Ethics in Marketing

and Advertising
What is Ethics?

Ethics is the art and science of

determining good and bad or right
and wrong moral behavior of a single
or group of people.
 What Are The 7 Principles Of
Ethics?

Honesty Integrity Promise – Loyalty Concern for Respect for Fairness

Keeping & Others Others
Trustworthi
ness
What Are The 5 Ethical Standards?

1. Truthfulness and confidentiality

2. Autonomy and informed consent
3. Beneficence
4. Nonmaleficence
5. Justice
What is Marketing?

MARKETING is the science and art of

exploring, creating, and delivering value
to satisfy the needs of a target
market at a profit.

- Philip Kotler
 What is Marketing ethics?

Marketing ethics are a set of moral

principles that guide a company's
promotional activities. Organizations that
establish and implement marketing ethics
are typically trying to respect the rights,
desires and expectations of consumers.
What is Ethical and Unethical Marketing?

Ethical marketing entails making honest claims

and satisfying the needs of potential and
existing customers. It boosts credibility and
trust, develops brand loyalty, increases
customer retention, and prompts customers to
spread word about the products or services
you’re marketing.
 10 Ethical marketing principles that all
marketers can commit to:

1.Transparency: being open and candid about the products or services

being offered and providing clear and accurate information.
2.Respect for the customer: treating customers with dignity and respect,
and avoiding tactics that manipulate or deceive them.
3.Social responsibility: considering the impact of marketing efforts on
society as a whole and taking steps to minimize negative effects.
4.Honesty: avoiding false or misleading claims about products or services.
5.Fairness: treating all customers equally and not discriminating based on
factors such as age, race, gender, religion, or sexual orientation.
6. Privacy: respecting customers' privacy and not sharing their personal
information without their consent.
7. Accountability: being accountable for the actions and decisions of
the company and addressing any issues or concerns raised by customers.
8. Sustainability: considering the long-term impact of marketing
efforts on the environment and taking steps to reduce any negative
effects.
9. Transparency in data collection: collecting customer data in a
transparent and ethical manner, and providing customers with clear
information about how their data will be used.
10. Compliance with laws and regulations: complying with all applicable
laws and regulations related to marketing, advertising, and consumer
protection.
What is Ethical and Unethical Marketing?

Unethical marketing, on the other hand, can

send wrong signals about your products and
services, destroy your brand’s reputation, and
possibly lead to legal problems. This explains
why you should avoid them like a plague.
 Unethical Marketing Practices
1. Making false, exaggerated, or unverified claims- in a desperate bid to
compel potential and existing customers to buy their products or services,
some marketers use false statements, exaggerated benefits, or make
unverifiable claims about their offers.
2. Distortion of facts to mislead or confuse potential buyers- this is another
common unethical marketing practice. A typical example is when a food
processing company claims that its products are sugar-free or calorie-free
when indeed they contain sugar or calories. Such a company is only trying to
mislead potential buyers, since they are unlikely to buy the products if it is
made known that they contain sugar or calories.
3. Concealing dark sides or side effects of products or services- this
unethical marketing practice is rife in the natural remedies industry, where
most manufacturers deceive potential buyers that their products have no side
effects because they are “made from natural products”.
4. Bad-mouthing rival products- emphasizing the dark sides of your rival’s products in
a bid to turn potential customers towards your own products is another common but
unethical marketing practice. Rather than resort to this bad strategy, you should
emphasize on those aspects that make your offer stand out from the rest of the pack.
That’s professional and ethical.
5. Using women as sex symbols for advertising- the rate at which even reputable
brands are resorting to this unethical marketing practice is quite alarming. If you observe
TV, billboard, and magazine adverts, there’s something common to most of them; a half-
naked lady is used to attract attention to the product or service being advertised.
6. Using fear tactics- this is another common unethical marketing practice among
snake oil salespersons. You will hear them saying something like: “This price is a limited-
time offer. If you don’t buy now, you might have to pay much more to buy it later because
the offer will end up in two days time, and the price will go up.”
7. Plagiarism of marketing messages- though uncommon, some business owners and
salespersons engage in using the exact marketing messages of their competitors to
market their own products or services. Creativity is a huge part of marketing, and using
other businesses’ marketing messages just passes you off as being creatively bankrupt
and fraudulent.
8. Exploitation- this is charging for much more than the actual value of a
product or service. For marketing efforts to remain with ethical limits; the
prices of your offers must be equal to or less than the value they give the
buyer. If the value is less than the cost, it’s unethical.
9. Demeaning references to races, age, sex, or religion- ethical
marketing must be devoid of all forms of discrimination. If your marketing
messages contain lines that place people of certain age range, sex, religion,
nationality, or race at a higher level than others, then you are crossing the
bounds of ethical marketing.
10. Spamming- spamming is when you send unsolicited emails to potential
customers, encouraging them to buy your products or services. This is the
commonest unethical marketing practice done online. The number of time
you send such emails doesn’t matter. Whether you send them once, or on
occasions, or frequently, you remain a spammer.
What Is Ethical And Unethical Behavior?
Unethical behavior can be defined as
actions that are against social norms or
acts that are considered unacceptable to
the public. Ethical behavior is the complete
opposite of unethical behavior. Ethical
behavior follows the majority of social
norms and such actions are acceptable to
the public.
What Is An Unethical Behavior In
Business?
Unethical behavior is an action that falls
outside of what is considered morally
right or proper for a person, a profession
or an industry. Individuals can behave
unethically, as can businesses,
professionals and politicians. Unethical Behavior in
Business include;
1. Misleading Product Information

