ETHICAL ISSUES IN MARKETING

Jerry John jerryacharyabbs@gmail.com. Acharyas Bangalore B school.

Abstract. Ethics in marketing is taking centre stage in todays business. Todays marketing professionals will find it useful to look at ethics through the eyes of the marketers of the future. 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 out company culture and through company practices. Key words: Surrogate Advertisements, Subliminal Advertisements, Predatory Pricing, Political marketing Copyright, Trademark violations. Introduction: Ethics are a collection of principles of right conduct that shape the decisions people or organizations make. Practicing ethics in marketing means deliberately applying standards of fairness, or moral rights and wrongs, to marketing decision making, behavior, and practice in the organization. From the mid 1950 s the subject of marketing management grew rapidly. Notwithstanding its usefulness to those who manage, marketing precepts emphasized the marketing element in management, and not the management element in marketing. Marketing management implied integration of marketing activities and a downward delegation of authority. The following aspects were evidence of the trend of thought at that time: 1. A decision oriented rather than research oriented point of view. 2. Incorporation of recent developments in the behavioral sciences, mainly economics, psychology, and sociology. 3. Distinction between controllable elements of the business and the uncontrollable environment. 4. Adaptation, as a principal task of executives. 5. Uncertainty (about buyers and competitors) and probability as aspects of decision making. Four reasons are attributed to the fugacious nature of the way marketing practices are being carried out in developing countries, 1. The role of Information and Communication technologies: As ICTs evolve so do marketing practices. If yesterday it was television that revolutionized the way advertisements could create a lasting impact on the consumer, then today the internet and phone text messages are doing just that. 2. The world today is an increasingly global village: Social and ethnic boundaries are fast falling in the wake of cable television and the like. 3. Rapid economic expansions in countries like China and India have meant that marketers have to quickly respond to the changing socio-economic scenarios. Millions of people have entered the middle class and millions more are poised to do so. For marketers, the consequences can be mind boggling-as incomes and spending powers rise, marketers have to respond to increasing demands from consumers.

4. Better and improved marketing research has meant that the entire populace is not seen in totality but rather as a congeries of different types of consumers. The outcome: But the outcome of such developments is that a number of ethical issues have arisen. While the globe is indeed becoming a smaller place, marketers have to bear in mind national, local and cultural sensitivities. Very often, in the hope of tapping a larger consumer base, marketers jump headlong in new markets without keeping in mind ethnic and social issues typical to certain areas. While marketers do have to act with celerity in gaining footholds in emerging markets such as China and India, care has to be taken in ensuring that the mores, etiquettes of the land are not encroached upon. The incorporation of newer technologies has meant that a number of issues such as invasion of privacy and credibility have arisen. Hence, in these rapidly changing circumstances, marketers and consumers alike face a nimiety of ethical issues that have to be addressed. This paper looks at some of the ethical issues in the developing countries context. Surrogate Advertisements- . Surrogate advertising is advertising which embeds a brand or product message inside an advertisement which is ostensibly for another brand or product. For example, a cigarette company might issue public service announcements relating to a topic such as lung cancer, using the company's logo or distinctive brand colours in the ads so that people are exposed to the company's branding without seeing an explicit ad for the company's product. The company would justify the advertisement by claiming that it's an example of social responsibility. In India alcohol and cigarette advertisements were banned outright some years back. However, alcohol and cigarette companies alike are using the avenue of surrogate advertisements to press forward their case. For the viewer though, the 'subtle' pointer towards the real deal is enough as the surrogate advertisements leave no ambiguity in their minds. Subliminal Advertisements- Consumers have a tendency to become influenced easily by the addition of certain phrases, pictures, sounds, and stimuli that advertisers spend millions studying in trials before products even hit the shelves. One of the most controversial and ethical issues in advertising is regarding subliminal advertisements. Inserting subliminal messages in an advertisement is an inherently misleading action. It is an attempt to manipulate a person's thinking without the person realizing that any such manipulation is occurring. The west has had its fair share of subliminal advertisements related hullabaloos primarily because the advertisement, marketing and regulating media themselves have been quite active in raising such issues. Predatory Pricing- In developing nations where the bulk of the populace is still employed in small and medium enterprises, the use of predatory pricing by large multinational corporations in order to wipe out competition is an ethical issue. While proponents of no holds barred pricing would attribute this to an unfettered free market, the fact remains that the larger issue is the threat of wiping out the livelihood of a large number of people. In India, a related issue is the entry of western discount stores that might eventually threaten the existence of millions of people employed in traditional mom-and-pop stores. WalMart's 'takeover of small towns' in the U.S.A. is also a related concern. Countries like India need to take a leaf out of the China book-China opened its market to these stores in 1991 and only recently allowed 100% foreign direct investment (FDI) in such ventures. False and Misleading Advertisements- Then there is the issue of false and downright disingenuous advertisements. While in itself this is an important ethical issue, an extension of this is the question of credibility. Nowadays, newspaper columns are rife with advertisements which blatantly compare features of brands with those of their competitors. Citing the opinion of 'experts', these advertisements claim their brands to be quantitatively and qualitatively better than those of their rivals. In India a leading car manufacturer had to recall its ad campaign when it incorrectly stated that one of its car models was superior to that of its competitor's. Post Purchase Dissonance- What you see is not often what you get Since very often what companies claim their products or services deliver is not what the consumers actually get, the issue of post purchase dissonance arises. There are two more noncontrasting viewpoints on this issue. One states the typical examples of Tele-Shopping Networks (TSN) and the internet.

