ETHICS IN MARKETING

APARNA H
S2 MBA
IMK KOLLAM
 ETHICS
• The word ethics is derived from the Greek
word “Ethikos” which means custom or
character.

“Our concern for good behaviour. We feel an

obligation to consider not only our own
personal well being but also that of others”.
Albert Schweitzer
Marketing
 Marketing consist of the performance of
business activities that direct the flow of goods
and services from producer to consumer.
 A number of distinct function is coming under
this broad characterization which include:
1) Product Development
2) Distribution
3) Pricing
4) Promotion
5) Sales
Marketing
• “Marketing is a societal process by

which individuals and groups obtain

what they need and want through
creating, offering and freely
exchanging products and services of
value with others”

Philip Kotler
 Marketing ethics
• Marketing ethics addresses principles and standards that

define acceptable conduct in the market place. Marketing

usually occurs in the context of an organization, and unethical

activities usually develop from the pressure to meet

performance objectives. Some obvious ethical issues in

marketing involves clear cut attempts to deceive or take

advantage of a situation
 MARKETING ETHICS AND
CONSUMER RIGHTS
• The law and regulations are generally designed
to protect the consumer from unethical
practices by businesses
• These law and regulations recognizes that
consumers have certain basic rights in the
market place
• Each marketer must relay on his/her own value
system to determine what is and is not ethical
 Cont………
• AMA has established a codes of ethics to provide
guidelines for ethical conduct. It says, in part, that,

“Marketers shall uphold and advance the

integrity, honour and dignity of the marketing
profession, by being honest in serving
consumers, clients, employees, suppliers,
distributors, and the public.”
 ETHICAL VALUES
• Honesty: to be truthful and forthright in our dealings with customers
and stakeholders.

• Responsibility: to accept the consequences of our marketing

decisions and strategies.

• Fairness: to try to balance justly the needs of the buyer with the
interests of the seller.

• Respect: to acknowledge the basic human dignity of all stakeholders.

CONTD…….
• Openness: to create transparency
in our marketing operations.
• Citizenship: to fulfill the
economic, legal and societal
responsibilities that serve
stakeholders in a strategic manner.
CRITICISMS OF ETHICS IN MARKETING
I. CRITICISM OF THE FORMER :
Promotion of morally ‘bad’ values such as the
excessive consumption of private rather than
public goods and services comes under this.
II. CRITICISM OF SPECIFIC PRACTICES :
These are frequently based on assumptions
drawn from system level critiques. The
criticism are:
• Advertisement : that gives false
information, penetrating to wrong values.
Eg: Indulekha
• Personal selling : the ethics of the
relationship of sales people to customer
• Packaging and labelling practices :
irregularities of package size and shape
ecological issues
Pricing practices
Provision of intelligible labelling information
 ETHICAL REASONING
MODEL
• Step 1: Identifying the decision options and the likely consequences of

each.

• Step 2: Identifying all individuals and organizations that will be +vely

or-vely affected by the consequences of each option

• Step 3: Estimating the-ve impacts and +ve impacts of each option

from the point of view of each affected party, taking into consideration

their particular interest and needs.

• Step 4: Ranking the cost and benefits of each option and making a

decision
SOCIALLY RESPONSIBLE ADVERTISING
 Most advertisements are socially responsible

 Some advertisements are willfully misinformed

the public
 Deceptive Advertising: Advertising that give
false info:
 Corrective Advertising: company publicly
ETHICAL ISSUES IN MARKETING
TO CHILDREN
• Children are an important marketing target for
certain products. Because their knowledge about
products, the media, and selling strategies is
usually not as well developed as that of adults,
children are likely to be more vulnerable to
psychological appeals and strong images.
 UNFAIR MARKETING PRACTICES
• False and misleading presentation of
facts.
• Deliberate omitting of required
information.
• Implying a benefit that hardly exists.
• Trade puffing and exaggerations
• Open criticism of competitors.
 ETHICS AND REGULATIONS IN
PRICING
• Pricing practices are regulated by the Govt.
more forcefully than other areas of the
marketing mix in that pricing illegalities are
made explicit in Act such as;
• FTC Act
 FOUR AREAS OF PRICING ARE
CONSIDERED UNETHICAL AND
ILLEGAL:
• Deceptive Pricing: Where a salesperson
tries to influence lure customers into a
store. Thereafter, a salesperson tries to
influence to buy a higher-priced item.
• Unfair Pricing: When competitors are driven
out by low prices the company raises price
back to their former level.
• Price Discrimination: It can be unethical if
similar buyers are charged different prices for
the same based on their ability to pay.
• Price fixing: It is an agreement among firms in
an industry to set up prices at certain levels.
Two types of price fixing:
1. Horizontal price fixing

2. vertical price fixing

THANK
YOU……..