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Marketing ethics is an area of
applied ethics Applied ethics refers to the practical aspect of moral considerations. It is ethics with respect to real-world actions and their moral considerations in the areas of private and public life, the professions, health, technology, law, and leadersh ...
which deals with the moral principles behind the operation and regulation of
marketing Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...
. Some areas of marketing ethics (ethics of
advertising Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
and
promotion Promotion may refer to: Marketing * Promotion (marketing), one of the four marketing mix elements, comprising any type of marketing communication used to inform or persuade target audiences of the relative merits of a product, service, brand or i ...
) overlap with media and public relations ethics.


Two types of marketing ethics

Marketing ethics is known to have similarities with business ethics. Marketing ethics, however, can be divided into two categories: # Positive marketing ethics. # Normative marketing ethics. Positive marketing ethics looks at the statement "what is" when it comes to examining marketing practices, an example would be to research fraudulent advertising and keep a record of the violations. Normative marketing ethics looks at theories that dictate how moral marketing should take place. The same theories and substructures used in business ethics to determine its level of morality are used to analyze whether moral marketing is taking place in normative marketing ethics. The three structures are known as duty-based theories, virtue ethics, and utilitarianism.


Fundamental issues in the ethics of marketing


Frameworks of analysis for marketing: possible frameworks

*
Value Value or values may refer to: Ethics and social * Value (ethics) wherein said concept may be construed as treating actions themselves as abstract objects, associating value to them ** Values (Western philosophy) expands the notion of value beyo ...
-oriented framework, analyzing ethical problems on the basis of the values which they infringe (e.g.
honesty Honesty or truthfulness is a facet of moral character that connotes positive and virtuous attributes such as integrity, truthfulness, straightforwardness, including straightforwardness of conduct, along with the absence of lying, cheating, theft ...
, autonomy, privacy, transparency). An example of such an approach is the American Marketing Association
Code of Ethics Ethical codes are adopted by organizations to assist members in understanding the difference between right and wrong and in applying that understanding to their decisions. An ethical code generally implies documents at three levels: codes of bus ...
. * Stakeholder-oriented framework, analyzing ethical problems on the basis of whom they affect (e.g. consumers, competitors, society as a whole). * Process-oriented framework, analyzing ethical problems in terms of the categories used by marketing specialists (e.g. research, price, promotion, placement). None of these frameworks allows, by itself, a convenient and complete categorization of the great variety of issues in marketing ethics


Power-based analysis

Contrary to popular impressions, not all marketing is adversarial, and not all marketing is stacked in favour of the marketer. In marketing, the relationship between producer/consumer or buyer/seller can be adversarial or cooperative. For an example of cooperative marketing, see relationship marketing. If the marketing situation is adversarial, another dimension of difference emerges, describing the power balance between producer/consumer or buyer/seller. Power may be concentrated with the producer (''caveat emptor''), but factors such as over-supply or legislation can shift the power towards the consumer (''caveat vendor''). Identifying where the power in the relationship lies and whether the power balance is relevant at all are important to understanding the background to an ethical dilemma in marketing ethics.


Is marketing inherently evil?

A popularist anti-marketing stance commonly discussed in the blogosphere and popular literature is that any kind of marketing is inherently evil. The position is based on the argument that marketing necessarily commits at least one of three wrongs: * Damaging personal autonomy. The victim of marketing in this case is the intended buyer whose right to self-determination is infringed. * Causing harm to competitors. Excessively fierce competition and unethical marketing tactics are especially associated with saturated markets. * Manipulating social values. The victim in this case is society as a whole, or the environment as well. The argument is that marketing promotes
consumerism Consumerism is a social and economic order that encourages the acquisition of goods and services in ever-increasing amounts. With the Industrial Revolution, but particularly in the 20th century, mass production led to overproduction—the su ...
and waste. See also: affluenza,
ethical consumerism Ethical consumerism (alternatively called ethical consumption, ethical purchasing, moral purchasing, ethical sourcing, or ethical shopping and also associated with sustainable and green consumerism) is a type of consumer activism based on the con ...
, anti-consumerism.


