Marketing Ethics: Not All’s Fair in Love and Marketing

Did you ever buy something advertised on TV or in a magazine and end up disappointed with the quality or the performance of the product? Does it matter that you didn’t get what you thought you would? Surely it is the buyer’s responsibility to know what they are purchasing. Perceptions about what a product or service should be, lies with the buyer not the seller, right? And isn’t the challenge for marketing to demonstrate an immediate return on activities with “quick wins” regardless of the long-term analysis of the firm’s accountability in communicating responsibly with its customers?

As businesses are coming under increasing scrutiny to be more transparent and socially responsible about what they are selling, how they are selling it and to whom they are selling, it seems not. The concept of ethics in marketing is becoming an important part of the market mix, driving marketers to reconsider how they go to market with their products and services. Practicing ethics in marketing means deliberately applying standards of fairness, or moral rights and wrongs, to marketing decision making, behavior, and practice.

There are several areas of concern in marketing ethics which businesses must take into consideration with their marketers when advertising their products and/or services.

Unfair or Deceptive Marketing Practices

Deceptive pricing practices cause customers to believe that the price they pay for in a product or service is lower than it really is. The deception might take the form of making false price comparisons, providing misleading suggested selling prices, omitting important conditions of the sale, or making very low price offers available only when other items are purchased as well. Promotion practices are deceptive when the seller intentionally misstates how a product is constructed or performs, fails to disclose information regarding pyramid sales, or employs bait-and-switch selling techniques (whereby a business offers to sell a product or service, often at a lower price, in order to attract customers who are then encouraged to purchase a more expensive item). False or exaggerated product or service claims are also deceptive. When packages are intentionally mislabeled as to contents, size, weight, or use information, that constitutes deceptive packaging. Selling hazardous or defective products without disclosing the dangers, failing to perform promised services, and not honoring warranty obligations are also considered deception.

Offensive and Objectionable Marketing Practices

Objectionable practices range from minor irritants, such as the timing and frequency of sales letters or commercials, to those that are offensive or even illegal including: persistent high-pressure selling, annoying telemarketing calls and television commercials that are too long or run too frequently. Offensive material within an advertisement, campaigns designed to take advantage of young or inexperienced consumers or senior citizens, and the use and exchange of mailing lists may also pose ethical questions. When people feel that products or appeals are offensive, they may pressure vendors to stop carrying the product.

Marketing to Children

Children have become an important marketing target for many products. Because their knowledge about products, the media, and selling strategies is usually not as well developed as that of adults, children are likely to be more vulnerable to strong images and advertising appeals. Of particular concern are questionable marketing tactics and appeals to youth in products such as tobacco and alcohol and, in recent years with growing concern about childhood obesity, junk food campaigns. Parental groups are also starting to retaliate against marketers who rely on “Pester Power” to sell their products — that is, advertisements which appeal to kids to nag their parents to buy them a particular product, rather than appealing to parents directly.

Unethical Product and Distribution Practices

Among the most frequently voiced complaints are about products that are unsafe, are of poor quality in construction or content, do not contain what is promoted, or that go out of style or become obsolete before they need replacing. A company that markets poor quality or unsafe products is not only jeopardizing its reputation for poor products and service but may incur claims or legal action.

Ethical questions may also arise in the distribution process. Exerting influence to cause vendors to reduce display space for competitors’ products, promising shipment when knowing delivery is not possible by the promised date, or paying vendors to carry a firm’s product rather than one of it’s competitors are also unethical.

Information gathered from research can be important to the successful marketing of products or services, the privacy of personal information needs to be taken into account. The public are becoming more hesitant in giving information that might cause them to become a marketing target.

Benefits of Marketing Ethically

Moving toward a more customer-led consumer market has led organizations to embrace standards or codes of practice and conduct to guide their marketing efforts. Customers are less tolerant of marketing practices which are dishonest, offensive, deceptive and inappropriate. Implementing socially responsible marketing and advertising practices is not just good for the target community and society, it can benefit your business too.

By considering social and environmental objectives as well as your economic aims when marketing your products or services, you can:

• Build sales, as customers increasingly choose to base their purchasing decisions on more than strict financial factors
• Enhance trust in your products and services and therefore in your business
• Accurate and factual information helps consumers make informed choices and evaluate the benefits of a product or service
• Attract investment, as ethically motivated investors grow in number
• Save money by minimizing product returns and risk of customer complaints

Marketing with a Conscience

To compete in an environment that is technologically based and consumer-focused it is important for small success to market ethically. Poor ethical marketing practices will continue, but customers will also develop more positive attitudes toward firms who deliver on their marketing promise. Expect customers, stakeholder groups and environmentalists, to take a keen interest in future marketing and advertising efforts.

What marketers must keep in mind is to be ethical in their communication with customers. According to the Institute of Business Ethics, the laws of small business advertising success are:

• Use one message which is honest, simple and compelling
• Only make claims which are real and credible
• Give clients your best advice, without fear or favor
• Compete fairly
• Be honest
• Ensure you can meet obligations stated in your marketing material
• Test everything you develop for advertising and marketing purposes — e.g. ask a sample customer group about the impact of your advertising before taking it to market, as small businesses don’t have the luxury to waste advertising spend
• Have clear documents (e.g. brochures) so they do not misrepresent or cannot be misinterpreted
• Honor all agreements
• Respect all people
• Be easily contactable — all advertising material should have full contact information including: phone and fax, website and email address, and company address
• Match advertisements to your target audience

---

 

Copyright 2006, RAN ONE Inc. All rights reserved. Reprinted with permission from www.ranone.com.