Ethical Issues in marketing products and services

 By: Nel Carlo P. Vidad

Divine Word College of Laoag

Abstract

This term paper talks about the ethical issues concerning marketing products and services that have arisen due to intense competition and the pressure to meet ambitious targets. It also discusses the drivers of unethical marketing strategies and explores the essential role of marketing in today’s modern business, highlighting the significance of satisfying customers’ needs while generating profits.

Keywords: Marketing, Ethics, Ethical Issues in Marketing

Introduction

In today’s business landscape, many marketers are continuously improving their skills in promoting their products and services to customers. Intense competition is prevalent among industries such as banking and insurance. This term paper is written to discuss the different ethical issues in marketing products and services that are arising due to intense competition and high pressures to achieve over-stretched targets to achieve their monetary goal. Likewise, with the advancement of technology, the growing number of customer complaints is overwhelming. This happens when a business does not deliver on its commitment and does not meet customer expectations in terms of the product or services. This paper focuses on the importance of marketing in businesses, its roles, ethics in marketing, drivers of unethical marketing strategies and the five common ethical issues in marketing and how to avoid them.

What is Marketing?

Marketing is considered to be the lifeblood of prosperous and well-heeled organizations.  A company having quality products and services but not informing the target customer has no meaning. Its sales may likely crash, and failure may be a certain destiny for such organizations. Marketing as a philosophy can be defined as all the activities geared up according to the needs and wants of customers in the targeted markets by recognizing the very importance of society, its norms,  and the rules and regulations of the government. As a philosophy, marketing should pervade every department of the organization. Most of the organizations have circumscribed it to the marketing section which is not justice to this discipline as a whole.  In the 21st century, one thing that is added to modern marketing is that its responsibilities are expanded to the betterment of society as a whole. It has an inordinate impact on the society and its elements. The most influential professor in marketing, Philip Kotler defines marketing as a societal process by which groups obtain what they need and want through creating, offering and by free exchange of products and services of value with others. Therefore, marketing is a societal process that facilitates the exchanges between customers and organizations to create value for the stakeholders. Therefore, the role of marketing is very crucial in society.

Marketing is identifying potential customers and discerning their present needs and wants as well as anticipating future ones and subsequently satisfying them profitably to create value for the stakeholders. It is a sobering activity that not only works on the existing needs of the targeted customers but also conceives their future needs and wants and formulates strategies for their satisfaction.  In other words, it is a strategic function that is exercised by organizations to create value by fueling innovation and edification of brands, and nurturing profitable relationships with targeted customers while keeping in view the larger interest of stakeholders and the community.  Nevertheless, marketing contributes to building brands and establishing long-term relationships with targeted customers.

Importance of Marketing in Business 

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. In layman’s terms, marketing is the practice of communicating about goods, services, and company mandates to the public at large. It's about meeting consumer wants, increasing customer satisfaction, introducing new products, and overall achieving connections to consumers. In the case of companies that are selling a new product or sharing a service, marketing is used to share information about that quality product and how it can support consumer wants and needs. But marketing can also be used long-term to communicate a company’s mandate, establish their brand, and build trust.

Marketing is used by every type of business. If you’ve ever heard of Nike, Coke, Disney, and the like, it’s because of marketing. Similarly, whenever a big movie comes out, it’s accompanied by a huge marketing push to make sure consumers know about it. Financial institutions use marketing to get the word out about their offerings, and even city services such as water and power departments use marketing to offer support and business insight to their clientele. Fast food companies use marketing strategy and market research to evaluate what kinds of food to offer to satisfy customers. Marketing serves as a powerful tool to help support a business’s success by keeping their clientele in the loop on what they have to offer.

Marketing Role in Organizations

Marketing is to build and maintain strong relationships with targeted customers to satisfy their needs at a profit. It has facilitated the flow of goods/services from the company to end users. It means that in the exercise of marketing, primacy is given to the profit of the firm, whatever the other outcomes may be. Here fulfilling customers’ needs is the fundamental and moral obligation of marketing.

