Ethical Issues in Contemporary Marketing Today
Introduction
Marketing ethics relate to principles and standards used to define acceptable conduct in the marketplace. Given that marketing usually happen in the context of an organization, ethically questionable activities often emerge from the high pressure to attain performance objectives. There is no organization that is totally immune to ethical misconduct and illegal behavior. Marketers with no ill-intent often develop schemes that appear legal on the face value but are ethically flawed and result in scandals and legal proceedings. The list of marketing ethics risks is extensive ranging from deceptive sales methods, overbilling clients, fraud, and price fixing to antitrust. In view of this, it is apparent that businesses have plan and infrastructure to determine unethical practices and respond to them accordingly.
Definition of Marketing
Although defining marketing has proven somewhat problematic over time, several definitions have brought forth to this effect. Some of the contributing reasons for lack of general consensus pertaining to ethics in marketing arise from the apparent lack of identical arguments on what constitutes “good” and “ethical” as well as whether “good” and “ethical” carry similar meaning (Carrigan, 2005, 481). According to the American Marketing Association (AMA), marketing is defined as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (AMA, 2007). Similarly, marketing can be seen to be “the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individuals’ and companies’ goals” (Harvard Business Press, 2010, 4).
The Chartered Institute of Marketing (CIM) defines marketing as “the management process which identifies, anticipates, and supplies customer requirements efficiently and profitably”. Furthermore, Philip Kotler (1997) gives a marketing definition as “a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others” (Blythe, 2006, 8).
A greater number of definitions of marketing and its related marketing concept are hinged on the consumer sovereignty mode, where much emphasis is laid on the need for ‘customer orientation’, ‘customer-driven strategies’ or ‘customer focus.’
Marketing serves to deal with the challenge of a business in providing goods and services so as to meet the demand of specific groups, individuals, or organizations. As such, marketing is a key business function because it identifies the current unfulfilled needs and wants, defining and measuring their magnitude, determining the target market the business can best serve, and makes decision on the appropriate products, services, as well as programs to serve these markets. That said, marketing is also a social process through which persons and groups obtain their needs and wants by creating and exchanging products/services and value with others.
The Marketing Process
Although there may be slight differences from organization to organization, the marketing process lends itself structure that sets off with strategic planning to planning and ultimately the implementation stages. When broken down, a typical marketing process is made up of these following steps:
1. Analysis of market opportunities – this stage entails identifying of target customers, understanding their needs, and knows the competition of the business.
2. Developing a marketing strategy – the business explores new product ideas, define its competitive edge, and test-market its ideas.
3. Creating a marketing plan – the marketing executives make decisions pertaining to how they will position, price and promote their product as well as the suitable distribution channels to employed among other things.
4. Implementing the marketing strategy – the business puts its marketing strategy and plan in action. The business also takes care to factor in any disappointments or surprises likely to be encountered besides incorporating feedback and controls.
5. Evaluating the effectiveness of the marketing strategy – the business evaluates how well it is doing with the implementation of its marketing process and then adjusts accordingly so as to achieve the set marketing and strategic objectives (Harvard Business Plan, 2010, 13).
Marketing is a core business discipline which is rather vulnerable to criticism relating to ethical practices. This is especially the case sub-disciplines of marketing such as; advertising, pricing marketing research, personal selling, and international marketing lend themselves to opportunities for unethical behavior (Kaynak & Delener, 1995, 6). Business literature indicates that the bulk of marketing ethics studies entail the use of scenarios in the form research instrument and largely relate to these marketing sub-disciplines: marketing management, advertising, market research, marketing education, and retail and purchasing management. Research on ethics in international marketing has particularly increased in the recent past owing to the fact that marketing activities are pronounced in international trade. Formalized moral criticisms of marketing go as far as late 1950s and have tremendous development, sophistication and intensity since 1960s. The criticisms relate to the increasing incidences of unethical marketing in the corporate world. As such, morality has been used to gauge the issues and shortcomings of marketing theory and practice (Kelly, 2005, 2). The underlying theme of the marketing theory is on the notion of the sovereign customer. This demands that the needs of the customer must be satisfied first above the self-interest of the business.
