems and harm the poor. While a judicious use of

advertising can stimulate developing countries to improve their standard of living,

serious harm can be done to them if advertising and commercial pressure become so

irresponsible that communities seeking to rise from poverty to a reasonable standard

of living are persuaded to seek this progress by satisfying wants that have been

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artificially created. The result of this is that they waste their resources and neglect

their real needs, and genuine development falls behind.

PREDATORY PRICING

In developing nations where the bulk of the populace is still employed in small and

medium enterprises, the use of predatory pricing by large multinational corporations

in order to wipe out competition is an ethical issue. While proponents of no holds

barred pricing would attribute this to an unfettered free market, the fact remains that

the larger issue is the threat of wiping out the livelihood of a large number of people.

In India, a related issue is the entry of western discount stores that might eventually

threaten the existence of millions of people employed in traditional mom-and-pop

stores. Wal-Mart's 'takeover of small towns' in the U.S.A. is also a related concern.

Countries like India need to take a leaf out of the China book-China opened its market

to these stores in 1991 and only recently allowed 100% foreign direct investment

(FDI) in such ventures.

FALSE AND MISLEADING ADVERTISEMENTS

Then there is the issue of false and downright disingenuous advertisements. While in

itself this is an important ethical issue, an extension of this is the question of

credibility. Nowadays, newspaper columns are rife with advertisements which

blatantly compare features of brands with those of their competitors. Citing the

opinion of 'experts', these advertisements claim their brands to be quantitatively and

qualitatively better than those of their rivals. In India a leading car manufacturer had

to recall its ad campaign when it incorrectly stated that one of its car models was

superior to that of its competitor's.

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Post Purchase Dissonance

What you see is not often what you get Since very often what companies claim their

products or services deliver is not what the consumers actually get, the issue of post

purchase dissonance arises. There are two more non-contrasting viewpoints on this

issue. One states the typical examples of Tele-Shopping Networks (TSN) and the

internet. Since there is no element of tangibility, the consumer would typically end up

getting an end product which he/she didn't literally ask for. The other viewpoint states

that such establishments would be punished by market forces since in today's world

the consumer is undoubtedly the king. But in associating such concerns to the game

play of market forces, the larger ethical issue is unfortunately trivialized. Depicting

groups in stereotyped roles All too often, marketing contributes to the invidious

stereotyping of particular groups that places them at a disadvantage in relation to

others. Women and children unfortunately end up being cast as stereotypes in ad

campaigns the world over. Often, the role of women in business or professional life is

depicted as a masculine caricature, a denial of the specific gifts of feminine insight,

compassion, and understanding. In India, which has traditionally been a patriarchal

society, tremendous cultural changes have been brought in with the advent of cable

television and the exposure to western content. Urban women are enjoying more

freedom than they've had before. Yet, promotional campaigns of certain firms still

show the Indian woman of yore-a fallback to a time when women did not enjoy the

freedoms they have today. The Über kid In India, objections have been raised against

advertisements that showed mothers benchmarking their children to the so called

'super-kid'- one who excels in studies and sports alike simply because he consumes a

particular health drink.

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Promotions of Alcohol, Tobacco

Creating Demand for Vice Cigarettes are one of the most heavily marketed products

in China and other developing nations. An increasing percentage of those marketing

dollars is dedicated to what are probably the most sophisticated consumer marketing

databases in the business world. Tobacco advertising is no longer just the province of

multi-million dollar ad budgets pushing the Marlboro Man, Joe Camel's phallic face

or the women in the Virginia Slims' ads who have 'come a long way.' It is equally the

province of direct marketers, pushing free packs to targeted prospects and mailing

slick magazines-published by tobacco companies-to influence the behavior and retain

the loyalty of tens of millions of smokers And the problem is pandemic-is is prevalent

in both developing as well as developed countries alike. In the US for example,

cigarette smoking is responsible for the deaths of almost half a million people a year.

Tobacco use is responsible for more than one in six deaths in the United States.

Smoking accounts for 30% of all cancer deaths. It is a major cause of heart disease,

and it is associated with conditions ranging from colds and gastric ulcers to chronic

bronchitis, emphysema and vascular disease. Smoking caused an estimated 264,087

male and 178, 311 female deaths in the United States each year from 1995 to 1999.

The U.S. Congress Office of Technology Assessment estimates the cost of smoking

(direct and indirect) to the economy at $150 billion a year. Each day more than 3,000

teenagers in the U.S. become addicted to cigarettes. The tobacco industry argues that

its advertising is not aimed at recruiting these young new smokers. Its representatives

say, disingenuously, that advertising by individual tobacco companies' targets adults

only and serve only to encourage regular smokers to switch brands or to retain brand

loyalty. However it has been seen that perception of cigarette brand advertising

actually is higher among young smokers and that changes in market share resulting

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from advertising occur mainly in this segment. Cigarette advertising thus undoubtedly

encourages youth to smoke. In a survey conducted by the Journal of the American

Medical Association, it was stated that the success of the tobacco industry is

dependent on recruiting people who don't believe that tobacco kills-thus enticing

children, developing nations populations, and disadvantaged members of society to

smoke is the only way for tobacco companies to make up for the number of smokers

who quit or die.

INTRUSIVE PROMOTIONS

A number of companies offer a plethora of freebies in terms of services and add-ons,

however all these come with the proverbial strings attached. These are particularly

true for telecom and internet services related companies. Mobile network providers in

India for example are notorious for literally bombarding the users with promotional

text messages. Many a times these companies share customer data with other

companies without the explicit permission of the customers themselves. The issue at

hand is such measures compromise the confidentiality of company-client relationships

and trivialize the privacy concerns of the customers.

Copyright, trademark violations Copyright and trademark violations are ubiquitous

throughout the developing world. One of the major grouses of multinational

corporations in countries like China and India is the lack of a robust legal framework

that harshly penalizes violators. Data piracy is a major concern in South East nations

and millions of illegal compact discs are made in such countries which cost software,

music and movie companies billions of dollars.

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ADVERTISEMENTS AS MIRRORS OF PREVAILING NORMS

Marketers claim that advertising simply mirrors the attitudes and values of the

surrounding culture. No doubt advertising, like the media of social communications in

general, does act as a mirror. But, also like media in general, it is a mirror that helps

shape the reality it reflects, and sometimes it presents a distorted image of reality.

Advertisers are selective about the values and attitudes to be fostered and encouraged,

promoting some while ignoring others. This selectivity does not impart credence to

the notion that advertising does no more than reflect the surrounding culture. For

example, the absence from advertising of certain racial and ethnic groups in some

multi-racial or multi-ethnic societies can help to create problems of image and

identity, especially among those neglected, and the almost inevitable impression in

commercial advertising that an abundance of possessions leads to happiness and

fulfillment can be both misleading and frustrating. Advertising also has an indirect but

powerful impact on society through its influence on media. Many publications and

broadcasting operations depend on advertising revenue for survival. This often is true

of religious media as well as commercial media. For their part, advertisers naturally

seek to reach audiences; and the media, striving to deliver audiences to advertisers,

must shape their content so to attract audiences of the size and demographic

composition sought. This economic dependency of media and the power it confers

upon advertisers carries with it serious responsibilities for both.