2. Unfair Competition

3. Mistreating Employees

4. Manipulating Accounts

5. Bribery
Ways to Overcome Unethical Behavior in the
Workplace

It all starts at the Implement security Have insurance in

hiring process measures place

Be sure to have a Punish Work on building a

clear code of appropriately loyal community
conduct
 How Can Unethical Marketing Affect A Brand?

Unethical behavior has serious consequences for both individuals and

organizations. You can lose your job and reputation, organizations can
lose their credibility, general morale and productivity can decline, or the
behavior can result in significant fines and/or financial loss.
Ethics in Advertising means a se
of well defined principles which
govern the ways of communicatio
taking place between the seller an
the buyer.
Ethics in Advertising is directly related
to the purpose of advertising and the
nature of advertising. Sometimes
exaggerating the ad becomes necessary
to prove the benefit of the product.
For example, a sanitary napkin ad which shows that when the
napkin was dropped in a river by some girls, the napkin
soaked whole water of the river. Thus, the purpose of
advertising was only to inform women about the product
quality. Obviously, every woman knows that this cannot
practically happen but the ad was accepted. This doesn’t show
that the ad was unethical.
Unethical Advertising
Generally, big companies
never lie as they have to
prove their points to various
ad regulating bodies. Truth
is always said but not
completely. Sometimes its
better not to reveal the
whole truth in the ad but at
times truth has to be shown
for betterment.
Pharmaceutical Advertising - they help creating
awareness, but one catchy point here is that the
advertisers show what the medicine can cure but
never talk about the side effects of that same thing or
the risks involved in intake of it.

Children - children are the major sellers of the ads

and the product. They have the power to convince the
buyers. But when advertisers are using children in
their ad, they should remember not to show them
alone doing there work on their own like brushing
teeth, playing with toys, or infants holding their own
milk bottles as everyone knows that no one will leave
their kids unattended while doing all these activities.
So showing parents also involved in all activities or
things being advertised will be more logical.
Alcohol - till today, there hasn’t come any liquor ad
which shows anyone drinking the original liquor.
They use mineral water and sodas in their
advertisements with their brand name. These types
of ads are called surrogate ads. These type of ads are
totally unethical when liquor ads are totally banned.
Even if there are no advertisements for alcohol,
people will continue drinking.

Cigarettes and Tobacco - these products should be

never advertised as consumption of these things is
directly and badly responsible for cancer and other
severe health issues. These as are already banned in
countries like India, Norway, Thailand, Finland and
Singapore.
Ads for social causes - these types of ads are ethical
and accepted by the people. But ads like condoms
and contraceptive pills should be limited, as these
are sometimes unethical, and are more likely to loose
morality and decency at places where there is no
educational knowledge about all these products.
Puffery - statements that are not outright lies, but merely exaggerations.
• Ex. Gum company saying their gum is the best taste your mouth ever had.
• Illegal or unethical?