Specific issues in marketing ethics


Market research

Market research is the collection and analysis of information about consumers, competitors and the effectiveness of marketing programs. With market research, businesses can make decisions based on how the responses of the market, leading to a better understanding of how the business has to adapt to the changing market. It is used to establish which portion of the population will or does purchase a product, based on age, gender, location, income level, and many other variables. This research allows companies to learn more about past, current, and potential customers, including their specific likes and dislikes. Meticulous codes of ethics have been devised by multiple professional institutions which aim to communicate conflicts that occur during the implementation of marketing research ( The European Society of Marketing and Opinion Research, the
Market Research Society The Market Research Society is a professional body for market research based in London, England. It was established in 1946 at the offices of the London Press Exchange. It represents the views of its members to government and in the press. MRS ...
, and the Council for Survey Research are a few examples). Ethical danger points in market research include: * Invasion of privacy.. *
Stereotyping In social psychology, a stereotype is a generalized belief about a particular category of people. It is an expectation that people might have about every person of a particular group. The type of expectation can vary; it can be, for example ...
. * Profit motive Invasion of privacy Without information from the public, it is difficult to do market research. As companies conduct research they also come into contact with confidential and personal information, which comes with a level of risk for both the business as well as the individual. At times this information can be sensitive and in the wrong hands, ethical abuse and misuse of sensitive data may happen. This is why the invasion of consumer privacy is still an issue in marketing research ethics. Today's consumers are bombarded with mail after using their email address to enter in a competition, thus becoming part of a business's mailing list. Therefore, companies are provided with critical information which they must not take advantage of but use in an ethical manner. Stereotyping: Portraying an ideal body, weight or physical appearance can have potential harmful effects on the individual such as low self-esteem issues or anorexia. Good marketing is
ethical marketing Ethical marketing refers to the application of marketing ethics into the marketing process. Briefly, marketing ethics refers to the philosophical examination, from a moral standpoint, of particular marketing issues that are matters of moral judgm ...
, it is about pleasing and developing a strong relationship with customers in a caring manner by not primarily only focusing on achieving results in order to generate profit. People affected by unethical market research: * Public * Respondents * Client * Researcher Approaches to privacy can, broadly, be divided into two categories: free market, and consumer protection. 1In a free market approach, commercial entities are largely allowed to do what they wish, with the expectation that consumers will choose to do business with corporations that respect their privacy to a desired degree. If some companies are not sufficiently respectful of privacy, they will lose market share. In a consumer protection approach, in contrast, it is claimed that individuals may not have the time or knowledge to make informed choices, or may not have reasonable alternatives available. Stereotyping occurs because any analysis of real populations needs to make approximations and place individuals into groups. However, if conducted irresponsibly, stereotyping can lead to a variety of ethically undesirable results. In the American Marketing Association Statement of Ethics, stereotyping is countered by the obligation to show respect ("acknowledge the basic human dignity of all stakeholders"). Profit motive: Manipulation of information and personal data can take place during market research conducted by for-profit organizations because they have a profit motive. This motive can affect the accuracy and objectivity of the marketing research and create an exaggerated positive image of the organization's products and services in order to attract clients to invest in their business.


Market audience

Ethical danger points include: * Excluding potential customers from the market: selective marketing is used to discourage demand from undesirable market sectors or disenfranchise them altogether. * Targeting the vulnerable (e.g. children, the elderly). Examples of unethical market exclusion or selective marketing are past industry attitudes to the gay, ethnic minority and plus size markets. Contrary to the popular myth that ethics and profits do not mix, the tapping of these markets has proved highly profitable. For example, 20% of US clothing sales are now plus-size. Another example is the selective marketing of health care, so that unprofitable sectors (i.e. the elderly) will not attempt to take benefits to which they are entitled. A further example of market exclusion is the pharmaceutical industry's exclusion of developing countries from AIDS drugs. Examples of marketing which unethically targets the elderly include: living trusts, time share fraud, mass marketing fraud and others. The elderly hold a disproportionate amount of the world's wealth and are therefore the target of financial exploitation. In the case of children, the main products are unhealthy food, fashionware and entertainment goods. Children are a lucrative market: "...children 12 and under spend more than $11 billion of their own money and influence family spending decisions worth another $165 billion",Tom McGee and Kevin Heubusch, `Getting Inside Kids' Heads', American Demographics, Vol. 19, No. 1 (1997), quoted in Sharon Beder
