unETHICal issues IN MARKETING, sales,

advertising and technology

Aakansha Murarka 104Shikha Bhanot 111Shruti Saxena 114

ETHICS• 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

Marketing 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 Development2) Distribution3) Pricing4) Promotion5) Sales

Marketing• “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

Marketing ethics• 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

ETHICAL VALUES• 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.

CONTD…….• Openness: to create transparency

in our marketing operations.• Citizenship: to fulfill the

economic, legal and societal responsibilities that serve stakeholders in a strategic manner.

Marketing Ethics

Ethical Criticisms of Marketing• High prices• Deceptive practices• High-pressure selling• Shoddy, harmful, or unsafe products• Planned obsolescence

HIGH PRICES• Caused by:– High costs of

distribution– High advertising

and promotion costs

– Excessive markups

(greed & profit pressures)

Why do branded products cost more than generics (i.e. store brand)?

The cost of advertising

Deceptive Practices• Deceptive Pricing– Falsely advertising “factory”, “wholesale”, “clearance” or other seemingly large

reductions from a phony high original retail (list) price.

• Deceptive Promotion– Overstating a product’s features or performance, running rigged or fraudulent

contests.– “Bait-and-Switch” advertising

• Deceptive Packaging– Exaggerating package contents through slick design, misleading quantity or quality

imagery and misleading labeling

HIGH-PRESSURE SELLING• Salespeople are trained to deliver smooth, canned

talks to entice purchase.– High-pressure selling persuades people to buy goods they

neither need nor want.– Driven by compensation structures (i.e. high bonus

potentials).– High-pressure selling ultimately destroys customer

relationships and goodwill.

• Includes– Poorly made products– Products that do not perform well– Products that deliver little benefit – Harmful products (cause bodily harm, illness, even death)

• How it happens– Undue focus on profit, increased production complexity, poorly trained labor,

and poor quality control– New products without safety track records– Outsourcing of production often leads to quality issues

SHODDY OR UNSAFE PRODUCTS

Planned Obsolescence• Refers to:

– Products needing replacement before they should because they are obsolete. (computers and software)

– Producers who change consumer concepts of acceptable styles. (clothing and fashion)

– Intentionally holding back attractive or advanced functional features, and introducing them later to make the old model obsolete. (electronics)

• Buyers have the right to:1. not buy a product offered for sale.2. expect the product to be safe.3. expect the product to perform as claimed.4. be well informed about important aspects of the product.5. be protected against questionable products and marketing

practices.6. influence products and marketing practices in ways that will

improve their “quality of life.”

Buyers’ Rights

UNETHICAL ISSUES IN SALES

ADULTERATION Adding something inferior to the product being sold

& this inferior product may be injurious to health. EXAMPLE: Black pepper is adulterated with dry

papaya seeds, Kerosene is mixed with petrol & vanaspati may be mixed with ghee/butter.

SALE OF SPURIOUS PRODUCTS

• Selling something of no value instead of the real product. This is often found in the case of medicines & drugs or health care products.

• Example: Cases have been reported where ampoules for injections contained only water or glucose water in bottles contained only distilled water.

USE OF FALSE WEIGHTS & MEASURE• Goods which are sold by weight (kg) like vegetables, cereals, sugar, etc.,

those sold by measure (meter) like textiles fabrics, suit pieces, are sometimes found to be less than the actual weight or length.

• False weights (Kg, 500 Grams, 250 Grams, etc.) or measuring tapes or sticks having false markings are used for the purpose & buyers are cheated.

• EXAMPLE: Sweets are often weighed along with the cardboard, which may weigh up to 50-100 grams. You pay for it at the same rate as the sweets.

SALE OF DUPLICATES• Goods indicate a mark, which is shown of superior

quality than what it actually is.

• For Example, Goods which are locally made are sold at a higher price as imported goods. Certain products like washing soaps, detergent powders, table lights, edible oil, even medicines, carry well-known brand names although these are made by others.

HOARDING & BLACK- MARKETING• When any essential commodity is not made available in the open market & stocks

are intentionally held back by dealers it is known as hoarding.

• Its purpose is to create an artificial scarcity, to push up the prices.

• Black marketing is the practice of selling hoarded goods, secretly at a higher price. These practices are sometimes adopted when there is short supply of any product.

• EXAMPLE: You may have read in the newspapers some years ago about scarcity of onions in the open market in some states & high prices being charged by traders who had stocks.

TIES-IN-SALE• Buyers of durable consumer goods are sometimes required

to buy some other goods as a pre-condition to sale or may be required to pay after-sales service charges for one year in advance.

• EXAMPLE: TV sets are sometimes sold on the condition that the buyers will make advance payment of a year’s service charge.

OFFERINGS GIFTS • Goods having no additional value or coupons to collect

a gift on the next purchase of some products are practices aimed at alluring consumers to buy a product.

• EXAMPLE: Dealers also announce contests or lottery among buyers of a product without the intention of awarding any prize.