Marketing Ethics
An ethical issue refers to an identifiable problem, opportunity or situation that calls for an organization or individual to choose from a list of actions that require to be evaluated either as right or wrong, ethical or unethical. A marketing ethical issue arises at any time an activity makes marketing managers or targeted customers to feel cheated or manipulated, regardless whether it is legal or not. Marketing ethics refers to the systematic study of the way moral standards are employed in marketing decisions, behaviors as well as institutions. In other words, marketing ethics alludes to the philosophical study, from a moral perspective, of given marketing issuers that are subject to moral judgment. If an issue is associated with greater consequences, it will be recognized as ethics issue and thus important in making an ethical decision (Pride & Ferrell, 2011, 105).
In order to understanding the importance of ethics in marketing decision-making, marketers need knowledge on factors that influence ethical decision making process itself. These are: individual factors, opportunity, and organizational relationships.
First, individual Factors means that every person has his/her own values and principles relating to what is right or wrong, ethical or unethical which they have learned over time through socialization with family members, religion, social groups, and formal education (Pride & Ferrell, 2011, 107). As such, people often base their decisions on them when resolving ethical issues experienced at the workplace. However, an organization’s culture bears more influence on marketing decisions as compared to an individual’s personal values and principles.
On the other hand, organizational Relationships – The ethical decision relating to marketing are often taken jointly, on discussions and conversations with co-workers, or in committees and work groups (Pride & Ferrell, 2011, 107). Thus, marketing managers resolve ethical problems they encounter on the basis of the personal values and what they have learned from other in the organization they work in. The influenced decisions could either be ethical or unethical.
Figure 1: Factors influencing ethical decision-making in marketing
Source: (Pride & Ferrell, 2011, 107)
Figure 2: Framework for Understanding Organizational Ethical Decision Making
Source: (Ferrell, 2005, 105)
Marketing in itself is a process that is closely inherent to majority of organizations, translating that marketing ethics is taken to be a subset of business ethics which drive the organizations. Nonetheless, given the rapidly changing business environment in modern day, there is argument that maintaining ethical marketing as the topmost priority is increasingly proving a major challenge for most organizations or businesses. This is largely because marketing marketers are constantly under pressure to ensure financial health and growth of their businesses, something which results in compromising of marketing ethics. In general, therefore, marketing ethics pertain to the ethical dilemmas associated with the marketing function of a business (Schlegelmilch, 1998, 8).
Over the years, discussions on marketing ethics in business press or the general media have related to a marketing strategy, policy, or tactic that some contributors term as “unfair” or “deceptive” or “exploitive”. The discussion typically grows into how marketing practices can be made more consumer-friendly, socially compatible or how marketing process can be normatively improved (SAGE, 2011, 78). However, the aspect of normative marketing ethics is rather controversial one given the divergent views among different players in business regarding to what is “proper or acceptable” behavior in marketing.
Accordingly, a mention of marketing ethics to the consumer or general public often evokes a range of differing reactions. A greater majority of the consumers are of the belief that ethics do not exist in marketing activities done by almost all businesses. Similarly, others hold that business and ethics are worlds apart and therefore do not mix. This can be attributed to the fact that ethical misconduct in marketing is highly noticeable because marketing depicts the all important link between a business and its customers. This is especially true because marketing creates and sustains the interface between a company’s market aspirations and consumer preferences by identifying, anticipating and satisfying customer requirements profitably (Carrigan, 2005, 481). The most common ethical issues that arise in marketing situations include: deceptive advertising, unsafe products, misleading pricing, gift-giving to customers, high pressure sales strategies, anti-competitive distribution concessions, privacy in marketing research, misrepresentation of services among others. Thus the basic ethical values central to marketing are freedom, justice, integrity, privacy and welfare.
