Ethical Issues in Marketing

 

Marketing ethics is the area of  applied ethics  ethics which deals with the moral principles behind the

marketing.. Some areas of marketing ethics (ethics of  advertising advertising  and operation and regulation of  marketing promotion promotion)) overlap with  with media ethics. ethics. 

Frameworks of analysis for marketing ethical Possible frameworks:  

Value--oriented framework, analyzing ethical problems on the basis of the values Value honesty,, autonomy autonomy,, privacy,  privacy, transparency transparency)). An example of  which they infringe (e.g.  (e.g. honesty [1] such an approach is the AMA  AMA Statement of Ethics. Ethics.     Stakeholder-oriented framework, analysing ethical problems on the basis of whom they affect (e.g. consumers, competitors, society as a whole).   Process-oriented framework, analysing ethical problems in terms of the categories used by marketing specialists (e.g. research, price, promotion, placement).

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 None of these frameworks allows, allo ws, by itself, a convenient and comp complete lete categorization o off the great variety of issues in marketing ethics.

[edit ] Specific issues in marketing ethics

[edit] edit] Market research Ethical danger points in market research include:    

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Invasion of  privacy privacy..  Stereotyping. 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 ethical undesirable results. In the  the  AMA  AMA Statement of Ethics, stereotyping is countered by the obligation to show respect ("acknowledge the basic human dignity of all stakeholders" stakeholders ").[5] 

[edit] edit] Market audience Ethical danger points include:  

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Excluding potential customers from the market: ma rket: 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[6] or selective marketing are past industry attitudes to the gay, ethnic minority and obese (" plus-size"  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  [7]

example is the selective example, of UScare, clothing sales are now plus-size. plus-size .  Another marketing20% of health so that unprofitable sectors (i.e. the elderly) will not attempt to take

 

 benefits to which they the y are entitled. entitled.[8] A further example of market exclusion is the  pharmaceutical industry's indust ry's exclusion o off developing countries from  from  AIDS drugs. drugs.[9]  Examples of marketing which unethically targets the elderly include: include:  living trusts trusts,, time share  share  [11] [10] others.  The elderly hold a disproportionate amount of  fraud, mass marketing fraud  and others. the world's wealth and are therefore the target of financial exploitation. exploitation .[12]  In the case of children, the main products are unhealthy food, fashionware 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", billion" ,[13]   but are not capable of resisting res isting or understanding understandin g marketing tactics at younger youn ger ages ("children don't understand persuasive intent until they are eight or nine years old "[13]). At older ages competitive feelings towards other children are stronger than financial sense. The practice of  extending children's marketing from television to the schoolground is also controversial (see schools)). The following is a select list of online articles: marketing in schools        

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Sharon Beder, Marketing to Children  ( University University of Wollongong , 1998).  [15] Miriam H. Zoll, Psychologists Challenge Ethics of Marketing to Children, (2000). (2000) .   [16] Donnell Alexander and Aliza Dichter, Ads and Kids: How young is too young?  young?    [17] Rebecca Clay, Advertising to children: Is it ethical ?  ?   (Monitor on Psychology, Volume 31, No. 8 September 2000),  2000), American Psychological Association Association   [18]

Media Awareness Network. How marketers target kids.

 

Other vulnerable audiences include emerging markets in developing countries, where the  public may not be sufficiently suffici ently aware of skilled marketing marketi ng ploys transferred ffrom rom developed countries, and where, conversely, marketers may not be aware how excessively powerful scandal.. Another vulnerable group are their tactics may be. See  See   Nestle Nestle infant milk formula scandal [19] mentally unstable consumers consumers..  The definition of vulnerability is also problematic: for  example, when should  should endebtedness endebtedness  be  be seen as a vulnerability vulnerabi lity and when should "cheap" "che ap" loan  providers be seen as  as  loan sharks, sharks, unethically exploiting the economically disadvantaged?

edit]] Pricing ethics [edit expansion..  This section requires  requires expansion

List of unethical pricing practices.                  

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rigging   Bid rigging policy)   Dumping (pricing policy) Predatory pricing pricing   discrimination   Price discrimination fixing   Price fixing Price skimming skimming   war   Price war Supra competitive pricing  pricing  pricing   Variable pricing

[edit] edit] Ethics in advertising and promotion

 

edit   ] Content   ]  Content   [ edit 

Ethical pitfalls in advertising and promotional content include:  

