Ethics in marketing

Ethics are explained as the moral principles and values that oversee the actions and decisions of a person or group. They serve as guidelines to act rightly and justly when faced with ethical problem. Ethics in marketing denotes to the practice of marketing in business in an ethical and moral way. It means intentionally applying standards of justice and represents the company to others. While the objective of any business is to be money-making, if a company has to use counterfeit advertisement, or misleading or objectionable marketing tactics to attain it, it's really not running a successful marketing campaign. There can be short term gain in doing something unethical. Researchers stressed on the fact that acts in an ethical manner will get in long-term rewards for their actions. Doing business in ethical way can build loyal customers, get more referrals, and will be building a positive image about their business. Marketing has the potential to influence beliefs and behaviours. It is important to maintain high ethical standards to protect the interests of customers and the public, and the reputation of clients. Marketing ethics has been developed with reference to business ethics that reflect interest of various stakeholders. These ethics describe principles that are acceptable in marketplace. Marketing is an activity which is at the front of business activities with regular interfaces with customers and general public. The non-adherence to moral practices in marketing has paved way for two major movements such as consumerism and environmentalism (Kotler and Armstrong 1996). These groups have started exerting pressures on marketers to consider and act in an ethical manner. Interest in ethical concerns in marketing has, considerably heightened (Hunt et al.1984). There is no overstatement in mentioning that researches in marketing ethics have become a precursor of researches in ethics in other areas

Ethical marketing is less of a marketing strategy and more of a philosophy that informs all marketing efforts. It seeks to promote honesty, fairness, and responsibility in all advertising. Ethics is a notoriously difficult subject because everyone has subjective judgments about what is “right” and what is “wrong.” For this reason, ethical marketing is not a hard and fast list of rules, but a general set of guidelines to assist companies as they evaluate new marketing strategies.

·        All marketing communications share the common standard of truth.

·        Marketing professionals abide by the highest standard of personal ethics.

·        Advertising is clearly distinguished from news and entertainment content.

·        Marketers should be transparent about who they pay to endorse their products.

·        Consumers should be treated fairly based on the nature of the product and the nature of the consumer (e.g. marketing to children).

·        The privacy of the consumer should never be compromised.

·        Marketers must comply with regulations and standards established by governmental and professional organizations.

·        Ethics should be discussed openly and honestly during all marketing decisions.

There are distinct advantages and disadvantages to ethical marketing. Unethical advertising is often just as effective as it is unethical. And since unethical behavior is not necessarily against the law, there are many companies who use unethical advertising to gain a competitive advantage.

Issues in ethics of Marketing

Marketing has gripped with ethical mistreatment because marketing manager face some of the most difficult ethical problems in business. Ethical problems occur only when an individual interacts with other people. Ethics can be viewed in terms of the needs of' the individual and the needs of applicable others. The value system of each individual consists of perceived sets of obligations toward others. Baumhart (1961) recognized the major ethical problems that must be removed from business process such as 1. Gifts, gratuities, bribes, and "call girls," 2. Price discrimination and unfair pricing, 3. Dishonest advertising, 4. Miscellaneous unfair competitive practices, 5. Cheating customers, unfair credit practices, and overselling, 6. Price collusion by competitors, (7) dishonesty in making or keeping a contract, and (8) unfairness to employees and prejudice in hiring.

Ethical conflict occurs when people perceive that their duties toward one group are inconsistent with their duties and responsibilities toward some other group (including one's self). They then must attempt to resolve these opposing obligations. Basically, Ethical conflicts in marketing can mainly arise in two contexts; firstly the difference between the needs of company, industry, and society. Secondly, the conflict arises when the interest of individual and organization vary (England, 1998). Bartels succinctly states "the nature of ethical conflict: In a pluralistic society not one but many expectations must be met. Therefore, resolution of what is right to do produces a balance of obligations and satisfactions. Ideally, full satisfaction of the expectations of all parties would constitute the most ethical behaviour. This is impossible for expectations are often contradictory and sometimes exceed social sanction. Therefore, skill and judgment must be used to guide one in determining the point at which his own integrity can be best maintained." Marketing ethics denotes morals and standards relating to marketing practices, including those related to 'four P's of marketing' and 'marketing research'. The first few editorials on ethical issues in marketing published in the 1960s

