Marketing ethics, audit and objectives

Ethics?

Ethics are moral principles that guide people (in respect) of what is right or wrong

Marketing ethics

Marketing ethics refer to the moral principles that guide a firm’s marketing activities. Unethical marketing behaviour takes place when marketing activities do not follow moral principles.

Regulations

In many countries, governments have set up rules or guidelines forethical marketing known as Ethical code of marketing practice. These codes mainly include:

Regulation of advertisements which must be decent, honest and truthful.

Consumer protection on prices and products. For example, prices must be displayed or a 500ml bottle must not contain 450ml of content.

Monitoring of unfair practices such as unfair price fixing by powerful firms to exit small firms

Examples of unethical marketing practices

Bait and switch

Bait and switch is one of the most common unethical practices. It consists of attracting customers (the bait) by advertising very cheap products which are available only to the first few buyers. Other customers, once attracted, have to switch to more expensive alternatives. Budget airlines, mobile phones retailers and estate agents frequently use bait and switch techniques

Health fraud advertisements

These are unproven promises of quick medical cures such as losing 10 kilos in 10 days, or ….

Get rich quick schemes

These are schemes that are promoted to offer people the opportunity to become rich quickly without telling them of the high adverse risk.

Product misrepresentation

This takes place when firms use brand names similar to well known trademarks such as: Ransonic which is very near to panasonic JNC which is very near to JVC…….

Marketing audit?

A marketing audit is an examination or review of the current marketing situation of a business.

It identifies the strengths, weaknesses, opportunities and threats in relation to the business marketing activities. The audit also analyzes the degree of competition in the industry or market.

Audit tools?

A marketing audit can be conducted by:

•Marketing SWOT analysis and•Porter’s five forces competition analysis

Examples of marketing SWOT

Strengths: Effective promotionStrong brands

Weaknesses: Small product rangePoor distribution networks

Opportunities: Possible expansion in new market Growing demand due to economic recovery

Threats: growing competition new laws forcing changes in production method

Read p148 for more examples

Porter’s five forces: HLDealt in Module 6

Marketing objectives

Marketing objectives are targets which a business is trying to achieve through its marketing activities. They are often more effective if they are SMART, i.e.

SpecificMeasurableAgreed RealisticTime related

Market objectives commonly focus on certain areas:

Growth: To increase market share by 10% next year.

Profitability: To increase profit by 5% in the next 3 years.

Market leadership: to have 75% of the market share in 5 years.

Product development: To launch at least one new product in the next 5 years

Market development: to enter the Iphone market in two years