Marketing Ethics

GROUP – 4Priyanthika Nilaweera

Ravin Ovitigala

Sujith De Alwis

Contents

• What is Marketing Ethics?

• How it is important?

• Ethical issues related to Marketing Mix

• The Nature of Marketing Ethics

• Improving Ethical Conduct in Marketing

• Social Responsibility and Ethics

• Benefit of Ethical Marketing

Marketing Ethics

Dimension of social responsibility that involvesprinciples and standards the define acceptableconduct in marketing.

Involvement of People

Acceptable standards of conduct in marketing involves;

– Individual or Group Decisions

– Stakeholders

– Organization ethical Climate

Marketers should be aware of their acceptable conduct from several view

points

• Company

• Industry

• Government

• Customer

• Special interest Group

• Society at Large

Is it Important?

When marketing activities deviate from accepted standards, the exchange process can break down, resulting;

- Customer Dissatisfaction

- Lack of trust

- Legal issues

- Income falls

Ethical Issues In Marketing

An identifiable problem, situation oropportunity that requires concern parties tochoose from several actions that must beevaluated as right or wrong, (ethical or Unethical)

Ethical issues related to Marketing Mix

PRODUCT

DISTRIBUTION

PROMOTION

PRICING

Product

Withholding critical information such asperformance, risk associated and also fail to informcustomers about existing condition and changes inproduct quality that could affect purchase decision.

Distribution

Ethical issues in distribution involve relationship amongproducers and middlemen or intermediaries(wholesales and retailer), facilitate the flow of productsfrom producer to the ultimate customer

Serious issues with regard to distribution includemanipulating a product availability for price gaining.

Eg – Milk Powder shortage

PROMOTION

It can create ethical issues in many ways among themfalse or misleading advertising and manipulative ordeceptive sales promotions, tactics and publicity.

Promotion

Pricing

Common ethical issues are price fixing, destructivepricing.

Organizations have right to price their product to earn areasonable profit, but issues may crop up when they seekto earn high profits at the expense of its customers.

Ravin Ovitigala2014 / MBS / WD / 18

The Nature of Marketing Ethics

Individual Factors

• People resolve their ethical conflicts in their dailylives, with their own values and principles of right orwrong.

• People learn values and principles throughsocialization, social group, religion, and formaleducation.

“ however research has established that anorganization values often influence on marketingdecisions than a persons own values “

Personal Moral Philosophies

• That is important for influencing a persons

ethical decisions there is two aspects of

personal moral philosophies

– Idealism

– Relativism

Organizational relationships

• Ethical choices in marketing are often made jointly, in work groups and committees or in conversations and discussions with coworkers

Marketers resolve their issues based not only on whatthey learned from their own background but also onwhat they learn from others in the organization.

Out come of the learning process depends on thestrength of each individual’s personal values…..

Opportunity

• Another factor that may shape ethical decisions in marketing. Conditions that limits barriers or provide rewards.

A marketer who takes advantage of an opportunity to act unethically and is rewarded or suffers no penalty may repeat such acts when an opportunity arise.

Corporate Culture and Ethics

• Firms culture may be expressed formally throughcodes of conduct, memos, manuals, dress codes, andceremonies. It is also conveyed informally throughcodes work habits, extracurricular activities.

• Culture gives its members meaning and suggestsrules for how to behave and deal with problems

within the organization.• Cond……

Cond…..

• Interaction between corporate culture and leadership helps determine the ethical value system .

Eg -Ethics & ComplianceThe core of the ethics and compliance program at The Coca-Cola Company is our Code of Business Conduct. The Code guides our business conduct, requiring honesty and integrity in all matters. All of our associates and directors are required to read and understand the Code and follow its precepts in the workplace and larger community.

Muhtar Kent, Coca-Cola's chairman and CEO.

Work Pressure

• Organization pressure plays a key role in creating ethical issues,

• Eg – Pressure to meet a sales target may result in overaggressive sales tactics.

Types of Misconduct likely to be reported

Giving or accepting bribes

Discrimination

Improper hiring practices

E mail or internet abuse

Lying to employees, customers etc..

• Source : National Business Ethics survey

Priyanthika Nilaweera2014 / MBS / WD / 17

Improving Ethical Conduct in Marketing

• Some times organizations become bad barrels it is not because the individuals and their unethical behavior but because of the pressures to survive and succeed create conditions that rewards unethical

behavior.

• Organizations that wish to improve their ethicsshould implement a strong ethics and complianceprogram and encourage organization widecommitment to an ethical culture,

–Code of Conduct

–Ethics officers

–System for anonymous reporting

Codes of Conduct

• Many organizations have developed codes of conduct that consist of formalized rules and standards that describe what the company expects of its employees

“Guidelines that enable employees to achieve organizational objectives in an ethical manner”

Ethics Officers

• Ethical officers are responsible for creating and distributing a code of conduct, enforcing code meeting with employees and discuss, advise about ethics.

A high ranking person should hold the position in the organization who are know to respect legal and ethical standards

• Eg - Telecom has appointed a independentperson as an ethical officer where employees cantalk, report any misconduct.

• has a employ toll free number“hotline” to provide any advice to employees whobelieve they face an ethical issue

Social Responsibility and Ethics

• Two concepts are interrelated, companies that support socially responsible decisions and adheres to a code of conduct likely to have positive effects on society.

Social Responsibility and Ethics

• Ethics is one dimension of social responsibility, Being socially responsible relates doing what is economically sound, legal, and socially conscious.

• A rule of thumb for resolving ethical and social responsibility issues is that if an issue can withstand open discussion that results in agreement or

acceptable solution may exist.

• Contd……..

Contd……..

• Openness is not the end - all solution to the ethics problem, however it creates trust and facilitates

learning relationships…

The challenge of ethical and socially responsible behavior

• Marketers must monitor changes and trends in society’s value while achieving organization goals.

• Most ethical issues cannot be viewed in Black & white. Therefore balancing society’s demand to satisfy is difficult

The challenge of ethical and socially responsible behavior

• Eg – 40 years ago tobacco marketers promoted cigarettes as being good for ones health, today years after the discovery that cigarette smoking is linked to cancer and other medical problems.

Social Responsibility and Ethics Improve Marketing Performance

• A direct association exists between social responsibility, ethics, customer satisfaction and profits..

• In a Survey of consumers, nearly 86% indicated that when quality and price are similar among competitors, they would likely to buy from the company associated with ethical and social responsibility.

Social Responsibility and Ethics Improve Marketing Performance

• Organizations that fails to develop strategies and programs to incorporate ethics and social responsibility into their culture may pay the price with poor marketing performance, potential cost of legal violation, wrong promotion activity etc…

However the concepts are undoubtedlycontroversial, it is possible and desirable topractice ethics and social responsibility in theirplanning process

Benefits of Ethical Marketing

• It pays

• You Build trust

• You make more money

• You build more relationship with people whose lives you are making better

• You are happy because you made others happy

Thank you !