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Marketing Ethics

The document discusses several criticisms of marketing practices from a social perspective, including high prices due to high costs and markups, deceptive practices like misleading advertising, and high-pressure selling tactics. It also addresses criticisms over issues like producing shoddy or unsafe products, engaging in planned obsolescence, and providing poor service to disadvantaged consumers. The document then outlines citizen and public actions taken to regulate marketing, such as consumerism and environmentalism movements, as well as business responses that aim to make marketing more socially responsible.

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Bunga Nafeera Hassan
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73 views26 pages

Marketing Ethics

The document discusses several criticisms of marketing practices from a social perspective, including high prices due to high costs and markups, deceptive practices like misleading advertising, and high-pressure selling tactics. It also addresses criticisms over issues like producing shoddy or unsafe products, engaging in planned obsolescence, and providing poor service to disadvantaged consumers. The document then outlines citizen and public actions taken to regulate marketing, such as consumerism and environmentalism movements, as well as business responses that aim to make marketing more socially responsible.

Uploaded by

Bunga Nafeera Hassan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Marketing Ethics &

Consumer
Protection
Mery Citra.S,SE.,MSi
Business Ethics #4
Social Criticisms of Marketing
• Marketing’s impact on individual
consumers has been criticized in terms
of:
– High prices
– Deceptive practices
– High-pressure selling
– Shoddy, harmful, or unsafe products
– Planned obsolescence
– Poor service to disadvantaged consumers
Social Criticisms of Marketing : High
Prices

• Three factors are cited as


leading to high prices:
– High costs of distribution
– High advertising and
promotion costs
– Excessive markups
Social Criticisms of Marketing : Deceptive
Practices

• Marketers are often accused of deceptive


practices such as:
– Deceptive Pricing: Falsely advertising
“factory” or “wholesale” prices or large
reductions from phony high retail list prices.
– Deceptive Promotion: Overstating a
product’s features or performance, running
rigged contests.
– Deceptive Packaging: Exaggerating package
contents through subtle design, using
misleading labeling, etc.
Social Criticisms of Marketing : High-
pressure selling
• Salespeople are often accused of using
high-pressure selling tactics:
– To persuade people to buy goods they had
no intention of buying.
– Because prizes are
often given to top
sellers.
Social Criticisms of Marketing : Shoddy or
unsafe product

• Shoddy or unsafe product criticisms


include complaints that:
– Products are not made well or services are not
performed well.
– Products deliver little benefit or that they may
even be harmful.
– Products are unsafe due to manufacturer
indifference, increased production complexity,
poorly trained labor, and poor quality control.
Social Criticisms of Marketing : Planned
obsolence
• Planned obsolescence refers to:
– Products needing replacement before they
should because they are obsolete.
• Criticisms include:
– Use of materials and components that will
break, wear, rust, or rot sooner then they
should.
– Continually changing consumer concepts
of acceptable styles.
– Intentionally holding back attractive
functional features, then introducing them
later to make older models obsolete.
Social Criticisms of Marketing : Poor
service to disadvantaged consumers

• Marketers are also accused of serving


disadvantaged consumers poorly as:
– The poor are forced to shop in smaller
stores where they pay more for inferior
goods.
– “Redlining” occurs in disadvantaged
neighborhoods by national chain stores,
insurers, banks, and health care providers.
– The poor are targeted for “rapid refunds.”

16-8
Marketing’s Impact on
Society as a Whole
• Creating false wants and
encouraging too much
materialism.
• Overselling private goods at
the expense of public
(social) goods.
• Creating cultural pollution,
stemming from constant
exposure to marketing
messages
Marketing’s Impact on
Other Businesses
• Critics charge that a firm’s
marketing practices can
harm other companies and
reduce competition via:
– Acquisitions of competitors.
– Marketing practices that
create barriers to entry.
– Unfair competitive
marketing practices.
Citizen and Public Actions to
Regulate Marketing
• Two major movements include:
– Consumerism
– Environmentalism
Consumerism:
– An organized movement of
citizens and government
agencies to improve the rights
and power of buyers in relation to
sellers.
Principles of consumer protection
In a 1962 speech, President John F. Kennedy proposed
that consumers had four basic rights:
• a right to safety
• a right to be informed
• a right to choose
• a right to be heard
Positive Business Responses to
Consumerism
Four main positive responses from business:
• Quality management