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THE ETHICAL ISSUE OF POLITICAL MARKETING

Political advertising can support and assist the working of the democratic process, but

it also can obstruct it. This happens when, for example, the costs of advertising limit

political competition to wealthy candidates or groups, or require that office-seekers

compromise their integrity and independence by over-dependence on special interests

for funds. Such obstruction of the democratic process also happens when, instead of

being a vehicle for honest expositions of candidates' views and records, political

advertising seeks to distort the views and records of opponents and unjustly attacks

their reputations. It happens when advertising appeals more to people's emotions and

base instincts-to selfishness, bias and hostility toward others, to racial and ethnic

prejudice and the like- rather than to a reasoned sense of justice and the good of all.

Ethical Issues in Internet, e-commerce The Internet is quickly becoming a major

conduit for business. On-line business has raised a host of new issues such as honesty

and responsibility, accountability, privacy and confidentiality, protection of data (i.e.

credit card numbers), freedom from invasiveness (i.e. so-called sticky websites that

automatically track and retain customer contact and information), quality of the goods

delivered, disclosure and reliability of information, sources of goods, Internet

economics vs. traditional economics, impacts of global Internet business, employment

through the net (local and global telecommuting), web advertising, competition on the

Internet (hacking into data, falsification of data), public information and financial

disclosure (investor relations on the Internet), and others.

1. The Small Print

The major ethical issues facing business over the internet are the ones regarding the

small print i.e. the policy notices or practices on websites. These issues include: A)

Usage of obfuscating and vague language B) The policy may be hard to find or

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difficult to read and understand. C) It may not contain all the disclosures D) May fail

to provide a contact address or procedures for dealing with complaints, corrections, or

conflict resolution E) It may not have clear access requirements or procedures for

verifying a valid requester before granting access. F) May not be linked to or

displayed on every page where information is collected

2. World Wide Web versus the Wild Wild Web:

To many, the utopian concept of the internet is that of a valueless zone-a free network

that is outside the purview of human control and restrain. But we feel that line of

reasoning is flawed. The internet is the progeny of civil society. This means that the

World Wide Web is not the wild wild Web, but instead a place where values in the

broadest sense should take a part in shaping content and services. This is recognition

that the Internet is not something apart from civil society, but increasingly a

fundamental component of it.

3. Ownership and Responsibility:

The internet is largely a boundary less network. The involvement in content of

companies hosting information is highly debatable. There are two sides to the

proverbial coin: The Internet as a medium supports all kind of contents. By espousing

the principle of allowing anyone to post any material on the net as a means of

furthering information exchange is extended by many as the raison d’être of absolving

the hosts of complicity of posting the material. In India, a major debate between the

erudite arose when the CEO of the Indian chapter (bazee) of ebay.com was arrested

over charges of allowing the exchange of video clips showing explicit scenes. The

sympathizers of the site owners cited the fact that the websites are merely enabling

people to exchange data over a common platform. What information is exchanged

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does not fall under the purview of the responsibilities of the website managers. The

opposing view was the hosts cannot turn a blind eye to the activities being carried out

through the medium of their site. We feel that although, given the nature of the

Internet, they cannot possibly be expected to pre-check content, once they receive a

notification or a complaint about something they are carrying or hosting, they have to

take a view. Thus if one is attempting to bring a sense of ethics to the Internet in any

particular instance, it is essential to know who has the control and the responsibility.

Increasingly the debate about

the content of the Internet is not national but global, not by specialists but by the

general populace. There is a real need for this debate to be stimulated and structured

and for it to lead to 'solutions' which are focused, practical and urgent.

Good Marketing Citizens All in all, it can be seen that ethical issues in marketing in

the context of developing countries is highly sensitive to cultural, social and ethnical

issues. The larger issue is thus not merely an occidental versus an oriental one. For the

marketing fraternity to be a good ethical citizen, the onus lie on themselves-for

indeed, marketers have to stop indulging in unethical practices and start respecting

local mores and values.

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ETHICAL MARKETING

Ethical marketing refers to the application of marketing ethics into

the marketing process. Briefly, marketing ethics refers to the philosophical

examination, from a moral standpoint, of particular marketing issues that are matters

of moral judgment. Ethical marketing generally results in a more socially responsible

and culturally sensitive business community. The establishment of marketing ethics

has the potential to benefit society as a whole, both in the short- and long-term.

Ethical marketing should be part of business ethics in the sense that marketing forms a

significant part of any business model. Study of Ethical marketing should be included

in applied ethics and involves examination of whether or not

an honest and factual representation of a product or service has been delivered in a

framework of cultural and social values.

It promotes qualitative benefits to its customers, which other similar companies,

products or services fail to recognize. The concern with ethical issues, such as child

labor, working conditions, relationships with third world countries and environmental

problems, has changed the attitude of the Western World towards a more socially

responsible way of thinking. This has influenced companies and their response is to

market their products in a more socially responsible way.

The increasing trend of fair trade is an example of the impact of ethical marketing. In

the 'Ethical Shoppers Price Index Survey' (2009) fair trade was the most popular

ethical badge products could have. It also revealed that many consumers distrusted

green claims. (The idea of fair trade is that consumers pay a guaranteed commodity

price to a small group of producers, the producers agree to pay fair labor prices and

conserve the environment - a fair deal for everyone.)

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The philosophy of marketing is not lost with this newfound ethical slant, but rather

hopes to win customer loyalty by reinforcing the positive values of the brand, creating

a strong citizen brand. However, this new way of thinking does create new challenges

for the marketer of the 21st century, in terms of invention and development of

products to add long-term benefits without reducing the product’s desirable qualities.

Many brands have tried to use ethics to make themselves look responsible, often

spinning environmental claims which has led to the term green wash (In research

consumers have shown to have even less trust of ethical claims in ads than ordinary

ads. media attention on ethics has resulted in many top brands suffering consumer

boycotts. Although many brands have tried to use green issues, it has been noted that

in research 2/3 of consumers responded more to ethical claims that relate to people

rather than to than environment.

Ethical marketing should not be confused with government regulations brought into

force to improve consumer welfare, such as reducing sulfur dioxide emissions to

improve the quality of the air. A government regulation is a legal remedy intended to

mitigate or correct an ethical issue, such as pollution of the air that we all share.

Enlightened ethical marketing is at work when the company and marketer recognize

further improvements for humankind unrelated to those enforced by governments or

public opinion. By way of example, the Coop Group refuses to invest money in

tobacco, fur and any countries with oppressive regimes.

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ETHICS IN MARKETING

Ethics are a collection of principles of right conduct that shape the decisions people or

organizations make. Practicing ethics in marketing means deliberately applying

standards of fairness, or moral rights and wrongs, to marketing decision making,

behavior, and practice in the organization.

In a market economy, a business may be expected to act in what it believes to be its

own best interest. The purpose of marketing is to create a competitive advantage. An

organization achieves an advantage when it does a better job than its competitors at

satisfying the product and service requirements of its target markets. Those

organizations that develop a competitive advantage are able to satisfy the needs of

both customers and the organization.