Marketing to Children
University of Wollongong, 1998.
but are not capable of resisting or understanding marketing tactics at younger ages ("children don't understand persuasive intent until they are eight or nine years old"). At older ages competitive feelings towards other children are stronger than financial sense. The practice of extending children's marketing from television to the school grounds is also controversial (see marketing in schools). The following is a select list of online articles: * Sharon Beder, ''Marketing to Children (
University of Wollongong The University of Wollongong (abbreviated as UOW) is an Australian public research university located in the coastal city of Wollongong, New South Wales, approximately 80 kilometres south of Sydney. As of 2017, the university had an enrolment of ...
, 1998). * Miriam H. Zoll, Psychologists Challenge Ethics of Marketing to Children, (2000). * Donnell Alexander and Aliza Dichter, ''Ads and Kids: How young is too young? * Rebecca Clay, ''Advertising to children: Is it ethical?'' (Monitor on Psychology, Volume 31, No. 8 September 2000),
American Psychological Association The American Psychological Association (APA) is the largest scientific and professional organization of psychologists in the United States, with over 133,000 members, including scientists, educators, clinicians, consultants, and students. It ha ...
* Media Awareness Network. ''How marketers target kids''. Other vulnerable audiences include emerging markets in developing countries, where the public may not be sufficiently aware of skilled marketing ploys transferred from developed countries, and where, conversely, marketers may not be aware how excessively powerful their tactics may be. See Nestle infant milk formula scandal. Another vulnerable group are mentally unstable consumers. The definition of vulnerability is also problematic: for example, when should endebtedness be seen as a vulnerability and when should "cheap" loan providers be seen as
loan sharks A loan shark is a person who offers loans at extremely high interest rates, has strict terms of collection upon failure, and generally operates outside the law. Description Because loan sharks operate mostly illegally, they cannot reasonably ...
, unethically exploiting the economically disadvantaged? Targeting the Vulnerable Marketing targeting strategies for products that may cause economic, physical and psychological harm has become an aspect of marketing which is criticized a considerable amount, especially in marketing literature with a particular focus on vulnerable consumers Children, elderly consumers, and economically disadvantaged consumers are often categorized as being a part of the vulnerable group in marketing, in terms of ethics. “Ethics and social responsibility communities seem to agree that targeting a vulnerable group with marketing campaigns that take advantage of their vulnerability is unjust”. George G Brenkert was amongst the first to raise the issue about taking advantage of the vulnerability of a person, which therefore makes marketing practices immoral or unjust. Adolescents and children in the US are major market force in the food and beverage industry and as a result, food marketers are “attracted to the youth as consumers because of their spending power, purchasing influences and as future adult consumers”. It is ethically wrong to target children especially when it comes to unhealthy food and beverages, as children may not want anything else, which could lead to child obesity. Children have difficulty deciding between the purpose of advertising and other modes of communication; therefore it is morally unacceptable to target vulnerable children with such products. In Belgium, it is banned to show commercials during children's programs, similarly in Australia, such ads are not allowed during television programs for preschoolers. It is considered unethical to generate profits through marketing to vulnerable groups, such as children, the poor or the elderly. The ethics of marketing practice, especially directed towards the vulnerable can be divided into two areas, product and process. Process related ethical issues are often demonstrated through the use of deceptive or misleading advertising, where as product related issues is predominately focuses on marketing of certain “harmful” products such as tobacco, unhealthy food etc. Excluding potential customers from the market: There are certain high caution aspects of ethical marketing in terms of market audience. Using selective marketing to discourage demand from an unwanted market group or exclude them altogether. Examples of market exclusion or selective marketing are certain company's attitudes towards the gay, ethnic groups and overweight (plus size) market groups. Customers are treated like this because companies think that they are unprofitable so they try to deprive them or avoid them altogether. It is often debated amongst the business community that in order to be profitable, often businesses have to be unethical. However, this idea is seemingly outdated as most businesses nowadays follow an ethical business plan. In the United States, plus size apparel is thought to have generated $17.5 billion between May 2013 and April 2014, which is a 5% increase from the previous year, this is to be expected as 65% of American women are plus sized . Another example of exclusion from the market is some pharmaceutical industry's exclude developing countries from AIDS drugs


