Serikbayev Rustem

20120512

Essay Ethical Issues in Marketing

Ethical marketing is a process through which companies generate
customer

interest

in

products/services,

build

strong

customer

interest/relationships, and create value for all stakeholders by incorporating

social and environmental considerations in products and promotions
(Financial Times Lexicon). In this essay I would like to illustrate how a
company used unethical application of marketing its production on the case
of targeting children. Children are more easily to be affected and are
vulnerable to advertisements. There were many cases when tobacco and
even some alcohol companies targeted children as future consumers.
Tobacco and cancer are closely connected therefore tobacco products harm
consumers health. I will explain it on the case of Camel Tobacco Company.
In 1974 the Camel Tobacco Company introduced its advertisement
campaign called Old Joe with cartoon mascot Joe Camel. However there are a
lot of researches who proved that Camel cigarettes were targeted children
because Joe Camel was more popular than Mickey Mouse or Flintstones
among children. After 3 years of introducing Old Joe campaign the Camel
brand has become the choice of one-quarter to one-third of smokers under
the age of 18. It has been a successful strategy as sales from childrens
cigarette market increased from 0.5 percent to 32.8 percent.
This case shows that unethical marketing practice has been used.
Many companies try to violate ethical standards. Marketers should be careful
when advertising potentially harmful products or advertising to children.
Nowadays in USA there is a Federal Trade Commission - an organization
which controls whether certain advertisement is appropriate or not. Also
there is an American Marketing Association Code of Ethics which includes
ethical values like honesty, responsibility, fairness, respect, openness and
citizenship and all these criteria should be followed by marketers. However
advertisers and marketers find ways to overcome these standards.
Advertising to children and harmful products are the most controversial
ethical standards. Nowadays its prohibited to advertise cigarettes on
television and radio. Joe Camel advertising campaign began on billboards

and promotional merchandise. Nowadays its prohibited to put tobacco ads

outdoor, on billboards or on and inside public transport.
Even Camel ads were unethical they were very successful. Camel
company could foresee the possible benefits because 2/3 smokers start
smoking in their teen ages therefore targeting underage smokers will
definitely increase sales. Moreover smokers show strong brand loyalty, so
Camel increased its customer loyalty base because even after reaching 18
years those teens continued to smoke Camel cigarettes. Nevertheless this
campaign led to increased number of teens smoking. Consequently, the
overall rate of smoking people increased and lead to more health costs. In
1997 anti-smoking activists convinced that Joe Camel ads were intended to
children auditory. However competitive tobacco company Marlboro has a
bigger market share among underage smokers and consumers would have
smoked anyway as there are different brands.
The other type of unethical marketing of the companies is charging
additional fees on the services, which are not directly presented in
advertisements or marketing campaigns. Let us consider several popular
types of such approach:
a) Banks and credit card companies
Credit card and bank fees have become both more common and more
expensive in recent years, even as new regulations have sought to keep
institutions from taking advantage of consumers. In fact, some of the newest
and sneakiest charges are in direct response to government regulation.
For instance, after rules were passed in 2010 limiting banks use of overdraft
fees, banks responded by quietly increasing maintenance, wire transfer, and
other fees and implementing new charges on services like mobile phone
deposits. Banks have responded to consumer outrage in a similar fashion;
after consumers revolted against Bank of Americas plan to introduce a $5
monthly charge for some debit card users (a plan other big banks intended
to implement as well), the banks instead turned toATM surcharge increases
to pad their bottom lines. The fees are bad, but even worse is the fact that
many of the charges are not disclosed to consumers. According to a
recent report from the Pew Charitable Trusts Safe Checking in the Electronic
Age project, the ten biggest banks disclose an average of 49 fees on their
websites but there are many fees that are hidden, most commonly

regarding account overdrafts. The report recommends that the new

Consumer Financial Protection Bureau require banks to offer customers a
one-page fee disclose box, as credit card companies are now required to do.
(Although it is an imperfect system, it's at least a start.)
b) Cell phone companies.
Cell phone companies have also been known to charge customers for
servicesthat they do not yet offer and allow third-party companies to attach
mystery costs to customers bills a practice called cramming that has
cost consumers at least $2 billion since the 1990s, according to a 2011
investigation by the Senate Commerce Committee. An accompanying
report concluded that often customers do not know these [third-party]
services have been set up for them and mobile providers are reluctant to
clarify the process because they make money from the extra charges.
c) Airlines
Hidden airline fees were always obnoxious, but airlines became much more
flagrant about them after the recent financial crisis wreaked havoc on the
industry. Fees for things like rebooking a flight have gone up, and its become
more common not only to charge for checked bags but also for in-flight
snacks. (As anyone whos flown in recent years knows, long gone are the
days on in-flight meals, except on the longest excursions.)
In conclusion marketing ethics is an important part of marketing as
moral dilemmas may cause substantial problems for company. Business
standards vary depending on the country therefore companies should adapt
and foresee any dilemmas.