The Aspects of Ethics in Marketing

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Abstract

The main aim for this study is to understand what does it means for ethics marketing. The study focus on theoretical by use liter-ature review own ideas of researcher, and to define, examine the nature and scope, identify issues, provide a decision-making framework, and trace the historical development of marketing ethics from a practice and academic perspective.. Findings – good marketing is ethical marketing. Good marketing is about satisfying and developing a long-term rela-tionship with your customers. Caring about your customers not only results in profits (or achieving your organization’s objectives if an or-ganization is not-for-profit), it is the ethical thing to do.

Introduction

Marketing ethics came of age in the 1990s. (Murphy, 2002). Ethics is a difficult and controversial concept. Many businesses and nearly all professions have a code of ethics. Marketing is a key functional area in the business organization that provides a visible interface with not only customers, but other stakeholders. (Ferrell, 2007)

Though a complete review of ethics will not be undertaken here, a very brief review of moral philosophy as it relates to business and mar-keting ethics is useful to understand the philosophical approaches to this subject. Modern moral philosophy probably had its beginnings in G. E. Moore’s Principia Ethics in 1903 (Maclntyre 1998), though Adam Smith addresses the idea of fair business competition at an earlier date in his book The Theory of Moral Sentiments (1759).

Formal ethical consideration found its way into business in the 1920s with the first code of ethics in the area of marketing being attributed to the advertising industry, which developed a code in 1928. Additional-ly, in academia some early advertising and marketing texts began ad-dressing ethical issues (Curtis,1931).

A few classic business ethics works were published as early as the 1930s, but as a distinct academic discipline, business ethics conceivably has its roots in the 1950s (Paul 1987). However, one of the first and most prominent, comprehensive empirical works in business ethics was by (Baumhart,1961), who identified eight major ethical problems that business people wanted to eliminate. As pointed out by (Chonko and Hunt, 2000), five of the eight ethical abuses fell in the domain of mar-keters’ activities.

In other words, most individuals do not feel they have the freedom to decide ethical issues independent of organizational pressures. This knowledge places significant pressure on organizations to develop codes of ethics, ethics training, and an ethical corporate culture that encourages appropriate behavior. Most organizational ethics programs focus on developing ethics codes and phonies and developing commu-nication systems and control mechanisms to encourage ethical behav-ior.( Terry, 2001)

The existence of a code of ethics in a profession means that unethical behavior may not be allowed or tolerated. (Yıldız et al, 2013)

Ethics marketing

Ethics is the standard that determines what is right and what is wrong (Kurtz, 1999). Ethics can be define as the inquiry into the nature and ground of morality, in which the morality is defined in the context of moral judgments, standards, and rule of conduct (Mason, Bearden& Richardson,1990). Velasquez (2002) stated that ethics is an important element in marketing decisions making. Dibb. et al (2001) defined mar-keting ethics “are the moral principles that define right or wrong behav-ior in marketing”. According to Yoo (2002), “marketing is considered as the most unethical of business functions and most marketing practic-es have been criticized as such, Dibb. et al (2001) have determined three factors that interact to determine ethical decision in marketing which are individual factors, organization relationship and opportunity, Singhapakdi (2004) defines Ethical Intentions as an individual predis-position to act in an ethical manner, In this sense, when an individual perceives an ethical problem, and he changes his actions favorably, there is a positive intention.

Normative perspectives for ethical and socially responsible marketing (Laczniak and Murphy 2006) outlined seven basic perspectives for ethical and socially responsible marketing. They are:

a) Ethical marketing puts people first.
b) Ethical marketers must achieve a behavioral standard in excess of the law.
c) Marketers are responsible for whatever they intend as a means or ends with a marketing action.
d) Marketing organizations should cultivate better (that is higher) moral imagination in their managers and employees.
e) Marketers should articulate and embrace a core set of ethical principles.
f) Adoption of a stakeholder orientation is essential to ethical mar-keting decisions.
g) Marketing organizations ought to delineate an ethical decision-making protocol.

