ETHICAL ISSUES IN MARKETING

Marketing ethics, regardless of the product offered or the market targeted, sets the guidelines for which good marketing is practiced. When companies create high ethical standards upon which to approach marketing they are participating in ethical marketing. The articles in Managerial Marketing constituted collectively a managerial approach by emphasizing problem solving and decision making, by expressing interdisciplinary concepts, and by focusing on management concern with survival in a dynamic economy.  To market ethically and effectively one should be reminded that all marketing decisions and efforts are necessary to meet and suit the needs of customers, suppliers, and business partners. Ethical behavior should be enforced throughout out company culture and through company practices.

Key words: Surrogate Advertisements, Subliminal Advertisements, Predatory Pricing, Political marketing Copyright, Trademark violations.

Ethical Issues in Marketing: The Context of Developing Countries

Introduction:

From the mid 1950?s the subject of marketing management grew rapidly. Notwithstanding its usefulness to those who manage, marketing precepts emphasized the marketing element in management, and not the management element in marketing. Marketing management implied integration of marketing activities and a downward delegation of authority. The following aspects were evidence of the trend of thought at that time:

1. A decision oriented rather than research oriented point of view.

2. Incorporation of recent developments in the behavioral sciences, mainly economics, psychology, and sociology.

3. Distinction between controllable elements of the business and the uncontrollable environment.

4. Adaptation, as a principal task of executives.

5. Uncertainty (about buyers and competitors) and probability as aspects of decision making.

The articles in Managerial Marketing constituted collectively a managerial approach by emphasizing problem solving and decision making, by expressing interdisciplinary concepts, and by focusing on management concern with survival in a dynamic economy. Related developments in marketing thought were evident in the following concepts:

• The marketing concept.
• The marketing mix.
• Product differentiation.
• Market segmentation.
• Physical distribution.
• Value added.
• Applicability of mathematical methods to problems in marketing research and advertising.
• Philosophic approach to marketing thought.

Kotler’s concept of the manner in which management theory is combined with marketing theory is suggested under four headings he arranged his various topics:

1. Analyzing marketing opportunities (the marketing concept, markets, market segmentation, buyer behavior.

2. Organizing for marketing activity (goals, planning, decision making, research, models, and creativity.

3.  Planning (theory of marketing programming, product decisions, price, channels, and promotion).

4. Controlling the Marketing effort (marketing control, sales and cost analysis, the marketing audit).

                        

 By 1970 the dimensions and content of marketing management thought were generally understood as basic functional management (analyzing, planning, organizing, and controlling). Marketing, in contemporary times, has seen a tumultuous change in the way it's conducted in developing countries. The oft cited dictum that only change is constant in the marketing genre is an opposite one. Just as the media of social communication themselves have enormous influence everywhere, so advertising and marketing, using media as their vehicles, are pervasive, powerful forces shaping attitudes and behavior in today's world.

Four reasons are attributed to the fugacious nature of the way marketing practices are being carried out in developing countries

 1. The role of Information and Communication technologies: As ICTs evolve so do marketing practices. If yesterday it was television that revolutionized the way advertisements could create a lasting impact on the consumer, then today the internet and phone text messages are doing just that.

2. The world today is an increasingly global village: Social and ethnic boundaries are fast falling in the wake of cable television and the like.

3. Rapid economic expansions in countries like China and India have meant that marketers have to quickly respond to the changing socio-economic scenarios. Millions of people have entered the middle class and millions more are poised to do so. For marketers, the consequences can be mind boggling-as incomes and spending powers rise, marketers have to respond to increasing demands from consumers.

4. Better and improved marketing research has meant that the entire populace is not seen in totality but rather as a congeries of different types of consumers.

