Marketing is the mechanism primarily aimed at maximizing brand equity and customer value. This question has arisen due to the techniques employed by brand managers, who prefer short run gains and employ expedients to maximize sales. Many marketers have positioned their offerings in order to achieve maximum variable pay leading to agency problem. Therefore it becomes imperative to critically analyze marketing and ethical issues related to the practices.
Many would come up with a resounding ‘Yes’ when it comes to the question of Marketing and Ethics. We should explore the mindset of the marketers that whether they are really concerned with the welfare of the consumers or do they just target the ‘bottom line’ of the firm?
A very interesting example revolving around this issue is the goal of a Coca Cola brand manager in Swedish office, who would like to see consumers drinking Coke for breakfast instead of juice and other supplements. So the question arises- Is this in the best interest of the consumer?
Change is in the air and has been initiated in the outlook of the customers and the marketers toward the marketing profession; marketers need a holistic approach toward the end customer. Therefore it should be the top priority of the companies to consider the relationship with customers as paramount rather than obsession with their own goals.
Some experts may opine whether there is a place for ethics in marketing or not. In discussing concerns that consumers and advocacy groups have with the apparent lack of concern for consumers’ well being, we must address the challenges that marketers have to ‘self regulate’ and become more socially responsible. It is really no different to the expectations of every stakeholder: It is the responsibility of every one, in an organized society, to behave ethically. The trouble surrounding the marketing industry is that if there is no change in the ways marketers act and display more social responsibility, they are bound to be subjected to stringent government controls.
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The ethics of marketing and its relationship with the customers forms a cornerstone to the success of the companies. It is natural that customers expect to be treated in a fair manner and with heed. Reliability of service, trustworthiness, responsiveness, understanding and reception of value addition to products are some of the important expectations of the end consumer. They do not want ‘lip service’, unrealistic promises, or misleading offerings. Those products which are inherently poor for the customers must be taken off the shelves as the consumer would never want a product/brand that does not add value to them. So there are ethical dilemmas for marketers to meet these expectations and the corresponding ethical implications are also grand.
Due to the ever-increasing influx of marketing professionals in this field and in particular ‘information marketing’ domain, these issues have to be addressed with priority. There needs to be a new foundation for marketing and the ethical implications of marketers targeting specific groups or segments of customers. It’s been a regular practice to service those customers who form the chunk of the total turnover of the organization, i.e. who provide the greatest returns to the company, most of the times to the exclusion of other segment of customers. The products have been positioned particularly for the most profitable customer. Is it the only goal of the firm to maximize profits to the exclusion of societal welfare? This tends to create a feeling of distrust and apathy for those customers who are second priority for the companies. They feel that marketers do not care after the product is sold. The directive of ‘caveat emptor’- ‘Let the buyer beware’ should lose significance on account of value creation for the customers and increasing competition. In other words it should be the seller who must be aware that customers are not lost due to expedient marketing gimmicks.
It is not to undervalue the overall goal of the organization that the customers should be treated with priority and over-obsession with creating value for them. Firms should understand the needs and wants of the customer and simultaneously fulfill the organizational goals. This unfortunately creates a conflict between the priorities of the marketer, the needs and wants of the consumer and the goals of the organization (profits), and is the basis for much of the confusion and concerns about ethical marketing practices.
To overcome the challenges of this phenomenon to the organizations and partly to the customers all the stakeholders must take a more comprehensive approach or rather an all encompassing view of the marketing process. Ethical decision making for businesses will require them to take an “enlightened self interest” approach to serving the consumer, to insure that there marketing practices are ethically sound.
It is also the responsibility of the consumers to be more self aware and well-informed about the product offerings, selection of products for use and purchase decision. The customers who are well-informed and can rationalize market offerings should definitely research the products they buy. In addition they must be well aware of their needs, as opposed to their wants, and consider appropriate decisions in line with their consumption of necessities. They say that in order for the consumers to expect firms to respect and heed them, and provide a level of service consistent with their needs, they must do a due diligence exercise and obviate being misled by the marketers
It is the service level which provides the consumers a bit extra offering than just the product itself. Partly that offering provides consumers with the assurance that the marketing conducted by the marketers to them is based on ethical principles. Two questions arise while dealing with this issue.
Do organizations treat their customers with respect?
Are they honest and forthright in their communications with consumers?
In this modern era people are becoming more aware of their consumer rights, further advocacy groups have been mounting pressure on firms and Government. This is bound to enhance the emphasis on the organizational priorities toward the relationship between their marketing programs and ethical implications which ensue.
A good example to note is the relationship between the consumer and the service provider in the services industry. It is good service level that matters the most, thus good service in addition to valuable product offerings prop the marketing efforts of the organizations. It is a proven fact that consumers will prefer other brands/products if they perceive of unethical treatment by a company. This results in a cascading effect wherein the affected customer, through word of mouth, provides negative feedback about the company’s products and these result in reduction of customer base.
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The information flow has also increased substantially in this internet and networking era, and people have access to new technologies. Thus in a very less time the current and prospective customers can have the feedback of a particular brand. The risk that organizations face by treating their customers/clients unethically is too great to let this happen. Thus poor and unethical marketing gimmicks reduce the brand loyalty in the long run.
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