Ethics in marketing | Management Optional Notes for UPSC PDF Download

Introduction

• Ethics can be defined as the moral principles and values that govern the actions and decisions of an individual or group. They serve as guidelines to act in a righteous and just manner when confronted with ethical dilemmas. In the context of marketing, ethics refers to the practice of conducting business marketing in an ethical and moral manner. This involves deliberately adhering to standards of justice and representing the company with integrity to others.
• While the primary objective of any business is profitability, resorting to deceptive advertising or misleading and objectionable marketing tactics undermines the success of a marketing campaign. Although there might be short-term gains in engaging in unethical practices, researchers emphasize that acting ethically yields long-term rewards. Conducting business in an ethical manner can cultivate loyal customers, generate more referrals, and establish a positive image for the business.
• Marketing, with its potential to influence beliefs and behaviors, holds a prominent position in business activities, regularly interacting with customers and the general public (Chonko, 1995). Maintaining high ethical standards is crucial to safeguard the interests of customers and the public, as well as to preserve the reputation of clients. Marketing ethics is aligned with business ethics, reflecting the interests of various stakeholders and describing principles acceptable in the marketplace.
• The lack of adherence to moral practices in marketing has given rise to significant movements such as consumerism and environmentalism (Kotler and Armstrong, 1996). These movements exert pressure on marketers to consider and act in an ethical manner. Interest in ethical concerns within marketing has substantially increased (Hunt et al., 1984), and it is noteworthy that research in marketing ethics has paved the way for research in ethics across various domains.
• Murphy and Laczniak (1981) emphasized in theoretical analysis that "the function within business firms most often charged with ethical abuse is marketing." They identified several areas where research in marketing ethics was imperative. In 1989, Tsalikis and Fritzsche reviewed the literature on marketing ethics, and Gaski (1999) conducted a comprehensive analysis of marketing ethics, categorizing the literature into topics such as the introduction to ethical problems, questioning the inherent ethics of marketing activity, empirical studies of ethical beliefs, and guidance for making marketing more ethical.

Issues in Ethics of Marketing

• The field of marketing grapples with ethical challenges as marketing managers confront some of the most complex ethical issues in business. Ethical problems arise in the interactions between individuals, viewed through the lens of the individual's needs and those of relevant others. Each individual's value system comprises perceived obligations toward others. 
• Baumhart (1961) identified significant ethical issues that should be eradicated from business processes, such as gifts, gratuities, bribes, and questionable practices, price discrimination, dishonest advertising, various unfair competitive practices, cheating customers, unfair credit practices, overselling, price collusion by competitors, dishonesty in contract-making or maintenance, and unfair treatment of employees and biased hiring practices.
• Ethical conflicts emerge when individuals perceive that their duties to one group conflict with their duties to another group, including themselves, necessitating the resolution of these conflicting obligations. Essentially, ethical conflicts in marketing arise in two primary contexts: differences between the needs of the company, industry, and society, and conflicts arising when the interests of individuals and organizations diverge (England, 1998). 
• Bartels succinctly captures the nature of ethical conflict, stating, "In a pluralistic society, not one but many expectations must be met. Therefore, the resolution of what is right to do produces a balance of obligations and satisfactions. Ideally, full satisfaction of the expectations of all parties would constitute the most ethical behavior. This is impossible, as expectations are often contradictory and sometimes exceed social sanction. Therefore, skill and judgment must be employed to determine the point at which one's own integrity can be best maintained."
• Marketing ethics encompasses morals and standards related to marketing practices, including those associated with the 'four Ps of marketing' and 'marketing research'. The first editorials on ethical issues in marketing were published in the 1960s.

Ethics Compliance Programs

• The creation of a code of ethics entails companies formulating guidelines to assist employees in making ethical decisions.
• Consumerism involves social movements that safeguard consumers from detrimental business practices.
• Green marketing focuses on promoting products and packages that are less toxic and can be recycled.
• Corrective advertising refers to promotional efforts aimed at clarifying previous misleading claims.

In summary, the ethical considerations in marketing and their connection with clients serve as the foundation for an organization's success. Ethics encompass the genuine values and principles governing the actions and decisions of an individual or group. It is expected that customers be treated fairly and with respect. The expectations of customers include reliable service, trustworthiness, responsiveness, understanding, and recognition of value addition to products. Unrealistic promises and deceptive offerings are undesirable, leading to ethical dilemmas for marketers striving to meet customer expectations. Ethical issues arise when there is a disparity between individual and company values and norms. Proper disclosure of products is crucial to avoiding dishonest marketing practices. Controlling unethical behavior involves establishing and enforcing guidelines, with appropriate actions taken against those who breach codes of conduct. In essence, marketing ethics emphasizes a clear understanding of right and wrong in business.