Lesley Rocque

MC 525

Spring 2010

Ethical Dilemmas in Marketing

Marketing consists of the strategies and tactics used to identify, create and maintain

satisfying relationships with customers that result in value for both the customer and

the marketer.[ CITATION Sco10 \l 1033 ]

Despite the fact that marketing is viewed as offering considerable amounts

benefits to businesses and to society, the fact that marketing is a business function

operating in close contact with the public opens this useful area to a widespread of

criticism and ethical dilemmas.

The most frequently made statement about marketing is that marketers re

only concerned with getting customers to buy whether they want the product or

not. This stem from the belief that marketers are only out to satisfy their own needs

and really do not care about the needs of their customers. While many marketers

are guilty of manipulating customers into making unwanted purchases, the vast

majority understands such tactics will not lead to loyal customers and is unlikely to

lead to long-term success.

Another issue is that marketers are criticized for embellishing the benefits by

their products. The most serious problems occurs when product claims are seen as
misleading customers into believing a product can offer a certain level of value that

it cannot. There is a fine line, however, between what a rational person should

accept as reasonable embellishing and what is considered completely misleading.

Fortunately, many countries offer customers some level of protection from

misleading claims since such business practices may subject the marketer to legal

action. [ CITATION Sam92 \l 1033 ] Using such tactics is likely to lead to marketing

failure as customers will not be satisfied and will likely not return.

An issue that has become more apparent in the recent years against

marketing is its impact on the environment. Some marketing effects on the

environment point to issues such as the use of excessive, non-biodegradable

packaging, the frequent development of resource consuming products, and the

production of uneconomical and wasteful methods of promotions. Marketers have

begun to respond to these concerns by introducing green marketing campaigns that

are not only intended to appease critics but also take advantage of potential

business opportunities. [ CITATION Sco10 \l 1033 ] For example, certain retailers

are finding financial opportunity and promotional value by asserting their

marketing muscle to encourage customers to become more environmentally

responsible. This can be seen with retailers, such as Wal-Mart, that are shifting its

inventory of light bulbs from standard incandescent types to more efficient

fluorescent products. It is expected that as environmental activism gains political

power and more consumer support, marketers will see even more opportunity to

market environmentally friendly products.

 Marketers use a process called target marketing, which determines most

marketing decisions including product development and price setting. During this

process Marketers deliberately identify customers who offer them the best chance

for satisfying organizational objectives.[ CITATION Sco10 \l 1033 ] But some argue

that target marketing leads marketers to focus their efforts primarily on customers

who have the financial means to make more expensive purchases. This is viewed as

intentionally discriminating against others, especially lower income customers who

cannot afford to purchase higher priced products. Instead lower income customers

end up being targeted with lower quality and unsafe products.

Furthermore, the money-making motive of some marketers has encouraged

many to cross the line in terms of ethical business behavior. Business ethics is

concerned with what is right and what is wrong in the commerce industry.

[ CITATION Sco10 \l 1033 ] Many people assume that only actions that violate laws

are considered unethical. While it is true that illegal activity is also unethical,

business activity can be unethical even though no laws are violated. For instance,

some consider it unethical for marketing companies to aggressively promote

unhealthy foods to children though such promotional practices are generally not

viewed as illegal.

Gathering and analyzing information in the market is a vital step in making

good marketing decisions. Often the most valuable information deals with

customers’ buying behavior and especially determining which factors influence how

customers make purchase decisions.[ CITATION Sam92 \l 1033 ] But to some

digging deep into customer buying behavior crosses the line of what is considered

private information. One of the biggest concerns about privacy is marketers’ use of

methods that track user activity. Specifically, the growing use of advanced

technologies that allow marketers to gain access to customer shopping and

information gathering habits. For example, marketers can use highly advanced

techniques to track user activity on the Internet. Some marketers do so by using

questionable practices, such as loading tracking software onto a user’s computer,

without the knowledge or permission of the user. One type of software called

adware allows marketers to monitor users’ website browsing activity and use this

information to deliver advertisements based on users Internet habits.[ CITATION

Sco10 \l 1033 ] Privacy issues are not limited to concerns with online tracking;

marketers also use technique to track customers’ offline purchase activity. One

example of offline tracking occurs when retail stores match sales transactions to

individual shoppers. This is easy to do when customers use purchase cards, such as

loyalty cards or discount cards, as part of the buying process. Other areas of

marketing have also experienced problems. For instance, there have been several

recent incidences, most particularly those involving mishandled credit card

payment information, where a breach in customer privacy has placed customers at

risk.

