Ethical Issues and Marketing Mix

Stephen A. Oyewole

NORTHCENTRAL UNIVERSITY
Prescott Valley, Arizona

Presentation Outline
Definition and Meaning of Market Ethics
Ethical Behavior and Marketing Influence
Factor Influencing Ethical Decision
Ethical Issues and Marketing Mix
Consumer Legislative Issues in Marketing
Regulatory Authorities
Legal and Ethical Issues
Ethics Compliance
Advantage of marketing ethics
Conclusion
Resources

Definition and Meaning of Market Ethics

Ethics - A set of principles of right conduct or a theory or a system of

moral values (Jones, 2007, p. 120).

Can consider ethical behavior as doing what is right according to

the standards of society. This, of course, begs the question of whose
society as what might be considered ethical behavior in one culture
(country, religion, and ethnicity) might not be so in another.

Marketing ethics is the application of marketing ethics into the

marketing process with the moral principles behind the operation
and regulation of marketing (AMA 2004).

Marketing ethics are standards of ethics that are relevant to

marketing.

Ethical marketing sets out the framework to provide customers with

the good marketing practices.

Ethical Behavior

Difference between Ethical

and Legal Behavior

Laws can be considered as simply enforcing

certain ethical behaviors. This leads to two
familiar ideas: what is ethical is legal and what is
unethical is illegal.
Consider
Is all unethical behavior illegal?
Is all ethical behavior legal?

Ethical codes of practice help determine whether

specific laws should be introduced. Ethics fills the
gap between the time when technology creates
new problems and the time when laws are
introduced.

The Influence of Ethics on

Marketing

Ethics are all about principles present in an

individual showing the right conduct which helps in
shaping the decisions of the customers as well as
of the organization.

Ethics play a very important role in influencing the

behavior of the individuals to help them in their
buying decision. Firstly, when an organization
behaves ethical manner, customers develop a
positive attitude about the organizations and its
products or services. Secondly, the organization will
get more frequent responses from its customers.

Factor Influencing Ethical

Decision
It is true that marketing involves buying and selling of
products, services or ideas to the people in different ways,
some are ethical but some are unethical.
The U.S. Constitution (Kennedy's Consumer Bill of Rights
1962) provides protections for basic consumer rights as
long as they meet five conditions:
-

The
The
The
The
The

Right
Right
Right
Right
Right

to
to
to
to
to

Safety
Be Informed
Selection
Confidentiality
Privacy

Factor Influencing Ethical

Decision Continue
The essential factors can be classified into
four important areas: Individual Factor
Opportunity
Organizational Relationship
Ethical Marketing Decision

Ethical Issues and the

Marketing Mix
Product Issues

Place
Issues

Price Issues

Promotion Issues

Consumer Privacy
Legislation
Since the 19th century, laws about consumer
rights to privacy have been constantly evolving
with time and with technology. In recent years
privacy has become a major issue for everyone.
The process of marketing has attained new
success since the explosion of credit cards to
the advent of personal computers and
cyberspace.
Presents policies and framework that must be
enacted into law and monitored by national
regulators.

Legislative Issues in Marketing

Ethics

Marketings Impact on Society as a Whole

False wants and too much materialism

Too few social goods
Cultural pollution
Too much political power

Marketings Impact on Other Businesses

Acquisitions of competitors
Marketing practices that create barriers to entry
Unfair competitive marketing practices

Legislative Issues in Marketing

Ethics Continue

Marketing Ethics
Corporate marketing ethics policies
Distributor relations, advertising standards, customer
service, pricing, product development and general
ethical standards.

Guiding principle in policy determination

Free market and legal system
Individual companies and managers

International ethical policies are a special

challenge

Securities and Exchange

Commission (SEC) Regulation
National
Market
System
(NMS)

Concerns activities that appear ethical but are

in fact illegal.
Presents an order protection rule under
which an activity that is acceptable to one
facet of the investment community was
deemed illegal under the new regulation.
Result of this regulation is that financial
services firms are now required to collect
market data so that they can demonstrate
that a better price was indeed not available at
the time the trade was executed.

Regulatory Authorities of
Marketing
Federal Trade Commission
Federal Communication Commission
United States Postal Service
State and Local Regulation
Private Organizations

Better Business Bureaus are sponsored by private

businesses and organizations to prevent promotional
abuses through common sense regulation.
The Marketing Association inconjuction with the Federal
Government have provided ethical guidelines for use by
their members and others desiring to adhere to them.

