Saturday, August 22, 2009

Ethical issues in marketing mix

Marketing Ethics

Marketing ethics concerns the application of ethical considerations to marketing decision making . Marketing ethics can be considered as moral judgement and behaviour standards in marketing practice or moral code or system in marketing area.

In other words, marketing ethics is the research of the base and structure of rules of conduct, standards, and moral decisions relating to marketing decisions and practices.

Marketing executives who take strategic decisions often face with ethical conditions and their decisions is related to all sides of marketing mix as product, price, place and promotion. Marketing executives' ethical decision making process related to these decisions is affected by miscellaneous ways as philosophical, economical, sociological, psychological, and religious.

In this study, marketing ethics is studied according to elements of marketing mix as product, price, place and promotion.

Ethics and Product Decisions

Marketing executives face with a lot of ethical problems related to planning and application of product strategies. For example,
• in new product development process, since ethics and legal subjects are discussed less than it is needed, faulty products are put on the market and so these products damage consumers. This grows out of seeing product security as engineering problem in most. Similarly, some product areas such as especially toys for children are sensitive to the ethical problems . For this reason, ethical way of thinking should come into all levels of marketing from engineering to customer support
• Other ethical issues related to product decisions, information on labels can sometimes be used as deceptive although it is technically true, rubbish problem which packing cause after its usage, failing in terms of guarantee related to product and performing planned product obselence to shorten product life cycle. .

Ethics and Pricing Decisions

Pricing is probably one of the most difficult areas of marketing when it is
analyzed from the ethical point of view. Ethically, price should be equal or
proportional to benefit which is taken by the consumers.

• However, when monopolistic power is had, it is seen that unreasonable price increase is set.
• Other ethical issues related to pricing include non-price price increases, misleading price reduction, price advertisements which can be misleading or considered as deceitful and their limits are not explained well,

Ethics and Distribution Decisions

Ethical issues related to place grow out of enterprises, which form channel of distribution, have different needs and goals. At power relationship in the channel, if channel members to put their power which they have into bad use, this may cause an ethical problem. For example, a powerful manufacturer may force retailer to conduct in different ways in subjects such as choice of retailer locations, minimum order size, product mix selection, restriction on alternative supply resources and arrangement of physical condition in retailer’s location.

Other ethical issues result in subjects as retailing decisions, direct marketing, supply and channel management.
• Ethical issues related to retailing decisions eventuate in areas such as buying, product assortment, pricing, selling, forward buying and slotting allowances.
• Ethical issues in direct marketing are the subjects which are privacy, confidentiality and intrusion
• Ethical problems which are faced while using of internet for marketing are reliability of operations, illegal activities, privacy, accuracy, pornographic, product guarantees, burglary, aiming at children, spams, deceptive advertisements.

Ethics and Promotion Decisions

Ethical issues related to promotion can be analysed under two headings as
• advertising and
• personal selling.

Advertisements are one of the ways of marketing which is criticised most from an ethical point of view. Unilateral advertising message, preconceived advertising messages, advertisements breaking programmes are criticized.

Whether advertisements are ethics or not is determined according to the extent of loss of advertisements to consumers. Loss can be defined in three ways:
• breach of the autonomy with control or manipulation,
• aggression to privacy, and
• breach of right to know .
Ethical problems in advertising can be analysed under two main headings:
• the content of advertising message and
• agent/customer relationships.

The relationship between advertising and ethics can be analysed from the point of view of persuasive trait of advertising, deception, puffery and making promises that cannot be kept. Other ethical issues related to advertising include advertising to children, demonstrations, mock-ups, endorsements and testimonials.

Thursday, October 30, 2008

AMA_Ethical Norms and Values for Marketers

Statement of Ethics

Ethical Norms and Values for Marketers

The American Marketing Association commits itself to promoting the highest standard of professional ethical norms and values for its members (practitioners, academics and students). Norms are established standards of conduct that are expected and maintained by society and/or professional organizations. Values represent the collective conception of what communities find desirable, important and morally proper. Values also serve as the criteria for evaluating our own personal actions and the actions of others. As marketers, we recognize that we not only serve our organizations but also act as stewards of society in creating, facilitating and executing the transactions that are part of the greater economy. In this role, marketers are expected to embrace the highest professional ethical norms and the ethical values implied by our responsibility toward multiple stakeholders (e.g., customers, employees, investors, peers, channel members, regulators and the host community).