As a result, leading business schools such as the Manchester Business School and the London Business School have adopted business ethics courses in their programs and business professors have ventured into researching and teaching this crucial element. Exposes on ethically questionable marketing practices among large and small organizations have increasingly become commonplace in the Mass Media and leading business periodicals. To a larger extent, the constant scrutiny has helped business organizations to appreciate the marketing advantage of exemplary ethical behavior, both in the form of corporate ethical positioning and in terms of related marketing campaigns.
Majority of consumer want to perceive a business as ethical if it is adhering to “ethical” codes and norms in regulating their self interest. As such, many businesses are faced with the dilemma of either striving to appear ethical to the consumer and other stakeholders (i.e. remaining committed to a marketing behavior that places the consumer and social welfare first) or pursuing their self-interest of gaining increased sales, profitability and market share through whatever means possible. For a long time now, marketing practitioners and scholars have looked into the myth of benevolent marketing applied on co-operative customers.
A general consensus is there arguing that not all marketing results in satisfactory outcome for the consumers when the definition of consumers is broaden to take in the greater stakeholder group of society at large. What customers desire may not ultimately be good for them. Furthermore, while a marketer may succeed in creating a satisfied customer in the short term using ethical marketing, it could result in negative far reaching implication for both the consumer and society in the long run. Consequently, a single consistent general principle can be said to exist – “Seek the greatest good for the greatest number.” However, the catch is in a business having to make a decisions on what is “the greatest good”, “the greatest number”, and how marketing should be used to give “the greatest good” to “the greatest number” (Carrigan, 2005, 482).
There is consensus among ethical relativists that moral absolutes do not exist, meaning that the definition of what is moral or ethical as relates to marketing can only apply to the social norms of the particular society in which they being practiced. In marketing context ethical relativism thus justifies varied different ethical standards that are applied to different countries and are subject to modification or change with time. To this end, it is therefore evident that implementing ethics in marketing is a big paradox as is the definition of marketing itself.
The marketing concept is founded on the notion that a company or business must strive to offer the customer what he/she needs if it is to sell and remain relevant given that there can be no business without the customer. In its entirety, the marketing concept holds that the customers’ want satisfaction is indeed the social and economic justification for the existence of a business.
The marketing concept stresses on consumer sovereignty where the consumer is the originator of needs which firms identify and act upon them when translated into consumer needs (Firat et al, 1994, 46). However, this may not be a true reflection of the state of affairs in the world of business. By and large, businesses originate rather than satisfy consumer needs. This is particularly true because businesses are the ones who originate the consumer needs but do not necessarily satisfy them. As it were, the industrial system is designed in a manner that it bears sufficient and power that leaves the consumer rather helpless in deciding what and quantity of what is produced.
Modern industrialized countries are effectively planned economies driven by expansive self-serving corporations that pay little regard to the public interest. Unfortunately, what is today often regarded as brilliant marketing practice is one that defies the notion of consumer sovereignty and the market concept. In conventional business and economic criteria, successful marketing practice is one that builds a hyper-reality which consumer buys into. This is because more often than not it is unexpected, unusual, but imaginative, exciting and creative (Firat et al, 1994, 46). In this light, therefore, the marketing practice is not significantly driven by the notion of a sovereign consumer instead the focus is on a powerful hyper-reality that both consumers and marketers will fully buy into.
In the same vein, moral questions surround marketing as it is regarded as manipulation tool for consumer need. Through conspiracy theory and ‘pop psychology’ it has been held that intense consumer research has succeeded in turning the hidden urges along with frustrations of innocent consumers into blind craving for unnecessary and unwanted products. In this sense, therefore, marketing is not believed to create need for individual products, but instead contributing (in aggregate) to the capitalist culture which does nothing good but emphasize and reward material accumulation (Kelly, 2005, 4).