Pricing ethics

Pricing ethics: Pricing along with product, place and promotion are the four functions of marketing. Retailers and producers must ensure that ethical pricing strategies are performed in order to earn profits without deceiving competitors or consumers .Issues in pricing ethics are related to fairness, specifically the fair treatment of buyers and sellers as well as fair competition. Ethical pricing practice happens when it allows the market to remain competitive and other players in the market are treated fairly. However buyers and sellers have different goals and perceived outcomes in the exchange process. Usually buyers are seeking to gain products and services at the best possible price whereas sellers are generally concentrated on generating maximum profit. Price fixing: Price fixing is maintaining a price at a certain level, which has been agreed upon between competing sellers and is illegal in most countries . When price fixing occurs and a price is set by an industry, customers are forced to pay the exorbitant price due to a lack of options. Price fixing is thought to be unethical and socially irresponsible as it breaks laws that are specifically put into place to promote regular competition between companies . With competition between companies, business will be likely to keep costs low at affordable prices, in order to compete. Horizontal price-fixing occurs when competitors in a market who are selling the same product or service come to decide on a mutual price that they will both set for their products or services. The anti-trust law in the United States as well as the competition law of the European Union state that horizontal-price fixing agreements are illegal because it creates a monopolistic market environment that can exploit consumers. Vertical price-fixing is also considered as illegal activity in the United States. This takes place when competitors in the same market enter into an agreement to set a mutual minimum or maximum resale price. Price wars: Price wars, is when businesses constantly lower its prices in an attempt to demoralize its competition . Price wars can create emotionally devastating and psychologically devastating situations, which has an extraordinary impact on an individual, a company and industry profits . The intention of a price war is to drive competitors out of the market or to create an entry barrier into the market. Although it is beneficial for consumers, as they will get the product or service at a low price, however they are often deprived for quality. Also in the long term, it will force other competitors out of business and lower profits threaten business survival. If a company is involved in price war tactics, then it can be seen as unethical within the industry because they are starting a dangerous position and driving other companies to use similar tactics. A companies overall goal is to maximize its profits and revenue, however through engaging in a price war they are unable to do this and are more likely making less money as they would have had they taken part in normal business competition. If price wars can be avoided, it will prove to be vital success for any business. Price Collusion: Price Collusion is when several companies get together in order to hold the price of a good or service at a raised level in the hopes of achieving large profits or restricting the market. Price fixing is sometimes called price collusion in order to emphasize the agreement using secretive, to avoid fair competition. Pricing practices that are considered unethical in most geographic markets include: *
Bid rigging Bid rigging is a fraudulent scheme in procurement auctions resulting in non-competitive bids and can be performed by corrupt officials, by firms in an orchestrated act of collusion, or between officials and firms. This form of collusion is illegal ...
*
Dumping (pricing policy) Dumping, in economics, is a kind of injuring pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price below the normal price with an injuring effect. The objective of d ...
*
Predatory pricing Predatory pricing is a pricing strategy, using the method of undercutting on a larger scale, where a dominant firm in an industry will deliberately reduce the prices of a product or service to loss-making levels in the short-term. The aim is th ...
*
Price gouging Price gouging is a pejorative term used to describe the situation when a seller increases the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair. Usually, this event occurs after a demand or ...
*
Price fixing Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...
* Supra competitive pricing List of pricing practices which may be unethical in certain circumstances and should be used with caution: *
Price discrimination Price discrimination is a microeconomic pricing strategy where identical or largely similar goods or services are sold at different prices by the same provider in different markets. Price discrimination is distinguished from product differe ...
(except where differential prices can be justified on economic grounds, such as discounts for volume purchasers) *
Price skimming Price skimming is a price setting strategy that a firm can employ when launching a product or service for the first time. By following this price skimming method and capturing the extra profit a firm is able to recoup its sunk costs quicker as w ...
*
Price war A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in the ...
*
Variable pricing Variable pricing is a pricing strategy for products. Traditional examples include auctions, stock markets, foreign exchange markets, bargaining, electricity, and discounts. More recent examples, driven in part by reduced transaction costs ...