Legal and Ethical Issues

Issues over Truth and Honesty
In

the 1940s and 1950s, tobacco used to be advertised as

promoting health. Today an advertiser who fails to tell the truth
not only offends against morality but also against the law.

Issues with Violence, Sex and Profanity

Sexual

innuendo is a mainstay of advertising content

(Hawkins, Best, & Coney, 2004, p.732), and yet is also
regarded as a form of sexual harassment.
Violence is an issue especially for children's advertising and
advertising likely to be seen by children.

Legal and Ethical Issues Continue

Issues with Taste and Controversy
The

advertising of certain products may strongly offend some

people while being in the interests of others (Waller, 2004).
Examples include: feminine hygiene products, hemorrhoid and
constipation medication.
The advertising of condoms has become acceptable in the
interests of AIDS-prevention, but are nevertheless seen by some
as promoting promiscuity.
Negative Advertising
Negative advertising techniques, such as attack ads. In negative
advertising, the advertiser highlights the disadvantages of
competitor products rather than the advantages of their own.
The methods are most familiar from the political sphere.
Democrats and Republicans

Establishing Culture of
Legal and Ethical Data
Stewardship
Senior managers such as board members,
presidents, Chief Information Officers (CIOs), and
data administrators are increasingly finding
themselves liable for any violations of these laws.
Steps to consider include Develop an organization-wide policy for legal and
ethical behavior.
Professional organizations and codes of ethics.

Intellectual Property (IP)

Ethical Compliance

Industry Watchdogs
AMA (American Marketing Association)
Direct Marketing Association
NAD (National Advertising Division)
- Part of Better Business Bureau

National Advertising Review Board

- Represents advertisers and agencies
- A division of the NAD

Advantage of Marketing
Ethics
Ethics always play crucial role in attracting the
attention of customers.
The transparency in selling or buying is always
liked by people and they show great interest in
the product/service.
Ethics synergizes a mutual relationship
between the customer and the organization
which is built on trust, good faith and fair
dealing in their interaction.
It helps the customers to take the right and fast
decision in choosing a particular product.

Conclusion
The philosophy of marketing is not lost with this newfound
ethical slant, but rather hopes to win customer loyalty by
reinforcing the positive values of the brand, creating a
strong citizen brand. However, this new way of thinking
does create new challenges for the marketer of the 21st
century, in terms of invention and development of products
to add long-term benefits without reducing the product's
desirable qualities.
Ethics in professional lives is not a new thing. Ethics have
been around for ages. Today every profession have its
codes that their professionals live by. Marketers are no
exception. So remember, where ever you go and whatever
you do remember the rules.

References
American Marketing Association Statement of Ethics (2004)
Retrieved from
http://www.marketingpower.com/AboutAMA/Pages/Statement
%20of%20Ethics.aspx
Chickenhead Productions, Truth in Advertising
http://www.chickenhead.com/truth/index.html
DeBock, T., and Van Kenhaove, P. (2010). Consumer ethics: The
role of self-regulatory focus. Journal of Business Ethics, 97,
247-25.

Grant, K. Hackney, R. Edgar, D. (2010). Strategic Information

Systems Management, pp.349.

References
Hawkins, D., Best, R., and Coney, K. (2004). Consumer
behavior: Building marketing strategy (9th ed.). New York:
McGraw-Hill Irwin.
Harding, C. Kohl, U and Salmon, N. (2008). Human Rights in
the Market Place: The Exploitation of Rights Protection by
Economic Actors. Ashgate Publishing Limited.
Jones, C. (2007). Philosophy and Organization Taylor and
Francis Inc.
Kottler, K. and Keller, K. (2009). A Framework for Marketing
Management (4th Edition) Pearson Education.

References
McDermott, A. J. (2012). Copyright: Regulation out of line
with our digital reality? Information Technology &
Libraries, 31(1), 7-20. doi:10.6017/ital. v31i1.1859
Siller, L. and Baier, M. (2010). Contemporary Direct and
Interactive Marketing (2nd Edition) Prentice Hall
The Origin of Ethics( 2003). Retrieved from
<http://www.geocities.com/Athens/Acropolis/1628/A53ethic.
htm>.