Marketing as a social, political, and economic force evolved rapidly and has changed the lifestyle of customers. The discipline of marketing plays a vital role in the aggregate and collective socioeconomic system. Marketers are an integral part of the socioeconomic system and contribute in a variety of ways to improve the well-being and life standards of millions. The diffusion of marketing discourse throughout society, the importance of its activities, and an ever-increasing number of students enrolled in its courses show the importance of the discipline.  Keeping in view these societal effects of marketing, it demands an immediate inquiry into its theory and practice. However, marketing also entices the gratuitous wants of consumers which leads to overconsumption and extravaganza and leads to depletion of meager resources on this planet.

Ethics in Marketing

Marketing ethics is a sub-specialization of business ethics. It is the systematic study of moral standards or guidelines that are employed in the decision-making process of the marketing discipline, marketers' behaviours, and relevant institutions. In the twenty-first century, the nature of business has changed significantly due to globalization. The functional area that is most vulnerable to ethical abuse is marketing. The cornerstone of marketing ethics builds on those morals and values that are exercised in a business organization. Understanding and practising proper marketing practices are pivotal for businesses. Ethical marketing can be defined as the process through which organizations determine the needs, wants and interests of target markets and then strive to deliver superior value to customers in a way that maintains or improves the well-being of both the customers and the society. They are the moral standards that are applied to the discipline of marketing specifically to its decisional, behavioral, and institutional aspects. They achieve the balance among profit, target customer needs, and society at large.

Ethics in marketing advocates for responsibility, honesty, and fairness in all forms of marketing activities.  It is a process through which companies attract targeted customers towards their products and services;  establish long-term profitable relationships and create value for all stakeholders by embracing and consolidating environmental and social considerations in all forms of marketing strategies and programs. Nevertheless, the ultimate objective of all forms of marketing activities is to earn profit for their organizations. However, if the stakeholders, particularly consumers and their environment are not considered properly, the activities will fall into the category of unethical marketing. Marketing activities executed for the sake of societal prosperity and well-being are more ethical and legal than those that are conducted for the accumulation of profits and capital.

Drivers of Unethical Marketing Strategies

There are multiple teamsters for unethical marketing strategies and consequently unethical behaviours in the marketplace. Some firms have developed a culture of profits in which prime consideration is given to performance and sales volumes. Such cultures have solicitude for quantitative figures while putting aside the qualitative aspects. The recruitment of managers who have low moral preferences in the organization tarnishes the reputation of the company due to decisions taken by those managers that are counterproductive and incongruent with the aims of stakeholders. Firms exert high pressure on managers to meet ambitious and over-stretched targets to ultimately achieve their monetary goals. The enthusiastic and overzealous pursuit of wealth,  selfish interests,  and personal gains are the major factors that lead to the devising and formulating of unethical strategies which consequently lead to immoral behaviours.

Five Common Ethical Issues in Marketing and How to Avoid Them

Marketing is about attracting customers and making sales. However, some unethical advertising and promotion tactics may cause people to mistrust a brand.

1. Selling Products to Markets That Don’t Want Them

Some businesses push products to multiple markets without proper research to sell more and hasten revenue production. They hope to stumble upon a willing market by pushing their products to as many people as possible. This isn’t just a wasteful tactic. It could also end up halting progress and destroying the reputation of the business.

Products are not just products, they are solutions. A business should focus on the solution, not the sale. The products are someone’s solution, and it’s the marketer’s job to find out who that someone is. Suppose the marketer heavily advertises and pushes their products on people who don’t need them or lack the problem their product solves. In that case, this can cause damage to the business’s reputation with unhappy customers. Keep a customer-oriented attitude and avoid clamouring for the sale.

2. Telling the Truth, But Not the Entire Fact

Half-truths remain half-lies and false promises can come back to haunt the business. Consumers today are astute. If the product isn’t a good fit for a market, it’s not a good fit. Marketers should avoid changing the messaging and copy to better meet the needs of the target audience without improving the product. If the marketer wants to be ethical, the product must always match his/her message. This should take precedence over sales.

