ethics_in_marketing

8/7/2019 Ethics_In_Marketing

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Moral principles and values

that govern the actions of anindividual or group.


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Marketing ethics is an area of appliedethics which deals with the moral

principles behind the operation andregulation of marketing.

Some area of marketing ethics overlapwith media ethics such as ethics ofadvertisement and promotion.


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Societal Culture and Norms The set of values, ideas, and attitudes that are

learned and shared among members of a group.

Business Culture and industry practicesCorporate Culture and expectations

Distributor relations

Advertising standards

Customer Service Pricing

Product Development

General Ethical Standards


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A reasonable practice leading to positive

relationships.

That rules are not necessarilycontractual.

Allows buyers and sellers to work

together.

Disadvantage: requires time to develop alist of expected conduct or rules of

behavior.


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More Selfish

More Mature

Preconventional Morality

Conventional Morality

Postconventional Motivate


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Childlike level

Based on what will be punished

or rewarded

Self-centered, calculating, selfish


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Moves toward the expectations of society

Concerned over legality and the opinion of

others

When in Rome, do as the Romans


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Morality of the mature adultConcern about how they judge themselves

Concern if it is right in the long run


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Help identify acceptable businesspractices

Help control behavior internally

Reduce confusion in decision making

Facilitate discussion about right andwrong


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American Marketing Association-Code of

ethics highlights:

3 Ethical

Norms

6 Ethical

Values


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Ethical Norms

Marketers first do no harm.

Marketers must foster trust in marketingsystem.

Marketers should embrace, communicate, and

practice the fundamental ethical values that will

improve consumers confidence in the integrity

of the marketing exchange system.

Source: American Marketing Association


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Ethical Values

Honesty Responsibility

Fairness Respect

Openness Citizenship

Source: American Marketing Association


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Ethical Issues in Marketing


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Predatory pricing

Vertical price fixing

Horizontal price fixing

Comparative price advertising

Bait-and-switch

Scanned vs. posted prices


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Price discrimination

Inside channel systems

Business to consumer


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Price discrimination inside channel

systems Justifications

x Differences in cost

x Differences in quality

x Changing market conditions

x To meet competition

Deals must be offered on a proportionately

equal basis


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Business to consumer price

discrimination

First degree price discrimination (i.e. charging

more to those who will pay it)

x Auto dealers

x Furniture


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Business to consumer price

discrimination Second degree price discrimination (charging

different prices based on the nature of the

offering)

x Multiple unit pricing

x Price bundling

x Coupons

x Rebates


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False and misleading advertising

Creating demand for vice or

unwholesome products Tobacco?

Alcohol?

Fattening foods?

Pornography or sexually explicit material? Intrusive promotions


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Slotting allowancesBuyback / stocklift / lift-outGray market merchandise

Diverted merchandiseExclusive geographic territoriesExclusive dealing agreementsTying contractsRefusal to deal


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Products that create harm Targeted at disadvantaged groups (e.g., cheap

wine targeted to alcoholics and homeless

people)

Quality deterioration as a result of a

harvesting strategy

Planned obsolescenceCounterfeit merchandise


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Moral idealism universal rights and

obligations

Utilitarianism the greatest good for the

greatest number

Social justice emphasis on fairness andequality for all individuals


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Stockholders

Employees

Customers

Distributors

Suppliers

Society


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Allow booking for a holiday when hotel itself has noroom.

Allow booking for a holiday when hotel itself has noroom.

Bait andSwitch

Failing to mention additional prices. Persuade you to buy at higher priced good or

service.

Failing to mention additional prices. Persuade you to buy at higher priced good or

service.Misleading

offers

Decreasing the quantity(or time) without loweringcost

Using packaging to appear bigger.

Decreasing the quantity(or time) without loweringcost

Using packaging to appear bigger.Downsizing

Giving free gifts as a way of coercion to buy(notcompetitions)

Giving free gifts as a way of coercion to buy(notcompetitions)Gift giving


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Ethical Issues when

Marketing to Children.


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