Ethics deals with moral principles and values. These moral principles and values govern the actions of an organization. They serve as guidelines to acting justly. Sometimes actions that are technically legal could be viewed as unethical. For example, charging exorbitant prices. Sometimes actions that are ethical may not be seen as legal. For example, some hiring practices.
Ethical Marketing - Public Opinion Polls
There has been a recent public outcry about unethical business practices.
58% of adults rated ethical standards as “fair” or “poor”.
90% think white-collar crime is “very common”.
76% say the lack of ethics contributes to falling moral standards.
41% of 2,000 employees knew of ethical problems in their companies.
There are some reasons for this poor perception of business ethical conduct.
- Ethical conduct may have declined
- Public expectations have increased
- Growing tendency for business decisions to be judged publicly.
- Increased pressure to make decisions in a society with diverse value systems.
Social Responsibility in Marketing
Because organizations are part of a larger society and are accountable to that society for their actions, they have a responsibility to preserve the ecological environment. Green marketing practices include not just recycling efforts but production of environmentally sound goods.
Green ethical marketing will involve:
Reducing the use of paper
Filling orders with the least amount of packaging
Using only recyclable materials
Leasing equipment requires a buy-back program to recycle the parts.
Understanding Ethical Marketing
There is a framework for understanding ethical marketing.
1. Society’s norms and culture, affect
2. The Business culture and business practices, affect
3. The corporate culture and corporate expectations, which affect
4. The personal moral values and personnel ethical behavior
Society’s culture refers to the set of values and attitudes of the group, and is transmitted from one generation to the next. Moral standards are thus relative to particular societies.
Therefore, it is common to observe different ethical behaviors in different countries.
Ethical marketing involves respecting another’s ideas, copyright, trademark, or patent. These are intellectual property and to use them is unethical and illegal.
The business culture of an organization will establish the:
Effective rules of the game
Boundaries between competitive and unethical behavior
Codes of conduct for employees
The business culture affects ethical conduct in the relationship between sellers and buyers. Both parties should be better off after a transaction is made. Consumers now have:
A right to safety
A right to be informed
A right to choose
A right to be heard
The Ethics of Competition
Two of the most common unethical competitive marketing behaviors are:
1. Economic espionage – illegally collecting trade secrets or proprietary information
2. Bribery – in the form of gifts, fees, or favors
To engage in ethical marketing is to avoid these two deceptive practices.
Ultimately ethical behavior is based on the personal moral philosophy of their corporate decision maker. One out of five large corporations have a corporate ethics officer. That is the person responsible for ethical marketing practices.
Ethical Marketing and Customers
When a company behaves ethically, customers develop more positive attitudes toward the company, its products and its services. Repeat business is assured. By not using ethical standards in marketing, it may lead to dissatisfied customers, bad publicity, a lack of trust, loss of business and possibly legal action. Marketers can control what they say or advertise to customers. When these ads are considered offensive, they can create strong negative reaction.
Direct marketing is also suspect to unethical behavior. Sales appeals that are disguised as contests, selling or using mailing lists are two common practices.
Children are an important marketing target for certain products and services. Children are more likely to be vulnerable to psychological appeals and strong images. The proliferation of direct marketing through the Internet to children raises ethical issues.
The directors of marketing in any company have a huge responsibility. The success or failure of an ad campaign can lead to the decline of a corporation. They have to be ethical in their dealings with their employees, first. It is only when ethical standards are upheld from the board members down to the mangers, that the results for the company will be positive.