Ethics in advertising and promotion

Advertising is mass and paid communication, with a fundamental purpose to deliver information, acquire attitudes and induce action beneficial to the advertiser – generally the sale of the product or service. Advertising and promotion have a significant influence on people, society in large, while shaping their attitudes, behaviors and priorities . Some scholars believe that advertising supports ethical issues. It is also considered unethical to shame a substitute or rivals product or services (Srivastava & Nandan, 2010). Other ethical issues include, mistreatment of women,
advertising to children Advertising to children refers to the act of advertising products or services to children as defined by national laws and advertising standards. Scope and form Advertising to children can take place on traditional media such as television, radio ...
, misleading advertising and other issues, which lead to ethical decline of society. Mistreatment of women is evident immensely in advertisements. Often women are matched up with household products such as cleaning supplies and are shown as doing domestic work, which represents stereotyping of women. Women are also often used as sex symbols, to convey particular messages about products. Also men are often apparent in DIY (do it yourself) ads, which deliver the idea of them being a “handy man. An ad, which demonstrates ethical features, is truthful, it doesn’t make false claims, and it provides sufficient information for the buyer to make informed choices. Exhibiting a level of respect and dignity for its buyers is important while demonstrating decency. An example of an advert produced by Coca Cola, through using false advertising, it showed unethical issues behind its production. Coca Cola used of Karl Langerfeld (Chanel designer) who had claimed to lose 80 pounds on a diet that was mainly attributed to diet coke, “I drink diet coke from the minute I get up to the minute I go to bed and I drink nothing else”. This advert was specially targeted towards women as it aimed to be conveyed as a fashion trend, through the use of a famous fashion designer. Coke used thin models and world-renowned fashion designers both of whom are cautious of body image, which shows the wrong message for women, especially young women. The advert shows that going overboard with dieting is conventional and that diet coke is the way of going about achieving a thin and attractive body. It is ethically wrong to be using Karl Lagerfeld's extreme dieting ways in order to promote diet coke. It is not only advocating an extreme statement, but it is also sending the wrong message about the drink by directly associating it to a “healthy ideal body”. Often the line between ethical and unethical advertising is blurred, what may seem unethical to some consumers or businesses, may not to for others. Therefore, in cases like this, businesses should proceed with caution, because unethical advertising and promotion can fail, causing consumers to shy away from the company consequently defeating the purpose of any campaign. Ethical pitfalls in advertising and promotional content include: * Issues over truth and honesty. In the 1940s and 1950s,
tobacco Tobacco is the common name of several plants in the genus '' Nicotiana'' of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the ...
used to be advertised as ''promoting'' health. Today an advertiser who fails to tell the truth not only offends against morality but also against the law. However the law permits "
puffery In everyday language, puffery refers to exaggerated or false praise. Puffery serves to "puff up" what is being described. In law, puffery is usually invoked as a defense argument: it identifies futile speech, typically of a seller, which does ...
" (a legal term). The difference between mere
puffery In everyday language, puffery refers to exaggerated or false praise. Puffery serves to "puff up" what is being described. In law, puffery is usually invoked as a defense argument: it identifies futile speech, typically of a seller, which does ...
and fraud is a
slippery slope A slippery slope argument (SSA), in logic, critical thinking, political rhetoric, and caselaw, is an argument in which a party asserts that a relatively small first step leads to a chain of related events culminating in some significant (usually ...
: "The problem... is the slippery slope by which variations on puffery can descend fairly quickly to lies." See main article: false advertising. * Issues with violence, sex and profanity.
Sexual innuendo An innuendo is a hint, insinuation or intimation about a person or thing, especially of a denigrating or derogatory nature. It can also be a remark or question, typically disparaging (also called insinuation), that works obliquely by allusion ...
is a mainstay of advertising content (see
sex in advertising Sex appeal is often used in advertising to help sell a particular product or service. According to research, sexually appealing content, such as imagery, used for marketing does not need to pertain to the product or service in question. Rath ...
), and yet is also regarded as a form of sexual harassment. Violence is an issue especially for children's advertising and advertising likely to be seen by children. * Taste and controversy. The advertising of certain products may strongly offend some people while being in the interests of others. Examples include:
feminine hygiene Feminine hygiene products are personal care products used during menstruation, vaginal discharge, and other bodily functions related to the vulva and vagina. Products that are used during menstruation may also be called menstrual hygiene product ...
products,
hemorrhoid Hemorrhoids (or haemorrhoids), also known as piles, are vascular structures in the anal canal. In their normal state, they are cushions that help with stool control. They become a disease when swollen or inflamed; the unqualified term ''he ...
and
constipation Constipation is a bowel dysfunction that makes bowel movements infrequent or hard to pass. The stool is often hard and dry. Other symptoms may include abdominal pain, bloating, and feeling as if one has not completely passed the bowel movement ...
medication. The advertising of
condoms A condom is a sheath-shaped barrier device used during sexual intercourse to reduce the probability of pregnancy or a sexually transmitted infection (STI). There are both male and female condoms. With proper use—and use at every act of inte ...
has become acceptable in the interests of AIDS-prevention, but are nevertheless seen by some as promoting promiscuity. Some companies have actually marketed themselves on the basis of controversial advertising - see Benetton.
Sony , commonly stylized as SONY, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan. As a major technology company, it operates as one of the world's largest manufacturers of consumer and professiona ...
has also frequently attracted criticism for unethical content (portrayals of Jesus which infuriated religious groups; racial innuendo in marketing black and white versions of its PSP product; graffiti adverts in major US cities). * Negative advertising techniques, such as
attack ad Attack may refer to: Warfare and combat * Offensive (military) * Charge (warfare) * Attack (fencing) * Strike (attack) * Attack (computing) * Attack aircraft Books and publishing * ''The Attack'' (novel), a book * ''Attack No. 1'', comic and ...
s. In negative advertising, the advertiser highlights the disadvantages of competitor products rather than the advantages of their own. The methods are most familiar from the political sphere: see
negative campaigning Negative campaigning is the process of deliberately spreading negative information about someone or something to worsen the public image of the described. A colloquial, and somewhat more derogatory, term for the practice is mudslinging. Delibe ...
. * Delivery channels *
Direct marketing Direct marketing is a form of communicating an offer, where organizations communicate directly to a pre-selected customer and supply a method for a direct response. Among practitioners, it is also known as ''direct response marketing''. By ...
is the most controversial of advertising channels, particularly when approaches are unsolicited. TV commercials and direct mail are common examples. Electronic spam and
telemarketing Telemarketing (sometimes known as inside sales, or telesales in the UK and Ireland) is a method of direct marketing in which a salesperson solicits prospective customers to buy products or services, either over the phone or through a subsequen ...
push the borders of ethics and legality more strongly, and have been described as
attention theft Attention theft is a theory in economic sociology and psychology which describes situations in which marketers serve advertisements to consumers who have not consented to view them and who are given nothing in return. Perpetrators seek to distr ...
. *
Shill A shill, also called a plant or a stooge, is a person who publicly helps or gives credibility to a person or organization without disclosing that they have a close relationship with said person or organization. Shills can carry out their operatio ...
s and astroturfers are examples of ways for delivering a marketing message under the guise of independent product reviews and endorsements, or creating supposedly independent watchdog or review organizations. For example, fake reviews can be published on Amazon. Shills are primarily for message-delivery, but they can also be used to drive up prices in auctions, such as
eBay eBay Inc. ( ) is an American multinational e-commerce company based in San Jose, California, that facilitates consumer-to-consumer and business-to-consumer sales through its website. eBay was founded by Pierre Omidyar in 1995 and became ...
auctions. *
Native advertising Native advertising, also called sponsored content, is a type of advertising that matches the form and function of the platform upon which it appears. In many cases it functions like an advertorial, and manifests as a video, article or editorial. ...
is the blurring of lines between advertising and content.