• Voluntary industry codes of conduct

• Consumer Affairs departments

• Product recalls
Citizen and Public Actions to
Regulate Marketing

• Environmentalism:
– An organized movement of concerned citizens
and government agencies to protect and
improve people’s living environment.
• First wave was driven in the 1960s and 1970s by
environmental groups and concerned consumers.
• Second wave was driven by the government in the
1970s and 1980s, resulting in environmental laws.
• Third wave is happening now. Firms are accepting
more responsibility and many have adopted a policy
of environmental sustainability.
Citizen and Public Actions to
Regulate Marketing

• Environmental sustainability:
– A management approach that involves
developing strategies that both sustain the
environment and produce profits for the
company.
• Levels of environmental sustainability:
– Pollution prevention
– Product stewardship
– New clean technologies
– Sustainability vision
Business Actions Toward
Socially Responsible Marketing

• Enlightened marketing:
– A marketing philosophy holding that a
company’s marketing should support the
best long-run performance of the marketing
system.
• Customer-oriented marketing
• Customer-value marketing
• Innovative marketing
• Sense-of-mission marketing
• Societal marketing
Business Actions Toward
Socially Responsible Marketing

• Consumer-oriented marketing:
– The philosophy of enlightened marketing
that holds that the company should view
and organize its marketing activities from
the consumer’s point of view.
Business Actions Toward
Socially Responsible Marketing

• Customer-value marketing:
– A principle of enlightened marketing that
holds that a company should put most of
its resources into value-building marketing
investments.
Business Actions Toward
Socially Responsible Marketing

• Innovative marketing:
– A principle of enlightened marketing that
requires that a company seek real product
and marketing improvements.
Business Actions Toward
Socially Responsible Marketing

• Sense-of-mission marketing:
– A principle of enlightened marketing that
holds that a company should define its
mission in broad social terms rather than
narrow product terms.
Business Actions Toward
Socially Responsible Marketing
• Societal marketing:
– A principle of enlightened marketing that
holds that a company makes marketing
decisions by considering consumers’ wants
and interests, the company’s requirements,
consumers’ long-run interests, and society’s
long-run interests.
• Seeks to introduce desirable products, rather than
those that are deficient or salutary.
Social Responsibility Issues in
Marketing

• Green Marketing
• Cause Marketing
Ethical Issues in Marketing

• An identifiable problem, situation, or


opportunity requiring a choice
among several actions that
must be evaluated as right
or wrong, ethical or
unethical
Major Ethical Issues in Marketing: 4 Ps Model

Product Promotion (marketing


• Product Safety. communications)
• “Me-toos.” • Deceptive/misleading advertising (e.g.,
• Product positioning and market sex/race stereotypes).
segmentation • Questionable sales techniques and conflicts
• Ethics in the delivery of service products of interest in selling.
• Environmental impacts of product and • Bribery.
packaging. • Direct marketing and privacy issues.

Price Place (channels of distribution)


• Horizontal/vertical price fixing. • Exclusivity and other forms of discrimination
• Price discrimination. in distribution (e.g., red-lining).
• Predatory pricing. • Channel control (including franchising
relationships).
• Price gouging
• Gray marketing
• Misleading pricing (e.g., non-unit pricing,
bait and switch, inflating prices to allow sale • Anti-competitive trade promotions (e.g.,
markdowns). slotting allowances).
• Lower standards in export markets.
Marketing Ethics Framework: An Ethics
Continuum
•Producer •Producer
interest interest less
favored. favored.
•Consumer •Consumer
interest less interests
favored. favored.

Caveat emptor Industry practice Ethics codes: Consumer Caveat venditor


school: In general. Of individual sovereignty school: school:
Profit The best firms. Capability. Consumer
maximization, companies. Of industries. Information. satisfaction.
subject to Of professional Choice.
legal bodies (e.g.,
constraints. AMA).

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