3. Portraying Hurtful Stereotypes

When creating a message, consider if it’s targeting a specific market or a stereotype. Examples of stereotypes in marketing include a woman cooking in the kitchen while the man works every day and acts as the home “handyman”. Market research can help remove bias and assumptions and give specific demographics for a target market. Marketers should avoid all campaigns that cross the line of target market demographics. The target market should be backed by research and not stereotypes. Market research challenges stereotypical judgments by talking to customers and studying the competition to speak appropriately to customers. Gender, race and age are sensitive topics, and without the right research, customers may call the business out publicly and let them know.

4. Misusing Consumer Data

Businesses might not even know that they are misusing the customer data. Third-party vendors may also be using this data without the businesses’ knowledge, but customers will fault the latter whether they are aware of the issue or not. Make sure the data collected is safe from third parties. Businesses may want to consult with a privacy expert to ensure that customer data is safe and not sold to other parties. Customer privacy is a big concern as people are sceptical of how businesses use their personal information and track their behaviour. However, businesses use this information to understand their target market and help produce the products they want. Transparency in marketing is critical to avoid crossing the privacy line. Most customers know that businesses get information from them, but businesses need to share what information they collect and how. Businesses have to make sure that there is an existing privacy policy visible on their website, such as in the footer. Some businesses also include messaging about cookies and how they are used. Others add pop-ups where visitors consent to using cookies before browsing.

5. Trying to Discredit Competitors

Another one of the most common ethical issues in marketing is when competition is taken a step too far. Businesses may focus on discrediting others in their industry by making false statements or highlighting negative aspects of the competitor’s offerings in their messaging. There’s a belief that pushing down other companies will raise them up in their customers’ eyes. In addition to being unethical, this can lead to legal trouble if the competitor is specifically mentioned. Plus, it can reflect poorly on the business’s brand. To stand out from the rest, businesses need to focus on what makes them unique. What they do better, not necessarily what competitors do poorly. And, of course, the idea is to highlight how businesses can provide the solution their customers are searching for.

Conclusion

As marketing continues to evolve and impact every aspect of society, it becomes increasingly important for businesses to prioritize ethical considerations in their strategies. The integration of ethics into marketing practices not only enhances consumer trust and brand reputation but also contributes to the well-being of society as a whole. Ethical marketing demands a balance between satisfying consumer needs and achieving profitability. Companies that fail to adhere to ethical standards risk damaging their reputations and losing the trust of their consumers. In a world where consumers are becoming more aware of business practices, the need for ethical marketing is more pressing than ever. Marketers must be vigilant in avoiding common ethical pitfalls, such as promoting products to uninterested markets, misleading advertising, stereotyping, misuse of consumer data and negative advertising. By embracing transparency, honesty, and fairness, businesses can not only achieve their financial goals but also contribute positively to the broader community. Ultimately, the success of marketing lies not just in driving sales but in building lasting relationships with customers and society. As businesses navigate the complexities of the modern marketplace, ethical marketing practices will be key to sustaining long-term success and fostering a positive impact on society.

References

Malik, F. (2023). A literature review on ethical marketing; A micromarketing perspective. ResearchGate. https://www.researchgate.net/publication/374055649

Hetler, A. (2022, December 21). Five ethical issues in marketing to avoid. TechTarget. https://www.techtarget.com/whatis/feature/5-ethical-issues-in-marketing-to-avoid

Viral Solutions (2024, February 27). Ethical issues in marketing: What practices to avoid and how. https://viralsolutions.net/ethical-issues-in-marketing/#h-6-misusing-consumer-data

Cruz, P. C. (n.d.). Ethical issues in sales and marketing: How to resolve them. AI Bees. https://www.ai-bees.io/post/ethical-issues-in-sales-and-marketing-how-to-resolve-them

Western Governors University. (2021, August 2). Important marketing concepts. https://www.wgu.edu/blog/important-marketing-concepts2108.