MARKETING ETHICS

Lecture-III IMRAN OMER

Marketing Ethics

Marketing ethics is the systematic study of

how moral standards are applied to
marketing decisions, behaviors, and
institutions.
Ethics of Marketing
Marketers must not knowingly do harm in carrying
out their selling responsibilities.
They should embrace basic marketplace values,
including truth telling, genuine service to customers,
avoidance of practices acclaimed to be unfair, and
an adherence to honest and open communications
with clients.
 Most general areas of marketing practice provoke
substantial ethical comment and discussion. These areas
include:
Marketing segmentation,
Marketing research,
Product development,
Pricing,
Distribution,
Personal selling,
Advertising
Market Segmentation
Ethical questions especially surround the target
marketing of segments that include potentially
vulnerable populations such as children, the elderly, the
impoverished(poor) ,and marketing illiterates. For
example:
Children are a $25+ billion market in the United States
alone for products such as toys, sugared cereal, DVDs,
and video games.
 If a company markets its products to an uneducated
customer base that is not aware of the serious
consequences of a certain product, such as selling
cigarettes in developing countries, thats an ethical issue
that needs to be addressed. If they are not aware of
these issues; therefore it is morally wrong to sell them
cigarettes.
 Similarly for older kids, the ethical issues might focus more
on the appropriateness of certain products (violent video
games), or the degree to which young teenagers might be
inclined to particular kinds of provocative fashion or lifestyle
advertising.

The key issue involved in targeting children turns on whether

marketers should be held to a higher standard care and
caution when marketing to children.
Marketing Research
During research process it is the responsibility of
researcher to keep the information secret which
he collects from respondent. Misuse of this info
creates unethical issue in marketing.
Product Management

Ethical issues surrounding the management of

products are central to marketing because the
marketing process generally begins with a product
(broadly defined to include goods, services, or
ideas).
Product Management
The most common ethical concerns in this area
pertain to the safety of products are safe "for their
use as intended" is a basic consumer expectation.
Product Management
Another growing area of concern is product
counterfeiting(copy of original). Product counterfeiting
involves the unauthorized copy of patented products,
inventions, and trademarks or the violation of
registered copyrights (often for the purposes of making
a particular product look like a more popular branded
leader).
Common examples of product counterfeiting include
fake Rolex watches, knockoff Levi jeans, and illegally
pirated video and audio tapes of popular movies and
music.
 Pricing

Perhaps no area of managerial activity is more difficult to

assess fairly and to prescribe normatively in terms of morality
than the area of pricing.

Price gouging is an example of an unethical pricing strategy. A

company may raise prices of items that are temporarily in high
demand. This is sometimes seen in the wake of emergency
situations when the price of plywood jumps after a flood, even
though there is enough plywood to repair houses.
Pricing
Predatory pricing, on the other hand, involves pricing a
product low enough to dampen demand. This type of
pricing is typically used to end a competitive threat. The
company lowering the price is operating to protect
market share from moving to the competition.
Selling counterfeit goods, such as watches, handbags
and designer athletic shoes at the same high price as
the "real" goods, is another example of an unethical
strategy.
Price fixing, price skimming, price discrimination are
also the examples of it.
Distribution
The distribution element of marketing involves the entire
supply chain from manufacturer through wholesalers and
distributors (including retailers) on to the final consumer. At
each point in the supply chain, because there are economic
interactions between these various parties, the potential for
ethical issues to occur is quite common.
Distribution
Power and Responsibility
Perhaps the most severe issue within the channel of
distribution supply chain has to do with the question
of power and responsibility within the channel itself.
Often one organization within the channel has
greater economic leverage than other channel
members, and with that economic leadership comes
a potential for ethical abuse.
Distribution
Example:
Powerful supermarket chains often demand
payments from producers (allowances) to ensure
that their products will have shelf space in
supermarkets. Many supermarket operators also
demand pay-to-stay fees payments to
supermarkets by producers to keep their products
on the shelf.
On the other hand power full manufacturer may
take advantage from small retailers.
Distribution
Gift Giving
Another common concern within channel
relationships has to do with "gift giving" that
sometimes transforms into bribery. A long-standing
business custom is to entertain clients and to give
modest gifts to business associates. Such practices
can cement important economic relationships.
Distribution
Grey Market
The grey market also raises ethical issues. The grey
market is unauthorized intermediaries that go around
authorized marketing channels by buying in low-price
markets and reselling in high-price markets at lower
prices than those charged by authorized channel
members.

Many consumer packaged goods including toothpaste,

bath soap, and deodorant are often purchased in the
grey market.
Personal Selling

There are number of ethical issues in personal

selling. The first one that comes to mind is the
manipulation of potential customer, Some
salespeople are pushy and make unrealistic claims
about product and give improbable (unbelievable,
impossible) guarantee.
Like wise some sales people give gifts ,money or
favor in exchange of purchase.
Advertising

Now a days we normally observe that advertising

industry also has some unethical issues.
Manufacturers or businessmen do not follow strictly
code of morality of society as well as religion .
In Pakistan we may also see many ads do not show
Pakistani culture or our most respectable religion Islam.
Islamic values we have forgotten. Vulgarity, women
exposition, etc. are very common examples of it.
Code of Ethics in Advertising
No advertisement shall be permitted which

(a) promotes or supports rabble-rousing, anarchy(revolution)

or violence in country;

(b) is against any provisions of the Constitution of Pakistan

or any other law for the time being in force;

(c) tends to motivate people to crime, cause disorder or

violence or breach of law or glorifies violence or obscenity
in any way;
 (d) glorifies adultery, lustful (immoral, shameless)
passions or alcoholic drinks or the non Islamic
values;

(e) distorts(alter) historical facts, traditions of

Pakistan or the person or personality of a national
leader or a state dignitary;
 (f) promotes social inequality, militates against
concepts of human dignity and dignity of labor.

(g) is directed against holiness or home, family and

marriage;

(h) is wholly or mainly of a religious or political

nature;
 (i) contains indecent, vulgar, or offensive themes or
treatment; or

(j) contains material which is repugnant to ideology

of Pakistan or Islamic values.
THE END