Advertising as the major sub-element of marketing is thus the one that carries the bulk of ethical criticisms. Advertising is criticized as emphasizing materialism, consumption, stereotyping, using sex to sell and drawing consumers to purchase goods and services they do not need. In addition, advertising is accused as taking advantage of children.
Specifically on children, marketing has special ethical issues. Children have always served as a significant marketing target for particular products especially because their relative limited knowledge regarding products, the media and selling. Generally, children are more vulnerable to the well psychological appeals and strong images depicted in marketing advertisements. Ethical questions surface when the children are exposed to rather questionable marketing messages and tactics. For instance, studies linking relationships between alcohol and tobacco marketing with youth consumption often results in increased public pressure.
Similarly, ethical issues stem from the proliferation of direct marketing together with the use of Internet in marketing to children. Most of the time some unethical marketers generate sites that children can bypass adult control or supervision. Objectionable materials are presented to underage consumers or lure them into buying items or providing their credit card numbers.
In order to attain the desired marketing with ethics, it would take the active role of individuals whose character has been stretched and mentored. This way the society would stand the chance of being served as opposed to being exploited, as is currently the case. Ethical marketing calls for marketers to revert to the ‘civic framework’ and contribute the many needs of the global society.
Postmodern Marketing
Postmodern marketing sprung up in the 1990s as a radical alternative to the mainstream scientific marketing. Postmodern conditions push for significant changes in the manner marketing is practiced, researched, theorized, and evaluated. Marketing and postmodernity have increasingly become synonymous with each other, particularly from an ethical standpoint. Postmodern marketing is of the idea that we are currently in an age of transition and transformation where the conventional economic, social, political, and cultural bases of society are rapidly fragmenting and being replaced by fresh new ones (Firat et al, 1994, 40). For instance, the rise of global economy, the revolution experienced in information and communication technologies, as well as the emergence of a consumer culture are all believed to be breaking down the traditional forms of competition, communication and consumption.
As a theory of knowledge, postmodern marketing holds that the changing circumstances of society are rather impossible to comprehend unless there is a corresponding change in the conventional modes of marketing thought. Otherwise stated, the new looking postmodern world needs nothing less of a new world outlook. Thus, unlike the traditional scientific perspective of marketing, postmodern negates the possibility of knowing the world.
Postmodernism as a philosophical argument hold that the human race is stagnant in terms of progress and it is merely living in the present time. In this respect, there seems to be a thriving cultural propensity where almost everything is juxtaposed with almost anything else regardless of whether it fits or not. In the same vein, postmodernists perceive chaos and disequilibria as normal as opposed to order and equilibrium.
Indeed the postmodernist views seem to capture well the current unethical state of play in marketing. For instance, production and consumed are greatly reversed – where individuals define themselves not by what they produce, rather by what they consume. This is especially the case in the post-industrial world (developed world) where the emphasis is mainly on consumption (Blythe, 2005, 22). It is further argued that marketing can no longer be termed to be integral instrument with effect on consumers and the society. Consequently, it is the postmodernist view that marketing ought to be reflexive and thus need to be examined as the sociocultural process which defines the postmodern society.
According to Firat and Shultz (1997), postmodern marketing has the following features in which ethical issues can be drawn:
• Openness/tolerance – there is apparent acceptance of varied styles and modes of living without any prejudice or evaluations of either inferiority or superiority. As much, marketers have taken advantage of the openness to new ideas and in turn designed products that do not necessary serve well the end consumer. For example, food preparation techniques simply borrowed from different cultures have been imposed on other people irrespective of their cultural ideals and practices. This in itself is unethical marketing in postmodernity.
• Hyper-reality – overstatement or use of hype is very pronounced in marketing. It is now common practice for marketers to employ hyper-real statements in advertising pitches in order to appeal to more customers. The ability of different products and services are overrated and the law backs it provided that they are not outright lies. Therefore, consumption and marketing are the most lucrative ground for hyper-real.