The outcome:

But the outcome of such developments is that a number of ethical issues have arisen. While the globe is indeed becoming a smaller place, marketers have to bear in mind national, local and cultural sensitivities. Very often, in the hope of tapping a larger consumer base, marketers jump headlong in new markets without keeping in mind ethnic and social issues typical to certain areas. While marketers do have to act with celerity in gaining footholds in emerging markets such as China and India, care has to be taken in ensuring that the mores, etiquettes of the land are not encroached upon. The incorporation of newer technologies has meant that a number of issues such as invasion of privacy and credibility have arisen. Hence, in these rapidly changing circumstances, marketers and consumers alike face a nimiety of ethical issues that have to be addressed.

This paper looks at some of the ethical issues in the developing countries context.

Exploiting Social Paradigms In the hopes of making a fast buck, marketers often resort to exploiting social paradigms typical to certain areas. In India, for example, a large multinational corporation ran an ad campaign that depicted a young woman who because of her dark facial complexion was unable to find jobs. But as the ad showed, as soon as the woman started using the facial whiteness cream manufactured by the corporation, she got the job of her choice. Needless to say, there was a big backlash against it and the ad campaign had to be scrapped. On an ethical standpoint, marketers have to exercise restraint in exploiting such social paradigms to their commercial advantage.

Surrogate Advertisements in India alcohol and cigarette advertisements were banned outright some years back. However, alcohol and cigarette companies alike are using the avenue of surrogate advertisements to press forward their case. For the viewer though, the 'subtle' pointer towards the real deal is enough as the surrogate advertisements leave no ambiguity in their minds.

Subliminal Advertisements One of the most controversial and ethical issues in advertising is regarding subliminal advertisements. Inserting subliminal messages in an advertisement is an inherently misleading action. It is an attempt to manipulate a person's thinking without the person realizing that any such manipulation is occurring. The west has had its fair share of subliminal advertisements related hullabaloos primarily because the advertisement, marketing and regulating media themselves have been quite active in raising such issues.

Example: During the US Presidential elections of 2000, it came to light that a political advertisement for George W. Bush subliminally flashed the word 'RATS' when criticizing Al Gore's prescription medicine plan. While the ad maker denied that the quickly flashed word was a subliminal message designed to furtively sling mud at Gore, many others, however, concluded that 'RATS' was indeed inserted with the intention of secretly causing viewers' to associate vermin with Al Gore. In line with the techniques of subliminal messaging, the questionable word appeared on the screen for only a microsecond (1/30th of a second), passing by so fast that it was almost unrecognizable to the conscious mind-especially when passively lulled by television. According to the theory of subliminal advertising the image would, indeed, register in a viewer's subconscious mind, thereby causing the viewer to negatively associate Al Gore with a rodent. The effects of subliminal advertisements are real and financially significant. Each year, consumers spend roughly $US50 million for self-help tapes embedded with subliminal messages that are supposed to teach a person a foreign language while they sleep, or help them lose weight, or quit smoking. Additionally, some stores embed subliminal messages in their background music in an effort to discourage shoplifting. Time magazine reported in 1979 that messages such as 'I am an honest person' and 'Stealing is dishonest' were being utilized in over fifty department stores. One department store utilizing the hidden messages reported a savings of $US600, 000 by reducing theft 37 percent during a nine month period. So, if subliminal messages evidently work in self-help tapes and embedded in department store music, it certainly seems reasonable that they would also work and perhaps even work better in a visual medium such as television. In developing countries the regulating watchdogs and related establishments are still in stages of latency so that the possibility that viewers who would be subject to such measures would probably never ever know that they were the focus of such procedures. The Ethical Issue of 'Creating Demand' in the words of Pope John Paul II, advertising also can be, and often is, a tool of the phenomenon of consumerism. Sometimes advertisers speak of it as part of their task to 'create' needs for products and services - that is, to cause people to feel and act upon desires for items and services they would ordinarily not need. A piquant issue arises when consumerist attitudes and values are transmitted by communications media and advertising to developing countries, where they exacerbate socio-economic problems and harm the poor. While a judicious use of advertising can stimulate developing countries to improve their standard of living, serious harm can be done to them if advertising and commercial pressure become so irresponsible that communities seeking to rise from poverty to a reasonable standard of living are persuaded to seek this progress by satisfying wants that have been artificially created. The result of this is that they waste their resources and neglect their real needs, and genuine development falls behind.