Product issue is that it may be harmful and Fail to disclose information about product. Pricing issues emerge when competitors making same product jointly to determine the price and manufacturers force retailers to charge high prices. Company set low price to eliminate competitors. Promotion issues are associated with deceptive advertising when the consumer is led to believe something which is not true. There is an exaggerated claim of a product's superiority statements that may not be literally true. There are some distribution issues like Slotting allowances in which fee paid by manufacturer to retailer in exchange of keeping their product in their shelves. Grey market goods where foreign made products imported into countries by distributors that are not authorized.

One of the major functions of marketing is the process of communicating the products or services to the prospective customers. Every firm attempts to market their products, service in an efficient and effective way. Advertising is an area which would need rigid laws and code of conduct when it comes to the style, content and delivery aspects. The ethical standards has been utilized entirely by marketing experts but when it comes to actual decision making, it is observed that very less indication in regards to the adoption of ethical principles is seen. One of the areas where it applies to a larger extent is Ambush marketing which is an effort by a company to relate its own brand to a sponsored activity without acquiring official rights. Doust (1997) proposes that the degree to which a company agrees to "back off a bit' will to a large extent be determined by its own code of ethics, and by whether that company views ambush marketing practices as unethical or simply good business sense"

Ethics Compliance Programs

1. Development of code of ethics in which guidelines are developed by companies to help employees in order to make ethical decisions.
2. Consumerism where social movements that protect consumers from harmful business practices.
3. Green marketing in which there is marketing of products and packages that are less toxic and recyclable.
4. Corrective advertising in which advertising that clarifies previous deceptive claims.

Many people buy diet pills even though they are rarely, if ever, effective. This is because some diet pill companies use exaggerated and manipulative claims to essentially trick customers into buying these products. If that same company committed to using ethical advertising they would probably go out of business. However sneaky their business model may be, it is not illegal and it is keeping their doors open.

For companies looking to improve the image of a brand and develop long-term relationships with customers, this kind of unethical behavior can quickly lead to failure. Customers do not want to feel manipulated by the brands they like. Companies can use ethical marketing as a way to develop a sense of trust among their customers. If a product lives up to the claims made in its advertising, it reflects positively on the entire company. It can make the consumer feel like the company is invested in the quality of the products and the value they provide customers.

It is impossible to claim that any company is completely ethical or unethical. Ethics resides in a gray area with many fine lines and shifting boundaries. Many companies behave ethically in one aspect of their advertising and unethically in another.

Dove soap, for instance, ran a widely seen ad campaign featuring “real” models. The ad was meant to promote realistic body images and encourage girls to love the way they looked even if they were not supermodels. However, other Dove ads both during and since featured stereotypically beautiful models whose images have been altered to hide imperfections. Dove marketed ethically in one campaign and unethically in another. This illustrates how difficult it is to do the right thing in all circumstances. What is most important for any company that claims to practice ethical advertising is to make it a fundamental feature of their marketing process. With every decision they must ask themselves “will this sell” and “is this the ethical way to sell it?” 

Every company has the opportunity to engage in ethical marketing. Any business, from the smallest mom and pop store to the biggest multinational corporation can choose to be open, honest, and fair when they advertise to their customers. When done in a thoughtful way, ethical marketing can be an economical and effective form of advertising. Similarly, unethical advertising doesn't guarantee higher sales or lower advertising costs.

Some companies operate according to lofty personal principles. For these companies, advertising in an ethical way is a natural and necessary extension of their corporate character. Corporate responsibility can be a major selling point to consumers who are interested in more than just price and quality. Companies that are known for treating workers fairly, sourcing sustainable materials, environmental stewardship, and charitable donation have to reflect these principles in their marketing efforts. .

