Ethical Issues in Marketing: Principles and Practices Report

This report delves into the critical domain of ethical issues in marketing, emphasizing the principles of honesty, fairness, and responsibility. It explores the importance of ethical practices in building trust, fostering a positive brand image, and cultivating customer loyalty. The report outlines key ethical issues such as bribery, fairness, honesty, pricing, product safety, personnel issues, confidentiality, advertising, and data manipulation. It further examines factors influencing ethical decision-making, including individual and organizational factors, and opportunities. The report also provides strategies for resolving ethical dilemmas, encompassing regulation, consumer protection, customer participation, corporate social responsibility, and balancing interests. Real-world examples, such as cases involving Fox News and Richemont, illustrate the practical implications of ethical lapses. The conclusion underscores the significance of ethical marketing in guiding pricing, advertising, research, and competitive strategies to meet the needs of customers, suppliers, and business partners. The report is submitted by Priyanka Kedia, an MBA 2nd semester student.

ETHICAL ISSUES IN MARKETING
Ethics are defined as the set of principles that guide a person’s conduct towards
being morally right. When a person is faced with moral dilemma, the choice that
the person makes largely depends upon the values and ethical principles that
person holds. It is over and above just being legal. Due to being dependent upon
the personal values and principles a person holds, an ethical code of conduct
cannot be described in absolute terms. Like in all disciplines of life, recognizing
and quantifying what is ethical in marketing and what is not is difficult. In a
broader sense, ethics in marketing mean implementing standards of moral rights
and wrongs and of fairness in the marketing practices of an organization.
Why we need ethics ?
1. To create values or trust in marketing communication.
2. To build good image about the organization in the minds of customer.
3. To develop the positive attitude of customers about the firm.
IMPORTANCE OF ETHICS:-
Ethical Marketing is a philosophy that focus focuses on honesty, fairness and
responsibility. it is a general set of guidelines can be put in place to ensure the
company’s intent is broadcasted and achieved. Principles of this practice include:
i. A shared standard of truth in marketing communications.
ii. A clear distinction between advertising and sensationalism.
iii. Endorsements should be clear and transparent.
iv. Consumers’ privacy should be maintained at all times.
v. Government standards and regulations must be adhered and practiced by
marketers.
According to O. C. Ferrell, the three factors influence the ethical decision making
process:

ET
As it is shown in Figure, individual factors mean that individuals substantiate their
decisions on their own concepts of right/ wrong act and act accordingly to their
daily lives. An organisational culture can be defined as a set of values, beliefs,
goals, norms, and rituals that the members or employees of an organisation
share. The culture of accompany may be expressed formally through work habits,
dress codes, extra-curricular activities and anecdotes. The culture of an
organization gives its members meaning and suggests rules for behavior and
dealing with problems within an organization” (Ferrel, 1998). An Opportunity
could be described as a favorable set of the conditions that limit barriers or
provide rewards.
ETHICAL ISSUES IN MARKETING:-
1. Bribery – Gifts from outside vendors, payment of questionable
commissions, ”money under the table.”
2. Fairness – Unfairly placing company interests over family obligations, taking
credit for the work of others, including customers to use services not
needed, manipulation of others.
3. Honesty – Lying to customers to obtain orders, misrepresenting services
and capabilities.
4. Price – Differential pricing, charging higher prices than firms with similar
products while claiming superiority.
5. Product – Product safety, product and brand infringement, exaggerated
performance claims, products that do not benefit consumers.
6. Personnel – Firing, hiring, employee evaluation
ETHICAL
DECISIONS
INDIVIDUAL FACTORS ORGANIZATION FACTORS
OPPORTUNITY

7. Confidentiality – Temptations to use or obtain classified, secret, or
competitive information.
8. Advertising – Crossing the line between exaggeration and
misrepresentation, misleading customers.
9. Manipulation of Data – Falsifying figures or misusing statistics or
information, distortion.
NOTICE that many watchwords like “questionable,” “exaggerated,” “distortion,”
and “crossing the line,” included. In marketing, the greatest challenge is to
influence the behavior of the target customer (by getting them to buy) without
violating the customer’s trust or acting unethically. With the rise of social media,
customers are in a much better position to share frank evaluations of products
and services publicly, and thus gives marketers a new means of capturing
unbiased customer feedback. (It also opens the door to the problem of “fake
customer reviews,” but that’s another issue.)
RESOLVING ETHICAL ISSUES IN MARKETING:-
1. Regulation – More than external regulation, marketing needs internal
controls and self-regulation. The organizations are expected to develop
principles of ethics to guide the marketing process. The establishment
bodies such as Advertising Standards Council of India (ASCI) can be seen as
a step in this direction.
2. Consumer protection – Various Consumer laws protects consumers and
competiti0on law protects competitors from unethical practices. Apart
from these regulators like CCI, TRAI, IRDA, etc. may also be approached for
grievance redressal.
3. Customer participation - Generally a customer is regarded as only a
recipient of products or services. However, if the marketer involves the
customer and does things in interaction with the customer it may work to
reduce two potential ethical dilemmas of consumer autonomy vs.
marketing effectiveness and consumer participation.

4. Taking responsibility – An organization should take the responsibility of its
actions. The responsibility also extends to the employees and other
organizations that the firm deals with like suppliers or dealer agencies. The
organization should make sure that any marketing decisions and actions
meet the customer’s needs and actions should also cater to the broader
needs of the society.
5. Balance the Interests – Marketing has a number of objectives ranging from
providing information about the product/service, stimulating the demand
and boosting the sale etc. The organization should focus on the long-term
benefits in terms of better branding and customer loyalty while making
decisions on ethical issues.
6. Corporate Social Responsibility – Customers are getting increasingly
sensitive about the production processes and the level of social
responsibility of an organization. Customers tend to prefer the
products/services from a company which is relatively more socially
responsible. Hence, it is a benefit for the organization to be ethically correct
for its customers.
ConcLUSION:-
Marketing ethics, regardless of the product offered or the market targeted, sets
the guidelines for which good marketing is practiced. 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. A company must have ethical marketing policies to guide their pricing,
advertising, research, and competitive strategies.
Ethical issues:Example

1. Fox News
Sexual harassment and abuse allegations against figures high up in Fox News
started in 2016 — just over a year before the #MeToo movement took off.
Multiple women at the television network said that sexual harassment from
superiors led to them being fired, demoted, or denied jobs entirely.
It was later revealed that Fox News had settled several lawsuits (some of them
years earlier), but the network was more concerned with covering up the
allegations than resolving the underlying issue.
2. Richemont
Racial discrimination is often subtle, which makes it extra difficult to combat.
However, there have been some instances where discrimination was blatant
enough to win a lawsuit. One example is that of Richemont, the luxury goods
company.
After black employee Cheryl Spragg called in sick due to a back injury, the
company decided to spy on her to confirm the veracity of her claim. Spragg, who
found the surveillance intimidating, sued Richemont for both breach of privacy
and for being passed over for promotions three times due to her race. The judge
ruled in her favor for both, saying that a reasonable course of action would have
been to ask a health professional for evidence of Spragg’s injury. Furthermore,
the judge found that the company had a preference for white continental
Europeans.
It’s important to be clear about what ethical issues in business you can expect to
face for two main reasons. First, you can ensure that you own behavior and
actions are always ethical. Second, it allows you to develop a positive workplace
culture where employees treat each other with respect and strive to grow the
business — rather than seeking purely personal gains.
SUBMITTED BY:- Priyanka Kedia [MBA 2nd sem]