As our economic system has become more successful at providing for needs and

wants, there has been greater focus on organizations' adhering to ethical values rather

than simply providing products. This focus has come about for two reasons. First,

when an organization behaves ethically, customers develop more positive attitudes

about the firm, its products, and its services. When marketing practices depart from

standards that society considers acceptable, the market process becomes less efficient

sometimes it is even interrupted. Not employing ethical marketing practices may lead

to dissatisfied customers, bad publicity, a lack of trust, lost business, or, sometimes,

legal action. Thus, most organizations are very sensitive to the needs and opinions of

their customers and look for ways to protect their long-term interests.

Second, ethical abuses frequently lead to pressure (social or government) for

institutions to assume greater responsibility for their actions. Since abuses do occur,

some people believe that questionable business practices abound. As a result,

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consumer interest groups, professional associations, and self-regulatory groups exert

considerable influence on marketing. Calls for social responsibility have also

subjected marketing practices to a wide range of federal and state regulations

designed to either protect consumer rights or to stimulate trade.

The Federal Trade Commission (FTC) and other federal and state government

agencies are charged both with enforcing the laws and creating policies to limit unfair

marketing practices. Because regulation cannot be developed to cover every possible

abuse, organizations and industry groups often develop codes of ethical conduct or

rules for behavior to serve as a guide in decision making. The American Marketing

Association, for example, has developed a code of ethics (which can be viewed on its

Web site at www.ama.org). Self-regulation not only helps a firm avoid extensive

government intervention; it also permits it to better respond to changes in market

conditions. An organization's long-term success and profitability depends on this

ability to respond.

Several areas of concern in marketing ethics are explored in the remainder of the

article.

UNFAIR OR DECEPTIVE MARKETING PRACTICES

Marketing practices are deceptive if customers believe they will get more value from

a product or service than they actually receive. Deception, which can take the form of

a misrepresentation, omission, or misleading practice, can occur when working with

any element of the marketing mix. Because consumers are exposed to great quantities

of information about products and firms, they often become skeptical of marketing

claims and selling messages and act to protect themselves from being deceived. Thus,

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when a product or service does not provide expected value, customers will often seek

a different source.

Deceptive pricing practices cause customers to believe that the price they pay for

some unit of value in a product or service is lower than it really is. The deception

might take the form of making false price comparisons, providing misleading

suggested selling prices, omitting important conditions of the sale, or making very

low price offers available only when other items are purchased as well. Promotion

practices are deceptive when the seller intentionally misstates how a product is

constructed or performs, fails to disclose information regarding pyramid sales (a sales

technique in which a person is recruited into a plan and then expects to make money

by recruiting other people), or employs bait-and-switch selling techniques (a

technique in which a business offers to sell a product or service, often at a lower price,

in order to attract customers who are then encouraged to purchase a more expensive

item). False or greatly exaggerated product or service claims are also deceptive. When

packages are intentionally mislabeled as to contents, size, weight, or use information,

that constitutes deceptive packaging. Selling hazardous or defective products without

disclosing the dangers, failing to perform promised services, and not honoring

warranty obligations are also considered deception.

OFFENSIVE MATERIALS AND OBJECTIONABLE MARKETING

PRACTICES

Marketers control what they say to customers as well as and how and where they say

it. When events, television or radio programming, or publications sponsored by a

marketer, in addition to products or promotional materials, are perceived as offensive,

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they often create strong negative reactions. For example, some people find advertising

for all products promoting sexual potency to be offensive. Others may be offended

when a promotion employs stereotypical images or uses sex as an appeal. This is

particularly true when a product is being marketed in other countries, where words

and images may carry different meanings than they do in the host country.

When people feel that products or appeals are offensive, they may pressure vendors to

stop carrying the product. Thus, all promotional messages must be carefully screened

and tested, and communication media, programming, and editorial content selected to

match the tastes and interests of targeted customers. Beyond the target audience,

however, marketers should understand that there are others who are not customers

who might receive their appeals and see their images and be offended.

Direct marketing is also undergoing closer examination. Objectionable practices range

from minor irritants, such as the timing and frequency of sales letters or commercials,

to those that are offensive or even illegal. Among examples of practices that may raise

ethical questions are persistent and high-pressure selling, annoying telemarketing

calls, and television commercials that are too long or run too frequently. Marketing

appeals created to take advantage of young or inexperienced consumers or senior

citizens’ including advertisements, sales appeals disguised as contests, junk mail

(including electronic mail), and the use and exchange of mailing listsâmay also pose

ethical questions. In addition to being subject to consumer-protection laws and

regulations, the Direct Marketing Association provides a list of voluntary ethical

guidelines for companies engaged in direct marketing (available at their

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ETHICAL PRODUCT AND DISTRIBUTION PRACTICES

Several product-related issues raise questions about ethics in marketing, most often

concerning the quality of products and services provided. Among the most frequently

voiced complaints are ones about products that are unsafe, that are of poor quality in

construction or content, that do not contain what is promoted, or that go out of style or

become obsolete before they actually need replacing. An organization that markets

poor-quality or unsafe products is taking the chance that it will develop a reputation

for poor products or service. In addition, it may be putting itself in jeopardy for

product claims or legal action. Sometimes, however, frequent changes in product

features or performance, such as those that often occur in the computer industry, make

previous models of products obsolete. Such changes can be misinterpreted as planned

obsolescence.

Ethical questions may also arise in the distribution process. Because sales

performance is the most common way in which marketing representatives and sales

personnel are evaluated, performance pressures exist that may lead to ethical

dilemmas. For example, pressuring vendors to buy more than they need and pushing

items that will result in higher commissions are temptations. Exerting influence to

cause vendors to reduce display space for competitors' products, promising shipment

when knowing delivery is not possible by the promised date, or paying vendors to

carry a firm's product rather than one of its competitors are also unethical.

Research is another area in which ethical is sues may arise. Information gathered from

research can be important to the successful marketing of products or services.

Consumers, however, may view organizations' efforts to gather data from them as

invading their privacy. They are resistant to give out personal information that might

cause them to become a marketing target or to receive product or sales information.

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When data about products or consumers are exaggerated to make a selling point, or

research questions are written to obtain a specific result, consumers are misled.

Without self-imposed ethical standards in the research process, management will

likely make decisions based on inaccurate information.

DOES MARKETING OVER FOCUS ON MATERIALISM?

Consumers develop an identity in the market place that is shaped both by who they

are and by what they see themselves as becoming. There is evidence that the way

consumers view themselves influences their purchasing behavior. This identity is

often reflected in the brands or products they consume or the way in which they lead

their lives.

The proliferation of information about products and services complicates decision

making. Sometimes consumer desires to achieve or maintain a certain lifestyle or

image results in their purchasing more than they need or can afford. Does marketing

create these wants? Clearly, appeals exist that are designed to cause people to

purchase more than they need or can afford. Unsolicited offers of credit cards with

high limits or high interest rates, advertising appeals touting the psychological

benefits of conspicuous consumption, and promotions that seek to stimulate

unrecognized needs are often cited as examples of these excesses.

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SPECIAL ETHICAL ISSUES IN MARKETING TO CHILDREN

Children are an important marketing target for certain products. Because their

knowledge about products, the media, and selling strategies is usually not as well

developed as that of adults, children are likely to be more vulnerable to psychological

appeals and strong images. Thus, ethical questions sometimes arise when they are

exposed to questionable marketing tactics and messages. For example, studies linking

relationships between tobacco and alcohol marketing with youth consumption

resulted in increased public pressure directly leading to the regulation of marketing

for those products.

