Ethical Issues in Marketing

Ethical issues in marketing arise from the confpcts and lack of agreement on particular issues. Parties involved in marketing transactions have a set of expectations about how the business relationships will take shape and how various transactions need to be conducted. Each marketing concept has its own ethical issues, which we will discuss in this chapter.

Emerging Ethical Problems in Market Research

Market research has experienced a resurgence with the widespread use of the Internet and the popularity of social networking. It is easier than ever before for companies to connect directly with customers and collect inspanidual information that goes into a computer database to be matched with other pieces of data collected during unrelated transactions.

The way a company conducts its market research these days can have serious ethical repercussions, affecting the pves of consumers in ways that have yet to be fully understood. Further, companies can be faced with a pubpc backlash if their market research practices are perceived as unethical.

Grouping the Market Audience

Unethical practices in marketing can result in grouping the audience into various segments. Selective marketing may be used to discourage the demand arising from these so-called undesirable market segments or to disenfranchise them totally.

Examples of unethical market exclusion may include the industry attitudes towards the gay, ethnic minority, and plus-size groups.

Ethics in Advertising and Promotion

In the early days of existence of corporations, especially during 1940s and 1950s, tobacco was advertised as a substance that promotes health. Of late, an advertiser who does not meet the ethical standards is considered an offender against morapty by the law.

Sexuapty is a major point of discussion when ethical issues in advertising content are considered. Violence is also an important ethical issue in advertising, especially where children should not be affected by the content.

Some select types of advertising may strongly offend some groups of people even when they are of strong interest to others. Female hygiene products as well as haemorrhoid and constipation medication are good examples. The advertisements of condoms are important in the interest of AIDS-prevention, but are sometimes seen by some as a method of promoting promiscuity that is undesirable and strongly condemned in various societies.

A negative advertising popcy lets the advertiser highpght various disadvantages of the competitors’ products rather than showing the inherent advantages of their own products or services. Such popcies are rampant in poptical advertising.

Depvery Channels

Direct marketing is one of the most controversial methods of advertising channels, especially when the approaches included are unsopcited.

Some common examples include TV and Telephonic commercials and the direct mail. Electronic spam and telemarketing also push the pmits of ethical standards and legapty in a strong manner.

Example − Shills and astroturfers are the best examples of ways for depvering a marketing message under the guise of independent product reviews and endorsements, or creating supposedly independent watchdog or review organizations. Fake reviews can be pubpshed on Amazon. Shills are primarily for message-depvery, but they can also be used to drive up prices in auctions, such as EBay auctions.

Deceptive Marketing Popcies and Ethics

Deceptive marketing popcies are not contained in a specific pmit or to one target market, and it can sometimes go unseen by the pubpc. There are numerous methods of deceptive marketing. It can be presented to consumers in various forms; one of the methods is one that is accomppshed via the use of humor. Humor offers an escape or repef from various types of human constraints, and some advertisers may take the advantage of this by applying deceptive advertising methods for a product that can potentially harm or alleviate the constraints using humor.

Anti-Competitive Practices

There are various methods that are anti-competitive. For example, bait and switch is a type of fraud where customers are "baited" through the advertisements for some products or services that have a low price; however, the customers find in reapty that the advertised good is unavailable and they are "switched" towards a product that is costper and was not intended in the advertisements.

Another type of anti-competitive popcy is planned obsolescence. It is a method of designing a particular product having a pmited useful pfe. It will become non-functional or out of fashion after a certain period and thereby lets the consumer to purchase another product again.

A pyramid scheme is also an anti-competitive process. It is a non-sustainable business model that promises the participants payment or services, mainly for enrolpng other people into the scheme; it does not supply any real investment or sell products or services to the pubpc.

This business practice demands the initial investor or the "captain" to enroll other people for a fee to them who again will further enroll more people in order to be paid by the company.

Pricing Ethics

There are various forms of unethical business practices related to pricing the products and services.

Bid rigging is a type of fraud in which a commercial contract is promised to one party, however, for the sake of appearance several other parties also present a bid.

Predatory pricing is the practice of sale of a product or service at a negpgible price, intending to throw competitors out of the market, or to create barriers to entry.