Stephen A. Oyewole

NORTHCENTRAL UNIVERSITYPrescott Valley, Arizona

Ethical Issues and Marketing Mix

Definition and Meaning of Market EthicsEthical Behavior and Marketing InfluenceFactor Influencing Ethical DecisionEthical Issues and Marketing MixConsumer Legislative Issues in MarketingRegulatory AuthoritiesLegal and Ethical IssuesEthics ComplianceAdvantage of marketing ethicsConclusionResources

Presentation Outline

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.

Definition and Meaning of Market Ethics

Ethical Behavior

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.

Difference between Ethical and Legal Behavior

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.

The Influence of Ethics on Marketing

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

Factor Influencing Ethical Decision

The essential factors can be classified into four important areas:-

- Individual Factor- Opportunity- Organizational Relationship- Ethical Marketing Decision

Factor Influencing Ethical Decision Continue

C

Product Issues Price Issues

Place Issues

Promotion Issues

Ethical Issues and the Marketing Mix

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.

Consumer Privacy Legislation

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

Legislative Issues in Marketing Ethics

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

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.

Securities and Exchange Commission (SEC) Regulation National Market System (NMS)

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.

Regulatory Authorities of Marketing

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.

Legal and Ethical Issues

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

Legal and Ethical Issues Continue

◦ 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)

Establishing Culture of Legal and Ethical Data Stewardship

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

Ethical Compliance

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.

Advantage of Marketing Ethics

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.

Conclusion

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.

References

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.

References

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/

A53ethic.htm>.

References