The proliferation of direct marketing and use of the Internet to market to children also

raises ethical issues. Sometimes a few unscrupulous marketers design sites so that

children are able to bypass adult supervision or control; sometimes they present

objectionable materials to underage consumers or pressure them to buy items or

provide credit card numbers. When this happens, it is likely that social pressure and

subsequent regulation will result. Likewise, programming for children and youth in

the mass media has been under scrutiny for many years.

In the United States, marketing to children is closely controlled. Federal regulations

place limits on the types of marketing that can be directed to children, and marketing

activities are monitored by the Better Business Bureau, the Federal Trade

Commission, consumer and parental groups, and the broadcast networks. These

guidelines provide clear direction to marketers.

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ETHICAL ISSUES IN MARKETING TO MINORITIES

The United States is a society of ever-increasing diversity. Markets are broken into

segments in which people share some similar characteristics. Ethical issues arise when

marketing tactics are designed specifically to exploit or manipulate a minority market

segment. Offensive practices may take the form of negative or stereotypical

representations of minorities, associating the consumption of harmful or questionable

products with a particular minority segment, and demeaning portrayals of a race or

group. Ethical questions may also arise when high-pressure selling is directed at a

group, when higher prices are charged for products sold to minorities, or even when

stores provide poorer service in neighborhoods with a high population of minority

customers. Such practices will likely result in a bad public image and lost sales for the

marketer.

Unlike the legal protections in place to protect children from harmful practices, there

have been few efforts to protect minority customers. When targeting minorities, firms

must evaluate whether the targeted population is susceptible to appeals because of

their minority status. The firm must assess marketing efforts to determine whether

ethical behavior would cause them to change their marketing practices.

ETHICAL ISSUES SURROUNDING THE PORTRAYAL OF WOMEN IN

MARKETING EFFORTS

As society changes, so do the images of and roles assumed by people, regardless of

race, sex, or occupation. Women have been portrayed in a variety of ways over the

years. When marketers present those images as overly conventional, formulaic, or

oversimplified, people may view them as stereotypical and offensive.

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Examples of demeaning stereotypes include those in which women are presented as

less intelligent, submissive to or obsessed with men, unable to assume leadership roles

or make decisions, or skimpily dressed in order to appeal to the sexual interests of

males. Harmful stereotypes include those portraying women as obsessed with their

appearance or conforming to some ideal of size, weight, or beauty. When images are

considered demeaning or harmful, they will work to the detriment of the organization.

Advertisements, in particular, should be evaluated to be sure that the images projected

are not offensive.

Because marketing decisions often require specialized knowledge, ethical issues are

often more complicated than those faced in personal lifeâ and effective decision

making requires consistency. Because each business situation is different, and not all

decisions are simple, many organizations have embraced ethical codes of conduct and

rules of professional ethics to guide managers and employees. However, sometimes

self-regulation proves insufficient to protect the interest of customers, organizations,

or society. At that point, pressures for regulation and enactment of legislation to

protect the interests of all parties in the exchange process will likely occur.

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FRAMEWORKS OF ANALYSIS FOR MARKETING ETHICALLY

Possible frameworks:

Value-oriented framework, analyzing ethical problems on the basis of the values

which they infringe (e.g. honesty, autonomy, privacy, transparency). An example

of such an approach is the AMA Statement of Ethics.

Stakeholder-oriented framework, analyzing ethical problems on the basis of

which they affect (e.g. consumers, competitors, society as a whole).

Process-oriented framework, analyzing ethical problems in terms of the categories

used by marketing specialists (e.g. research, price, promotion, placement).

None of these frameworks allows, by itself, a convenient and complete categorization

of the great variety of issues in marketing ethics.

Power-based analysis

Contrary to popular impressions, not all marketing is adversarial, and not all

marketing is stacked in favour of the marketer. In marketing, the relationship between

producer/consumer or buyer/seller can be adversarial or cooperative. For an example

of cooperative marketing, see relationship marketing. If the marketing situation is

adversarial, another dimension of difference emerges, describing the power balance

between producer/consumer or buyer/seller. Power may be concentrated with the

producer (caveat emptor), but factors such as over-supply or legislation can shift the

power towards the consumer (caveat vendor). Identifying where the power in the

relationship lies and whether the power balance is relevant at all are important to

understanding the background to an ethical dilemma in marketing ethics.[2]

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Is marketing inherently evil?

A popularist anti-marketing stance commonly discussed on the blogosphere[3] and

popular literature is that any kind of marketing is inherently evil. The position is

based on the argument that marketing necessarily commits at least one of three

wrongs:

Damaging personal autonomy. The victim of marketing in this case is the

intended buyer whose right to self-determination is infringed.

Causing harm to competitors. Excessively fierce competition and unethical

marketing tactics are especially associated with saturated markets.

Manipulating social values. The victim in this case is society as a whole, or the

environment as well. The argument is that marketing promotes consumerism and

waste. See also: influenza, ethical consumerism, anti-consumerism.

Marketing has a major impact on our self-images, our ability to relate to one

another, and it ruins any knowledge and action that might help to change that

climate.

Marketing/Advertising creates artificiality and influences sexual attitudes.

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ETHICAL DANGER POINTS IN MARKET RESEARCH INCLUDE:

Invasion of privacy.

Stereotyping.

Stereotyping occurs because any analysis of real populations needs to make

approximations and place individuals into groups. However if conducted

irresponsibly, stereotyping can lead to a variety of ethically undesirable results. In

the American Marketing Association Statement of Ethics, stereotyping is countered

by the obligation to show respect ("acknowledge the basic human dignity of all

stakeholders"

Market audience

Ethical danger points include:

Excluding potential customers from the market: selective marketing is used to

discourage demand from undesirable market sectors or disenfranchise them

altogether.

Targeting the vulnerable (e.g. children, the elderly).

Examples of unethical market exclusion or selective marketing are past industry

attitudes to the gay, ethnic minority and obese ("plus-size") markets. Contrary to the

popular myth that ethics and profits do not mix, the tapping of these markets has

proved highly profitable. For example, 20% of US clothing sales are now plus-

size. Another example is the selective marketing of health care, so that unprofitable

sectors (i.e. the elderly) will not attempt to take benefits to which they are entitled. A

further example of market exclusion is the pharmaceutical industry's exclusion of

developing countries from AIDS drugs.

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Examples of marketing which unethically targets the elderly include: living

trusts, time share fraud, mass marketing fraud] and others. The elderly hold a

disproportionate amount of the world's wealth and are therefore the target of financial

exploitation.

In the case of children, the main products are unhealthy food, fashion ware and

entertainment goods. Children are a lucrative market: "...children 12 and under spend

more than $11 billion of their own money and influence family spending decisions

worth another $165 billion", but are not capable of resisting or understanding

marketing tactics at younger ages ("children don't understand persuasive intent until

they are eight or nine years old". At older ages competitive feelings towards other

children are stronger than financial sense. The practice of extending children's

marketing from television to the school ground is also controversial (see marketing in

schools).

Other vulnerable audiences include emerging markets in developing countries, where

the public may not be sufficiently aware of skilled marketing ploys transferred from

developed countries, and where, conversely, marketers may not be aware how

excessively powerful their tactics may be. See Nestle infant milk formula scandal.

