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Workplace Ethics (Marketing)

By: Arvind Hoskote B Quennie Balaram Sahu Barjona Foning Bhupesh Yadav Bhaskar Gupta

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Definition
What is Work Ethics? A group of moral principles, standards of behavior, or set of values regarding proper conduct in the work place Marketing Work Ethics Practices that emphasize transparent, trustworthy, and responsible personal and organizational marketing policies and actions that exhibit integrity as well as fairness to consumers and other stakeholders (Marketing ethics focuses on principles and standards that define acceptable marketing conduct, as determined by various stakeholders and the organization responsible for marketing activities. )

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

COCA COLA vs Mountain Dew

Racial stereotypes Violence towards women

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Ethical Norms - Marketers


Do no harm
(add value to their organizations and customers, adhering to all applicable laws and regulations, ethical standards in choice making)

Foster trust in the marketing system


(products are appropriate for their intended and promoted use)

Embrace ethical values


(honesty, responsibility, fairness, respect, openness and citizenship)

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Ethical Values - Marketers


Honesty
(to be truthful and forthright in our dealings with customers and stakeholders)

Responsibility
(to accept the consequences of our marketing decisions and strategies)

Honesty

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

Openne ss

Respons ibility

Respect
(to acknowledge the basic human dignity of all stakeholders)

Openness
(to create transparency in our marketing operations)

Respect

Citizenship

Fairnes s

(to fulfil the economic, legal, philanthropic and societal responsibilities that serve stakeholders in a strategic manner)

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Factors influencing ethical decision making process


Individual Factor
(When people need to resolve ethical conflicts in their daily lives, they often base their decisions on their own values and principles of right or wrong)

Organizational Factors

(learn from others in the organization, Organizational pressure)

Opportunity

(Opportunityconditions that limit barriers or provide rewards may also shape ethical decisions in marketing)
OPPORTUNITY

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Current ethical issues in marketing


Controversial Product - Advertising Controversial Advertising Topic Alcohol Cigarettes Condoms Female contraceptives Female hygiene products Female underwear Funeral services Gambling Male underwear Pharmaceuticals Political parties Racially extremist groups Religious denominations Sexual diseases Weight loss programs

Using deceptive advertisements Advertising for children Tobacco advertising Alcoholic beverages advertising Negative political advertising Racial stereotyping Sexual stereotyping

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Current ethical issues in marketing


Sexism in marketing Super market Asdas Marketing Campaign Behind every great Christmas, theres mum and behind every great Christmas, theres Asda (caused particular offence among male viewers who claimed it belittled non-mothers running households, 180 complaints) Gender marketing Barclaycards ad ( the stuffed monkey character says to a Barbie doll: on your bike dolly, its for his son)

Social gambling Facebooks dealing with online gaming firm 888 (Is social networking site a suitable environment for gambling? - younger social network users)

ETHICAL ISSUES AND THE MARKETING MIX

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Product Issues
Product that is harmful
Ex: thalidomide disaster in Germany in 1958. Ex: Compaq sued Packard Bell for not disclosing that Packard Bell computers incorporated used parts

Fail to disclose information about product

Larger packages are more noticeable on the shelf


Ex: chips
Adding of carcinogenic substances to make preparation tasty Type: Material Planned Obsolescence Style Planned Obsolescence

Product quality

Planned obsolescence: purposely causing existing product out of date by introducing new product

Material planned obsolescence: obsolescence in functionality


Ex: electronics products

Style planned obsolescence: firms make minor changes in product within a short period, to attract style conscious people.
Ex: fashion items and cars

Copying the style of packaging to mislead customers


Ex: Ferrero Rocher lookalikes

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Pricing Issues
Bait and switch: advertising one item at low price (bait) customers into stores sale of different product at higher price.(switch).
Selling higher priced product is legal but advertising low priced item is unethical Horizontal price fixing: when competitors making same product jointly determine the price.
Ex: in 1994 six major US airlines fixed the prices

Price fixing: collaboration of two or more firms in setting prices usually to keep prices high.
Vertical price fixing: manufacturers force retailers to charge high prices.

Predatory pricing: company set low price to eliminate competitors>>>>>> monopoly>>>>> increase prices
Ex: American airlines in 1990

Price discrimination: charging different prices to different customers based on their assumed ability or willingness to pay
Ex: amazon.com

Dumping

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Promotion Issues
Deceptive advertising: when the consumer is led to believe something which is not true
Ex: hair restoration or weight loss advertisements

Puffery: exaggerated claims of a products superiority; statements that may not be literally true
Ex: Taj Mahal tea campaign where Ustad Zakir Hussain vowed to give up tabla

Cookies: small text files that automatically download to a users computer whenever that user visits a Web Site and that is capable of gathering information on the user Unsubstantiated claims: claims need to substantiated by trials from independent and recognized institutions
Olays Total effects cream Indias first anti-ageing cream

Offending sensibilities
ING Vysya Bank: father distressed by higher education of daughter and also by birth of baby girl (considered anti-women)

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Distribution Issues
Slotting allowances: fee paid by manufacturer to retailer in exchange of keeping their product in their shelves. Grey market goods: foreign made products imported into countries by distributors that are not authorized.
Ex: selling electronics items

Exclusive territories: an area assigned by company to distributer in which no other distributer will work. Vendor lock-in/ lock-out

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Indian Context Fairness Cream Ads

Why is it unethical?