MISLEADING ADVERTISEMENTS• Advertisement falsely represents a product or service to

be of superior quality, grade or standard, or falsely asserts the need for or usefulness of a product or service.

• EXAMPLE: A pharmaceuticals company advertised that use of its paracetamol tablet did not have any side effects like aspirin, but is suppressed the expert’s report that use of paracetamol had adverse effect on the liver.

SALE OF SUB-STANDARD GOODS• Sale of goods which do not conform which do not

conform to prescribed quality standards particularly for safety.

• EXAMPLE: Such products include pressure cookers, stoves, electric gadgets (heaters, toasters, etc.), and cooking gas cylinders.

ETHICAL ISSUES IN ADVERTISING

• Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services.

• Advertising is a highly visible business activity and any lapse in ethical standards can often be risky for the company.

• ASCI (Advertising Standards Council of India) regulates the advertising in India

• Ethics in Advertising – Should not mislead the consumer – What it promises must be there in the performance of products – Ad should not be indecent and obscene – As advertising is also a social process, it must honour the norms of social

and moral behaviour

WAYS OF UNETHICAL ADVERTISEMENT• Surrogate Advertisement• Puffery• Exaggeration• Unverified Claims• Stereotyping• Unhealthy brand comparisons• Use of children in advertisements

SURROGATE ADVERTISING• Surrogate advertising is prominently seen in

cases where advertising a particular product is banned by law.

• Advertisement for products like cigarettes or alcohol which are injurious to heath are prohibited by law in several countries and hence these companies have to come up with several other products that might have the same brand name and indirectly remind people of the cigarettes or beer bottles of the same brand

• Common examples include Fosters and Kingfisher beer brands.

PUFFERY• Puffery as a legal term refers to promotional statements

and claims that express subjective rather than objective views, such that no reasonable person would take literally.

• Puffery is the language used in the promotion of a product which is designed to make the product seem more appealing with the use of claims which are usually subjective and difficult to prove.

EXAGGERATION• Using false claims in the advertisements about the product

One drop challenge Wherever you go our network follows

UNVERIFIED CLAIMSIt includes advertisements that cover unverified offers and claims that are either scientifically impossible or otherwise misleading to users.

STEREOTYPING• Gender Stereotyping: Women are generally associated with household works and are not

supposed to be good decision makers which contribute to women stereotyping .

• Racial Stereotyping: Advertising can also perpetuate racial stereotypes that have lasted for generations.

A scene from a commercial for the Indian lemon drink LMN

UNHEALTHY BRAND COMPARISONS• Comparative advertising is an advertisement in which a particular product, or

service, specifically mentions a competitor by name for the express purpose of showing why the competitor is inferior to the product naming it.

• It is also referred to as ‘knocking copy’, is loosely defined as advertising where the advertised brand is explicitly compared with one or more competing brands and the comparison is oblivious to the audience.

CHILDREN IN ADVERTISEMENTS• Young children are increasingly the target of advertising because of the amount of

money they spend themselves, the influence they have on their parents spending etc.

• Whilst this child-targeted advertising used to concentrate on sweets and toys, it now includes clothes, shoes, a range of fast foods, sports equipment, computer products and toiletries as well as adult products such as cars and credit cards.

ETHICAL ISSUES IN TECHNOLOGY

ETHICAL ISSUES IN TECHNOLOGY• The advent of technology has raised a host of legal and ethical

issues that are unique to the 21st century. From personal privacy online, to the appropriate uses of new technology, to copyright and intellectual property on the Internet, the legal and ethical issues in technology are multifaceted and complex.

• Technology users are obliged to observe ethical issues including privacy, piracy, safety, data security, data integrity, competence, honesty, loyalty, and fairness.

PRIVACY AND CONFIDENTIALITY– Privacy is a particularly hot-button issue in

technology, considering the pervasive nature of the Internet in people's daily lives.

– Many websites collect user data, from usernames and passwords to personal information such as addresses and phone numbers, without the explicit permission of users. Selling this information is widely considered unethical.

– On a larger scale, the use of technology by some governments to infringe on the privacy rights of their citizens is a troubling legal and ethical issue being dealt with in the legal systems of many countries.

APPROPRIATE USE– One of the biggest ethical concerns, which often also become

a legal issue, is the appropriate use of technology. As technology advances in its capabilities, age-old ethical questions are raised and brought into the realm of public discussion.

– Developments in cloning technology raised similar debates regarding the definition of "human" and the ethical obligations of the biological sciences.

– In the realm of non-scientific technology, the development of technology for military use has raised questions about the responsibilities inherent in creating technology that can help encourage or exacerbate war and genocide.

COPYRIGHT• Copyright and intellectual property rights are also major issues

that have taken the public spotlight with the advent of technology.

• The development of the Internet as a publishing medium created a forum where copyright infringement became extremely easy and almost unavoidable for many creators.

• Software piracy and the battle of copyright holders to exert control over their intellectual property is a fight that is played out on a daily basis online and in the courts.

THANK YOU……..