Sometimes the line between what is considered ethical and unethical is

difficult to distinguish since what is right and wrong differs depending on such

factors as nationality, culture, and even industry. For example, many websites offer

users access at no monetary charge for the use of their content, such as social
networks, but do so only if users register and provide contact information including

email addresses. Some of these sites then automatically add registrants to

promotional email mailing lists. Some view the practice of automatic opt-in, e-mails

that are sent to many people at a time, to a mailing list as being unethical since

customers do not request it and are forced to take additional action to be removed

from the list, which is referred to as opt-out. Many marketers, however, see no

ethical issue with this practice and simply view adding registered users to an email

list as part of the cost to customers for accessing material.

The call for marketers to become more responsible for their actions has led

to the development of a code of ethics by many companies and professional

organizations. A company code of ethics includes extensive coverage of how

business is conducted by members of an organization. For example, Yahoo!

provides an extensive list of what is expected of their employees in their Code of

Ethics. Some of the issues the issues covered are business relationships and that

they “must never take unfair advantage of others through manipulation,

concealment, abuse of privileged information, misrepresentation of material facts or

any unfair dealing practice.” When it comes to business communication employees

“should take care to avoid exaggeration, colorful language, guesswork, legal

conclusions and derogatory remarks or characterizations of people and other

companies.”[ CITATION Yah09 \l 1033 ]

Marketers often join professional organizations for the purpose of

associating with others who share similar interests. These organizations include
industry associations, whose membership is mostly limited to those who work

within a particular industry, and professional services associations, whose

membership consists of those who share similar job responsibilities. Marketers

joining these organizations often find that a code of ethics has been developed that

is intended to be followed by all organization members. For instance, the Canadian

Marketing Association provides rules for members, which includes marketers from

many for-profit and non-profit organizations. In their Code of Ethics and Standards

and Practices they discuss issues such as accuracy of representation, members

“must accurately and fairly describe the product of service offered.” Also, when it

comes to supporting claims made about products members “must be able to

substantiate the basis for any performance claim or comparison. In addition, the

code provides guidelines for advertising product comparisons; members “must be

factual, verifiable and not misleading.”[ CITATION Can10 \l 1033 ]

Most marketing organizations do not purposely work hidden from the rest of

society. Instead they find that better opportunity exists if the organization is visibly

accessible and involved with the public. Marketers often operate as the public face

of an organization and when issues arise between the public and the organization

marketing is often at the center. In recent years the quantity and variety of issues

raised by the public has increased. One reason for the increase is the growing

perception that marketing organizations are not just sellers of product but also have

an innate responsibility to be more socially responsible Including being more

responsible for their actions and more responsive in addressing social concerns.

[ CITATION Sam92 \l 1033 ]

 Being socially responsible means an organization shows concern for the

people and environment in which it transacts business. It also means that these

values are communicated and enforced by everyone in the organization and, in

some cases, with business partners, such as those who sell products to the company,

for example, the supplier of raw material for product production. As well as those

who help the company distribute and sell to other customers, for example, retail

stores. In addition to insuring these values exist within the organization and its

business partners, social responsibility may also become visible in the support of

social causes that help society. [ CITATION Sam92 \l 1033 ] For example, marketers

may sponsor charity events or produce cause related advertising.

Marketers should maintain a socially responsible agenda and they should

keep in mind that such efforts do not automatically transform into increased

revenue or even an improved public image. Marketers that steadily demonstrate

socially responsible tendencies, however, may eventually gain a strong reputation

that could receive bonuses in the form of increased customer loyalty.

Bibliography
Canadian Marketing Association. (2010). Canadian Marketing Association. Retrieved
May 3, 2010, from Code of Ethics and Standards: http://www.the-
cma.org/public.asp?WCE=C=47|K=225849

Samli, A. C. (1992). Social Responsibility in marketing: A proactive and profitable

marketing management strategy. Westport, CT, USA: Quorum Books.

Scott, D. M. (2010). The new rules of Marketing and PR: How to use social media,
blogs, news releases, online video, and viral marketing to reach buyers directly.
Hoboken, NJ, USA: John Wiley & Sons, Inc.

Yahoo! (2009, September). Winning With Integerity. Yahoo! Code of Ethics .

Sunnyvale, CA, USA: Yahoo!