Another vulnerable group are mentally unstable consumers. The definition of

vulnerability is also problematic: for example, when should endebtedness be seen as

vulnerability and when should "cheap" loan providers be seen as loan sharks,

unethically exploiting the economically disadvantaged?

Chris Akabusi is the leading academic author of Marketing Ethics and his theories are

widely debated.

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Pricing ethics

List of unethical pricing practices.

Bid rigging

Dumping (pricing policy)

Predatory pricing

Price discrimination

Price fixing

Price skimming

Price war

Supra competitive pricing

Variable pricing

Ethics in advertising and promotion

Ethical pitfalls in advertising and promotional content include:

Issues over truth and honesty. In the 1940s and 1950s, tobacco used to be

advertised as promoting health. Today an advertiser who fails to tell the truth not

only offends against morality but also against the law. However the law permits

"puffery" (a legal term). The difference between mere puffery and fraud is

a slippery slope: "The problem... is the slippery slope by which variations on

puffery can descend fairly quickly to lies." See main article: false advertising.

Issues with violence, sex and profanity. Sexual innuendo is a mainstay of

advertising content (see sex in advertising), and yet is also regarded as a form

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of sexual harassment. Violence is an issue especially for children's advertising and

advertising likely to be seen by children.

Taste and controversy. The advertising of certain products may strongly offend

some people while being in the interests of others. Examples include: feminine

hygiene products, hemorrhoid andconstipation medication.

 The advertising of condoms has become acceptable in the interests of AIDS-

prevention, but are nevertheless seen by some as promoting promiscuity. Some

companies have actually marketed themselves on the basis of controversial

advertising - see Benetton. Sony has also frequently attracted criticism for

unethical content (portrayals of Jesus which infuriated religious groups; racial

innuendo in marketing black and white versions of its PSP product; graffiti

adverts in major US cities).

Negative advertising techniques, such as attack ads. In negative advertising, the

advertiser highlights the disadvantages of competitor products rather than the

advantages of their own. The methods are most familiar from the political sphere:

see negative campaigning.

Delivery channels

Direct marketing is the most controversial of advertising channels, particularly

when approaches are unsolicited. TV commercials and direct mail are common

examples. Electronic spam and telemarketing push the borders of ethics and

legality more strongly.

Shills and astroturfers are examples of ways for delivering a marketing message

under the guise of independent product reviews and endorsements, or creating

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supposedly independent watchdog or review organizations. For example, fake

reviews can be published on Amazon. Shills are primarily for message-delivery,

but they can also be used to drive up prices in auctions, such as EBay auctions.

Deceptive Advertising and Ethics

Another breach of marketing ethics has to do with the use of deceptive advertising.

This form of advertising is not specific to one target market, and can sometimes go

unnoticed by the public. There are a number of different ways in which deceptive

marketing can be presented to consumers; one of these methods is accomplished

through the use of humor. In a study conducted by Hassib Shabbir and Des Thwaites,

238 advertisements were assessed and 73.5% of them were found to have used

deceptive marketing practices. Of those advertisements that were conducted

deceptively, 74.5% of them used humor as a masking device in order to mislead

potential customers. Part of what drives this study is the idea that humor provides an

escape or relief from some kind of human constraint, and that some advertisers intend

to take advantage of this by deceptively advertising a product that can potentially

alleviate that constraint through humor. Through the study it was also found that all

types of humor are used to deceive consumers, and that there are certain types of

humor that are used when making certain deceptive claims.

It is important to understand that humor is not the only method that is used to deter

consumer’s minds from what a product actually offers. Before making important

purchases, one should always conduct their own research in order to gain a better

understanding of what it is they are investing in. ]

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The use of ethics as a marketing tactic

Business ethics has been an increasing concern among larger companies, at least since

the 1990s. Major corporations increasingly fear the damage to their image associated

with press revelations of unethical practices. Marketers have been among the fastest

to perceive the market's preference for ethical companies, often moving faster to take

advantage of this shift in consumer taste. This results in the expropriation of ethics

itself as a selling point or a component of a corporate image.

The Body Shop is an example of a company which marketed itself and its entire

product range solely on an ethical message.

Green wash is an example of a strategy used to make a company appear ethical

when its unethical practices continue.

Liberation marketing is another strategy whereby a product can masquerade

behind an image that appeals to a range of values, including ethical values related

to lifestyle and anti-consumerism.

"Liberation marketing takes the old mass culture critique — consumerism as

conformity — fully into account, acknowledges it, addresses it, and solves it.

Liberation marketing imagines consumers breaking free from the old enforcers of

order, tearing loose from the shackles with which capitalism has bound us, escaping

the routine of bureaucracy and hierarchy, getting in touch with our true selves, and

finally, finding authenticity, that holiest of consumer grails." (Thomas Frank)

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Marketing strategy

The main theoretical issue here is the debate between free markets and regulated

markets. In a truly free market, any participant can make or change the rules.

However when new rules are invented which shift power too suddenly or too far,

other participants may respond with accusations of unethical behaviour, rather than

modifying their own behaviour to suit (which they might not be able to anyway).

Most markets are not fully free: the real debate is as to the appropriate extent of

regulation.

Case: California electricity crisis, which demonstrates how constant innovation of

new marketing strategies by companies such as Enron outwitted the regulatory bodies

and caused substantial harm to consumers and competitors.

A list of known unethical or controversial marketing strategies:

Anti-competitive practices

Bait and switch

Planned obsolescence

Pyramid scheme

Vendor lock-in / Vendor lock-out

Viral marketing / guerilla marketing

Controversial marketing strategies associated with the internet:

Embrace, extend and extinguish

Search engine optimization

Spamdexing

Spyware / Adware

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Further issues in marketing ethics

Marketing ethics overlaps with environmental ethics in respect of waste problems

associated with the packaging of products.[31]

Some, such as members of the advocacy group No Free Lunch, have argued that

marketing by pharmaceutical companies is negatively impacting physicians'

prescribing practices, influencing them to prescribe the marketed drugs rather than

others which may be cheaper or better for the patient.[32]

Ethically thinking is responding to situations that deal with principles concerning

human behavior in respect to the appropriateness and inappropriateness of certain

communication and to the decency and indecency of the intention and results of such

actions. In other words, ethics are distinctions between right and wrong. Businesses

are confronted with ethical decision making every day, and whether employees decide

to use ethics as a guiding force when conducting business is something that business

leaders, such as managers, need to instill. Marketers are ethically responsible for what

is marketed and the image that a product portrays. With that said, marketers need to

understand what good ethics are and how to incorporate good ethics in various

marketing campaigns to better reach a targeted audience and to gain trust from

customers.

Marketing ethics, regardless of the product offered or the market targeted, sets the

guidelines for which good marketing is practiced. When companies create high ethical

standards upon which to approach marketing they are participating in ethical

marketing. To market ethically and effectively one should be reminded that all

marketing decisions and efforts are necessary to meet and suit the needs of customers,

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suppliers, and business partners. Ethical behavior should be enforced throughout

company culture and through company practices.