Issues over truth and honesty. In the 1940s and 1950s,  1950s, tobacco  tobacco used to be advertised as [20]  promoting health health..  Today an advertiser who fails to tell the truth not only offends against [21] term).  The morality but also against the law. However the law permits "puffery" puffery" (a legal term). and  fraud fraud  is a a  slippery slope: slope: "The problem... is the difference between mere  mere puffery  puffery and slippery slope by which variations on puffery can descend fairly quickly to lies." lies."[22] See main article:  false advertising. article: advertising.  profanity.  Sexual innuendo innuendo  is a mainstay of advertising content   Issues with violence, sex and profanity.  [23] advertising)), and yet is also regarded as a form of  sexual harassment harassment..  Violence (see  sex in advertising (see 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 i nterests of others. Examples include:  include: feminine hygiene  hygiene products, [24] hemorrhoid  and and  constipation  constipation medication medication..  The advertising of  condoms  condoms has become hemorrhoid AIDS--prevention, but are nevertheless seen by some as acceptable in the interests of  AIDS promoting  promiscuity. promoting promiscuity. Some companies have actually marketed themselves on the basis o of  f  Sony  has also frequently attracted criticism for controversial advertising - see  see Benetton. Benetton. Sony unethical content (portrayals of Jesus which infuriated religious groups; racial innuendo in [25] marketing black and white versions of its PSP product; graffiti adverts in major US cities). cities) .   as attack ads. ads. In negative advertising, the advertiser   Negative advertising  advertising techniques, such as  highlights the disadvantages of competitor products rather than the advantages of their own. The methods are most familiar from the political sphere: see  see negative campaigning campaigning.. 

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edit   ] Delivery  ]  Delivery channels  [ edit   

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Direct marketing marketing  is the most controversial of advertising channels, particularly when approaches are unsolicited. TV commercials and direct mail are common examples. and  telemarketing  telemarketing push the borders of ethics and legality more strongly. Electronic  spam  Electronic spam and Shills and Shills  and  astroturfers  astroturfers are examples of ways for delivering a marketing message under the guise of independent product reviews and endorsements, or creating c reating supposedly independent watchdog or review organisations. For example, fake reviews can be published [26] on Amazon. Amazon.  Shills are primarily for message-delivery, but they can also be used to drive up [27] auctions.   prices in auctions, such as  as Ebay  Ebay auctions.

[edit] edit] 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.  

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The Body Shop Shop  is an example of a company which marketed itself and its entire product range solely on an ethical message. Greenwash Greenwash  is an example of a strategy used to make a company appear ethical when its unethical practices continue.

 

 

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marketing  is another strategy whereby a product can masquerade behind an Liberation marketing image that appeals to a range of values, including ethical values related to lifestyle and anti[28] consumerism..   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 )[29] 

[edit] edit] Marketing strategy The main theoretical issue here is the debate between  between free markets  markets and  and regulated markets. 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 Case: crisis,, which demonstrates how constant innovation of new marketing strategies by companies such as  as  Enron  Enron outwitted the regulatory bodies and caused substantial harm to consumers and competitors. A list of known unethical or controversial marketing strategies:            

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Anti-competitive practices  practices  switch   Bait and switch Planned obsolescence obsolescence   Pyramid scheme  scheme  lock-in  / Vendor lock-out  lock-out  Vendor lock-in Viral marketing  marketing  marketing / guerilla marketing 

Controversial marketing strategies associated with the internet:        

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extinguish   Embrace, extend and extinguish optimisation  Search engine optimisation  Spamdexing Spamdexing   Spyware  Adware  Spyware / Adware 

[edit] edit] Further issues in marketing ethics Marketing ethics overlaps with environmental ethics in respect of waste problems associated with the packaging of products. products .[30]  Lunch,, have argued that marketing Some, such as members of the advocacy group  group  No No Free Lunch  by   pharmaceutical  by pharmaceutical compan companies ies  is negatively impacting physicians' prescribing practices, influencing them to prescribe the marketed drugs rather than others which may be cheaper or  [31]

 better for the patient. patient .

 

 

Ethically thinking is responding to situations that deal with principles concerning human  behavior in respect to the t he appropriateness and a nd inappropriateness o off 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 mark eters need to understand understan d what good ethics are and how h ow 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, suppliers, and business partners. Ethical behavior should be enforced throughout out company culture and through company practices.

[edit ] Regulation and enforcement  This section requires  requires expansion expansion.. 

Marketing ethics and  and marketing law  law are related subjects. Relevant areas of law include law which protects consumers and  consumer law  and antitrust law  law which protects competitors - in  both cases, against unethical un ethical marketing practices. Regulation extends beyond be yond the law to lobbies, watchdog bodies and self-regulatory industry bodies.    

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Advertising regulation regulation   Consumer protection  protection 

[edit ] See also      

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Consumerism Consumerism   management   Customer relationship management Ethical marketing  marketing  False advertising advertising   topics  List of business ethics, political economy, and philosophy of business topics  Marketing   Marketing strategies   Marketing warfare strategies ethics  Media ethics  Propaganda Propaganda