Predatory Pricing In developing nations where the bulk of the populace is still employed in small and medium enterprises, the use of predatory pricing by large multinational corporations in order to wipe out competition is an ethical issue. While proponents of no holds barred pricing would attribute this to an unfettered free market, the fact remains that the larger issue is the threat of wiping out the livelihood of a large number of people. In India, a related issue is the entry of western discount stores that might eventually threaten the existence of millions of people employed in traditional mom-and-pop stores. Wal-Mart's 'takeover of small towns' in the U.S.A. is also a related concern. Countries like India need to take a leaf out of the China book-China opened its market to these stores in 1991 and only recently allowed 100% foreign direct investment (FDI) in such ventures.

False and Misleading Advertisements Then there are the issue of false and downright disingenuous advertisements. While in itself this is an important ethical issue, an extension of this is the question of credibility. Nowadays, newspaper columns are rife with advertisements which blatantly compare features of brands with those of their competitors. Citing the opinion of 'experts', these advertisements claim their brands to be quantitatively and qualitatively better than those of their rivals. In India a leading car manufacturer had to recall its ad campaign when it incorrectly stated that one of its car models was superior to that of its competitor's.

Post Purchase Dissonance-What you see is not often what you get Since very often what companies claim their products or services deliver is not what the consumers actually get, the issue of post purchase dissonance arises. There are two more non-contrasting viewpoints on this issue. One states the typical examples of Tele-Shopping Networks (TSN) and the internet. Since there is no element of tangibility, the consumer would typically end up getting an end product which he/she didn't literally ask for. The other viewpoint states that such establishments would be punished by market forces since in today's world the consumer is undoubtedly the king. But in associating such concerns to the game play of market forces, the larger ethical issue is unfortunately trivialized. Depicting groups in stereotyped roles all too often, marketing contributes to the invidious stereotyping of particular groups that places them at a disadvantage in relation to others. Women and children unfortunately end up being cast as stereotypes in ad campaigns the world over. Often, the role of women in business or professional life is depicted as a masculine caricature, a denial of the specific gifts of feminine insight, compassion, and understanding. In India, which has traditionally been a patriarchal society, tremendous cultural changes have been brought in with the advent of cable television and the exposure to western content. Urban women are enjoying more freedom than they've had before. Yet, promotional campaigns of certain firms still show the Indian woman of yore-a fallback to a time when women did not enjoy the freedoms they have today.

Promotions of Alcohol, Tobacco-Creating Demand for Vice Cigarettes are one of the most heavily marketed products in China and other developing nations. An increasing percentage of those marketing dollars is dedicated to what are probably the most sophisticated consumer marketing databases in the business world. Tobacco advertising is no longer just the province of multi-million dollar ad budgets pushing the Marlboro Man, Joe Camel's phallic face or the women in the Virginia Slims' ads who have 'come a long way.' It is equally the province of direct marketers, pushing free packs to targeted prospects and mailing slick magazines-published by tobacco companies-to influence the behaviour and retain the loyalty of tens of millions of smokers And the problem is pandemic-is is prevalent in both developing as well as developed countries alike. In the US for example, cigarette smoking is responsible for the deaths of almost half a million people a year. Tobacco use is responsible for more than one in six deaths in the United States. Smoking accounts for 30% of all cancer deaths. It is a major cause of heart disease, and it is associated with conditions ranging from colds and gastric ulcers to chronic bronchitis, emphysema and vascular disease. Smoking caused an estimated 264,087 male and 178, 311 female deaths in the United States each year from 1995 to 1999. The U.S. Congress Office of Technology Assessment estimates the cost of smoking (direct and indirect) to the economy at $150 billion a year. Each day more than 3,000 teenagers in the U.S. become addicted to cigarettes. The tobacco industry argues that its advertising is not aimed at recruiting these young new smokers. Its representatives say, disingenuously, that advertising by individual tobacco companies' targets adults only and serve only to encourage regular smokers to switch brands or to retain brand loyalty. However it has been seen that perception of cigarette brand advertising actually is higher among young smokers and that changes in market share resulting from advertising occur mainly in this segment. Cigarette advertising thus undoubtedly encourages youth to smoke. In a survey conducted by the Journal of the American Medical Association, it was stated that the success of the tobacco industry is dependent on recruiting people who don't believe that tobacco kills-thus enticing children, developing nations populations, and disadvantaged members of society to smoke is the only way for tobacco companies to make up for the number of smokers who quit or die