Deceptive Advertising and Ethics

Another breach of marketing ethics has to do with the use of deceptive advertising. This form of advertising is not specific to one target market, and can sometimes go unnoticed by the public. There are a number of different ways in which deceptive marketing can be presented to consumers; one of these methods is accomplished through the use of humor. In a study conducted by Hassib Shabbir and Des Thwaites, 238 advertisements were assessed and 73.5% of them were found to have used deceptive marketing practices. Of those advertisements that were conducted deceptively, 74.5% of them used humor as a masking device in order to mislead potential customers. Part of what drives this study is the idea that humor provides an escape or relief from some kind of human constraint, and that some advertisers intend to take advantage of this by deceptively advertising a product that can potentially alleviate that constraint through humor. Through the study it was also found that all types of humor are used to deceive consumers, and that there are certain types of humor that are used when making certain deceptive claims. It is important to understand that humor is not the only method that is used to deter consumer's minds from what a product actually offers. Before making important purchases, one should always conduct their own research in order to gain a better understanding of what it is they are investing in.


The use of ethics as a marketing tactic

Business ethics has been an increasing concern among larger companies, at least since the 1990s. Major corporations increasingly fear the damage to their image associated with press revelations of unethical practices. Marketers have been among the fastest to perceive the market's preference for ethical companies, often moving faster to take advantage of this shift in consumer taste. This results in the expropriation of ethics itself as a selling point or a component of a corporate image. *
The Body Shop The Body Shop International Limited, trading as The Body Shop, is a British cosmetics, skin care and perfume company. Founded in 1976 by Anita Roddick, the company currently has a range of 1,000 products sold in about 3,000 stores, divided ...
is an example of a company which marketed itself and its entire product range solely on an ethical message. *
Greenwash Greenwashing (a compound word modeled on "whitewash"), also called "green sheen", is a form of advertising or marketing spin in which green PR and green marketing are deceptively used to persuade the public that an organization's products, aims ...
is an example of a strategy used to make a company appear ethical when its unethical practices continue. * Liberation marketing is another strategy whereby a product can masquerade behind an image that appeals to a range of values, including ethical values related to lifestyle and anti-consumerism.
''"Liberation marketing takes the old mass culture critique — consumerism as conformity — fully into account, acknowledges it, addresses it, and solves it. Liberation marketing imagines consumers breaking free from the old enforcers of order, tearing loose from the shackles with which capitalism has bound us, escaping the routine of bureaucracy and hierarchy, getting in touch with our true selves, and finally, finding authenticity, that holiest of consumer grails."'' (
Thomas Frank Thomas may refer to: People * List of people with given name Thomas * Thomas (name) * Thomas (surname) * Saint Thomas (disambiguation) * Thomas Aquinas (1225–1274) Italian Dominican friar, philosopher, and Doctor of the Church * Thomas the ...
)


Neuromarketing ethics

Neuromarketing Neuromarketing is a commercial marketing communication field that applies neuropsychology to market research, studying consumers' Piaget's theory of cognitive development, sensorimotor, cognitive, and affective responses to marketing stimuli. The ...
and its precursor,
neuroeconomics Neuroeconomics is an interdisciplinary field that seeks to explain human decision-making, the ability to process multiple alternatives and to follow through on a plan of action. It studies how economic behavior can shape our understanding of t ...
, uses clinical information about brain functions and mechanisms to help explain what is happening inside of the “black box” so prevalent in many explanations of consumer behavior. In order to do so, specialists use neuroimaging techniques and record brain responses to different stimuli
The Neuromarketing Science & Business Association
has launched on November 2012
Neuromarketing Code of Ethics
This is a first step towards adopting international standards applied to using neuroscientific methods to study the effectiveness of advertising campaigns, packaging and product design, as well as communication campaigns from non-profit organizations and government institutions. However, some ethicists condemn the code as protecting only a very narrow class, and in the extreme position that neuromarketing itself should only be used for the advancement of what is reasonably believed to be public good, employing Thomas Aquinas' doctrine of double effect (DDE). Although one could make the argument that engineering profit serves the public good, it would not be saved under the DDE because the intention behind it is not to generate a greater good than to which the collective harm of manipulation is greater. However, neuromarketing programs to encourage healthy lifestyle choices may be saved under the DDE, provided it is based on good scientific information in the first place, such as regular exercise.


