Marketing Ethics



Good ethics is a cornerstone of sustainable marketing. In the long term, unethical marketing harms customers and society as whole. Further, eventually damage a company’s reputation and effectiveness, jeopardizing the company’s very survival. Thus the sustainable marketing goals of long term consumer and business welfare can be achieved only through ethical marketing conduct.

Conscientious marketers face many moral dilemmas. The best thing to do is often unclear. Because not all managers have fine moral sensitivity, companies need to develop corporate marketing ethics policies, broad guideline that everyone in the organization must follow. These policies should cover distributor relations, advertising standards, customer service, pricing, product development and general ethical standards. The finest guidelines cannot resolve all the difficult ethical situations the marketer faces.

SMDSM list show some difficult ethical issues marketers could face during their careers. If marketers choose immediate sales producing actions in all these cases, their marketing behavior might well be described as immoral or even amoral. If they refuse to go along with any of the actions, they might be ineffective as marketing managers and unhappy because of the constant moral tension. Manager need a set of principles that will help them figure out the moral importance of each situation and decide how far they can go in good conscience.

But what principle should guide companies and marketing managers on issues of ethics and social responsibility? One philosophy is that such issues are decided by the free market and legal systems. Under this principle, companies and their managers are not responsible for making moral judgments. Companies can in good conscience do whatever the market and legal system allow.

A second philosophy puts responsibility not on the system but in the hands of individual companies and managers. This more enlightened philosophy suggests that a company should have a social conscience. Companies and managers should apply high standards of ethics and morality when making corporate decisions, regardless of what the system allow. History provides an endless list of examples of company actions that were legal but highly irresponsible. Each company and marketing manager must work out a philosophy of socially responsible and ethical behavior. Under the social marketing concept, each manager must look beyond what is legal and allowed and develop standards based on personal integrity, corporate conscience and long term consumer welfare.
SMDSM List:

  1. You work for a cigarette company. Public policy debates over the past many years leave no doubt in your mind that cigarette smoking and cancer are closely linked. Although your company currently runs an “if you don’t smoke, don’t start” promotion campaign, you believe that other companies’ promotions might encourage young non-smokers to pick up the habit. What would you do?
  2. Your R&D department has changed one of your products slightly. It is not really (new and improved) but you know that putting this statement on the package and in advertising will increase sales. What would you do?
  3. You have been asked to add a stripped down model to your line that could be advertised to pull customers into the store. The product won’t be very good but salespeople will be able to switch buyers up to higher priced units. You are asked to given the green light for the stripped down version. What would you do?
  4. You are thinking of hiring a product manager who has just left a competitor’s company. She would be more than happy to tell you the entire customer’s plan for the coming year. What would you do?
  5. One of your top dealers in an important territory recently has had family troubles and his sales have slipped. It looks like it will take him a while to straighten out his family trouble. Meanwhile you are losing many sales. Legally on performance grounds, you can terminate the dealer’s franchise and replace him. What would you do?
  6. You have a chance to win a big account that will mean a lot to you and your company. The purchasing agent hints that a gift would influence the decision. Your assistant recommends sending a big screen television to the buyer’s home. What would you do?
  7. You have heard that a computer has a new product feature that will make a big difference in sales. The competitor will demonstrate the feature in a private dealer meeting at the annual trade show. You can easily send a snooper to this meeting to learn about the new feature. What would you do?
  8. You have to choose between three ad campaign outline by your agency. The (a) is a soft-sell, honest and straight-information campaign. The (b) uses sex loaded emotional appeals and the product benefits. The (c) involves a noisy, somewhat irritating commercial that is sure to gain audience attention. Pretests show that the campaigns are effective in the following order: c, b and a. What would you do?
  9. You are interviewing a capable female applicant for a job as salesperson. She is better qualified than the men interviewed. Nevertheless you now that in your industry some important customers prefer dealing with men and you lose some sales if you hire her. What would you do?

