This presentation is about ethics that needs to be followed in the field of marketing.

1. Ethics In Marketing
by
Aniket K. Kulkarni
Roll No:- MT14IND003
Industrial Engineering (2014-15)
Mechanical Engg. Department
VNIT Nagpur

2. WHAT IS ETHICS?
• It is the art and science of determining good and
bad or right and wrong moral behaviour.
• Ethics are moral guidelines which govern good
behaviour. So behaving ethically is doing what is
morally right.
• Behaving ethically in Marketing is widely
regarded as good Marketing practice.
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3. An important distinction to remember is that
behaving ethically is not quite the same thing as
behaving lawfully.
• Ethics are about what is right and what is wrong.
• Law is about what is lawful and what is unlawful.
An ethical decision is one that is both legal and
meets the shared ethical standards of the
community.
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4. What Is Marketing?
• Marketing is about identifying and meeting
human and social needs.
• “meeting needs profitably.”
• Marketing is the activity, set of institutions, and
processes for creating, communicating,
delivering, and exchanging offerings that have
value for customers, clients, partners, and society
at large (American Marketing Association).
• Process by which companies create value for
customers & build strong customer relationships
in order to capture value from customers in return.
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5. Marketing Ethics
It is the area of applied ethics which deals with the
moral principles behind the operation and regulation
of marketing.
Ethics in marketing applies to different spheres such
as in Marketing segmentation, Marketing research,
Product packaging, Pricing, Distribution, Personal
selling, Advertising & promotion.
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6. Why we need Ethics in Marketing?
We can give many reasons but will notify some:
• When an organization behaves ethically,
customers develop more positive attitudes about
the firm, its products, and its services.
• To create Values or trust with key stakeholders.
• To build good image about the organization in the
minds of customer, employees, shareholders and
the society.
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7. Ethical issues in marketing
• Ethical issues in Marketing Research.
• Ethical issues in Marketing segmentation.
• Ethical issues in Product Packaging.
• Ethical issues in Pricing.
• Ethical issues in Advertising & Promotion.
• Ethical issues in Distribution.
• Ethical issues in Personal Selling.
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8. Ethics of Marketing research
Ethics in marketing research refers to moral
principles that researcher or research organization
should consider.
Generally three parties are involved in marketing
research:
• The client who sponsors the research project.
• The supplier who designs & executes the
research.
• The respondents who provides the information.
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9. Ethical issues in Marketing research
• Information or data collected from respondents
should not used for other purpose or for other
research work.
• Researcher should not force any respondents
for answers.
• Protection of data or confidentiality of data.
• In case of personal or sensitive questions,
researcher should give enough time to
respondents to think about it.
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10. Continues..
• Proper, unbiased and accurate information
collection.
• Invasion of privacy (e.g. obtaining research data
without permission).
• Stereotyping (drawing unfair or inappropriate
conclusions).
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11. Ethical issues in Marketing
segmentation
Ethical danger points include:
• Excluding potential customers from the market
(e.g. discouraging demand from undesirable
market sectors or simply refusing to sell to certain
customers).
Examples of unethical market segmentation or
selective marketing are past industry attitudes to the
gay, ethnic minority etc.
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12. • Targeting the vulnerable (e.g. children, the
elderly).
Children are not capable of resisting or
understanding marketing tactics at younger ages
(“children don't understand persuasive intent until
they are eight or nine years old’’).
In the case of children, the main products are
unhealthy food, fashion ware and entertainment
goods. Children are considered as lucrative market.
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13. • Marketing in schools is a widespread
phenomenon in which schools sign contracts
allowing certain businesses to conduct marketing
activities in school facilities - primarily
advertising. For example, a school might allow
only one brand of soft drink to be sold in vending
machines on the campus; in return, the soft drink
company would provide compensation to the
school (frequently money, but it may provide
other compensation as well, such as building new
facilities or paying for school supplies).
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14. Ethics of Product Packaging
Packaging is a crucial element in the marketing of a
product, as it is essentially the casing that the
product comes in. So after all the advertising and
promotion, when customers go to the store and pick
up the product, it is only the packaging that they
see, smell, and touch. It is thus extremely important
for the marketer to ensure that potential customers
like what they see. The packaging should be
appropriate to the product, and induce customers to
buy it.
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15. Ethical issues in Product Packaging
• Problems With Label Information: Sometimes
marketers use label information to mislead
consumers by providing untrue information to
exaggerate the attributes of their product. Labels
that display nutrition information like low fat, fat
free, cholesterol free, and 100% pure juice are
examples.
• Problems With Packaging Graphics: There are
many cases in which marketers use pictures in
packaging that do not represent the actual
product.
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16. Continues..
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17. Continues..
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18. Continues..
• Problems With Packaging Safety: Consumers
are concerned with packaging safety issues,
especially when it comes to products for
children. Marketers should avoid unsafe
packaging that uses high ingredients of
chemicals that are unsuitable for young
children and are not tamper-proof.
• Problems With Environmental Issues: Some
marketers tend to label their products as
environmentally friendly. However, the
products actually do not have environmentally
friendly attributes.
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19. Ethics of Pricing
Economist defines price as the exchange value of a
product or service always expressed in money.
The amount a customer pays for the product.
The price is very important as it determines the
company's profit and hence, survival. Adjusting the
price has a profound impact on the marketing
strategy, and depending on the price elasticity of the
product, often it will affect the demand and sales as
well. The marketer should set a price that
complements the other elements of the marketing
mix.
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20. List of unethical pricing practices
• Bid rigging
• Dumping (pricing policy)
• Predatory pricing
• Price discrimination
• Price gouging
• Price fixing
• Price skimming
• Price war
• Supra competitive pricing
• Variable pricing
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21. Continues..
• Bid rigging:
Illegal conspiracy in which competitors join to
artificially increase the prices of goods and/or
services offered in bids to potential customers.
Dumping (pricing policy):
In economics, "dumping" is a kind of predatory
pricing, especially in the context of international
trade. It occurs when manufacturers export a
product to another country at a price either below
the price charged in its home market or below its
cost of production.
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22. Continues..
• Predatory pricing
Predatory pricing (also undercutting) is a pricing
strategy where a product or service is set at a very
low price, intending to drive competitors out of the
market, or create barriers to entry for potential new
competitors. If competitors or potential competitors
cannot sustain equal or lower prices without losing
money, they go out of business or choose not to
enter the business. The predatory merchant then has
fewer competitors or is even a de facto monopoly.
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23. Continues..
• Price discrimination: Price discrimination or price
differentiation is a pricing strategy where
identical or largely similar goods or services are
transacted at different prices by the same provider
in different markets or territories.
• Price fixing: It is an agreement between
participants on the same side in a market to buy or
sell a product, service, or commodity only at a
fixed price, or maintain the market conditions
such that the price is maintained at a given level
by controlling supply and demand.
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24. Continues..
• Price skimming is a pricing strategy in which a
marketer sets a relatively high price for a product
or service at first, then lowers the price over time.
• Price war is "commercial competition
characterized by the repeated cutting of prices
below those of competitors".
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25. Continues..
• price gouging - pricing above the market price
when no alternative retailer is available.
• Variable pricing is a pricing strategy for products.
Traditional examples include auctions, stock
markets, foreign exchange markets, bargaining
and discounts.
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26. Ethics of Advertising & Promotion.
• There is no doubt that advertising attracts all of us
in number of ways, but there are also number of
controversies associated with advertising.
• Advertising is primarily a means by which sellers
communicate “ The worth of their goods and
services” to prospective buyers.
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27. Ethical issues in Advertising &
Promotion
• Advertising Should not mislead the consumer.
• What it promises must be there in the
performance of products.
• Ads. should not be indecent and obscene.
• As advertising is also a social process, it must
honour the norms of social behaviour, and should
not offend our moral sense.
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28. Unethical Issues in Advertising &
Promotion
Advertising is a highly visible business activity and
any lapse in ethical standards can often be risky for
the company.
• Vulgarity/Obscenity used to gain consumer’s
attention.
• Misleading information and deception.
• Puffery.
• Stereotypes.
• Racial issues.
• Controversial products (e.g. alcohol, gambling,
tobacco etc.).
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29. Fake adds.
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30. Exaggerated ads.
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31. Ethics In Marketing Aniket K.Kulkarni 31

