Introduction

Meaning of Marketing Ethics:

Marketing ethics are moral principles that define right or wrong behaviour in the world of marketing. What is right or wrong behaviour is determined by public interest groups, business organisations and individual’s personal values and morals. The coverage of marketing ethics, is wider, as it deals with norms in relation to customers, shareholders, employees, dealers, government and competition. Dealings with all the above groups should be honest and fair. Every professional activity has rules of conduct and professionals like lawyers, doctors, accountants are expected to follow ethical standards. Marketing ethics deals with moral standards and extend beyond legal limit. The statement “If it is legal, it is ethical too.”

Example: Giving inadequate information in an advertisement may be legally permitted, but is unethical.

e.g. Tata group, Wipro, Infosys.

Importance of Marketing Ethics

1. When a company changes fair prices, offer quality products, provides after sales services and pay regular taxes to govt. it creates good image in the mind of people.
2. It helps the company to increase sales.
3. The morals of the employee is high as the company enjoys a good reputation in the market.
4. Business ethics is required to check malpractices and offer protection to consumers.
5. To develop the confidence of consumers regarding price, weight, quality.
6. To protect the interests of all the stakeholders i.e. employees, dealers, suppliers and shareholders.

Unfair Marketing Practices:

Marketing is recognised as one of the important functions of the business enterprise. Marketing alone generates revenue for the company. In the days of intense competition, the emphasis is on increasing sales volume, market share and profit, even at the cost of consumer-satisfaction and services. Marketers adopt an aggression sales approach in selling unsought or unwanted goods.

Examples:

Sale of insurance policies, toys, cosmetics, credit cards, chocolates, etc.

1. Product

a. Product Safety: Consumers buy products believing that they would not harm or injure them, consumers lack technical knowledge to judge many of the sophisticated products and it becomes its responsibility of the marketer to ensure consumer safety.

Example:

Safety of toys, medicines, pesticides, etc. to man and environment.

b. Product Quality: The manufacturer and marketer should take responsibility to ensure that the quality of the product measure up to the claim made about it and meets reasonable consumer expectations.

Example: Many people believe that bottled water is purer and safer than tap water. When the seller claims that the saree is shrink-proof/fast colours, the moral concern is whether the product lives up to its claims.

c. Spurious Products: Several spurious drugs meant for cold, cough, body ache, fever are available in the market. The main ingredients of such products are sugar, wheat and chalk powder which do not have any negative effects on human beings. Illegal trades sell such products, as they get attractive discounts.

Example: Winter fit suitings are available in major wholesale markets in India.

2. Pricing:

a. Many consumers feel that higher prices mean better products and manufactures increase the price of the products to show it as a superior product.

The price may be higher as compared to products extra quality.

b. Price-fixing: It is another unethical marketing practice followed by some companies.

It is an agreement between two or more firms on the price they will charge for a product or services or bidding the lowest price on a contract.

c. Predatory Pricing: Covers the practice of selling at a very low price or below the cost of production so as to eliminate competition.

Packaging and Labelling:

The marketer has the responsibility to provide accurate and adequate information through packaging and labelling.

Example: Many companies come out with catchy words such as ‘organic’, ‘biodegradable’, ‘recyclable’, ‘environmentally safe’, ‘ayurvedic’, etc.

4. Distribution Channel:

a. Exclusive dealing refers to manufactures insisting on its distribution to sell only its products and not to deal in competitor’s products.

b.Typing contracts require distributor/dealers to purchase unwanted/slow-moving products as a condition for obtaining fast-moving brands.

c. Full line forcing: Here, the buyer is forced to purchase all the products when only part of the line is required by the buyer.

Unfair Advertising Practices

Advertising has become an integral part not only of our marketing process but also of our entire economic and social life.

1. Deceptive advertising

Advertising should win the confidence of consumer to achieve its objective. Many feel that advertising is deceptive and claims made in the advertisement are exaggerated and untrue.

Example:

Deceptive advertisements for curing baldness, weight reduction and fair skin. The advertisement on fairness cream. Is this not an exploitation of the weakness Indians have for fair skin? Is this advertisement ethical?

2. Harmful effects:

The appeal to sex, nudity, violence, fear, adventure, has become the most adverse aspects of advertising. Some advertisements have created emotional disturbances and long-run anxiety conditions among younger generations.

Example:

Fairness creams, soft drinks, fast foods, namkeens, durable like refrigerators, air conditioners, two wheelers, etc.

3. Confuses People:

Advertising creates confusion in the mind of people. Consumers do not take rational decisions. They are biased by unethical and emotional advertising.

a. Power of advertising is so high that it has the potential to manipulate consumers.

b. Due to proliferation of brands, companies are forced to advertise to show the superiority of the products.

c. Uniformity and conformity refer people’s desire to buy products similar to the one purchased by relatives, neighbours and friends.

d. Degrading of Women: Women are irritated when they are shown as sex symbols, servants or housewives in advertisement, women’s organisation have objected to such advertisement.

e. Advertisement creates unnecessary comparison between two products. Such advertisement conveniently hide the weakness and highlight only favourable attributes of the products.

4. Force full Selling:

a. Emotional appeals are used to induce prospective buyers to buy their products. Producers are interested in the sale of their products without caring for the impact of emotional advertisements on ethics and moral value of consumers.

b. Manufacturers use persuasive advertising of influence people. Real and factual information is often concealed from the people.

c. Advertisers try to sell those products which are not required by consumers.

Example: A middle class man is lured into purchasing a car, though he is unable to maintain it.

d. Many worthless products/insignificant products have been sold under heavy advertising.

5. Media misuses:

Newspapers, magazines, television, etc. are crowded with advertisement.

a. Many advertisers buy advertising time or space to present their messages. They try to sell stores favouring the products and small newspaper accept such advertisements.

b. Many magazines contain advertisement offering care for cancer and baldness in the case of TV serials, the advertisements continue sometime for half of the time of the serial.

6. Message problem:

The message are often emotional and sexy. If people start liking such advertisement there would be violence and immoral activities in the society. Advertisement should carry acceptable messages.

7. Moral influence:

Advertising motivates people in such a way that people have come to believe that success is evaluated primarily based on material possessions.

Spiritual, mental and intellectual satisfaction also determine the level of success.

8. Advertising impact on children:

a. Children are more susceptible to deception because they lack the conceptual defence of adults.

b. They are unable to assess the advantages and disadvantages of advertising and many advertisers have used this innocence of children to create a particular impression about a product. e.g. Chocolates, fruit juice.

c. Children enjoy seeing commercial advertisement. They are easily attracted towards using food products which are playfully advertised.d. Children recall the commercial messages and slogans and ask for the products when they go for shopping with parents.

d. Advertisements showing violence, anxiety, sex, fever, etc. creates emotional disturbances in children.

They have a few cases where children have been seriously injured trying to repeat a scene they have seen in TV programme. After seeing advertisements for toys, many children start fighting with toys guns.