The concepts of Corporate Social Responsibility (CSR)

CSR is viewed as a comprehensive set of policies, practices and programs that are

integrated into business operations, supply chains, and decision-making processes

throughout the company – wherever the company does business – and includes

responsibility for current and past actions as well as future impacts. The issues that

represent a company’s CSR focus vary by business, by size, by sector and even by

geographic region. In its broadest categories, CSR typically includes issues related

to : business ethics, community investment, environment, governances, human rights,

market place and workplace .CSR goes beyond charity and requires that a responsible

company take into full account of the impact on all stakeholders and on the

environment when making decisions. This requires them to balance the needs of all

stake holders with their need to make a profit and reward their shareholders

adequately.

For the new generation of corporate leaders, optimization of profits is the key, rather

than the maximization of profit. Hence, there is a shift from accountability to share

holders to social responsibility to customers and other stake holders.

In today’s competitive global marketing, ethics play a vital role, because we are

dealing with human values and beliefs. Business spreads beyond boundaries. The

marketer has to deal with cross country culture. Many MNC’S like Mc Donald and

Nestle had faced lot of problems because of neglecting ethical issues in their

marketing practices. They have incurred billions of dollars in monetary values and

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above all losing thousands of valuable hybrid customers due to the adaptation of

unethical advertising & promotional strategies.

According to experts, marketing is viewed as human conduct and is subject to

academic analysis and public scrutiny. Ethics is the study of the moral principles that

guide the conduct.

Historically, there have been two points of view on the study on ethics in marketing.

The first is “Let the buyer beware”. From these points of view, the rights of the seller

are central. A company has little regard for customer’s needs and wants. The other

point of view is “let the seller beware”. Here, customer satisfaction is taken to an

extreme. No matter what the customer does, it is ok. Which position is correct? How

do we resolve the inevitable conflicts brought by these competing viewpoints?

Corporate Social Responsibility (CSR) and Ethics in Marketing:

Kotler and Levy, in their book, Corporate Social Responsibility define corporate

social responsibility as “a commitment to improve community well-being through

discretionary business practices and contributions of corporate resources”.

Some of the benefits of being socially responsible include (a) enhanced company and

brand image (b) easier to attract and retain employees (c) increased market share (d)

lower operating costs and (e) easier to attract investors. A socially – responsible firm

will care about customers, employees, suppliers, the local community, society, and the

environment. CSR can be described as an approach by which a company (a)

recognizes that its activities have a wide impact on the society and that development

in society, in turn supports the company to pursue its business successfully and (b)

actively manages the economic, social, environmental and human rights. This

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approach is derived from the principles of sustainable development and good

corporate governance.

Marketing managers within different firms will see some social issues as more

relevant than others. The relevance of a given social issue is determined by the

company’s products, promotional efforts, and pricing and distribution policies but

also by its philosophy of social responsibility.

Focus entirely in profits (and profitable firms typically serve society well)

Explicitly incorporate social responsibility into its day-today marketing

decisions to minimize negative effects on society and enhance positive effects

Go even further and engage in social projects that are unrelated to the

corporate mission and even detrimental to profits ( which could net out to be

socially undesirable)

The Success strategies of a Business formed out of abundance and grounded in

ethics and cooperation are powerful and long-lasting and they help you feel

good about yourself even while bringing in profits ( Shel Horowitz)

Management must decide which of these three levels of social responsibility to adopt

and which social issues are relevant to its business.

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Ethical Conflict faced by the Marketers:

Marketers must be aware of ethical standards and acceptable behavior. This

awareness means that marketers must recognize the viewpoints of three key players:

the company, the industry, and society. Since these three groups almost always have

different needs and wants, ethical conflicts are likely to arise. Ethical conflicts in

marketing arise in two contexts : First, when there is a difference between the needs

of the three aforementioned groups ( the company, the industry, and society) a

conflict may arise. Second and ethical conflict may arise when one’s personal values

conflict with the organization. In either case, a conflict of interest is a possible

outcome.

An example of the first type of conflict is the tobacco industry. Cigarettes have for

many decades been a lucrative business. So, cigarette and tobacco marketing have

been for companies and good for the tobacco industry. Many thousands of people

around the world are employed in the tobacco industry. So, the world economy has

been somewhat dependent on cigarettes and tobacco. However, cigarettes are harmful

to society. There is documented proof that cigarette smoking is harmful to health.

This is an ethical conflict for cigarette marketers. An example of the second type of

conflict, when one’s personal values conflict with the organizations occurs when a

leader in the company seeks personal gain (usually financial profit) from false

advertising. “Cures” for fatal diseases are one type of product that falls into this

category of ethical conflict: In their greed to make a profit, a marketer convinces

those who may be dying from an incurable disease to buy a product that may not be a

cure, but which a desperately ill person (or members of his or her family) may choose

to purchase in an effort to save the dying family member suffering. Promoting and

marketing such products violates rules of marketing ethics.

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Ethical dilemmas facing marketing professionals today fall into one of three

categories: tobacco and alcohol promoting, consumer privacy, and green marketing.

Standards for ethical marketing guide business in efforts to do the right thing. Such

standards have four functions: to help identify acceptable practices, foster internal

control, avoid confusion, and facilitate a basis for discussion.

Consumerism

Consumerism is concerned with broadening the rights of consumers. The concepts of

social responsibility and consumerism go hand-in-hand. If every organization

practiced a high level of social responsibility the consumer movement might never

have begun. Consumerism is a struggle for power between buyers and sellers;

specifically, it is a social movement seeking to increase the rights and powers of

buyers in relation to sellers.

Seller’s rights and powers are presented in the following list:

To introduce any product in any size and style they wish into the marketplace,

so long as it is not hazardous to personal health or safety or if it is hazardous,

to introduce it with the proper warnings and controls

To price the product at any level they wish, provided there is no discrimination

among similar classes of buyers

To spend any amount of money they wish to promote the product, so long as

the promotion is not defined as unfair competition

To formulate any message they wish about the product provided that it is

misleading or dishonest in content or execution

To introduce any buying – incentive schemes they wish

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In contrast, here are buyers’ rights and power:

To refuse to buy a product that is offered to them

To except the product to be safe

To expect the product to essentially match how the seller represented it

To receive adequate information about the product

It is in the best interest of marketers to understand the level of consumer standards

and the nature of consumer perceptions, as well as what is required to foster realism

and accuracy among consumers.

Marketing and the Natural Environment

Another significant area of social concern is the environment. Marketing is ultimately

dependent on the use of scarce resources to fulfill human needs, without harming or

unnecessarily using scare resources.

Marketing managers should help to determine which products are produced, and

which products are indirectly affecting the environment:

The natural resources and materials used

The amount of energy required in the production process

The residuals (e.g., waste water) that result from production

The consumption of resources and energy that is required to use products

( cars, air conditioners)

The generation of pollutants (e.g., exhaust fumes) in using products

The amount of packaging material that may have to be discarded. (packaging

comprises less than 14 percent of collectible solid waste, but consumers often

estimate its share of that waste at 40 to 80 percent)

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Relationship Marketing and Ethics

Nowadays, most ethicists believe that Relationship Marketing is a reasonable practice

leading to positive relationships between buyers and sellers. Relationship marketing

requires that rules are not necessarily contractual..

Relationship marketing allows buyers and sellers to work together. However, there

are disadvantages to this approach- relationship marketing requires time to develop a

list of expected conduct or “rules of behavior.” According to a recently published

book on this subject, a shift in emphasis in marketing ethics – towards buyers interests

and away from seller’s interests – characterizes the new country.

