Marketing ethics is an area of applied ethics that examines the moral principles and standards governing the practice and regulation of marketing. It addresses ethical issues arising in areas such as advertising, promotion, pricing, product development, and distribution. Certain aspects of marketing ethics, particularly advertising and promotional practices, overlap with media ethics and public relations ethics.
Marketing ethics is commonly analyzed from both descriptive and normative perspectives. Descriptive, or positive, marketing ethics examines existing marketing practices and documents ethical issues such as misleading or fraudulent advertising. Normative marketing ethics evaluates how marketing ought to be conducted and draws on ethical theories to establish standards for responsible practice. Ethical analysis in marketing is often informed by broader frameworks in business ethics, including duty-based theories, virtue ethics, and utilitarianism.
Fundamental issues
Frameworks of analysis Value-oriented framework, analyzing ethical problems on the basis of the values which they infringe (e.g. honesty, autonomy, privacy, transparency). An example of such an approach is the American Marketing Association Code of Ethics. American Marketing Association Code of Ethics(2020) Stakeholder-oriented framework, analyzing ethical problems on the basis of whom they affect (e.g. consumers, competitors, society as a whole). Process-oriented framework, analyzing ethical problems in terms of the categories used by marketing specialists (e.g. research, price, promotion, placement).
However, none of these frameworks, by itself, allows a convenient and complete categorization of the variety of issues in marketing ethics.
Power-based analysis Contrary to popular impressions, not all marketing is adversarial, and not all marketing is stacked in favor of the marketer. In marketing, the relationship between producer/consumer or buyer/seller can be adversarial or cooperative. For an example of cooperative marketing, see relationship marketing. If the marketing situation is adversarial, another dimension of difference emerges, describing the power balance between producer/consumer or buyer/seller. Power may be concentrated with the producer (caveat emptor), but factors such as over-supply or legislation can shift the power towards the consumer (caveat vendor). Identifying where the power in the relationship lies and whether the power balance is relevant are important in understanding the background to an ethical dilemma in marketing ethics.Lizabeth England,Marketing With A Conscience: Sales and Ethics , US Dept. of State.
Anti-marketing stance A popularist anti-marketing stance commonly discussed in the blogosphereA.J.Kandy, Is marketing evil? , King Marketing, 2004; William DeJong, Marketing Gets Unfairly Branded as Evil , Youth Today; Kathy Sierra, You ARE a marketer. Deal with it, 2005. and popular literatureThe vastness of the literature on this topic is perhaps best conveyed by D. Slaters 1999 bibliography of consumer culture with over 1500 items. W.R. Childs (Ohio State University) has posted a shorter bibliography of consumer culture . is that any kind of marketing is inherently evil. The position is based on the argument that marketing necessarily commits at least one of three wrongs: Damaging personal autonomy: The victim of marketing in this case is the intended buyer whose right to self-determination is infringed. Causing harm to competitors: Fierce competition and unethical marketing tactics are especially associated with saturated markets. Manipulating social values: The victim in this case is either the environment or the society as a whole. The argument is that marketing promotes consumerism and waste. See also: affluenza, ethical consumerism, anti-consumerism.
Specific issues
Market research
Market research is the collection and analysis of information about consumers, competitors and the effectiveness of marketing programs. With market research, businesses can make decisions based on the responses of the market, leading to a better understanding of how the business should adapt to the changing market. It is used to establish which portion of the population will or does purchase a product, based on age, gender, location, income level, and many other variables. This research allows companies to learn more about past, current, and potential customers, including their specific likes and dislikes. Meticulous codes of ethics have been devised by multiple professional institutions which aim to communicate conflicts that occur during the implementation of marketing research (The European Society of Marketing and Opinion Research, the Market Research Society, and the Council for Survey Research are a few examples).
Ethical danger points in market research include: Invasion of privacy. Stereotyping. Profit motive Invasion of privacy
Without information from the public, it is difficult to do market research. As companies conduct research, they also come into contact with confidential and personal information, which comes with a level of risk for both the business as well as the individual. At times this information can be sensitive and in the wrong hands, ethical abuse and misuse of sensitive data may happen. This is why the invasion of consumer privacy is still an issue in marketing research ethics. Today's consumers are bombarded with mail after using their email address to enter in a competition, thus becoming part of a business's mailing list. Therefore, companies are provided with critical information which they must not take advantage of but use in an ethical manner.
Stereotyping:
Portraying an ideal body, weight, or physical appearance can have potentially harmful effects on individuals, such as low self-esteem or anorexia. Good marketing is ethical marketing; it is about pleasing customers and developing strong relationships with them in an ethical and humanitarian manner, without focusing too much on generating profit.
