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Lecture 3 marketing ethics


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Lecture 3 marketing ethics

  2. 2. Marketing Ethics  Marketing ethics is the systematic study of how moral standards are applied to marketing decisions, behaviors, and institutions.
  3. 3. Ethics of Marketing  Marketers must not knowingly do harm in carrying out their selling responsibilities.  They should embrace basic marketplace values, including truth telling, genuine service to customers, avoidance of practices acclaimed to be unfair, and an adherence to honest and open communications with clients.
  4. 4. Most general areas of marketing practice provoke substantial ethical comment and discussion. These areas include:  Marketing segmentation,  Marketing research,  Product development,  Pricing,  Distribution,  Personal selling,  Advertising
  5. 5. Market Segmentation  Ethical questions especially surround the target marketing of segments that include potentially vulnerable populations such as children, the elderly, the impoverished(poor) ,and marketing illiterates. For example:  Children are a $25+ billion market in the United States alone for products such as toys, sugared cereal, DVDs, and video games.
  6. 6.  If a company markets its products to an uneducated customer base that is not aware of the serious consequences of a certain product, such as selling cigarettes in developing countries, that’s an ethical issue that needs to be addressed. If they are not aware of these issues; therefore it is morally wrong to sell them cigarettes.
  7. 7.  Similarly for older kids, the ethical issues might focus more on the appropriateness of certain products (violent video games), or the degree to which young teenagers might be inclined to particular kinds of provocative fashion or lifestyle advertising.  The key issue involved in targeting children turns on whether marketers should be held to a higher standard care and caution when marketing to children.
  8. 8. Marketing Research  During research process it is the responsibility of researcher to keep the information secret which he collects from respondent. Misuse of this info creates unethical issue in marketing.
  9. 9. Product Management  Ethical issues surrounding the management of products are central to marketing because the marketing process generally begins with a product (broadly defined to include goods, services, or ideas).
  10. 10. Product Management  The most common ethical concerns in this area pertain to the safety of products are safe "for their use as intended" is a basic consumer expectation.
  11. 11. Product Management  Another growing area of concern is product counterfeiting(copy of original). Product counterfeiting involves the unauthorized copy of patented products, inventions, and trademarks or the violation of registered copyrights (often for the purposes of making a particular product look like a more popular branded leader).  Common examples of product counterfeiting include fake Rolex watches, knockoff Levi jeans, and illegally pirated video and audio tapes of popular movies and music.
  12. 12. Pricing  Perhaps no area of managerial activity is more difficult to assess fairly and to prescribe normatively in terms of morality than the area of pricing.  Price gouging is an example of an unethical pricing strategy. A company may raise prices of items that are temporarily in high demand. This is sometimes seen in the wake of emergency situations when the price of plywood jumps after a flood, even though there is enough plywood to repair houses.
  13. 13. Pricing  Predatory pricing, on the other hand, involves pricing a product low enough to dampen demand. This type of pricing is typically used to end a competitive threat. The company lowering the price is operating to protect market share from moving to the competition.  Selling counterfeit goods, such as watches, handbags and designer athletic shoes at the same high price as the "real" goods, is another example of an unethical strategy.  Price fixing, price skimming, price discrimination are also the examples of it.
  14. 14. Distribution  The distribution element of marketing involves the entire supply chain from manufacturer through wholesalers and distributors (including retailers) on to the final consumer. At each point in the supply chain, because there are economic interactions between these various parties, the potential for ethical issues to occur is quite common.
  15. 15. Distribution  Power and Responsibility Perhaps the most severe issue within the channel of distribution supply chain has to do with the question of power and responsibility within the channel itself. Often one organization within the channel has greater economic leverage than other channel members, and with that economic leadership comes a potential for ethical abuse.
  16. 16. Distribution Example:  Powerful supermarket chains often demand payments from producers (allowances) to ensure that their products will have shelf space in supermarkets. Many supermarket operators also demand pay-to-stay fees payments to supermarkets by producers to keep their products on the shelf.  On the other hand power full manufacturer may take advantage from small retailers.
  17. 17. Distribution  Gift Giving Another common concern within channel relationships has to do with "gift giving" that sometimes transforms into bribery. A long- standing business custom is to entertain clients and to give modest gifts to business associates. Such practices can cement important economic relationships.
  18. 18. Distribution  Grey Market The grey market also raises ethical issues. The grey market is unauthorized intermediaries that go around authorized marketing channels by buying in low-price markets and reselling in high-price markets at lower prices than those charged by authorized channel members. Many consumer packaged goods including toothpaste, bath soap, and deodorant are often purchased in the grey market.
  19. 19. Personal Selling  There are number of ethical issues in personal selling. The first one that comes to mind is the manipulation of potential customer, Some salespeople are pushy and make unrealistic claims about product and give improbable (unbelievable, impossible) guarantee.  Like wise some sales people give gifts ,money or favor in exchange of purchase.
  20. 20. Advertising  Now a days we normally observe that advertising industry also has some unethical issues.  Manufacturers or businessmen do not follow strictly code of morality of society as well as religion .  In Pakistan we may also see many ads do not show Pakistani culture or our most respectable religion Islam. Islamic values we have forgotten. Vulgarity, women exposition, etc. are very common examples of it.
  21. 21. Code of Ethics in Advertising  No advertisement shall be permitted which  (a) promotes or supports rabble- rousing, anarchy(revolution) or violence in country;  (b) is against any provisions of the Constitution of Pakistan or any other law for the time being in force;  (c) tends to motivate people to crime, cause disorder or violence or breach of law or glorifies violence or obscenity in any way;
  22. 22.  (d) glorifies adultery, lustful (immoral, shameless) passions or alcoholic drinks or the non Islamic values;  (e) distorts(alter) historical facts, traditions of Pakistan or the person or personality of a national leader or a state dignitary;
  23. 23.  (f) promotes social inequality, militates against concepts of human dignity and dignity of labor.  (g) is directed against holiness or home, family and marriage;  (h) is wholly or mainly of a religious or political nature;
  24. 24.  (i) contains indecent, vulgar, or offensive themes or treatment; or  (j) contains material which is repugnant to ideology of Pakistan or Islamic values.
  25. 25. THE END