Marketing Ethics

Ethics in Marketing

Function and process of marketing keeping to the standard norms of it and achieving the ends through a sound means.

What does Marketing Ethics involve?

 Not cheating the consumers at the first place.  Product should be qualitative and should satisfy the customer.

Corporate marketing ethics policies:Distributor relations Advertising standards Customer service Pricing Product development General ethical standards

Some morally difficult situations in Marketing

 You work for a cigarette company. Public policy debates

over the past many years no doubt in your mind that cigarette smoking and cancer are closely linked. Although your company currently runs an if you dont smoke, dont start promotion campaign, you believe that other company promotions might encourage young (although legal age) non smokers to pick up the habit. What should you do?

 You are thinking of hiring a product manager who has

just left a competitors company. She would be more than happy to tell you all the competitors plans for the coming year. What would you do?

 You are interviewing a capable female applicant for a job

as salesperson. She is better qualified than the men that you just interviewed. Nevertheless, you know that some of your important customers prefer dealing with men, and you will lose some sales if you hire her. What would you do?

 One of your top dealers in an important territory

recently has had family troubles, and his sales have slipped. It looks like it will take him a while to straighten out his family trouble. Meanwhile you are losing many sales. Legally, on performance grounds, you can terminate the dealers franchise and replace him.

What would you do?

Ethical Norms and Values for Marketers

 Marketers must do no harm

Doing work for which they are appropriately trained or experienced so that they can actively add value to their organizations and customers.

 Marketers must foster trust in the marketing system.

Products are appropriate for their intended and promoted uses. Marketing communications about goods and services are not intentionally deceptive or misleading.

Ethical Values Honesty

To be truthful and forthright in our dealings with customers and stakeholders.

 We will tell the truth in all situations and at all times.  We will offer products of value that do what we claim in our communications.  We will stand behind our products if they fail to deliver their claimed benefits.

Responsibility
To accept the consequence of our marketing decisions and strategies.
 We will make strenuous efforts to serve the needs of our

customers.
 We will acknowledge the social obligations to stakeholders

that come with increased marketing and economic power.

 We will recognize our special commitments to economically

vulnerable segments of the market such as children, the elderly and others who may be substantially disadvantaged.

Fairness
To try to balance justly the needs of the buyer with the interests of the seller.

 We will represent our product in clear way in selling,

advertising and other forms of communication

 We will reject manipulations and sales tactics that harm

customer trust.

Respect

To acknowledge the basic human dignity

 We will listen to the needs of our customers and make all

reasonable efforts to monitor and improve their satisfaction on an ongoing basis.

 We will make a special effort to understand suppliers,

intermediaries and distributors from other cultures.

We will appropriately acknowledge the contributions of

others, such as consultants, employees and coworkers.

Openness
To create transparency in our marketing operations.
 We will strive to communicate clearly with all our

constituencies.
 We will accept constructive criticism from our customers

and other stakeholders.

 We will explain significant product or service risks,

component substitutions or other foreseeable eventualities that could affect customers or their perception of the purchase decision.

Citizenship
To fulfill the economic, legal and societal responsibilities that serve stakeholders in a strategic manner.

 We will strive to protect the natural environment in the

execution of marketing campaigns.

 We will give back to the community through volunteerism

and charitable donations.

Sources of Ethical lapses

 Discriminating buyers and sellers on age, sex, country of origin, racial identity, complexion, caste, creed, faith etc.  Disclosing premature offerings.  Using confidential information for any benefit.  Trying to steal information.  Violating patents and copyrights.  Giving or accepting bribes, gifts, or any kind of obligation

 Not helping business partners improve their quality and standards of operations and performance.  Be indifferent to or against the standards of the global environment.  Disallow employees participation in social and humanitarian activities.  Not willing to have fair and open relations with suppliers and retailers.  Not behaving as a good citizen in the society and the market.

Ethics in five Pillars of marketing Ethical Product

Products of high safety standard and high utility These are the categories of products that help the users and consumers enjoy the full value of products from a level of low safety, low utility making unethical product. An unethical product would fail to achieve the safety and utility standards.

Ethics in Pricing
Price is the amount of money customers have to pay to obtain the product. List of unethical pricing strategies: 1. Price fixing 2. Price skimming 3. Price discrimination

 Price fixing
Agreement between participants on the same side in a market to buy or sell the same product only at a fixed price or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand.

Price fixing requires a conspiracy between two or more sellers or buyers; the purpose is to coordinate pricing for mutual benefit of the traders.

 Price skimming
Pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time. The objective of a price skimming strategy is to capture the consumer surplus. If this is done successfully, then theoretically no customer will pay less for the product than the maximum they are willing to pay. The advantage of Price Skimming is that:
 The high initial price does not attract more competitors  The high price communicates the image of a superior product.

 Price discrimination
Exists when sales of identical goods or services are transacted at different prices from the same provider. Practice of charging different customers different prices is called price discrimination.

Ethics in Place
Place includes company activities that make the product available to target consumers. Ford partners with a large body of independently owned dealerships that sell the companys many different models. Ford selects its dealers carefully and supports them strongly.

Ethical Promotion
Promotion means activities that communicate the merits of the product and persuade target customers to buy it. Promotional claims have to conform to the reality of the company and its standards. Unethical promotions are those where the companys offer varies significantly from its claims.

Ethical People

Company should remember not to discriminate on the identity of a human being. Be it the case of recruiting sales people, selling products, services to customers of different identities or getting supplies from firms , the company should not discriminate on age, sex, faith, caste, complexion.

Personal moral philosophies

What rights are included in the Consumer Bill of Rights?

The Right to Be Safe: Aimed at the defense of consumers against injuries caused by products other than automobile vehicles.

The Right to Choose Freely Consumers should have a variety of options provided by different companies from which to choose.

The Right to Be Heard Ability of consumers to voice complaints and concerns about a product in order to have the issue handled efficiently and responsively.

The Right to Be Informed Consumers should be provided with enough appropriate information to make intelligent and informed product choices