MARKETING ETHICS

Marketing Ethics

Marketing Ethics

Introduction

Ethics are a collection of principles of right conduct that shape the decisions people or organizations make. Practicing ethics in marketing means deliberately applying standards of fairness, or moral. When an organization behaves ethically, customers develop more positive attitudes about the firm, its products, and its services. When marketing practices depart from standards that society considers acceptable, the market process becomes less efficient—sometimes it is even interrupted. Not employing ethical marketing practices may lead to dissatisfied customers, bad publicity, a lack of trust, lost business, or, sometimes, legal action. Thus, most organizations are very sensitive to the needs and opinions of their customers and look for ways to protect their long-term interests.

Literature Review

Firms are developing codes of ethics to help guide corporate behavior. Ethical codes are formal written statements of a firm's policy regarding how the organization intends to manage its professional relationships with a wide range of stakeholders. (Heath, Heath & Palenchar 2008, 148)Codes are becoming common place and are used to set the standard of behavior for employees. Codes are often general in scope and consequently do not provide practical guidelines to managers regarding how the firm should act in any given situation. (Hartman 2004)To encourage the application of ethical standards to business conduct, scholars proposed a framework which describes how ethics might be incorporated into the developmental stages underlying the formation of marketing strategies. Their framework consists of a parallel planning process. The first process (right column) includes stages commonly associated with developing marketing strategy by corporate planners. The second process (left column) identifies the various ethical considerations which correspond to each strategic development stage. Given that the stages of strategy development are relatively well known to most readers, only the corresponding ethical considerations will be examined here. According scholars the process begins by specifying the firm's ethical profile. (Frederick 2002, 179)The profile is the firm's “ethical compass” providing guidance on how to treat its various constituents in domestic as well as international markets. The firm derives the profile in part from its history, mission, and image. In terms of strategic planning, the profile later serves as a standard which the firm can use to assess the ethical merits of strategic marketing options available to it. Following the development of the ethical profile, the firm identifies publics that might be impacted by the implementation of the particular marketing strategy under consideration. Impacted publics could include large social systems (e.g., societies and communities) as well as smaller social organizations (e.g., competitors, employees, shareholders, and target markets). (Mahon & McGowan 1998, 178) Once the set of relevant publics has been determined, the potential impact of marketing actions upon each must be assessed (Frain 1999, 17). When an anticipated action is in conflict with the firm's ethical profile (i.e., how publics are to be treated), the firm may wish to reconsider that activity. The list of relevant publics not only provides a means of assessing the ethical bearing of a given marketing action, but may also suggest some ...