For other companies, ethical marketing will be little more than an opportunity to boost their credibility. Domino's pizza, for example, carried out a well known advertising campaign in which they showed consumers pictures of real Domino’s pizzas without the studio photography that makes them look so perfect. This was a refreshing look behind the artifice of much advertising, but this did not signal a more open and honest relationship between Domino's and the pizza buying public. The campaign was considered an attention seeking stunt at best.

· Surrogate Advertising – In certain places there are laws against advertising products like cigarettes or alcohol. Surrogate advertising finds ways to remind consumers of these products without referencing them directly.

· Exaggeration – Some advertisers use false claims about a product's quality or popularity. A Slogan like “get coverage everywhere on earth” advertises features that cannot be delivered.

· Puffery – When an advertiser relies on subjective rather than objective claims, they are puffing up their products. Statements like “the best tasting coffee” cannot be confirmed objectively.

· Unverified Claims – Many products promise to deliver results without providing any scientific evidence. Shampoo commercials that promise stronger, shinier hair do so without telling consumers why or how.

· Stereotyping Women – Women in advertising have often been portrayed as sex objects or domestic servants. This type of advertising traffics in negative stereotypes and contributes to a sexist culture.

· False brand comparisons – Any time a company makes false or misleading claims about their competitors they are spreading misinformation.

· Children in advertising – Children consume huge amounts of advertising without being able to evaluate it objectively. Exploiting this innocence is one of the most common unethical marketing practices.

Ethical marketing doesn’t refer to a plan in and of itself, but offers tools for companies to evaluate the marketing strategies they use in the past, present, and future. If a company decides that an ethical marketing strategy can increase their profits or advance their public image, they can take steps to revise their existing marketing (See also Public Relations Specialist). In some cases this involves minor changes; in others it will require entirely new ad campaigns.

Any ethical marketing effort will begin with a careful analysis of the company, its customers, and the markets it operate within. Ethical marketing has many advantages, but few companies would undertake an ethical marketing strategy if it reduces profits. Careful research is the best way to predict the effects of a change in strategy. If ethical marketing proves to be cost prohibitive, many companies will abandon the effort.

A company will then decide which features of their advertising to perform in ethical ways. As previously mentioned, the field of ethics is notoriously abstract. What is right to one may be wrong to another. Marketing professionals must reach an agreement about how they want to deliver their campaigns. They might decide to focus on making honest claims, avoiding marketing to children, or falsely criticizing competitors. A delicate balance has to be struck between the truth of the ad and its ability to persuade the customer.

Finally, ethical marketers need to make difficult choices about how to leverage the capitol of their ethical decisions. For most companies, the simple knowledge that they are doing the right thing will not be enough of a motivating factor. Ethical marketing often highlights the ethical choices a company has made in order to improve their public reputation. This can be a powerful way to connect with customers, but it also runs the risk of seeming self congratulatory. Any effort at ethical marketing has to balance a company’s self interest with their social responsibility.

One company which embodies the spirit of ethical marketing is The Body Shop, a worldwide chain of bath and body stores. Since their inception they have been committed to treating workers fairly, avoiding animal testing, using organic products, and promoting healthy body images. These values are often at the center of their marketing efforts. The ethical nature of the company is highlighted as a way to differentiate themselves from their competitors in the cosmetics industry.

To summarize, the ethics of marketing and its bond with the clients forms a basis to the victory of the organization. Ethics are the honest values and principles that govern the actions and verdicts of an entity or cluster. It is normal that customers anticipate to be treated in a fair manner and with regard. Reliability of service, trustworthiness, responsiveness, understanding and reception of value addition to products are some of the expectations of the customers. They do not want unrealistic promises, or deceptive offerings. There are some ethical dilemmas for marketers to meet expectations of customers. Ethical issues arise due to the dissimilarity between the individual and company's values and norms. When the products are not disclosed properly then they are dishonourably marketing their product. To control these unethical behaviours are by control them properly and then by making sure that everyone follow it. If someone does not follow rules then the proper actions must be taken against them for breaching the codes of conduct. In sum, marketing ethics indicates that there should be an apparent understanding of what is right and what is wrong in business.