Counter Arguments

Usage of fear to advertise a certain product Fears often unsubstantiated Reflect vivid racial discrimination Depict sexual stereotyping, for a long time were targeted towards women

Other ads do the same (Seat-belt Ads) Large market for the product Indian mindset inclined towards fairness of skin (e.g. matrimonial ads.)

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Indian Context Fairness Cream Ads


Typical Fear tactics utilized include: Unwanted by parents Cant secure jobs Rejection during marriage proposals
Effect on Consumers Builds up fear about darker complexion Induces wrong ideas about skin color preference Encourages racial and sexual stereotyping Consumers View*: Majority of the respondents feel that the ads are exaggerated 75% of the respondents view advertisements of fairness produ cts as unethical

* Based on a study conducted by Raghave Rao Gundala et al.

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Indian Context Fairness Cream Ads


As an alternative to the typical fear tactics employed by the advertisers, they should emphasize other priorities of their products such as Protecting the skin from possible damage sunburns etc. Enhancing the health and cleanliness of the skin rather than its color Beauty Enhancement

Is this more acceptable??

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Political Advertising
Clip 1
Clip 2

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Subliminal Advertising
Subliminal advertising, also known as subconscious stimuli messaging, is a form of advertising that uses subtle imagery, sounds, and content to attempt to influence the subconscious mind into making purchases or finding something to be appealing
Why is it unethical? Even such brief messages can be processed by the brain but at an unconscious or subliminal level Can manipulate viewers into liking or disliking an object Reasons for the same are completely unrelated to the objects characteristics Deprives consumer of choice Counter Arguments No conclusive research to prove the efficacy of the same Although it is not strictly illegal, in 1974 the FCC adopted a policy saying that subliminal advertising was contrary to the public interest. It is widely considered to be an unethical practice

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Unethical Marketing Practices by Philip Morris


On an average company sells harmful addictive products that kill almost 20% of Americans each year Instead of targeting the health problems and looking to manufacture safer cigarettes, Phillip Morris began marketing to the younger crowd.

United States Tobacco Division of Altria Group Inc. Unethical practices


Tried to coerce the University of Stirling to hand over secret data into teenage smoking and cigarette packaging gathered over more than a decade PMI were fined 10 billion US dollars for damage settlements related to their marketing of Light cigarettes which was positioned as a healthier alternative to existing range The young tend to me more impressionable and naive, warranting a tag as a vulnerable group, therefore potentially easily persuaded into smoking Tried to gain access to about 6000 confidential interviews undertaken with teenagers as young as 13, which discuss their views on smoking and tobacco Targeted at a trendy and young smoker, in contrast to its more masculine heritage the brand is associated with

Statements on record/internal documents


1975: Marlboros phenomenal growth rate in the past has been attributable in large part to our high market penetration among young smokers . . .15 to 19 years old . . . my own data, which includes younger teenagers, shows even higher Marlboro market penetration among 15-17-year-olds 1969: Smoking a cigarette for the beginner is a symbolic act. . . . 'I am no longer my mother's child, I'm tough, I am an adventurer, I'm not square. The company issued a report in the Czech Republic saying that premature smokers deaths have 'positive effects' because they save governments money.

Marlboro Man associated with becoming a man based on research on young teens who start smoking Product placed in close proximity to schools through outlets etc. with specific purpose of targeting teenagers

Source: http://www.telegraph.co.uk/health/healthnews/8734295/Philip-Morris-tobacco-firm-

Source: http://www.tobaccofreekids.org/research/factsheets/pdf/0011.pdf using-FOI-laws-to-access-secret-academic-data.html

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

The boycott of Nestle


A boycott was launched in the United States on July 7, 1977, against the Swiss-based Nestl corporation for "aggressive marketing" of mothers milk substitutes.