FTC (Federal Trade Commission) - regulates advertisers and advertising

• Allows puffery

Bait and Switch - advertising a product at a low price while intentionally

stocking a low amount in hopes of luring shoppers to buy more expensive items.
• Illegal, but difficult to prove
• No mandated minimum number of products that must be in stock
• If items are limited, the company must:
• Clearly state the number in stock
Offer rain checks to customers who request them.
Advertising to Children - laws passed to protect children from deception and
manipulation.
• Children are vulnerable to deceptive advertising
• Trouble separating fantasy from reality
Ex. Laws prohibit creators of children's cartoons from advertising products
related to the characters of that program during the broadcast.

Telemarketing - selling directly to people through unsolicited phone calls, e-

mails, or faxes.
Computers can dial hundreds of phones, send thousands of faxes and millions of
e-mails.
• Laws allow people to sign up for "do not call" lists
• "Spam" e-mails must allow people to unsubscribe
Code of ethics
- written set of principles and
rules intended to serve as a 8 Standards of Ethics in
guideline for ethical behavior for Advertising:
individuals under the • Truth
organization’s authority. • Substantiation
• Comparisons
American Advertising • Bait Advertising
Federation (AAF) • Guarantees and Warranties
- wrote Advertising Ethics and • Price Claims
Principles advertisers. • Testimonials
•Code sets the professional • Taste and Decency
standard and provides a way to
evaluate the ethics of advertisers.
ETHICAL STANDARD
TRUTH
• Advertising shall tell the truth, and shall
reveal significant facts, the omission of which
would mislead the public. (AAF)
• Lying about a product is unfair to customers
who are cheated and exploited by dishonest
claims.
2 key parts to the statement
• Tell the truth
Omission would mislead the public
• Car commercial example (great car, wheels
fall off during sharp turns)
• Medicine commercials (side effects)
Substantiation
• Advertising claims shall be
substantiated by evidence in possession
of the advertiser and advertising agency,
prior to making such claims.
• Substantiation is the validation of
advertising claims with objective data
from independent research.
•Burden of responsibility is on the
advertiser to be able to prove that all
claims are true.
•Ex. Headache medicine says it relieves
twice as much pain in half the time. Is
that true?
Comparisons
• Advertising shall refrain from making false,
misleading, or unsubstantiated statements or
claims about a competitor or his/her products
or services.
• Making false claims and comparisons about
competitors is unprofessional and unethical,
but also illegal.
• Can be sued for libel.
Bait advertising
• Advertising shall not offer products or
services for sale unless such offer
constitutes a bona fide effort to sell the
advertising products or services and is
not a device to switch consumers to
other goods or services, usually higher
priced.
• Refers to bait and switch
Guarantees and Warranties

• Advertising of guarantees and warranties shall be

explicit, with sufficient information to apprise Price Claims
consumers of their principal terms and limitations or,
when space or time restrictions preclude such • Advertising shall avoid price claims which
disclosers, the advertisement should clearly reveal are false or misleading, or saving claims
where the full text of the guarantee or warranty can be which do not offer provable savings.
examined before purchase.
• Guarantee- an assurance attesting to the durability • Fairness and honesty in price claims are
or quality of a service or product required, violations can be hard to prove.
• Warranty- a written promise to repair or replace a
product if it breaks or becomes defective within a • May contain disclaimers
specified period of time.
• Jewelry example
Both are often explained in complex terms that are
hidden in small print
Testimonials

• Advertising containing testimonials shall be limited

to those of competent witnesses who are reflecting a
real and honest opinion or experience Taste and decency

• Testimonial - an endorsement of a product by • Advertising shall be free of statements,

someone claiming to have benefited from illustrations or implications which are
its Use. offensive to good taste or public decency.

• Often celebrities and experts • Special groups closely monitor ads in

publications and broadcasts aimed at children
• Very effective sales technique and minors.

• "What constitutes competent witnesses?" Anyone is • Groups may try to embarrass sponsors into
capable of a "real and honest opinion or experience" retracting the ads and replacing them with
right? more appropriate content.
Limitations of the Advertising Code of Ethics

• For any code to be effective, it must be enforceable and actually enforced

• Lack of enforcement of the advertising code represents a problem

• Membership in groups such as the AAF is voluntary

• Don't need a license to make a living as an advertiser

• AAF has no authority to revoke someone's license to advertise for violating the
code.

• Conformity is voluntary.
Thank you!