If this is true, new challenges are presented for marketing ethics and professionals in

the field of marketing who want to conduct business in an ethical way.

Green Marketing and Ethical Issues

The next important areas the marketer need to know about what is the relevance of

Social Marketing in order to protect the environment and to improve the quality of life

and are concerned with issues that include conservation of natural resources, reducing

environmental pollution, protecting endangered species, and control of land use. The

three Rs of environmentalism are Reduce, Reuse, and Recycle. Many companies are

finding that consumers are willing to pay more for a green product. Toyota has

become quite successful with their hybrid cars.

Green marketing refers to the development and distribution of ecologically-safe

products.

It refers to products and packages that have one or more of the following

characteristics: (1) are less toxic, (2) are more durable, (3) contain reusable materials,

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or (4) are made of recyclable material. In short, these are products considered

“environmentally responsible”.

To sight an example One Canadian Executive stated that “Any marketing executive

who does not put a ‘green’ filter on their strategies is looking at losing market share.

The whole idea of disposal is going to become unacceptable”. In West Germany and

Canada, Procter & Gamble has found high consumer acceptance of pouches of liquid

detergents and fabric softeners so consumers can refill rather than discard large plastic

bottles.

Cause – Related Marketing and Ethics

Cause-related marketing should not be confused with social marketing. A key

difference is that a major purpose of cause-related marketing is to help a business. It

might be used to improve the image of the firm or to increase market share. The

technique involves associating a business with a cause. Social marketing, on the other

hand, is generally not associated with any company and issued solely to help society

by dealing with a social problem.

Cause-related marketing has to be done correctly or it can hurt a company. A firm

may look like it is exploiting a charity. It is important for the firm to be transparent

and honest about what it is doing. There should also be a fit between the company

and the cause. A good fit would be, for example, might be a bottled water company

and a cause, it deals with providing clean water for poor people in Asia and Africa.

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Social Marketing and Ethics

Social Marketing is defined as the use of marketing principles and techniques to

influence a target audience to voluntarily accept, reject, modify, or abandon a

behaviour for the benefit of individuals, groups or society as a whole.

Social marketing is usually done by a non-profit organization, government, or quasi-

government agency. The goal is either to steer the public away from products that are

harmful to them and / or society (e.g., illegal drugs, tobacco, alcohol, etc.) or to direct

them towards behaviors or products that are helpful to them and / or society (e.g.,

having family meals, praying together, etc.).

Ethnic Marketing and Ethics

Another aspect the marketer has to know about Ethnic Issues while going for global

marketing and still take care of Ethics. Culture plays an important role in defining

ethical standards because dissimilar cultures socialize their people differently,

according to what is acceptable behavior.

The potential significance of ethnic groups for marketing justifies inquiry into the

moral judgments, standards, and rules of conduct exercised in marketing decisions

and situations arising from decisions whether or not to focus on individual ethnic

groups within an economy.

Identifying and targeting ethnic groups for marketing purposes are tasks fraught with

many ethical difficulties. In a multicultural society consisting of a dominant group

and many diverse, minority groups defined by ethnicity, these problems can be

expected to increase substantially.

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Consequently, marketers may include minority ethnic consumers in their mainstream

marketing programs. In itself, this has ethical consequences. Alternatively, if

marketers seek to target individual minority ethnic groups within the same economy a

further set of ethical consequences needs to be considered.

The international environment is recognized as attracting more difficulties for

marketers (Kotler et sl., 1998, p. 833) because their “ethics” parameters may not

match the notion of “good” in the foreign country where they wish to operate. This is

a problem because it may compromise successful international market penetration,

that is, a firm’s ability to compete in the international market. To the extent that

international operations are part of an overall competitive strategy (either because of a

firm’s need to have a presence where its main customers operate, or because the firm

must/needs to follow its competitors) this also can influence a firm’s ultimate survival

in its domestic market. Ethical concerns are thus clearly important both in the parent

country and also in the host country..

One possible approach to ethnic marketing ethics within one country, understood as

ethics applied to marketing practice targeting minority ethnic groups, is to apply the

same procedures that firms use to deal with ethics problems in the international

context (Kotler et al., 1998).

Ethnic minority consumers, particularly in their first time of settlement in a new

country, may be inexperienced in relation to what is available, where, and for how

much, as well as being unaware of market dos and don’ts. This justifies their possible

reliance on referral or recommendation by others they trust, eventually their minority

ethnic group of affiliation, particularly when communication difficulties limit the

number and range of accessible secondary sources. Within such a scenario, ethnic

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minority consumers may be perceived as disadvantaged because they are arguably

more vulnerable to be taken advantage of through deceptive practices (Kotler et al.,

1998).

Targeting of minority ethnic consumers with ethically unsound strategies may lead to

alienation of the ethnic markets. Careful consideration needs to be exercised before

ethnic marketing strategies are developed and implemented.

Ethical Norms and Values for Marketers

Professional associations and accrediting bodies have identified guidelines for ethics

in marketing. According to one of those associations, the American Marketing

Association, the following rules guide marketing behavior. The American Marketing

Association commits itself to promoting the highest standard of professional ethical

norms and values for its members. Norms are established standards of conduct that

are expected and maintained by society and / or professional organizations. Values

represent the collective conception of what people find desirable, important and

morally proper. Values serve as the criteria for evaluating the actions of others.

Marketing practitioners must recognize that they not only serve their enterprises but

also act as stewards of society in creating, facilitating and executing the efficient and

effective transactions that are part of the greater economy. In this role Marketers

should embrace the highest ethical norms of practicing professionals and the ethical

values implied by their responsibility toward stakeholders (e.g., customers,

employees, investors, channel members, regulators and the host community).

Responsibility of the marketer. Marketers must accept responsibility for the

consequences of their activities and make every effort to ensure that their

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decisions, recommendations, and actions function to identify, serve, and

satisfy all relevant publics: customers, organizations and society

Honesty, Integrity and Quality are far more important than quick profits (Shel

Horowitz)

Rights and duties in the marketing exchange process: - Participants should be

able to expect that products and services are safe and fit for intended uses; that

communications about offered products and services are not deceptive; that all

parties intend to discharge their obligations, financial and otherwise, in good

faith; and that appropriate internal methods exist for equitable adjustment

and / or redress of grievances concerning purchases

Organizational relationships: - Marketers should be aware of how their

behavior influences the behavior of others in organizational relationships.

They should not demand, encourage, or apply coercion to encourage unethical

behavior in their relationships with others.

Conduct your business so as to build long term loyalty. When you get a

customer, you want to keep that customer and build a sales relationship that

can not only last years, but also create a stream of referral business. (Shel

Horowitz)

Marketers must do no harm. This means doing work for which they are

appropriately trained or experienced so that they can actively add value to

their organizations and customers. It also means adhering to all applicable

laws and regulations and embodying high ethical standards in the choices they

make.

Marketers must foster trust in the marketing system. This means that products

are appropriate for their intended and promoted uses. It requires that

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marketing communications about goods and services are not intentionally

deceptive or misleading. It suggests building relationships that provide for the

equitable adjustment and / or redress of customer grievances. It implies

striving for good faith and fair dealing so as to contribute toward the efficacy

of the exchange process.

