ETHICS IN MARKETING: ETHICS IN MARKETING APARNA H S2 MBA IMK KOLLAM ETHICS: ETHICS The word ethics is derived from the Greek word “Ethikos” which means custom or character. “Our concern for good behaviour. We feel an obligation to consider not only our own personal well being but also that of others”. Albert Schweitzer Marketing: Marketing Marketing consist of the performance of business activities that direct the flow of goods and services from producer to consumer. A number of distinct function is coming under this broad characterization which include: Product Development Distribution Pricing Promotion Sales Marketing: Marketing “ Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others” Philip Kotler Marketing ethics: Marketing ethics Marketing ethics addresses principles and standards that define acceptable conduct in the market place. Marketing usually occurs in the context of an organization, and unethical activities usually develop from the pressure to meet performance objectives. Some obvious ethical issues in marketing involves clear cut attempts to deceive or take advantage of a situation MARKETING ETHICS AND CONSUMER RIGHTS: MARKETING ETHICS AND CONSUMER RIGHTS The law and regulations are generally designed to protect the consumer from unethical practices by businesses These law and regulations recognizes that consumers have certain basic rights in the market place Each marketer must relay on his/her own value system to determine what is and is not ethical Cont………: Cont……… AMA has established a codes of ethics to provide guidelines for ethical conduct. It says, in part, that, “Marketers shall uphold and advance the integrity, honour and dignity of the marketing profession, by being honest in serving consumers, clients, employees, suppliers, distributors, and the public.” ETHICAL VALUES: ETHICAL VALUES Honesty : to be truthful and forthright in our dealings with customers and stakeholders. Responsibility : to accept the consequences of our marketing decisions and strategies. Fairness : to try to balance justly the needs of the buyer with the interests of the seller. Respect : to acknowledge the basic human dignity of all stakeholders. CONTD…….: CONTD……. Openness : to create transparency in our marketing operations. Citizenship : to fulfill the economic, legal and societal responsibilities that serve stakeholders in a strategic manner. CRITICISMS OF ETHICS IN MARKETING: CRITICISMS OF ETHICS IN MARKETING CRITICISM OF THE FORMER : Promotion of morally ‘bad’ values such as the excessive consumption of private rather than public goods and services comes under this. CRITICISM OF SPECIFIC PRACTICES : These are frequently based on assumptions drawn from system level critiques. The criticism are: PowerPoint Presentation: Advertisement : that gives false information, penetrating to wrong values. Eg: Indulekha Personal selling : the ethics of the relationship of sales people to customer Packaging and labelling practices : irregularities of package size and shape ecological issues Pricing practices Provision of intelligible labelling information ETHICAL REASONING MODEL: ETHICAL REASONING MODEL Step 1: Identifying the decision options and the likely consequences of each. Step 2: Identifying all individuals and organizations that will be +vely or-vely affected by the consequences of each option Step 3: Estimating the-ve impacts and +ve impacts of each option from the point of view of each affected party, taking into consideration their particular interest and needs. Step 4: Ranking the cost and benefits of each option and making a decision SOCIALLY RESPONSIBLE ADVERTISING: SOCIALLY RESPONSIBLE ADVERTISING Most advertisements are socially responsible Some advertisements are willfully misinformed the public Deceptive Advertising : Advertising that give false info: Corrective Advertising : company publicly correct a false impression created by past advertising ETHICAL ISSUES IN MARKETING TO CHILDREN: ETHICAL ISSUES IN MARKETING TO CHILDREN Children are an important marketing target for certain products. Because their knowledge about products, the media, and selling strategies is usually not as well developed as that of adults, children are likely to be more vulnerable to psychological appeals and strong images. UNFAIR MARKETING PRACTICES: UNFAIR MARKETING PRACTICES False and misleading presentation of facts. Deliberate omitting of required information. Implying a benefit that hardly exists. Trade puffing and exaggerations Open criticism of competitors. ETHICS AND REGULATIONS IN PRICING: ETHICS AND REGULATIONS IN PRICING Pricing practices are regulated by the Govt. more forcefully than other areas of the marketing mix in that pricing illegalities are made explicit in Act such as; FTC Act Robinson- Patman Act. PowerPoint Presentation: FOUR AREAS OF PRICING ARE CONSIDERED UNETHICAL AND ILLEGAL : Deceptive Pricing : Where a salesperson tries to influence lure customers into a store. Thereafter, a salesperson tries to influence to buy a higher-priced item. Unfair Pricing : When competitors are driven out by low prices the company raises price back to their former level. PowerPoint Presentation: Price Discrimination : It can be unethical if similar buyers are charged different prices for the same based on their ability to pay. Price fixing: It is an agreement among firms in an industry to set up prices at certain levels. Two types of price fixing: Horizontal price fixing vertical price fixing THANK YOU……..: THANK YOU……..