Marketing Practices under scrutiny


IBFAN claim that Nestle distributes free formula samples to hospitals and maternity wards After leaving the hospital, the formula is no longer free, but because the supplementation has interfered with lactation, the family must continue to buy the formula Nestle systematically undermines public health messages by, for example, claiming its formula 'protects' babies, when babies fed on formula are more likely to become sick than breastfed babies It also refuses to bring instructions on preparing formula into line with WHO guidance, so denying parents information on how to reduce the risks from the possible intrinsic contamination of powdered infant formula

Targeting less economically developed countries (LEDCs), which campaigners claim contributes to the unnecessary suffering and deaths of babies, largely among the poor Promoting infant formula with misleading and harmful strategies that violate the International Code of Marketing of Breastmilk Substitutes and put babies at risk Resulted in several premature infant deaths because uneducated and poor mothers ceased to breastfeed and instead fed their babies Nestls formula

Examples of marketing of artificial baby milk in countries


In Thailand, it gives out samples of its milk substitutes to mothers in a marketing scheme
Source:

International Baby Food Action Network (IBFAN) and Save the Children claim the promotion of infant formula over breastfeeding has led to health problems and deaths among infants in less economically developed countries

In Egypt, packaging and advertising of Nestl powders repeatedly use phrases such as identical to breast-milk or as in breast-milk

Botswana proclaims that Growing up is Thirsty Work and promotes Lactogen for the hungry fullterm infant

http://en.wikipedia.org/wiki/Nestl%C3%A9_boycott

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus
Utilitarian theory

Ethics Compliance & CSR

McDonalds marketing practices towards Kids


One of the largest distributors of toys, which is included in 20% of their sales. The Happy Meal that is targeted towards children began in 1979. McDonald's targets children through Ronald McDonald and the kids play areas as well, making it a fun environment

Happiness should be maximized while pain should be minimized All the stakeholders are happy considering the situation, the stakeholders are the customers, which include the parents and children, the employees of McDonald's and the McDonald's corporation With higher profits employees are able to have job security, ore job opportunities available around the world, happy parents and children.

In 2010 McDonald's was sued for unethical marketing practices towards children through the act of providing those toys by Monet Parham from Sacramento

Virtue theory
One should express good character, which includes courage, honesty, temperance, and justice McDonald's has good ideas, good products, and fairness to their consumers. McDonald's is honest with their food nutrition, and variety of products that satisfy different consumers needs

Evaluating McDonalds marketing practices


Friedmans Theory of Individualism
Company's main goal is to maximize profit for the owner and stockholders Purposely marketing to children because they are able to persuade their parents to purchase their products Friedman would agree with their practices because it has and will continue to create maximum profit

Kantian Theory
McDonald's has been consistent with their marketing techniques since the 1970's McDonald's has done so with gender based products, age focused meals and healthy options Began the marketing techniques to children out of self-interest to maximize profits

Ethics Compliance Programs and Corporate Social Responsibility

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Ethics compliance programs


Development of code of ethics : guidelines developed by companies to help employees to make ethical decisions

Example: Dows code of business conduct include ethical principles and policies to deal with various issues

Consumerism : social movements that protect consumers from harmful business practices

Example: Establishment of various act and legislations ( cigarette labeling act 1966)

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Ethics compliance programs (Cont.)


Green marketing : marketing of products and packages that are less toxic and recyclable.

Example: Aveda a skin care product manufacturer developed products without animal contents and synthetic materials and recyclable packaging material.

Corrective advertising : advertising that clarifies previous deceptive claims

Example: Warner Lamberts corrective advertisement for LISTERINE mouthwash would not prevent colds or sore throat

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Corporate Social Responsibility


Firms have become viewed as responsible for more than generating profits. Social responsibility Marketing philosophies, policies, procedures, and actions that have the enhancement of societys welfare as a primary objective. Provide future benefits in the form of consumer approval and loyalty.

Marketing Work Ethics

Ethical Issues & Marketing Mix

Focus on India

International Focus

Ethics Compliance & CSR

Steps for Corporations to improve Standards of Business Ethics


1) 2) 3) 4) 5) Appoint a senior- level ethics compliance officer. Setup an ethics code capable of detecting and preventing misconduct. Distribute a written code of ethics to employees, subsidiaries and require all business partners to abide by it. Conduct regular ethics training programs to communicate standards and procedures. Establish systems to monitor misconduct and report grievances.

6)
7)

Establish consistent punishment guidelines to enforce standards and codes.


Promote ethically aware and responsible Managers.

References
http://www.csustan.edu/market/williams/Chapter%204.htm http://www.marketingweek.co.uk/news/2012-the-year-in-marketing-ethics/4005139.article http://www.academia.edu/2012630/Ethical_Aspects_in_the_Advertising_of_Fairness_Creams www.iped-uk.com/marketing_ethics.doc http://www.marketingpower.com/AboutAMA/Documents/Ethics%20Code%20Update%20-%202%2017%2009%20%20Final.pdf http://www.tobaccofreekids.org/research/factsheets/pdf/0011.pdf http://www.telegraph.co.uk/health/healthnews/8734295/Philip-Morris-tobacco-firm-using-FOI-laws-to-accesssecret-academic-data.html http://en.wikipedia.org/wiki/Nestl%C3%A9_boycott

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