Since there is no element of tangibility, the consumer would typically end up getting an end product which he/she didn't literally ask for. The other viewpoint states that such establishments would be punished by market forces since in today's world the consumer is undoubtedly the king. Discomfort or dissonance occurs when a consumer holds conflicting thoughts about a belief or an attitude toward an object. When cognitive dissonance occurs after a purchase it is called post purchase dissonance. Post purchase dissonance occurs because each of the alternatives considered by the consumer usually has both advantages and limitations. Post purchase typically increases as (1) the money value of the computer purchase increases, (2) the degree of similarity between items selected and items rejected increases, and (3) the relative importance of the decision increases Promotions of Alcohol- Tobacco-Creating Demand for Vice Cigarettes are one of the most heavily marketed products in China and other developing nations. An increasing percentage of those marketing dollars is dedicated to what are probably the most sophisticated consumer marketing databases in the business world. Tobacco advertising is no longer just the province of multi-million dollar ad budgets pushing the Marlboro Man, Joe Camel's phallic face or the women in the Virginia Slims' ads who have 'come a long way.' It is equally the province of direct marketers, pushing free packs to targeted prospects and mailing slick magazines-published by tobacco companies-to influence the behavior and retain the loyalty of tens of millions of smokers Intrusive Promotions- A number of companies offers a plethora of freebies in terms of services and add-ons, however all these come with the proverbial strings attached. These are particularly true for telecom and internet services related companies. Mobile network providers in India for example are notorious for literally bombarding the users with promotional text messages. Many a times these companies share customer data with other companies without the explicit permission of the customers themselves. The issue at hand is such measures compromise the confidentiality of company-client relationships and trivialize the privacy concerns of the customers.

Copyright, trademark violations.

Copyright and trademark violations are ubiquitous throughout the developing world. One of the major grouses of multinational corporations in countries like China and India is the lack of a robust legal framework that harshly penalizes violators. Data piracy is a major concern in South East nations and millions of illegal compact discs are made in such countries which cost software, music and movie companies billions of dollars.

Advertisements
Advertisements as Mirrors of prevailing norms Marketers claim that advertising simply mirrors the attitudes and values of the surrounding culture. No doubt advertising, like the media of social communications in general, does act as a mirror. But, also like media in general, it is a mirror that helps shape the reality it reflects, and sometimes it presents a distorted image of reality. Advertisers are selective about the values and attitudes to be fostered and encouraged, promoting some while ignoring others. This selectivity does not impart credence to the notion that advertising does no more than reflect the surrounding culture. For example, the absence from advertising of certain racial and ethnic groups in some multi-racial or multi-ethnic societies can help to create problems of image and identity, especially among those neglected, and the almost inevitable impression in commercial advertising that an abundance of possessions leads to happiness and fulfillment can be both misleading and frustrating. Advertising also has an indirect but powerful impact on society through its influence on media. Many publications and broadcasting operations depend on advertising revenue for survival. This often is true of religious media as well as commercial media. For their part, advertisers naturally seek to reach audiences; and the media, striving to deliver audiences to advertisers, must shape their content so to attract audiences of the size and demographic composition sought. This economic dependency of media and the power it confers upon advertisers carries with it serious responsibilities for both.

Further issues in marketing ethics.

Marketing ethics overlaps with environmental ethics in respect of waste problems associated with the packaging of products. Some, such as members of the advocacy group No Free Lunch, have argued that marketing by pharmaceutical companies 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. Ethically 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 out company culture and through company practices.

Conclusion
Good Marketing Citizens All in all, it can be seen that ethical issues in marketing in the context of developing countries is highly sensitive to cultural, social and ethical issues. The larger issue is thus not merely an occidental versus an oriental one. For the marketing fraternity to be a good ethical citizen, the onus lie on themselves-for indeed, marketers have to stop indulging in unethical practices and start respecting local mores and values

Reference
Abratt, D Sacks - Journal of Business Ethics, 1988 Springer. Athmanand.R. Managerial Economics, Excel, 2002, New Delhi. Marketing concepts and cases Michael J Etzel, Bruce J Walker, William J Stanton and Ajay Pandit, TMH 13th Edition, New Delhi, 2007. Marketing Management: A South Asian Perspective Philip Kotler and Kevin Lane Kotler, Pearson Education, 11th Edition, 2007. Marketing of Services Indian Edition Hoffman and Bateson Cengage Learning 2006. W. Michael Hoffman, Judith Brown Kamm, Robert E. Frederick, Edward S. Petry From the Tenth National Conference on Business Ethics Sponsored by the Centre for Business Ethics at Bentley College. http://www.faculty.missouristate.edu/c/ChuckHermans/Bartels.htm. http://www.enotes.com/ethics-marketing-reference/ethics-marketing http://www.marketingpsychology.com.