Ethics in Marketing

2. • The word ethics is derived from the Greek word
“Ethikos” which means custom or character.
“Our concern for good behaviour. We feel an
obligation to consider not only our own personal
well being but also that of others”.
Albert Schweitzer

3.  Marketing consist of the performance of
business activities that direct the flow of goods and
services from producer to consumer.
 A number of distinct function is coming under
this broad characterization which include:
1) Product Development
2) Distribution
3) Pricing
4) Promotion
5) Sales

4. • “Marketing is a societal process by which
individuals and groups obtain what they
need and want through creating, offering
and freely exchanging products and services
of value with others”
Philip Kotler

5. • Marketing ethics addresses principles and standards that define
acceptable conduct in the market place. Marketing usually occurs
in the context of an organization, and unethical activities usually
develop from the pressure to meet performance objectives. Some
obvious ethical issues in marketing involves clear cut attempts to
deceive or take advantage of a situation

6. • The law and regulations are generally designed to
protect the consumer from unethical practices by
businesses
• These law and regulations recognizes that consumers
have certain basic rights in the market place
• Each marketer must relay on his/her own value system
to determine what is and is not ethical

7. • AMA has established a codes of ethics to provide
guidelines for ethical conduct. It says, in part, that,
“Marketers shall uphold and advance the
integrity, honour and dignity of the
marketing profession, by being honest in
serving consumers, clients, employees,
suppliers, distributors, and the public.”

8. • Honesty: to be truthful and forthright in our dealings with
customers and stakeholders.
• Responsibility: to accept the consequences of our marketing
decisions and strategies.
• Fairness: to try to balance justly the needs of the buyer with the
interests of the seller.
• Respect: to acknowledge the basic human dignity of all
stakeholders.

9. • Openness: to create transparency in
our marketing operations.
• Citizenship: to fulfill the economic,
legal and societal responsibilities that
serve stakeholders in a strategic manner.

10. I. CRITICISM OF THE FORMER :
Promotion of morally ‘bad’ values such as the
excessive consumption of private rather than public
goods and services comes under this.
II. CRITICISM OF SPECIFIC PRACTICES :
These are frequently based on assumptions drawn
from system level critiques. The criticism are:

11. • Advertisement : that gives false information,
penetrating to wrong values. Eg: Indulekha
• Personal selling : the ethics of the relationship
of sales people to customer
• Packaging and labelling practices :
⊗irregularities of package size and shape
⊗ecological issues
⊗Pricing practices
⊗Provision of intelligible labelling information

12. • Step 1: Identifying the decision options and the likely consequences of
each.
• Step 2: Identifying all individuals and organizations that will be +vely or-
vely affected by the consequences of each option
• Step 3: Estimating the-ve impacts and +ve impacts of each option from
the point of view of each affected party, taking into consideration their
particular interest and needs.
• Step 4: Ranking the cost and benefits of each option and making a
decision

13.  Most advertisements are socially responsible
Some advertisements are willfully misinformed the public
Deceptive Advertising: Advertising that give false info:
Corrective Advertising: company publicly correct a false
impression created by past advertising

14. • 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.

15. • False and misleading presentation of facts.
• Deliberate omitting of required information.
• Implying a benefit that hardly exists.
• Trade puffing and exaggerations
• Open criticism of competitors.

16. • Pricing practices are regulated by the Govt. more
forcefully than other areas of the marketing mix in
that pricing illegalities are made explicit in Act such as;
• FTC Act
• Robinson- Patman Act.

18. • Price Discrimination: It can be unethical if similar buyers
are charged different prices for the same based on their
ability to pay.
• Price fixing: It is an agreement among firms in an industry
to set up prices at certain levels. Two types of price fixing:
1. Horizontal price fixing
2. vertical price fixing