Connections between Ethics and Relationship Marketing

Chonko and Hunt (1985) conducted an empirical study relating to the ethical issues of marketing management. They tried to delimit, first-ly, the nature and extent of the problems of marketing ethics, and sec-ondly to examine the effectiveness of managers actions and codes of ethics in the promotion of the ethical behavior. They concluded that corruption, fairness, honesty, price, product, staff, confidentiality, ad-vertising, data manipulation and purchase are the ethical main issues confronted by marketing managers. Thus, ethics is a parameter which influences the effectiveness of marketing actions.

Murphy et al. (2007) believe that relationship marketing is inherently a concept with strong ethical roots, since ethics is the key to the sus-tainability of relationships. They recognized the existence of several ethical dimensions, but they proposed the use of the theory of “ethical virtues” based on good moral habits. They assumed that there are three fundamental ethical virtues in relationship marketing, which stress on individuals and the organization rather than on problems and dilemmas. These are: trust, commitment and diligence.

Takala and Uusitalo (1996) proposed on the basis of normative ethi-cal theory, a conceptual framework for the evaluation of relationship marketing in an ethical perspective. They suggested a program aiming at helping managers to plan and implement morally justified operations of relationship marketing. This program consists of four components name-ly: the ethics of keeping promises and truth-telling, the ethics of equal treatment of consumers, the ethics commitment and the ethics of com-munication. They add that it is necessary to establish a code of ethics to resolve ethical dilemmas of the everyday practice of marketing. This code must contain four elements and form a fixed part of the marketing program to ensure its effectiveness.

The introduction of codes of ethics within the company aims to cre-ate a climate of collaboration and cooperation between employees and the company and between employees themselves. Moreover, codes of conduct transmit ethical values of the company who are supposed to influence the behavior of employees and their decision making. (Amine, 2012)

Internal marketing seen as a process and a principal component of re-lationship marketing, promotes the creation, maintenance and strength-ening of relations between the company and its employees from the perspective of satisfying consumers. (Berry, 1981)

Code of ethics marketing

Establishing a code of ethics within an organization should not be left to chance. It is better to have a code of practice, and monitor the code in practice, so that employees and others know exactly what the firm is doing about its ethical responsibilities. As with any other ques-tion of marketing, the decision as to what the code should contain can be made by reference to the firm’s customers and consumers: what would these people regard as ethical behavior? (BLYTHE, 2005)

a) Products should be honestly made and described; commercial pressures may tempt companies to use cheaper raw materials or to use new additives to make the product perform differently.
b) Promotions can involve deceptive or misleading advertising, manipulative sales methods, and even bribery in selling situa-tions. While a certain amount of advertising ‘puff’ is acceptable and even expected, it is clearly not acceptable to tell outright lies or even to use misleading phrases, Likewise, salespeople of-ten face ethical conflicts: perhaps a salesperson is faced with correcting a customer’s mistaken belief about a product, and thus losing the business, or allowing the customer to continue with the false belief right up to the point of taking delivery of the goods.
c) Pricing raises ethical issues in the areas of price fixing, predatory pricing (pricing below the cost of production in order to bank-rupt competitors) and not revealing the full cost of purchase.
d) Distribution ethics involve abuse of power in channel manage-ment, and failure to pay for goods within the specified credit terms..

Ethical/Legal Framework in Marketing

A good starting point for understanding the nature and significance of ethics is the distinction between legality and ethicality of marketing decisions. While ethics deal with personal and moral principles and val-ues, laws are society’s values and standards that are enforceable in the courts. In general, what is illegal is also unethical. For example, decep-tive advertising is illegal. It is also unethical because it conflicts with the moral principles of honesty and fairness, But not all unethical con-duct is illegal. For instance, price gouging is usually not illegal but is often viewed as unethical. Marketing managers often find themselves in many situations where they must make judgments in defining ethical and legal boundaries. For some, the distinction between ethics and laws can sometimes lead to the rationalization that if a behavior is within legal limits, then it is not really unethical.