Code of Ethics of AMS                                 

Preamble

The American Marketing Association commits itself to promoting the highest standard of professional ethical norms and value for its members. Norms are established standards of conduct that are expected and maintained by society and/or professional organizations. Values represent the collective conception of what people find desirable, important and morally proper. Values serve as the criteria for evaluating the actions of others. Marketing practitioners must recognize that they not only serve their enterprises but also act as stewards of society in creating, facilitating and executing the efficient and effective transactions that are part of the greater economy. In this role, marketers should embrace the highest ethical norms of practicing professionals and the ethical value implied by their responsibility toward stakeholders (e.g., customers, employees, investors, channel members, regulators and the host community).

Ethical Norms

  • Marketers must do no harm. This means doing work for which they are appropriately trained or experienced so that they can actively add value to their organization and customers. It also means adhering to applicable laws and regulations and embodying high ethical standards in the choices they make.
  • Marketers must foster trust in the marketing system. This means that products are appropriate for their intended and promoted uses. It requires that marketing communication about goods and services are not intentionally deceptive or misleading. It suggests building relationships that provide for the equitable adjustment and/or redress of customers grievances. It implies striving for good faith and fair dealing so as to contribute towards the efficacy of the exchange process.
  • Marketers must embrace, communicate and practice the fundamental ethical values that will improve consumer confidence in the integrity of the marketing exchange system. These basic values are intentionally aspirational and include honesty, responsibility, fairness, respect, openness and citizenship.

Ethical Values

Honesty – to be truthful and forthright in our dealing with customers and stakeholders

  • We will tell the truth in all situations and at all times.
  • We will offer products of value that do what we claim in our communication.
  • We will stand behind our products if they fail to deliver their claimed benefits.
  • We will honor our explicit and implicit commitments and promises.

Responsibility – to accept the consequences of our marketing decisions and strategies

  • We will make strenuous efforts to serve the needs of our customers.
  • We will avoid using coercion with all stakeholders.
  • We will acknowledge the social obligations to stakeholders that come with increased marketing and economic power.
  • We will recognize our special commitments to economically vulnerable segments of the market such as children, the elderly and others who may be substantially disadvantaged.

Fairness – to try to balance justly the needs of the buyer with the interests of the seller

  • We will represent our products in a clear way in selling, advertising and other forms of communication, this include the avoidance of false, misleading and deceptive promotion.
  • We will reject manipulations and sales tactics that harm customer trust.
  • We will not engage in price fixing, predatory pricing and price gouging bait or switch tactics.
  • We will not knowingly participate in material conflicts of interest.

Respect – to acknowledge the basic human dignity of all stakeholders

  • We will value individual differences even as we avoid stereotyping customers or depicting demographic groups (e.g. gender, race, sexual orientation in a negative or dehumanizing way in our promotions.
  • We will listen to the needs of our customers and make all reasonable efforts to monitor and improve their satisfaction on an ongoing basis.
  • We will make a special effort to understand supplies, intermediaries and distributors from other cultures.
  • We will appropriately acknowledge the contributions of others such as consultants, employees and coworkers to our marketing endeavors.

Openness – to create transparency in our marketing operations

  • We will strive to communicate clearly with all our constituencies.
  • We will accept constructive criticism from our customers and other stakeholders.
  • We will explain significant product or service risks, component substitutions or other foreseeable eventualities that could affect customers or their perception of the purchase decision.
  • We will fully disclose list prices and terms of financing as well as available price deals and adjustments.

Citizenship – to fulfill the economic, legal, philanthropic and social responsibilities that serve stakeholders in a strategic manner

  • We will strive to protect the natural environment in the execution of marketing campaigns.
  • We will give back to the community through volunteerism and charitable donations.
  • We will work to contribute to the overall betterment of marketing and its reputation.
  • We will encourage supply chain members to ensure that trade is fair for all participants including producers in development countries.

Implementation

Finally, we recognize that every industry sector and marketing sub discipline (e.g. marketing research, e-commerce, direct selling, direct marketing and advertising) has its own specific ethical issues that require policies and commentary. An array of such codes can be accessed through links on the AMA web site. We encourage all such groups to develop and/or refine their industry and discipline specific codes of ethics to supplement these general norms and values.