Marketing Ethics* INTRODUCTION itis sai that a salesman, an important role:player in the marketing of goods and services, helps create them and plays a pivotal role mn reaching them tc ne jem to ietimate ‘consumers. They say, with a certain degree of exag- eration, that a good salesman knows how to sell refrigerators to Eskimos by” practising the art of sophistry ‘Asalesman may not have a decisive role in a market where the buyers are well informed and there is a sur- paca poods and sources fo ehnase Rom Dut eariy-OFven MTRes persons who KNOW Tie arf mar Fetagoniy wil know how to promote their mpaus. BuVit is aso mnportantwemmphasize Here Row this is done without aking the consumers fora ide This chapter oulines how such etheal practices are impart ina consumers society suc as our, ‘We commence this chapter with the role of marketing in bringing products of great value to humankind. “The chapter also details some norms in marketing ethics, with examples of practice as well as infraction, We then look at the darker side of marketing also—its role in bringing out products of harm to the society. In this milieu some firms bring out good products, even though there are no market compulsions to do so and at times even at a cost tothe frm. A few other firms are compelled to mave away from products that are harmful © the society due tions By OT governmental Organizations (NGOR) oF IepSTACON- We as examine ~ ie Taian context in which market din ot Later thi ty and infraction is TOStered. Later, we deliberate on Some suidelines and norms that could build marketing ethics of high standard, Towards the end of th = elaborate on how marketing ethics is not 7 ovards the end ofthis chapter ‘Just concerned about bringing out sai luct permed about the process of delivering the produ rebel pesca dies aay uet—namely, how firms advertise, promote, distribute and pri products and examine areas within marketing, citing of good tod ted chica ee iia citing examples, of good and bad ethical practices. tis bow eve, notte objetivo this chapter to prescribe carctve sedonc be Ghee eee ROLE OF MARKETING. Posmve ROLE OF MARKETING Marketing is performing remarkable role in-developi Marking spr ie it ing anddelivering products of great value to the soci “oauhascepus meshed hen saan ely ge eo aaa SRT ad Ran ort nana EI Teas tee ; ‘merican Marketing Association (AMA) to expound 02 ee = Scanned with CamScannerMARKETING ETHICS 399 derstand the needs of consumers and delivers a product ora service that satisfies the need, In fact, astute (0 wneting is about uncovering even unstated or latent needs of consumers, making him or her aware of those a delving prot ora service (0 sais thse needs sede Scese, an office furniture manufpctare, set up video cameras a various businesses and analysed the -s looking for patterns of behaviouy and motion. The company came to a conclusion that employees who wer in teams would beable to work fost effectively if they work collaboratively and privately. This resulted inthe creation of modula alice ui that permit people o work in teams 25 well 8 alone ‘e"asketing’scoitbution in serves is equally valuable. Evolving effective eampaigns in containing many a world’ scourge, for example, AIDS, polio, ete. are noteworthy. Banking, financial services and insurance solutions, healthcare, ete, are other areas in services where marketing has provided solutions to diverse con- sumer needs. For instance, the State Bank of India’s diverse banking, financial and insurance products serve innumerable Indians even in the remote corners of rural India. The services of Housing Development Finance Corporation (HDFC) in providing housing solutions worth one trillion rupees to about 2.7 million customers is equally noteworthy. NeGamve ROLE OF MARKETING But there is a darker side to marketing too. It makes and sells unsafe products. For instance, Coke and Pepsi in India are selling colas that contain harmful pesticides exceeding 140 times the BIS standards, When con sumed it may have several side effects, including cancer and genetic impairment of the foetus? Plastic bags ‘are known to harm the environment since {hey a¥€ not biodegradable, Many well-intended products for adults, such as iron supplements, are not packed as ‘child-proof rendering them unsafe for children with possible risks including fatality. The darker side of marketing is evident even in services. Scores of quacks tout mira- «le medicines impairing body organs-permanently or even causing fatality, Banks compromise confidential- ity by selling their customey-lists to telemarketers who iittcude into the privacy of customers. ne Vountary ADHERENCE TO HIGH MARKETING ETHICS pgrrva7tl nm Yet there are many examples of marketers adhering to high ethical standards even when there is no market compulsion to do so. A good example is Merck’s development and distribution? of a drug for river blindness oronchocerciasis. tis eaused by the bites OF Black flies found in some fast-flowing rivers of Africa and Latin, ‘Amzrica: River blindness is accompanied by intense itching and eventual blindness: two outcomes that dra ‘matically affect the quality and duration of ifé, In 1978, the World Health Organization estimated that 340,000 people were blind because of onchocerciasis and 18 million or more were infected. There were no safe treat- ‘ments and no financial incentives to develop drugs for some of the world’s poorest populations. Merck dis. covered ivermectin as a possible remedy for-river blindness. However, it faced an unattractive market, Yet it ‘went ahead and developed the drug called Mectizan, and was ready to market the drug for free. Again it faced Problems in distribution, Merck organized ths as well, Merck has tll date donated more than a billion tablets, ‘benefiting more than 45 millign people. Sarr Closer at home the story of Alacrity Housing.