Ethics in Marketing

Marketing Ethics.
Marketing ethics is the area of applied ethics which deals with the moral principles behind the operation and regulation of marketing.

Framework Analysis of Marketing Ethics.

1. VALUE ORIENTED FRAMEWORK (honesty, autonomy, transparency, privacy, truth, trust) 2. STAKEHOLDER ORIENTED FRAMEWORK (customers, competitors, society) 3. PROCESS ORIENTED FRAMEWORK (Research, price, promotion)

1. Product Features and Properties

Organizations should communicate clearly what their products can do or cannot do. Eg: The limitations of usage, service life, installation, and maintenance costs, make exaggerated claim of performance.

2.Unethical pricing
1. Three for the price of two or Buy One get One free.

2.
3. 4.

New and Improved.

Reduce volume while reducing the price. Bait and Switch ( Form of False Advertising) In retail sales, a bait and

switch is a form of fraud in which the party putting forth the fraud lures
in customers by advertising a product or service at an unprofitably low price, then reveals to potential customers that the advertised good is not available but that a substitute is.

5.
6.

Horizontal Price Fixing

Vertical Price Fixing

Horizontal and Vertical Price Fixing

Horizontal Price Fixing - An illegal practice by which two competitors agree to a fixed price of a certain item. This is illegal because it restricts capitalism and keeps prices at an artificial level.

Vertical Price Fixing - Occurs when manufacturers or wholesalers are able to control the retail prices of their goods and services.

Eg: Resale Price Maintenance

3.Unethical practices in Distribution and Marketing

New products or concepts introduceddealers or distributors put enormous effort no returns or rewards in short run.

Product establishedsales started picking in the long

rundealers shown the door No clear and transparent distribution policysome dealers given special offers and discounts

How to increase effectiveness of marketing without affecting ethical policies???

Be familiar with professional codes Know your own values Provide your staff with guidance Work across functions

Be familiar with professional codes It mainly includes honesty, fairness, responsibility and transparency Ethics in marketing means actively applying these principles to marketing decision-making and practice

It doesn't mean that marketing has to be boring or that

it can't be effective in achieving the goals of delivering quality products to customers that want them.

Know your values

The

meaning of ethics and responsible marketing in the

context of the organization and its products should be

considered
The values of the organization should be given more importance

Provide your staff with guidance Take time to engage all the marketing team with the values of the company Explore with them what this means in terms of your marketing mission specifically All the employees of the organization should be knowledgable about the ethical policies of the

organization

Work across functions The product developers and marketers should work together so as to carry out a proper planning for the products

When this happens, the marketers will get more idea

about what is actually the idea of the product developers

ETHICAL PRACTICES IN MARKETING

Unethical practices in marketing mainly include misleading advertisements Statutory Warnings in advertisements and on the packing of products are a good example of ethical practices in marketing.

Statutory Warning Examples

Ethical marketing of eco tourism

Ethical advertising(Audi A3)

A good example of this changing trend is the Audi A3 TDI, which was featured in the 2010 Super Bowl advertisements. The car won "Green car of the Year" from the Green Car Journal for its clean diesel

Ethical Criticisms of Marketing

High prices Deceptive practices High-pressure selling Shoddy, harmful, or unsafe products Planned obsolescence Poor service to disadvantaged consumers

High Prices
Caused by:
High costs of distribution High advertising and promotion costs Excessive markups

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 products 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.

Shoddy or Unsafe Products

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

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)

Poor Treatment of Disadvantaged Consumers

Examples
The poor are forced to shop in smaller stores where they pay more for inferior goods. The poor receive worse service (or no service) at stores. Redlining by national chain stores in disadvantaged neighborhoods. Poor are targeted for rapid refunds and other quick-money swaps.

DECEPTIVE ADVERTISEMENTS Advertisements are the worst form unethical practices in marketing.
Deceptive ads gives false information or misleads consumers about the benefits of the brand.

COMMON DECEPTIVE PRACTICES IN ADVERTISEMENTS

False and misleading presentation of facts Deliberate omitting of required information Implying a benefit that hardly exist Exaggerated claims Using unnecessary technical jargons Creating Cultural degeneration Persuasive role models for inappropriate products Open criticism of competitors

Ways of unethical advertisement

Surrogate advertisement Puffery Exaggeration Unverified claims

Women stereotyping
Comparative advertisements Use of children in advertising

Surrogate Advertising
Advertising of products that is banned by law

PUFFERY
Promotional claims that no reasonable person would take literally

Exaggeration
Using false claims in the advertisements about the product

White ho to Tide ho.

One Drop Challenge

Wherever you go our network follows.

Unverified Claims
Includes the advertisements of energy drinks

Women Stereotyping

Comparative Advertisements

Children in Advertisements

Unethical advertising

EXAMPLES OF UNETHICAL MARKETING

Diet Coke An Example of Unethical Marketing
Nestle boycott

Video about ethics and marketing mix