32. Racial issues in ads.
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33. The ad starts with the host asking a young
contestant the question, “Kohima city is part of
which country? A.China, B.Nepal, C.India,
D.Bhutan” The contestant opts for an audience poll,
a life-line in the game show, where 100% of the
respondents say India. “It’s India, everyone knows
this answer,” says Amitabh Bachchan, to which the
young contestant replies: “Everyone knows the
answer, but how many people actually acknowledge
it?”
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34. Unethical issues in promotion
• Offers of additional gift items (bonuses)
• Discounts
• “Free” offers.
• Distribution of discount vouchers, coupons and
samples.
• Using personalities for sales promotion.
• Linking charity purposes with sales promotions.
• Consumer contests and lotteries.
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35. Continues..
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36. Continues..
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37. Unethical issues in Distribution.
• Powerful supermarket chains often demand
payments from producers (slotting 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.
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38. Continues..
• The gray market also raises ethical issues. The
gray market is unauthorized intermediaries that go
around authorized marketing channels by buying
in low- price from wholesaler and reselling in
markets at lower prices than those charged by
authorized channel members.
e.g. Importing and selling Apple products in
countries such as South Korea where official Apple
retail stores aren't present.
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39. Continues..
• One ethical issue that arises in connection with
distribution is the use of power by a channel
leader.
• Conflicts that arises between different levels or at
the same levels within the same channel .
e.g.HUL came into conflict with its distributers
in Kerala on the issue of commissions.
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40. Unethical issues in Personal Selling
• Misrepresentation.
• Deception: Deliberately presenting inaccurate
information, or lying, to a customer is illegal.
• Bribes, gifts and entertainment: Bribes are
payments made to buyers to influence their
purchase decisions.
• Kickbacks are payments made to buyers based on
the amount of orders placed.
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41. • High-Pressure Selling: High Pressure Selling is
defined as a extremely aggressive behaviour by an
salesperson to convince a consumer to purchase
the product or service without due regard for the
consumer’s ability to pay and/or needs for the
product or service.
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42. • Kotler, Philip, Keller, Kevin Lane, Koshy, Abrahan,
& Jha, Mithileshwar. (2009). Marketing
Management (13th ed.). Dorling Kindersley:
pearson education in south asia.
• https://www.boundless.com/marketing/textbooks/
boundless-marketing-textbook/social-
responsibility-ethics-in-marketing-16/ethics-in-
marketing-102/issues-in-marketing-502-10770/
• http://en.wikipedia.org/wiki/Marketing_ethics
• http://www.slideshare.net/clawtin09/marketing-
ethics
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43. THANK YOU
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