• Perpetual present – in the postmodern world, everything is experienced in present regardless of whether it belongs in the past or in the future. To this effect, marketers are promoting goods and services that have both been overtaken with time and yet to become relevant to the present times of consumers.
• Fragmentation – Postmodernism is characterized by the continuous presence of disconnected and disjointed experiences and moments in life. Marketers have become more dynamic and thus more fragmented as a result. This is because not all consumers are satisfied with the same product owned by everyone else (Baker, 2012, 21). As such, the demand for new, different and customized products has led business to go out of their ways to capture the market. Similarly, TV commercials are today have adopted a novel trend where the commercial is sliced in the middle – a ‘fake’ commercial is sliced by a real one or integrating a real, different advertisement between two spots in case of a product. These are dizzying, kaleidoscopic, fleeting forms that are meant to lure the consumer into purchasing the product or service.
• Reversal and production and consumption – Postmodernism emphasizes the idea that value is generated by consumption and not production (Blythe, 2009, 23). Reversals in production and consumption is as a result of production having lost its admirable status in culture rendering consumption as the suitable means by which individuals define their own self-images as well as those of others. In all this, marketing is the primary factor which supports this questionable trend that leads to decentring of the subject.
• Decentring of the subject – In postmodern marketing, there is apparent delinking of the human being from the core significance he or she had in modern culture together with the increasing embracing of the potentials of her or his objectification. In marketing, the focus on target markets and segments as opposed to individuals. This means that individuals are rendered powerless without any form of control whatsoever. This is unethical because the sovereignty is compromised. For instance, Commercials from leading retailers such as Pepsi Cola often depict the brand object as the real hero who the human subject (the consumer) looks on from the sidelines and irreverently just worshipping the brand object or subject.
• Paradoxical juxtapositions – Marketers are increasingly offering odd combinations of products and services with the sole aim of cashing in as much as possible. For instance, books sold in a pharmacy. Surprisingly enough, the postmodern culture consumer appreciates and enjoys the paradox together with the satire and difference that such juxtapositions enable and provide (Firat et al, 1994, 43). The customer of the postmodern culture does not favor the uniformity of style, form, function and content that is inherent in the modern culture. On the hand, the postmodern culture finds favor in that which is different, regardless of whether it is so paradoxically opposed.
• Lack of commitment – Nonetheless, customers often suffer disillusionment from the failure of the modern project to measure up to the promises and the willingness to experiences the differences mentioned above. The net result of this frustrations is loss of commitment to brands. Instead, the postmodern culture samples multiple or contradictory brands, to which the individual is momentarily or marginally committed, and does not take any one of them too seriously. Marketers often suffer the consequences of this when the consumer loyalty to the either their brand or corporation that they took for granted are greatly compromised (Firat et al, 1994, 43).
In the effort to gain loyalty and involvement with their customers, marketers are constantly facing the challenge of cultural lack of commitment to a single idea or project. More often than not, the result of such conflict is things that are morally questionable.
There greatest ethical issue affecting marketing in postmodernity is that when a business places on the market the goods and services they have produced, they become commodities with at particular value for a person taken in isolation, but are seldom objects with an aesthetical potential of connecting value for a community of persons or individuals (SAGE, 1998, 78).
The Impact of Social Network in Marketing Ethics
In the recent past, the Internet has emerged with powerful application such as e-Commerce, blogs, VoIP, instant messaging, and social networking sites. Since the social networking era begun in 2002, social networking sites have gradually grown to position themselves as essential platforms for businesses to market themselves to customers. This explains why social networking sites like Facebook, LinkedIn MySpace, and Twitter currently stand as most highly valued accessories for companies around the globe.
