Ethics is the study of understanding whether what we do is good and right (Manikutty, Being Ethical p. 19). If we speak of business ethics, we can infer that it is a combination of proper business policies and practices regarding several businesses and marketing related issues. Basically, it is a way in which a marketer conducts its business with its customers by applying several marketing strategies. It is quite often that businesses come under intense scrutiny because they routinely pose tough ethical dilemmas and it becomes very difficult to differentiate between a normal marketing practice and unethical behaviour. If we look at marketing and ethics in the same picture, we can say that there is definitely a problem here!
Ethical issues in Direct Marketing
Let us analyse the reasons that makes the relationship between marketing and ethics quite complicated. If we speak of direct marketing, there are some instances where certain ethical issues arise (Kotler, Marketing Management. p. 525):
- Irritation and frustration: Marketers use several strategies for targeting customers, which sometimes become quite irritating for customers. Direct marketing solicitations such as late night phone calls, phone calls during office hours, unsolicited e-mails, poorly trained call centre- callers and pre-recorded calls often create frustration and irritation among the target customers. Customers think that their privacy is being invaded and this often leads to a negative response.
- Being unfair to customers: Sometimes, marketers take advantage of the fact that their buyers have little knowledge about their product or they are impulsive in nature (Kotler, Marketing Management. p. 525): This is quite common in case of elder people, who place more trust on marketers and do less product research. Also, young customers often make their purchase decisions based on their impulse and urges.
- Deception, fraud and misleading information: One of the most serious ethical issues in marketing is misleading the prospective customers by designing mailers with contradictory and convoluted information. Marketers may provide misleading information about the product quality, product quantity, size, performance claims and price (Kotler, Marketing Management. p. 525). One of the ways in which marketers mislead their customers is by breaking up the product price in a way that makes the product look cheaper than it actually is! They do not disclose the taxes and duties that would be levied on the final product pricing, and when the customer buys or books the product, they are informed about the actual product cost. One of the best examples of this is pricing and marketing of cars in India. Car marketers in India advertise their car prices by using an ‘Ex-Showroom price’, a price of the car in their showrooms. When someone would buy their car, they would have to pay for the ‘On-Road price’ of the car, which would include ‘Ex-Showroom price’ + Insurance Cost+ Maintenance Cost+ Service Tax+ Custom Duty (if applicable). The final car cost would be around 25% more than the ‘Ex-Showroom price’!
- Privacy issues: One of the most common problems that customers face is that from the moment they apply for a credit card or enter a contest, their contact details are added to several mailing lists of different companies. Therefore, marketers have a lot of critical information about their consumers and this knowledge may cause some privacy concerns (Kotler, Marketing Management. p. 525):
Direct marketers are aware of these ethical issues and some positive steps are being taken to address them. If left unaddressed, these issues can grow into conflicts and can cause some serious damage to the image and long term sustainability of the concerned organisations. Moreover, such problems will lead to negative customer feedbacks and poor response rates. Marketers need to be sensitive about how their promotion, sales and advertising practices would impact the society. Advertisements that promote exploitation, violence, sexual misconduct, etc. must be avoided. If it becomes known to the marketers that their activities are producing undesirable effects to the society, they should withdraw it immediately.
Ethical Issues in Digital Marketing and Social Media Marketing
The social media and digital have become an effective way to market a product, brand or a service. Telephone calls and client visits are no longer the primary way of communication (Wind chimes Communications. Social media Handbook .p.01). It is important that marketers, who are responsible for utilising digital media and social media outlets like Twitter and Facebook, be well versed with workplace and business ethics. Some of the ethical issues that come up in digital media and social media marketing are:
- Misusing of product reviews and fake product endorsements: Product reviews and endorsements describe how an existing customer feels about the product or the service. As per the U.S Federal Trade Commission’s guidelines ,if any reviewer is getting paid by the company to write its reviews and comments in digital space, then it needs to be disclosed and officially recorded. If marketers are not disclosing this (Federal Trade Commission, 2009), they would be using unethical ways of wrongly influencing their customers.
- Disclosing of sensitive company or client information: The digital media marketers normally have access to sensitive company information, which they require for creating their digital content. This sensitive information must be protected and never be disclosed to any other entity except the client. The servers used to store this data must be secured and protected from any malware or virus attacks from outside sources.
- Posting content without client’s consent and over-confidence: Although digital media is a place where things are relaxed and there is no direct customer contact, marketers need to be conscious of the fact that they are dealing directly with their potential customers in a digital way. They often post content without the consent or approval of the client and this creates a huge opportunity loss for the company, it also tarnishes the company’s brand image and results in breach of trust and contract.
In today’s cut throat competitive world, it is very important that marketers get involved in an ethical decision making process. Ethical decision making process involves participation of marketers as well as their customers and clients. The goal of an ethical decision making process is to do what is right and establish trust, respect and credibility in front of all the stakeholders. Marketers must be obliged to deliver the product or service that is supposed to be delivered to the customers (Manikutty, Being Ethical p. 80). They must advertise and offer their products at the right price, not taking advantage of their position in the market. If there is any product or service defect, it must be their obligation to make necessary amends (Manikutty, Being Ethical p. 80). In short, a marketer’s goal must be to satisfy and bring delight to its potential and existing customers in an ethical way. Then, there would be no problem between marketing and ethics!
Wind chimes Communications. (2013). Social media Handbook. Mumbai, India. Print.
Manikutty, S. (2011). Being Ethical: Ethics as foundation of business. IIM Books, India. Print.
Kotler, P., Keller, L., Koshy, A. (2009). Marketing Management. United States, Pearson. Print.
Federal Trade Commission (2009) FTC publishes final guides governing endorsements, testimonials Retrieved from http://www.ftc.gov/news-events/press-releases/2009/10/ftc-publishes-final-guides-governing-endorsements-testimonials