UG098: Principles of Marketing Marketing Ethics

What are Ethics?

1. Ethics are the moral principles and values that govern the actions and decisions of an individual or a
   group of people.
2. Business ethics are the moral principles and values that guide a firm’s behaviors as it conducts business
3. Marketing ethics is an area that deals with the moral principles behind marketing. Ethics in marketing
   applies to different spheres such as in product, pricing, Placing (Distribution), promotion & advertising etc
   • Marketing ethics are the moral principles and values that guide behaviors within the field of marketing;
   it cover issues such as:
   • Product safety and health implications
   • Truthfulness in marketing communications
   • Honesty in relation with customers and other stakeholders
   • Pricing issues such as price fixing and underpricing
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   Ethical Issues in Marketing:
   Marketing mix effects
   on consumers
4. Product
5. Price
6. Promotion
7. Distribution
   Societal Issues
8. Materialism- an ethical concern within the realm of
   the society that marketing promotes materialism- an
   overemphasis on material possessions.
9. Short- termism- marketing is accused of putting the
   short term interests of consumers before the
   consumer’s and society’s long term interests.
   Political Issues
10. Globalisation
    Environmental Issues
11. Use of cheap ingredients
12. Large packaging to gain attention
13. Pollution- disposal of waste
    products
14. Increase in depletion of natural
    resources
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    Product safety
    Place- slotting allowances
    Misleading advertising.
    Invasion of privacy.
    Internet privacy.
    Use of promotional inducement.
    Price fixing
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    Corporate Social Responsibility:
    • Ethical principles that an organization should be accountable for in terms of how its behaviors affect the
    society and the environment in general
    • Stakeholder Theory suggests that companies should not be managed purely in the interest of their
    shareholders, rather there is a range of groups that have legitimate interest in the companies as well.
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    The Nature of CSRPyramid
    of Corporate
    Social Responsibility
    FIGURE 4.1
    Source: Archie B. Carroll, “The Pyramid of Corporate Social
    Responsibility: Toward the Moral Management of
    Organizational Stakeholders,” adaptation of Figure 3, p. 42.
    Reprinted from Business Horizons, July/Aug. 1991. Copyright
    © 1991 by the Foundation for the School of Business at
    Indiana University. Reprinted with permission.
    Dimension of CSR Key Issues Marketing Type
    Physical environment • Combating global warming
    • Pollution control
    • Conservation of energy and scarce resources
    • Use of environmental friendly ingredients and components
    • Recycling and non-wasteful packaging
    Sustainable marketing
    Social and community
    involvement
    • Support for local community
    • Support for the wider community
    Societal marketing
    Consumers • Product safety
    • Avoidance of price fixing
    • Honesty in communications
    • Respecting privacy
    Societal marketing
    Supply chain • Fair trading; suppliers and competitors Fair-trade marketing
    Employees’ relations • Fair pay
    • Equal opportunities
    • Training, development and motivation
    • Safe working place
    • Human rights
    Internal marketing
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    Arguments…. Against CSR
    • is misguided
    • is too costly
    • encourages consumer cynicism
    • does not improve profitability
    For CSR
    • leads to good brand/corporate
    image & reputation
    • provides marketing
    opportunities
    • can reduce operating costs
    • increases organisations ability to
    attract and retain employees
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    Social Responsibility Issues
    • Green Marketing
    • The specific development, pricing,
    promotion, and distribution of
    products that do not harm
    the natural environment
    • Green Marketing Goals
    • Eliminate the concept of waste
    • Reinvent the concept of a product
    • Make prices reflect actual and environmental costs
    • Make environmentalism profitable
    Recycle marketing: In the last decade or so, it seems we’ve entered the age of the
    conscientious consumer. Research has shown that 55% of people are willing to pay extra for products and services from
    companies committed to making positive social and environmental impacts.
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    COMMON THREADS INITIATIVE
    REDUCE
    We make useful gear that lasts a long time. You don’t buy what
    you don’t need.REPAIR
    REPAIR
    We help you repair your Patagonia gear. You pledge to fix
    what’s broken.
    REUSE
    We help find a home for Patagonia
    gear you no longer need. You sell or
    pass it on to someone who needs it.
    RECYCLE
    We will take back your Patagonia gear that is worn out. You
    pledge to keep it out of landfills.
    REIMAGINE
    Together we reimagine a world where
    we take only what the planet can replace
    Fair Trade
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