To a larger extent, social networking has revolutionized the way businesses conduct their marketing activities. It is no longer enough for marketers to disseminate a single general message to the target audience. Marketers are therefore able to target more people over due to the rather high rush in varsity of audience (Jothi et al, 2011, 234). Marketers are able to communicate their brand besides creating an effective brand identity using the highly effective and interactive communication strategies.
Marketers also face the challenge of figuring out how best to influence consumers on a one-to-one basis online because these individuals will share their choices and opinions meaning that they can either bolster or undermine any traditional marketing campaign. Indeed, the opinions of bloggers and their follower have grown more influential than conventional advertisements on other media. Research has continuously shown that individuals become more attached to brand communication in social media that common pop up ads and banners. Furthermore, the social networking sites have become primary platforms for highly targeted marketing as well as advertising. In general, marketing communication has become more precise, social, personal, interactive and interesting because of the social networking sites.
In addition, the impact of social networking on business has been great in terms of reduced cost of marketing and connecting with customers. More and more companies across the world are utilizing social network in promotion of their products and services. The social media enables businesses and professional to connect with each other and exchange ideas on effecting marketing, and the gap in the market among other things. This way, the business people are able to find trustworthy contacts to undertake their marketing functionalities given that introductions emanate from individuals they know and trust. Similarly, social networks are fertile grounds for job seekers where businesses find suitable recruits. However, the social networks have the greatest positive impact on reputable businesses that dedicate their time and effort to engage online with their customer base.
The scope and speed of social networks render it an effective medium through which businesses market themselves along with their products and services. The interactive nature of these social networks provides businesses with the ability to engage with their customers more directly as compared to other forms of media used for marketing. However, this poses new unprecedented ethical challenges to companies.
It is now common practice for business to created profiles on social media to advertise their goods and services, most of which are misleading to consumers and other stakeholders.
A company’s ability to adequately fulfill fair competition guideline can also be compromised by their employees who use the social networking sites on the behalf of the company. For instance, an employee representing a company can decide to go overboard and act unethically by discrediting the reputation of their company’s competitors (Institute if Business Ethics, 2011, 2).
Critical Thinking
Using the Service-Dominant Logic in Contemporary Marketing
In view of the many challenges that businesses face in contemporary marketing, there is need to resort to creative ideas in exercising and maintaining ethics in the marketing operations. In my view, businesses can achieve this if the adopt the emerging service-dominant (S-D) logic which has relatively lesser ethical tensions as compared to the traditional marketing theory. The S-D logic proposed by Vargo and Lusch, is fast proving to be a rather positive development for marketing ethics as it facilitates smooth integration of ethical accountability into most marketing decision-making. The S-D logic offers a better ground for ethical marketing considering that it is a theory that interestingly avoids compartmentalizing of ethical issues. Compartmentalization refers to the common practice of separating “business” and “ethics” especially when it comes to the marketing functionality. Thus, compartmentalization both hinders effective response to ethical issues and contributes to ethical issues by arising ethical tensions. To this effect, the foundational principles of the emerging S-D logic will assist in reducing ethical both ethical conflicts and violations in marketing settings. Borrowing from Lusch and Vargo 2006, p. 283, the S-D logic “has some strong and arguably very important normative implications. It intimates a very different kind of purpose and process for marketing activity and for the firm as a whole: to provide service to stakeholders, including customers, stockholders, and employees”. The S-D logic offers firm relationship focus and in so doing tries to overcome the depersonalizing effects brought about by the traditional marketing theory, meaning the former is centered on human beings as being at the core and active players in the exchange process that is marketing and business.
Conclusion
Interpretations of marketing ethics must consider a variety of interpretations of ethical norms reflecting diverse cultures and practices. There is also need for marketing adaptation within a specific market with time as changes occur in the societal culture, knowledge and technology across markets at a given time. As such, adherence to ethical and corporate social responsibility must be made a key part of decision making process as marketing, financial, production, legal as well as human resource considerations.
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