Ethics are a
collection of principles of right conduct that shape the decisions people or organisations make. Practising ethics in marketing
means deliberately applying standards of fairness, or moral
rights and wrongs, to marketing decision making, behaviour, and practice
in the organisation.
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 organisation achieves an advantage when it does a
better job than its competitors at satisfying the product and service
requirements of its target markets. Those organisations that develop a competitive advantage are able to satisfy the
needs of both customers and the organisation.
As our economic system has become more successful at providing for
needs and wants, there has been greater focus on organisations' adhering to
ethical values rather than simply providing products. This focus has come about
for two reasons. First, when an organisation 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 organisations 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, 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, organisations and industry groups
often develop codes of ethical conduct or rules for behaviour to serve as a
guide in decision making. The American Marketing
Association, for example, has developed a code of ethics.
Self-regulation not only helps a firm avoid extensive government intervention;
it also permits it to better respond to changes in market conditions. An organisation's long-term success and profitability depends on this ability to
respond.
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 sceptical of marketing claims and selling messages and act to protect
themselves from being deceived. Thus, 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 mislabelled 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 honouring 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, 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 lists—may 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 .
Ethical Product & Distribution Services
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 organisation 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. The quick and fair correction of genuine errors reinforces the
message to the customer that it cares about long-term customer welfare.
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 issues may arise. Information gathered from
research can be important to the successful marketing of products or services.
Consumers, however, may view organisations' 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. 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 behaviour. This identity
is often reflected in the brands or products 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 unrecognised needs are often cited as examples of these
excesses.
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, youth
wanting to imitate the vulgar or immodest clothing as seen in advertisements or
in movies.
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.
Ethical Issues In Marketing to Minorities
India 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
neighbourhoods 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 behaviour 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.
Examples of demeaning stereotypes include those
in which women are presented 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 organisation. Advertisements, in particular, should be
evaluated to be sure that the images projected are not offensive.
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