People affected by unethical market research include the public, respondents, clients, and researchers Approaches to privacy can broadly be divided into two categories: free market, and consumer protection. In a free market approach, commercial entities are largely allowed to do what they wish, with the expectation that consumers will choose to do business with corporations that respect their privacy to a desired degree. If some companies are not sufficiently respectful of privacy, they will lose market share. In contrast, in a consumer protection approach, it is claimed that individuals may not have the time or knowledge to make informed choices, or may not have reasonable alternatives available.^ Quinn, Michael J. (2009). Ethics for the Information Age. . Stereotyping occurs because any analysis of real populations needs to make approximations and place individuals into groups. However, if conducted irresponsibly, stereotyping can lead to a variety of ethically undesirable results. In the American Marketing Association Statement of Ethics, stereotyping is countered by the obligation to show respect ("acknowledge the basic human dignity of all stakeholders").American Marketing Association Statement of Ethics
Profit motive:
Manipulation of information and personal data can take place during market research conducted by for-profit organizations because they have a profit motive. This motive can affect the accuracy and objectivity of the marketing research and create an exaggerated positive image of the organization's products and services in order to attract clients to invest in their business.
Market audience
Ethical danger points include: Excluding potential customers from the market: selective marketing is used to discourage demand from undesirable market sectors or disenfranchise them altogether. Targeting the vulnerable (e.g. children, the elderly).
Examples of unethical market exclusionThe term "selective marketing" is preferred. The term market exclusion is normally used in the different context of a cartel of suppliers excluding newcomers from distribution chains. or selective marketing are past industry attitudes to the gay, ethnic minority and plus size markets. Contrary to the popular myth that ethics and profits do not mix, the tapping of these markets has proved highly profitable. For example, 20% of US clothing sales are now plus-size.CBS News, Plus-Size People, Plus-Size Stuff, Nov 10, 2003 Another example is the selective marketing of health care, so that unprofitable sectors (i.e. the elderly) will not attempt to take benefits to which they are entitled.Mark H. Waymack, The ethics of selectively marketing the Health Maintenance Organization, Journal of Theoretical Medicine and Bioethics, Issue Volume 11, Number 4 / December 1990, Pages 301-309 A further example of market exclusion is the pharmaceutical industry's exclusion of developing countries from AIDS drugs.Ruairí Brugha, Antiretroviral treatment in developing countries, BMJ 2003;326:1382-1384
Examples of marketing which unethically targets the elderly include: living trusts, time share fraud, mass marketing fraudSenior Journal, Hundreds Arrested in Mass-Marketing Fraud Targeting Senior Citizens , May 24, 2006 and others.Washington State Department of Financial Institutions, Frauds That Target The Elderly , July 11, 2006 (Originally from: Federal Deposit Insurance Corporation Consumer News) The elderly hold a disproportionate amount of the world's wealth and are therefore the target of financial exploitation.US Federal Trade Commission, Consumer fraud against the elderly .
In the case of children, the main products are unhealthy food, fashionware and entertainment goods. Children are a lucrative market: "...children 12 and under spend more than $11 billion of their own money and influence family spending decisions worth another $165 billion",Tom McGee and Kevin Heubusch, `Getting Inside Kids' Heads', American Demographics, Vol. 19, No. 1 (1997), quoted in Sharon Beder, Marketing to Children , University of Wollongong, 1998. but are not capable of resisting or understanding marketing tactics at younger ages ("children don't understand persuasive intent until they are eight or nine years old"). At older ages competitive feelings towards other children are stronger than financial sense. The practice of extending children's marketing from television to the school grounds is also controversial (see marketing in schools). The following is a select list of online articles: Sharon Beder, Marketing to Children (University of Wollongong, 1998). Miriam H. Zoll, Psychologists Challenge Ethics of Marketing to Children, (2000).Mediachannel.org Donnell Alexander and Aliza Dichter, Ads and Kids: How young is too young?Mediachannel.org Rebecca Clay, Advertising to children: Is it ethical? (Monitor on Psychology, Volume 31, No. 8 September 2000), American Psychological Association Media Awareness Network. How marketers target kids.Media-awareness.ca
Other vulnerable audiences include emerging markets in developing countries, where the public may not be sufficiently aware of skilled marketing ploys transferred from developed countries, and where, conversely, marketers may not be aware how excessively powerful their tactics may be. See Nestle infant milk formula scandal. Another vulnerable group are mentally unstable consumers.Deborah Josefson, Marketing of antipsychotic drugs attacked BMJ 1998;316:645 The definition of vulnerability is also problematic: for example, when should endebtedness be seen as a vulnerability and when should "cheap" loan providers be seen as loan sharks, unethically exploiting the economically disadvantaged?
Targeting the vulnerable