Marketing strategy

The main theoretical issue here is the debate between
free markets In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ot ...
and regulated markets. In a truly free market, any participant can make or change the rules. However, when new rules are invented which shift power too suddenly or too far, other participants may respond with accusations of unethical behaviour, rather than modifying their own behaviour to suit (which they might not be able to anyway). Most markets are not fully free: the real debate is as to the appropriate extent of regulation. Case:
California electricity crisis California is a state in the Western United States, located along the Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the most populous U.S. state and the 3rd largest by area. It is also the m ...
, which demonstrates how constant innovation of new marketing strategies by companies such as
Enron Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded by Kenneth Lay in 1985 as a merger between Lay's Houston Natural Gas and InterNorth, both relatively small regional compani ...
outwitted the regulatory bodies and caused substantial harm to consumers and competitors. A list of known unethical or controversial marketing strategies: *
Anti-competitive practices Anti-competitive practices are business or government practices that prevent or reduce competition in a market. Antitrust laws differ among state and federal laws to ensure businesses do not engage in competitive practices that harm other, usuall ...
*
Bait and switch Bait-and-switch is a form of fraud used in retail sales but also employed in other contexts. First, customers are "baited" by merchants' advertising products or services at a low price, but when customers visit the store, they discover that the ...
*
Planned obsolescence In economics and industrial design, planned obsolescence (also called built-in obsolescence or premature obsolescence) is a policy of planning or designing a good (economics), product with an artificially limited Product lifetime, useful life o ...
* Pyramid scheme *
Vendor lock-in In economics, vendor lock-in, also known as proprietary lock-in or customer lock-in, makes a customer dependent on a vendor for products, unable to use another vendor without substantial switching costs. The use of open standards and alternat ...
/ Vendor lock-out *
Viral marketing Viral marketing is a business strategy that uses existing social networks to promote a product mainly on various social media platforms. Its name refers to how consumers spread information about a product with other people, much in the same way tha ...
/
guerilla marketing ''Guerilla Marketing'' ( si, ගරිල්ලා මාර්කටිං, italic=yes) is a 2005 Sri Lankan Sinhala action thriller film directed by Jayantha Chandrasiri and produced by K.C.K Communications for Euroshian Consultancy. It stars Y ...
* Subliminal advertising Controversial marketing strategies associated with the internet: *
Embrace, extend and extinguish "Embrace, extend, and extinguish" (EEE), also known as "embrace, extend, and exterminate", is a phrase that the U.S. Department of Justice found that was used internally by Microsoft to describe its strategy for entering product categories involvin ...
*
Search engine optimisation Search engine optimization (SEO) is the process of improving the quality and quantity of website traffic to a website or a web page from search engines. SEO targets unpaid traffic (known as "natural" or "organic" results) rather than direc ...
* Spamdexing *
Spyware Spyware (a portmanteau for spying software) is software with malicious behaviour that aims to gather information about a person or organization and send it to another entity in a way that harms the user—for example, by violating their priva ...
/
Adware Adware, often called advertising-supported software by its developers, is software that generates revenue for its developer by automatically generating online advertisements in the user interface of the software or on a screen presented to the ...


Further issues in marketing ethics

Marketing ethics overlaps with environmental ethics in respect of waste problems associated with the packaging of products.Definition of marketing ethics
(in German), excerpted from: Bruhn, M., Homburg, C.: Gabler Marketing Lexikon, Wiesbaden 2001.
Some, such as members of the advocacy group No Free Lunch, have argued that marketing by
pharmaceutical companies The pharmaceutical industry discovers, develops, produces, and markets drugs or pharmaceutical drugs for use as medications to be administered to patients (or self-administered), with the aim to cure them, vaccinate them, or alleviate symptoms. ...
is negatively impacting physicians' prescribing practices, influencing them to prescribe the marketed drugs rather than others which may be cheaper or better for the patient.Brendan I. Koerner
Dr. No Free Lunch
''Mother Jones'', March/April, 2003. Retrieved on 2007-10-06.
Ethical thinking is responding to situations that deal with principles concerning human behavior in respect to the appropriateness and inappropriateness of certain communication and to the decency and indecency of the intention and results of such actions. In other words, ethics are distinctions between right and wrong. Businesses are confronted with ethical decision making every day, and whether employees decide to use ethics as a guiding force when conducting business is something that business leaders, such as managers, need to instill. Marketers are ethically responsible for what is marketed and the image that a product portrays. With that said, marketers need to understand what good ethics are and how to incorporate good ethics in various marketing campaigns to better reach a targeted audience and to gain trust from customers. Marketing ethics, regardless of the product offered or the market targeted, sets the guidelines for which good marketing is practiced. When companies create high ethical standards upon which to approach marketing they are participating in ethical marketing. To market ethically and effectively one should be reminded that all marketing decisions and efforts are necessary to meet and suit the needs of customers, suppliers, and business partners. Ethical behavior should be enforced throughout
company culture Historically there have been differences among investigators regarding the definition of organizational culture. Edgar Schein, a leading researcher in this field, defined "organizational culture" as comprising a number of features, including a s ...
and through company practices. However, marketers have been known to market questionable products to the public. These tend to be controversial products in that they appeal to some while offending others. An example of such a product that is sold regularly today is a cheap handgun. America is a country in which its citizens have the right to bear arms, yet these weapons are criticized by the public because they are sold at a low price making it rather easy to purchase by members of less affluent communities. Critics have referred to these weapons as " Saturday Night Specials" referring to the negative connotation that they are purchased to commit crimes. In defense of the critics opinions, if in fact these guns are purchased with the intent to commit such crimes, than one must question the ethics behind marketing these products to criminals. Is the marketer facilitating the crime by appealing to this target market with a weapon that is easily accessible? While the argument in this case may seem unethical due to the questionable nature of these cheap handguns, this argument does not apply to the sale of all guns. That is because weapons that are legally sold to customers at an affordable rate for safety purposes, self-defense, hunting, and law enforcement are perfectly ethical due to the fact that they are safe product that is marketed to a responsible consumer. This comparison supports the fact that ethical marketing can be perceived differently by consumers depending on the nature of the product that is being sold.


