Ethical issues and marketing mix

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Ethical issues and marketing mix

  1. 1. Stephen A. Oyewole NORTHCENTRAL UNIVERSITY Prescott Valley, Arizona
  2. 2. Definition and Meaning of Market Ethics Ethical Behavior and Marketing Influence Factor Influencing Ethical Decision Ethical Issues and Marketing Mix Consumer Legislative Issues in Marketing Regulatory Authorities Legal and Ethical Issues Ethics Compliance Advantage of marketing ethics Conclusion Resources
  3. 3.  Ethics - A set of principles of right conduct or a theory or a system of moral values (Jones, 2007, p. 120).  Can consider ethical behavior as “doing what is right” according to the standards of society. This, of course, begs the question “of whose society” as what might be considered ethical behavior in one culture (country, religion, and ethnicity) might not be so in another.  Marketing ethics is the application of marketing ethics into the marketing process with the moral principles behind the operation and regulation of marketing (AMA 2004).  Marketing ethics are standards of ethics that are relevant to marketing.  Ethical marketing sets out the framework to provide customers with the good marketing practices.
  4. 4.  Laws can be considered as simply enforcing certain ethical behaviors. This leads to two familiar ideas: what is ethical is legal and what is unethical is illegal.  Consider – ◦ Is all unethical behavior illegal? ◦ Is all ethical behavior legal?  Ethical codes of practice help determine whether specific laws should be introduced. Ethics fills the gap between the time when technology creates new problems and the time when laws are introduced.
  5. 5.  Ethics are all about principles present in an individual showing the right conduct which helps in shaping the decisions of the customers as well as of the organization.  Ethics play a very important role in influencing the behavior of the individuals to help them in their buying decision. Firstly, when an organization behaves ethical manner, customers develop a positive attitude about the organizations and its products or services. Secondly, the organization will get more frequent responses from its customers.
  6. 6. It is true that marketing involves buying and selling of products, services or ideas to the people in different ways, some are ethical but some are unethical. The U.S. Constitution (Kennedy's Consumer Bill of Rights 1962) provides protections for basic consumer rights as long as they meet five conditions: - The Right to Safety - The Right to Be Informed - The Right to Selection - The Right to Confidentiality - The Right to Privacy
  7. 7. The essential factors can be classified into four important areas:- - Individual Factor - Opportunity - Organizational Relationship - Ethical Marketing Decision
  8. 8. C Product Issues Price Issues Place Issues Promotion Issues Ethical Issues and the Marketing Mix
  9. 9.  Since the 19th century, laws about consumer rights to privacy have been constantly evolving with time and with technology. In recent years privacy has become a major issue for everyone.  The process of marketing has attained new success since the explosion of credit cards to the advent of personal computers and cyberspace.  Presents policies and framework that must be enacted into law and monitored by national regulators.
  10. 10.  Marketing’s Impact on Society as a Whole ◦ False wants and too much materialism ◦ Too few social goods ◦ Cultural pollution ◦ Too much political power  Marketing’s Impact on Other Businesses ◦ Acquisitions of competitors ◦ Marketing practices that create barriers to entry ◦ Unfair competitive marketing practices
  11. 11.  Marketing Ethics ◦ Corporate marketing ethics policies  Distributor relations, advertising standards, customer service, pricing, product development and general ethical standards. ◦ Guiding principle in policy determination  Free market and legal system  Individual companies and managers ◦ International ethical policies are a special challenge Legislative Issues in Marketing Ethics Continue
  12. 12.  Concerns activities that appear ethical but are in fact illegal.  Presents an ‘order protection rule’ under which an activity that is acceptable to one facet of the investment community was deemed illegal under the new regulation.  Result of this regulation is that financial services firms are now required to collect market data so that they can demonstrate that a better price was indeed not available at the time the trade was executed.
  13. 13.  Federal Trade Commission  Federal Communication Commission  United States Postal Service  State and Local Regulation  Private Organizations - Better Business Bureaus are sponsored by private businesses and organizations to prevent promotional abuses through common sense regulation. - The Marketing Association inconjuction with the Federal Government have provided ethical guidelines for use by their members and others desiring to adhere to them.
  14. 14. 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. Issues with Violence, Sex and Profanity  Sexual innuendo is a mainstay of advertising content (Hawkins, Best, & Coney, 2004, p.732), and yet is also regarded as a form of sexual harassment.  Violence is an issue especially for children's advertising and advertising likely to be seen by children.
  15. 15. Issues with Taste and Controversy  The advertising of certain products may strongly offend some people while being in the interests of others (Waller, 2004). Examples include: feminine hygiene products, hemorrhoid and constipation medication.  The advertising of condoms has become acceptable in the interests of AIDS-prevention, but are nevertheless seen by some as promoting promiscuity. Negative Advertising  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. Democrats and Republicans
  16. 16. ◦ Senior managers such as board members, presidents, Chief Information Officers (CIOs), and data administrators are increasingly finding themselves liable for any violations of these laws. ◦ Steps to consider include -  Develop an organization-wide policy for legal and ethical behavior.  Professional organizations and codes of ethics.  Intellectual Property (IP)
  17. 17. Industry Watchdogs AMA (American Marketing Association) Direct Marketing Association NAD (National Advertising Division) - Part of Better Business Bureau National Advertising Review Board - Represents advertisers and agencies - A division of the NAD
  18. 18. Ethics always play crucial role in attracting the attention of customers.  The transparency in selling or buying is always liked by people and they show great interest in the product/service.  Ethics synergizes a mutual relationship between the customer and the organization which is built on trust, good faith and fair dealing in their interaction.  It helps the customers to take the right and fast decision in choosing a particular product.
  19. 19. 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. Ethics in professional lives is not a new thing. Ethics have been around for ages. Today every profession have it’s codes that their professionals live by. Marketers are no exception. So remember, where ever you go and whatever you do remember the rules.
  20. 20. American Marketing Association Statement of Ethics (2004) Retrieved from http://www.marketingpower.com/AboutAMA/Pages/ Statement%20of%20Ethics.aspx Chickenhead Productions, Truth in Advertising http://www.chickenhead.com/truth/index.html DeBock, T., and Van Kenhaove, P. (2010). Consumer ethics: The role of self-regulatory focus. Journal of Business Ethics, 97, 247-25. Grant, K. Hackney, R. Edgar, D. (2010). Strategic Information Systems Management, pp.349.
  21. 21. Hawkins, D., Best, R., and Coney, K. (2004). Consumer behavior: Building marketing strategy (9th ed.). New York: McGraw-Hill Irwin. Harding, C. Kohl, U and Salmon, N. (2008). Human Rights in the Market Place: The Exploitation of Rights Protection by Economic Actors. Ashgate Publishing Limited. Jones, C. (2007). Philosophy and Organization Taylor and Francis Inc. Kottler, K. and Keller, K. (2009). A Framework for Marketing Management (4th Edition) Pearson Education.
  22. 22. McDermott, A. J. (2012). Copyright: Regulation out of line with our digital reality? Information Technology & Libraries, 31(1), 7-20. doi:10.6017/ital. v31i1.1859 Siller, L. and Baier, M. (2010). Contemporary Direct and Interactive Marketing (2nd Edition) Prentice Hall The Origin of Ethics( 2003). Retrieved from <http://www.geocities.com/Athens/Acropolis/1628/A 53ethic.htm>.

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