Marketers must embrace, communicate and practice the fundamental ethical

values that will improve consumer confidence in the integrity of the marketing

exchange system. These basic values are intentionally aspiration and include

honesty, responsibility, fairness, respect, openness and citizenship.

SOCIAL RESPONSIBILITY OF BUSINESS BY MULTINATIONAL

COMPANIES IN INDIA

In the last twenty years, MNCs have played a key role in defining markets and

influencing the behavior of a large number of consumers. Globalization and

liberalization have provided a great opportunity for corporations to be globally

competitive by expanding their production base and market share.

Recent years have seen many progressive organizations in our country keenly playing

a social role. In some of these organizations the approach has been to take up only

business-centric activities, i.e., Which are directly relevant to their business. The

guiding philosophy in these organizations is that social reasonability is good only if it

pays.

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This approach benefits both the organization and the stake-holder. Thus, ITC has

been afforesting private degraded land to augment the supply of raw material for its

paper factory.

Similarly, Hindustan Lever which requires good quality water for the manufacture of

its food products has been improving the quality of water in many communities.

Companies like Cadbury

India, Glaxo and Richardson Hindustan are helping farmers to grow crops which

serve as raw materials for them. Lipton in Eath district of Uttar Pradesh has started

veterinary hospitals in the region from where it buys milk. British Gas (which sells

compressed natural gas to India) has recently started teaching unemployed youngsters

how to become mechanics for gas-based auto rickshaws in Delhi. In some other

organizations the approach has been to take up such philanthropic activities in which

they can make a difference.

Coca – Cola

As one of the largest and most global companies in the world, Coca – Cola took

seriously its ability and responsibility to positively affect the communities in which it

operated. The company’s mission statement, called the Coca-Cola Promise, stated:

“The Coca-Cola Company exists to benefit and refresh everyone who is touched by

our business.” The Company has made efforts towards good citizenship in the areas

of community, by improving the quality of life in the communities in which they

operate, and the environment, by addressing water, climate change and waste

management initiatives. Their activities also included The Coca – Cola Africa

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Foundation created to combat the spread of HIV / AIDS through partnership with

governments,

UNAIDS, and other NGOs, and The Coca – Cola Foundation, focused on higher

education as a vehicle to build strong communities and enhance individual

opportunity

Coca – Cola`s footprint in India was significant as well. The Company employed

7000 citizens and believed that for every direct job, 30 – 40 more were created in the

supply chain. Like its parent, Coke India’s Corporate Social Responsibility (CSR)

initiatives were both community and environment – focused. Priorities included

education, where primary education projects had been set up to benefit children in

slums and villages, water conservation, where the Company supported community –

based rainwater harvesting projects to restore water levels and promote conservation

education, and health..

PepsiCo

Pepsi Cola is also helping in rural areas in their economic development. It further

offered to transfer food-processing, packaging, and water-treatment technology to

India. Pepsi’s bundle of benefits won four Ps for entering a market, Pepsi added two

additional Ps, namely, politics and public opinion. Similarly almost all MNCs like

Microsoft, Mc Donald, Nokia, Unilever, ITC are also adopting social responsibility of

business in order to have sustainable market development and growth not only in

their countries but also in the host countries.

Several forces are driving companies to practice a higher level of corporate social

responsibility: rising customer expectations, changing employee expectations,

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government legislation and pressure, the inclusion of social criteria by investors, and

changing business procurement practices. Companies need to evaluate whether they

are truly practicing ethical and socially responsible marketing. Business success and

continually satisfying the customer and other stakeholders are closely tied to adoption

and implementation of high standards of business and marketing conduct. The most

admired companies in the world abide by a code of serving people’s interests, not

only their own. The following are the suggestions that the society must use the law to

define, as clearly as possible, those practices that are illegal, anti-social, or

anticompetitive. Next, companies must adopt and disseminate a written code of

ethics, build a company tradition of ethical behavior, and hold its people fully

responsible for observing ethical and legal guidelines. And, individual marketers

must practice a “social conscience” in their specific dealings with customers and

various stakeholders.

The future holds a wealth of opportunities for companies. Technological advances in

solar energy, online networks, cable and satellite television, biotechnology, and

telecommunications promise to change the world as we know it. As the same time,

forces in the socioeconomic, cultural, and natural environments will impose new

limits on marketing and business practices.

Companies that are able to innovate new solutions and values in a socially responsible

way are the most likely to succeed.

It is my belief that good marketing is ethical marketing. Good marketing is about

satisfying and developing a long-term relationship with our customers. Caring about

your customers not only results in profits (or achieving your organization’s objectives

if an organization is not-for-profit), it is the ethical thing to do. Deceiving customers

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may help a firm’s profits in the short-run, but is not the way to build a successful

business. The same goes for social responsibility. A firm has to care about all

stakeholders: customers, employees, suppliers and distributors, local communities in

which they do business, society, and the environment.

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Conclusion

Ethical marketing refers to the application of marketing ethics into

the marketing process. Briefly, marketing ethics refers to the philosophical

examination, from a moral standpoint, of particular marketing issues that are matters

of moral judgment. Ethical marketing generally results in a more socially responsible

and culturally sensitive business community. It promotes qualitative benefits to its

customers, which other similar companies, products or services fail to recognize. The

concern with ethical issues, such as child labor, working conditions, relationships with

third world countries and environmental problems, has changed the attitude of the

Western World towards a more socially responsible way of thinking. This has

influenced companies and their response is to market their products in a more socially

responsible way.

Many brands have tried to use ethics to make themselves look responsible, often

spinning environmental claims which has led to the term green wash (see green

washing) In research consumers have shown to have even less trust of ethical claims

in ads than ordinary ads. Media attention on ethics has resulted in many top brands

suffering consumer boycotts. Although many brands have tried to use green issues, it

has been noted that in research 2/3 of consumers responded more to ethical claims

that relate to people rather than to than environment.

Ethical marketing should not be confused with government regulations brought into

force to improve consumer welfare, such as reducing sulfur dioxide emissions to

improve the quality of the air. A government regulation is a legal remedy intended to

mitigate or correct an ethical issue, such as pollution of the air that we all share.

Enlightened ethical marketing is at work when the company and marketer recognize

further improvements for humankind unrelated to those enforced by governments or

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public opinion. By way of example, the Coop Group refuses to invest money in

tobacco, fur and any countries with oppressive regimes.

Points to be taken into consideration

1. The most often mentioned ethical problem faced by marketers is bribery. Five other

issues (fairness, honesty, pricing strategy, product strategy, and personnel decisions)

were also frequently cited as difficult ethical problems.

2. The primary ethical conflict reported by marketing managers involved balancing

demands of the corporation against customer needs.

3. Marketing managers perceive many opportunities in their firms and industries to

engage in unethical behavior. However, they reported that few managers engaged in

such behaviors.

4. Marketing managers do not believe that unethical behaviors in general lead to

success. However, many believe that successful marketing managers do engage in

certain specific unethical behaviors.

5. When top management reprimands unethical behavior, the ethical problems

perceived by marketing managers seem to be reduced.

6. The existence of corporate or industry codes of ethics seems to be unrelated to the

extent of unethical problems in marketing management.

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