As Marketers, we must:

  1. Do no harm. This means consciously avoiding harmful actions or omissions by embodying high ethical standards and adhering to all applicable laws and regulations in the choices we make.
  2. Foster trust in the marketing system. This means striving for good faith and fair dealing so as to contribute toward the efficacy of the exchange process as well as avoiding deception in product design, pricing, communication, and delivery of distribution.
  3. Embrace ethical values. This means building relationships and enhancing consumer confidence in the integrity of marketing by affirming these core values: honesty, responsibility, fairness, respect, transparency and citizenship.

Honesty – to be forthright in dealings with customers and stakeholders. To this end, we will:

  • Strive to be truthful in all situations and at all times.
  • Offer products of value that do what we claim in our communications.
  • Stand behind our products if they fail to deliver their claimed benefits.
  • Honor our explicit and implicit commitments and promises.

– to accept the consequences of our marketing decisions and strategies. To this end, we will:

  • Strive to serve the needs of customers.
  • Avoid using coercion with all stakeholders.
  • Acknowledge the social obligations to stakeholders that come with increased marketing and economic power.
  • Recognize our special commitments to vulnerable market segments such as children, seniors, the economically impoverished, market illiterates and others who may be substantially disadvantaged.
  • Consider environmental in our decision-making.

– to balance justly the needs of the buyer with the interests of the seller. To this end, we will:

  • Represent products in a clear way in selling, advertising and other forms of communication; this includes the avoidance of false, misleading and deceptive promotion.
  • Reject manipulations and sales tactics that harm customer trust.
    Refuse to engage in price fixing, predatory pricing, price gouging or “bait-and-switch” tactics.
  • Avoid knowing participation in conflicts of interest.
    Seek to protect the private information of customers, employees and partners.

Respect – to acknowledge the basic human dignity of all stakeholders. To this end, we will:

  • Value individual differences and avoid stereotyping customers or depicting demographic groups (e.g., gender, race, sexual orientation) in a negative or dehumanizing way.
  • Listen to the needs of customers and make all reasonable efforts to monitor and improve their satisfaction on an ongoing basis.
  • Make every effort to understand and respectfully treat buyers, suppliers, intermediaries and distributors from all cultures.
  • Acknowledge the contributions of others, such as consultants, employees and coworkers, to marketing endeavors.
  • Treat everyone, including our competitors, as we would wish to be treated.

Transparency – to create a spirit of openness in marketing operations. To this end, we will:

  • Strive to communicate clearly with all constituencies.
  • Accept constructive criticism from customers and other stakeholders.
  • Explain and take appropriate action regarding significant product or service risks, component substitutions or other foreseeable eventualities that could affect customers or their perception of the purchase decision.
  • Disclose list prices and terms of financing as well as available price deals and adjustments.

Citizenship – to fulfill the economic, legal, philanthropic and societal responsibilities that serve stakeholders. To this end, we will:

  • Strive to protect the ecological environment in the execution of marketing campaigns.
  • Give back to the community through volunteerism and charitable donations.
    Contribute to the overall betterment of marketing and its reputation.
  • Urge supply chain members to ensure that trade is fair for all participants, including producers in developing countries.


Every one of us have heard 'marketing' throughout our life. It is always been a dramatic backdrop for stories about big ideas and big risks. Marketing successes don't come easy-they tend to appear after bouts of hard work. Of course, the story of marketing doesn't consist entirely of successful episodes. Teaching people to become marketing professional is a challenge. My experience in marketing and also teaching of marketing management at various colleges has prompted me to start this blog. This blog will be an open book for all those people who are in marketing where I am going to share my views and experiences.