Regulation and enforcement

Marketing ethics and marketing law are related subjects. Relevant areas of law include
consumer law Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent business ...
which protects consumers and
antitrust law Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust ...
which protects competitors - in both cases, against unethical marketing practices. Regulation extends beyond the law to lobbies, watchdog bodies and self-regulatory industry bodies. * Advertising regulation * Consumer protection


See also

*
Consumerism Consumerism is a social and economic order that encourages the acquisition of goods and services in ever-increasing amounts. With the Industrial Revolution, but particularly in the 20th century, mass production led to overproduction—the su ...
*
Customer relationship management Customer relationship management (CRM) is a process in which a business or other organization administers its interactions with customers, typically using data analysis to study big data, large amounts of information. CRM systems data collectio ...
*
Ethical marketing Ethical marketing refers to the application of marketing ethics into the marketing process. Briefly, marketing ethics refers to the philosophical examination, from a moral standpoint, of particular marketing issues that are matters of moral judgm ...
* False advertising *
Marketing Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...
*
Marketing warfare strategies Marketing warfare strategies represent a type of strategy, used in commerce and marketing, that tries to draw parallels between business and warfare and then applies the principles of military strategy to business situations, with competing firm ...
*
Media ethics Media ethics is the subdivision dealing with the specific ethical principles and standards of media, including broadcast media, film, theatre, the arts, print media and the internet. The field covers many varied and highly controversial topics, r ...
* Propaganda *
Socially responsible marketing Socially responsible marketing is a marketing philosophy that a company should take into consideration; "What is in the best interest of society in the present and long term?"Armstrong, Gary, and Philip Kotler. ''Principles of Marketing''. 12th e ...


References


Bibliography

* * * * * CNBC. (2015, April 8). ''Retail's plus-size problem: Designing for larger sizes''. Retrieved March 31, 2016, from http://www.cnbc.com/2015/04/08/retails-plus-size-problem-designing-for-larger-sizes.html * Colley, R. (1961). ''Defining advertising goals for measured advertising results.'' New York . * * Ellis, N., Fitchett, J., Higgins, M., Jack, G., Lim, M., Saren, M., et al. (2011). ''Marketing: A Critical Textbook.'' United Kingdom * * Harvard Business Review. (2000, March). ''How to Fight a Price War''. Retrieved March 28, 2016, from https://hbr.org/2000/03/how-to-fight-a-price-war * * Mahmood, A., & Vulkan, N. (2013). ''How does dominance and competition affect the use of consumer information? Evidence from a famed field experiment.'' Retrieved from * * Melé, D. (2009). ''Business Ethics in Action: Seeking Human Excellence in Organizations.'' United Kingdom * * Outterson, K. (2004). ''Pharmaceutical Arbitrage: balancing access and innovation in international prescription drug markets.'' Retrieved from http://www.who.int/intellectualproperty/news/en/Submission5.pdf * * Peppin, J. (1998). ''Price-Fixing Agreements under the Sherman AntiTrust Law.'' 299–303. Retrieved from http://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=3704&context=californialawreview * Srivastava, V., & Nandan, T. (2010). A Study of Perceptions in Society Regarding Unethical Practices in Advertising. ''South Asia Journal of Management'' , 61–69. * Story, M., & French, S. (2004). Food Advertising and Marketing Directed at Children and Adolescents in the US. ''International Journal of Behavioral Nutrition and Physical Activity'' , 1–3. doi: 10.1186/1479-5868-1-3 * The Guardian . (2013, January 12). ''How Diet Coke became fashion's favourite fizz''. Retrieved April 1, 2016, from the guardian : http://www.theguardian.com/fashion/2013/jan/12/diet-coke-fashion-favourite-fizz


External links


American Marketing Association Statement of Ethics
(2004) *
Ethics in Marketing
" Encyclopedia of Business and Finance. Mohandeep Singh. Thomson Gale, 2001.
eNotes eNotes was a free student and teacher educational website founded in 1998 by Brad Satoris and Alexander Bloomingdale, that provides material to help students complete homework assignments and study for exams. Based in Seattle, Washington, eNote ...
. 2006. 16 Oct, 2006
Marketing Ethics Resources
from the
Center for the Study of Ethics in the Professions Center or centre may refer to: Mathematics *Center (geometry), the middle of an object * Center (algebra), used in various contexts ** Center (group theory) ** Center (ring theory) * Graph center, the set of all vertices of minimum eccentricit ...
,
Illinois Institute of Technology Illinois Institute of Technology (IIT) is a private research university in Chicago, Illinois. Tracing its history to 1890, the present name was adopted upon the merger of the Armour Institute and Lewis Institute in 1940. The university has prog ...
. * Direct Marketing Association
Guidelines for Ethical Business Practice
(September 2006)

* Federal Trade Commission
FTC Guidelines on Advertising
{{DEFAULTSORT:Marketing Ethics Business ethics Marketing