MARKETING ETHICS

Introduction:
 Marketing is the heart of business. All transactions related to goods and services
are carried out in marketing only.
 A market is defined as a place where buyers and sellers meet to make an
economic transaction.
 Therefore, all aspects of marketing, like components, suppliers, production,
distributors, pricing and advertisement are related to ethics.

I. Consumerism:
 The very purpose of marketing is to satisfy the needs of the consumers.
The starting point of economic activity is consumption. There was a time
the consumers were cheated and exploited. In modern days, the concept of
consumerism is popular and prevailing.
 Consumerism refers to social activism of protecting the rights of
consumers in their dealings with business.

The following are the basic rights of the consumers:

(a) Right for safe products.
(b) Right to be informed about products.
(c) Right to be heard.
(d) Right to choose.
(e) Right to be educated about purchases.
(f) Right to a courteous service.

In fact in many of the developed countries there is a positive encouragement of the

growth of consumer councils and forums. These organisations try to promote the
interests and benefits of the consumers. When there is an enlightened and organised
consumers' council, it is good for the marketing also. The consumers get a right type of
consumer education from these councils.
The consumers can act more rationally and powerfully.

II. Packaging and labeling:

A good packaging so as to protect the product from external damages should be done.
Moreover the label attached to the package should contain the right type of information
such the nature of contents, date of package, expiry if it is eatable or medicine etc.

III. Marketing research:

The following are the important ethical practices in marketing research:
(a) There should be no misrepresentation of research results.
(b) While interviewing children, special care should be taken into account.
(c) The client confidentiality should be maintained.
(d) The marketing research should be used only for the purpose of doing research related
to marketing. It should not be used as a means of developing sales or promotions.
(e) It should secure the co-operation of respondents' for the interviewing process.
(f) It should provide the name of the research agency conducting the study.
(g) It should prevent undue stress on respondents.

IV. Price fixing:

Price refers to the value of a product in terms of Rupees or any other currency. Both
demandand supply are the two forces operating in fixing the price. Apart from the cost of
production, a reasonable amount of incentive is to be given for the seller as profit. At the
same time, the price should not be exploitive in nature.
In accordance with the welfare economy, dual pricing is fixed for many goods and
services. The price of an air-conditioned ticket in a train is costlier for a poor man. But he
can buy an ordinary ticket in a second class. The students' edition of the book is cheaper
compared to the library edition.
Collusion and price gouging are the two unfair pricing methods. Collusion occurs when
two or more firms agree to collaborate on such wrongful acts such as price fixing. Price
gouging is a response to increased demand with a high price rise.

V. Advertisement:
A good advertisement should be a positive appeal to the consumers about the nature and
contents of the product.
It should not contain any wrong information. There should not be any criticism of the
competitors.
A good advertisement should be creative. It should be information oriented. It should
avoid irritation and unpleasantness.
Moreover, an ideal advertisement should not try to promote a culture of consumerism.
The famous American economist lK. Galbraith has called this as "dependence effect".
An advertisement should be a rational persuasion.

Portraying of women in advertising should avoid exploitations. There are

two types of exploitation of women in advertisement.
(a) Misuse of women in unrelated products:
In fact many women are used in products as advertising models with which they have no
relationship at all. Many household items like white goods, sports goods and ordinary
medicines make use of film actors and attractive girls. This is more an advertisement to
these girls than to the products. The film actresses are given an extraordinary role. In
some cases, these women are used by another product also.
(b) Exploitation of girls:
The girls are exploited in all countries for promoting beauty aids, medicines and other
herbal products. The women are given a wrong socio-cultural thinking that beauty is
everything.
The youngsters are wrongly motivated to use more and more of creams and medicines.
The place for hard work and intelligence becomes secondary.

VI. Production related ethics:

The process of production should be undertaken in healthy and good working conditions.
Thepattern of production should be related to the sources available in the area of
operation. Theconditions of production should be favourable for all.
There should be operation of due care theory. In terms of this theory, the producers ought
toexercise due care. All the necessary precautions are to be undertaken to produce a
product free of defects. The producers are liable for the damages caused by a firm.
If production is below the standard, it is called negligence.
The areas of due care are the design of the product, materials used, method of production,
quality control, packing and notification of safety messages.
The contractual theory is also in operation in terms of which both the sellers and buyers
have some contract. It should be in all fairness to both producers and buyers. Both these
parties should recognize the existence of such a contract.

VII. Marketing strategies:

The increase of market share of the product should be in accordance with ethical
practices.
Force has to be avoided and there should be always a policy of persuasion.
There are certain value based responsibilities towards the customers by the producers. A
right type of information containing all details about the product, quality, contents, usage
etc. should be provided to the consumers.
There should be clarity in instructions and information.
Even if the hire purchase system is encouraged in marketing, it should not try to exploit
the consumers.
The marketing people should know the limitations of the consumers.

VIII. Avoidance of unethical practices in marketing:

(a) Discrimination against the rural markets should be avoided.
(b) Any form of violation of copy rights should be avoided.
(c) The damaged products should be abandoned from the market. Similarly the medical
and eatable products should be sold within the expiry dates.
(d) The side effects of medicines should be pointed out to the consumers.
(e) The duplicated goods should not be sold in the market.
(f) Giving big gifts or extra quantity should be discouraged as unethical practices.
(g) The big companies should promptly pay to the small companies.
(h) The growth of black marketing and the creation of artificial scarcity are the most
unethical practices. These economic offences are serious criminal offences to be avoided.

IX. Child labour:

Use of child labour and payment of low wages have to be avoided. The women labour
should be treated on par with men labour in terms of wages and other benefits.

X. Industrial espionage:
It refers to corporate spying of getting confidential information from different competing
companies and making use of this information for trading. In fact globalisation has
encouraged corporate spying and trading in confidential information. In fact certain
managements give recognition for spying by employees. Some managements even go to
the extent of sending an employee as a spy.
The employee of a competitive firm is also corrupted by a few managements. Technical
information, marketing information, strategic information and financial information are
collected by other firms.
It should be noted that business is also a game. The ethical rules of the game have to be
followed.

Questions
Section 'A'
(1) Define consumerism.
(2) What is industrial espionage?
Section 'B'
(1) What are the unethical practices in marketing?
(2) What are the ethical practices in marketing research?
(3) How far advertisement can be unethical?
(4) Discuss the portrayal of women in advertisement.
(5) What are the basic rights of the consumers?
Section 'c'
(1) Discuss the unethical practices in marketing. Suggest suitable remedies.
(2) Explain the need for ethical practices in marketing. Examine the steps to be taken to
introduce the ethical practices in marketing.