Intrusive Promotions A number of companies offer a plethora of freebies in terms of services and add-ons, however all these come with the proverbial strings attached. These are particularly true for telecom and internet services related companies. Mobile network providers in India for example are notorious for literally bombarding the users with promotional text messages. Many a times these companies share customer data with other companies without the explicit permission of the customers themselves. The issue at hand is such measures compromise the confidentiality of company-client relationships and trivialize the privacy concerns of the customers.

Copyright, trademark violations.

 Copyright and trademark violations are ubiquitous throughout the developing world. One of the major grouses of multinational corporations in countries like China and India is the lack of a robust legal framework that harshly penalizes violators. Data piracy is a major concern in South East nations and millions of illegal compact discs are made in such countries which cost software, music and movie companies billions of dollars.

Advertisements as Mirrors of prevailing norms Marketers claim that advertising simply mirrors the attitudes and values of the surrounding culture. No doubt advertising, like the media of social communications in general, does act as a mirror. But, also like media in general, it is a mirror that helps shape the reality it reflects, and sometimes it presents a distorted image of reality. Advertisers are selective about the values and attitudes to be fostered and encouraged, promoting some while ignoring others. This selectivity does not impart credence to the notion that advertising does no more than reflect the surrounding culture. For example, the absence from advertising of certain racial and ethnic groups in some multi-racial or multi-ethnic societies can help to create problems of image and identity, especially among those neglected, and the almost inevitable impression in commercial advertising that an abundance of possessions leads to happiness and fulfilment can be both misleading and frustrating. Advertising also has an indirect but powerful impact on society through its influence on media. Many publications and broadcasting operations depend on advertising revenue for survival. This often is true of religious media as well as commercial media. For their part, advertisers naturally seek to reach audiences; and the media, striving to deliver audiences to advertisers, must shape their content so to attract audiences of the size and demographic composition sought. This economic dependency of media and the power it confers upon advertisers carries with it serious responsibilities for both.

The Ethical issue of Political marketing

Political advertising can support and assist the working of the democratic process, but it also can obstruct it. This happens when, for example, the costs of advertising limit political competition to wealthy candidates or groups, or require that office-seekers compromise their integrity and independence by over-dependence on special interests for funds. Such obstruction of the democratic process also happens when, instead of being a vehicle for honest expositions of candidates' views and records, political advertising seeks to distort the views and records of opponents and unjustly attacks their reputations. It happens when advertising appeals more to people's emotions and base instincts-to selfishness, bias and hostility toward others, to racial and ethnic prejudice and the like- rather than to a reasoned sense of justice and the good of all. Ethical Issues in Internet, e-commerce The Internet is quickly becoming a major conduit for business. On-line business has raised a host of new issues such as honesty and responsibility, accountability, privacy and confidentiality, protection of data (i.e. credit card numbers), freedom from invasiveness (i.e. so-called sticky websites that automatically track and retain customer contact and information), quality of the goods delivered, disclosure and reliability of information, sources of goods, Internet economics vs. traditional economics, impacts of global Internet business, employment through the net (local and global telecommuting), web advertising, competition on the Internet (hacking into data, falsification of data), public information and financial disclosure (investor relations on the Internet), and others.