* It offered to pay liquidated damages to customers in case of delay inthe completion of @ housing project, even when the delay might have been attributed to delayed clearances from various governmental authorities. This practice was and is still unparalleled in the annals of housing solutions business in the world Ithas to be read in combination with the fact that Alacrty Housing ‘would never pay any bribe to government aut OF stich Clearances in spite of the fact that bribing is the ‘orm in-construction industry.” = =o eet Etiies Due 10 Marker ComPULSIONS i We can also observe many ethical practices due to market compulsions, Marketers are movin; ay from guns and cigarettes due to public demands (e.g, pressures from NGOs like the Centre for Science sal ESsitomr ironment) ‘aniT government restrictvons. Many of them are becoming increasingly aware of marketing ethics and are mov- 'n8 towards healthier and safer products. Wills, a brand of cigarettes from ITC, on its own volition, withdrew gia LS “The Cheana-based housing slusons fim snow unde liiation posedings “cent B00" Scanned with CamScanner400 BUSINESS ETHICS—AN INDIAN PERSPECTIVE o rm codes of advertising ethics. Such activism by ee alo ak whether the age-old philosophy ‘Let the buyer 5, government, ¥ ee ne changed to Letibe seller beware’ Devaar oe from the NGOs and government, firms ean continue ty "tien mean that i there Was no Pressure 7 ; aaa for which there is sufficient demand? Philip Kotler‘ addresses this issue by delving i om of marketing—"sasTy Customers’. History bears out the ao a different interpretation ofthe central axiom o! ta sa rms that satisty their target consumers stayin business and make profits while those that do not ‘atic, Kotler then restates the axiom tbe to ‘give the customer what e wants and implies a corollary ‘Don't Jadge wat the customer wants The corollary rise two public interest concerns: that is not good for him or her? ricket Team. Advertisers for al initiatives impels one to tht 6 What if the customer wants something What if the produet or service, while good forthe customer, isnot good forthe society or other groups? Addictive or compulsive consumption isnt only observed in cigarettes, but also in innocuous pred vets such as quithas" burgers-cbocolates,and soft drinks. In services, such addiction can be seen in gambling, Internet surfing/chatting and vide igames(in a general sense, even shopping is aknown addic ion the so-called shop-a-holic finds release in this behaviour in much the same ways as alcoholics op = 1¢ 0 snag users do) Some products that are good forthe consumer but are not good forthe society are | asbestos, lead paint, fuel-guzzling automobiles, etc. What should firms engaged in such businesses do? | Gl Te these firms engaged in products that are acceptable to the society? Itis indeed not easy to answer Such questions. Some may find nothing unethical in marketing such products while others may find the practice objectionable. oy) / SHIFT FROM EMPHASIS ON PRODUCTS TO PROCESS ‘We deliberated on some products that are good for the society and some bad. The issue of marketing ethics is not limited to the provision of ethical or unethical products alone. Marketing ethics also deals with how such products are delivered tothe customers. Marketing is an organizational function and a set of processes for ereating, communicating and delivering value to customers, and for managing customer relationships in ways that benefit the organization and its stakeholders* (our emphasis). Marketing achieves this through various processes such as the product development, packaging, branding, adver- tising, promoting, selling, distributing, pricing and customer servicing, Determinants of the appropriate value such as + what the product shouldbe; how itis manufacrured; its appropriate price: its appropriate form of packaging; how its distributed and delivered tothe customers; how itis communicated to the eustomers; the kindof incentives provided tothe customers for fist tral and repeat purchase of products the appropriate division ofthe realized value among te sukeholden ete pe ‘are all areas in marketing laden with subjective value judgments of what is right and wrong, cope a me ri - Cleary, the cof marketing ethics encompasses not only the outcome of the product bu iver f ly the outcome ofthe product but also.an. Issues of marketing ethic races For instance, 7 of marketing ethics involving the processes are many. For instance, there may be the following ‘+ Marketing provides compelling stories to keep up with the Joneses, “Nei ide’ eeeesek nar campelig sor ep up with the Joneses, ‘Neighbour's envy, owner's pride” ‘Guat a tobescoate roc ats chewed. Coming vob an dave sabe - poor, my states banned Howse. the Spree Cou held sich nenblen Auge! 2008 inn ‘gains githa by banng it wile 01 imposing similar ans on cigarettes Read abou i il efor of rncareee cr we ‘cursci/may/252001/1306 pa fects of consumption at ww a ee Scanned with CamScannerAN MARKETING ETHICS 401 + Marketing targets children directly. bypassi i Taare bepassing ~assing parents, even though childrer ‘ reasoned Gai famous toy store in Chenier ens sap pen a friendly and provided ‘kids shopping cart’ which mma tn i a Yactie nee ents to children. e power of de © Marketing misleads and uses deception : india based brand of inner phi ae consumes by products and serves. A South Marketing intrudes into the privacy of consumers. Direct marketing ean be seen asa casein point. Is Coca-Cola or Pepsi an unsafe produc? 1s OnidaTV compelling consumers to kee up withthe Joneses? Js direct marketing an intrusion into the privacy of consumers? It appears, there exists a thin line between a ‘normal and acceptable marketing practice and unethical behaviour. ‘What is right and what is wrong is diffi- cult to determine. ion making from the par- Scanned with CamScanner