The moral problems in the marketing field

a) consumer behavior

Since the scientific sphere of consumer behavior aims to gather criti-cal factors for human needs in order to better guide the market to them, its importance can not be doubted because the theory becomes radical. (Murphy and Laszaniak, 1981). Singer et al. (1991) suggested that the risk that comes with knowledge of consumer behavior is that consumer needs can be guided by the companies themselves.

b) Product and Services Management

Laczniak and Murphy (1985) mentioned that some corporations im-port extremely short lived products in the market in order to benefit from the repurchase of that same product. The same thing applies to products that have been purchased by customers after being stimulated by advertising even though the products do not satisfy their actual needs and expectations.

c) Advertisement

Advertisement is primarily marketing’s most powerful instrument. It is, however, also the means that has suffered the strongest criticism and restrictions by legislative frameworks (Nwachukwu et al., 1997). For example, during the last few years with the appearance of products con-taining lower cholesterol or environment-friendly products, the case of ethics in advertising, which had been forgotten during the previous time, has been reopened (Landler, 1991)

d) Pricing

Among all the characteristics of the product, the price is most im-portant to the consumer. The consumer aims to increase the quali-ty ratio to the maximum price (Nantel Weeks, 1996). Although the pricing framework for pricing is specific and often strict, some companies do not refrain from trying to deceive consumers. Such practices are often encountered during sales events where the discount displayed is sometimes unreal and subtracted from a fictitious initial price that is actually higher than the normal price.

e) Delivery Channels

Direct marketing is the most controversial of advertising channels, particularly when approaches are unsolicited. TV commercials and di-rect mail are common examples. Electronic spam and telemarketing push the borders of ethics and legality more strongly. ( Boundless, 2014)

Resolving Ethical Challenges in Marketing

Improving the status of ethics in marketing for the future, especially in a global world, will require substantial effort on a number of fronts. Ones examined here are regulation, organization, communication and social responsibility (these headings are adapted from Shultz and Holbrook 1999)

a) Regulation

Several ethical issues facing marketing appear to be sufficiently in-tractable that some type of governmental regulation will be needed to find solutions for them. One is the area of bribery and corruption.

Dunfee et al. (1999) examined bribery in detail and contended that an ethical solution can be found. A major effort to put pressure on gov-ernments to reduce bribery and corruption is Transparency International

b) Organizational Leadership

Ethics at the organizational level obviously has a pronounced impact on decisions made in marketing. Leadership at the corporate and mar-keting level set the ethical climate for the firm. Organizational factors such as size, culture/climate and presence or absence of ethics state-ments need further investigation as to their influence on marketing ac-tions . (Murphy, 2002)

c) Social Responsibility

The relationship between ethics and social responsibility is one that is often discussed, but sometimes interpreted differently. For our purpos-es, ethics deals with issues pertaining to the organization and its stake-holders in day to day business transactions. Social responsibility refers to a company to posture relative to the community (either narrowly or broadly defined). Ethics tends to be more internal in orientation, while social responsibility is more external, but the orientation is not an abso-lute one. Ethics usually deals at the individual manager level, while so-cial responsibility is associated with the corporate/organizational level. . (Murphy, 2002)

d) Candid Communication

A common theme in both business and marketing ethics is the im-portance of communication to reduce unethical behavior or the percep-tion of it. This communication should be both internal and external. (Murphy, 2002)

Conclusion

Many consumers are aware that the ethics of marketing have shifted radically. In the mid-20th century, for example, advertisers made claims which simply were not true about the products they sold. Marketing ethics today frowns upon this practice, as does the law. Marketers are encouraged to find ways to promote products and services in a way which makes them appeal without being deceptive or coercive, and marketing ethics also includes professional relationships such as those between marketers and their clients.

Marketing ethics plays into corporate ethics and media ethics, both of which connect with marketing on many levels. Ethical business practic-es are an increasing cause for concern in many areas of the world as consumers become more active about identifying and pushing back against practices which they feel cross ethical lines. As a result, market-ing ethics started to become more clearly defined at the close of the 20th century, and marketers began devising ethical standards which they could utilize as guidelines for the industry

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