1.   The Small Print: The major ethical issues facing business over the internet are the ones regarding the small print i.e. the policy notices or practices on websites.

These issues include:

A) Usage of obfuscating and vague language B) The policy may be hard to find or difficult to read and understand.

 C) It may not contain all the disclosures

 D) May fail to provide a contact address or procedures for dealing with complaints, corrections, or conflict resolution

 E) It may not have clear access requirements or procedures for verifying a valid requester before granting access.

F) May not be linked to or displayed on every page where information is collected

2. World Wide Web versus the Wild Web: To many, the utopian concept of the internet is that of a valueless zone-a free network that is outside the purview of human control and restrain. But we feel that line of reasoning is flawed. The internet is the progeny of civil society. This means that the World Wide Web is not the wild Web, but instead a place where values in the broadest sense should take a part in shaping content and services. This is recognition that the Internet is not something apart from civil society, but increasingly a fundamental component of it.

3. Ownership and Responsibility: The internet is largely a boundary less network. The involvement in content of companies hosting information is highly debatable. There are two sides to the proverbial coin: The Internet as a medium supports all kind of contents. By espousing the principle of allowing anyone to post any material on the net as a means of furthering information exchange is extended by many as the raison reason for being of absolving the hosts of complicity of posting the material. In India, a major debate between the erudite arose when the CEO of the Indian chapter (bazee) of ebay.com was arrested over charges of allowing the exchange of video clips showing explicit scenes. The sympathizers of the site owners cited the fact that the websites are merely enabling people to exchange data over a common platform. What information is exchanged does not fall under the purview of the responsibilities of the website managers? The opposing view was the hosts cannot turn a blind eye to the activities being carried out through the medium of their site. We feel that although, given the nature of the Internet, they cannot possibly be expected to pre-check content, once they receive a notification or a complaint about something they are carrying or hosting, they have to take a view. Thus if one is attempting to bring a sense of ethics to the Internet in any particular instance, it is essential to know who has the control and the responsibility. Increasingly the debate about the content of the Internet is not national but global, not by specialists but by the general populace. There is a real need for this debate to be stimulated and structured and for it to lead to 'solutions' which are focused, practical and urgent.

Further issues in marketing ethics

Marketing ethics overlaps with environmental ethics in respect of waste problems associated with the packaging of products. Some, such as members of the advocacy group no free lunch, have argued that marketing by pharmaceutical companies is negatively impacting physicians' prescribing practices, influencing them to prescribe the marketed drugs rather than others which may be cheaper or better for the patient.

Ethically thinking is responding to situations that deal with principles concerning human behaviour in respect to the appropriateness and inappropriateness of certain communication and to the decency and indecency of the intention and results of such actions. In other words, ethics are distinctions between right and wrong. Businesses are confronted with ethical decision making every day, and whether employees decide to use ethics as a guiding force when conducting business is something that business leaders, such as managers, need to instil. Marketers are ethically responsible for what is marketed and the image that a product portrays. With that said, marketers need to understand what good ethics are and how to incorporate good ethics in various marketing campaigns to better reach a targeted audience and to gain trust from customers.

Marketing ethics, regardless of the product offered or the market targeted, sets the guidelines for which good marketing is practiced. When companies create high ethical standards upon which to approach marketing they are participating in ethical marketing. To market ethically and effectively one should be reminded that all marketing decisions and efforts are necessary to meet and suit the needs of customers, suppliers, and business partners. Ethical behaviour should be enforced throughout out company culture and through company practices.

Conclusion

Good Marketing Citizens All in all, it can be seen that ethical issues in marketing in the context of developing countries is highly sensitive to cultural, social and ethical issues. The larger issue is thus not merely an occidental versus an oriental one. For the marketing fraternity to be a good ethical citizen, the onus lie on themselves-for indeed, marketers have to stop indulging in unethical practices and start respecting local mores and values

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