Marketing and Ethics

Marketing ethics has been defined by various authors but the main focus of these definitions is that marketing decisions and practices should comply with generally accepted moral judgment, standards, and rules.

The General Theory of Marketing Ethics explains the individual decision-making process in situations involving ethical issues. This decision process consists of both deontological and teleological dimensions (Vitell and Hunt, 2015:15). While deontological perspective considers “specific actions or behaviors of an individual”, teleological perspective considers “the consequences of the action or behaviors” (Hunt and Vitell, 1986: 6).

The Social and Personal Ethics Model, proposed by Bartels (1967) suggests a framework based on two fundamental questions: “How are ethical standards set ? ” and “How are ethical decisions made ? ”.

The Moral Development Theory has three levels and each level consists of two stages: (1) Preconventional Level: (a) The punishment and obedience orientation and (b) The instrumental-relativist orientation; (2) Conventional Level: (a) The interpersonal concordance or “good boy-nice girl” orientation
and (b) The “law and order” orientation; (3) Postconventional, Autonomous, or Principled Level: (a) The social-contract, legalistic orientation and (b) The universal ethical principle orientation (Kohlberg and Hersh, 1977:54-55).

“Winning at any cost” is the expression that best reflects
the culture of amoral organizations.

According to the contingency model, there are three important premises for individual decision making: Individual factors (knowledge, values, attitudes, intentions), opportunity (professional codes, corporate policy, reward/punishment) and significant others (differential association, role set configuration). When an individual is involved in an ethical/ unethical decision-making dilemma, individual factors interacting with organizational factors influence the individual (Ferrel and Gresham, 1985:88-89).

Materialism is the attitude of some people who attach more importance to money and material things than spiritual values.

Subliminal advertising which means “a technique of exposing consumers to product pictures, brand names, or other marketing stimuli without the consumers having conscious awareness” (Trappey, 1996:517). Subliminal advertising involves hidden messages and stimuli that our senses cannot perceive consciously.

Product-related warranties; problems arising during or after use; legal regulations on these issues; imitation of goods, services, packaging, and brands are the main marketing ethics issues related to the products.

Product counterfeiting is the practice of selling products by imitating superior quality branded products, generally at a lower price.

Advertising ethics includes the following elements:

• The purpose of advertising to be clear and legitimate,
• The compatibility of the content of the advertisement with the general moral
principles of society.
• Regulatory compliance,
• Professional principles compliance,
• Leaving the decision-making to the consumer,
• Fronting to the appropriate target audience in terms of channels and time,
• Being honest,
• Not disparaging the competitors,
• Not deluding,
• Product safety,
• Not aiming to change the values of consumers.

Greenwashing is a broadly accepted and recognized phenomenon since the mid-1980s. The term is used to describe the practice of making groundless or exaggerated claims about sustainability and environmental friendliness in an effort to gain market share. The use of greenwashing has escalated dramatically in recent years as consumer’s demand for green products and services escalates. According to TerraChoice Environmental Marketing, 2219 products made green claims and 98% of those products were guilty of greenwashing.

Consumer ethics mainly includes the dimensions of consumers’ conscious consumption and environmental consciousness. Consumption consciousness develops both with the consumer’s past consumption experiences and with the support of its social circle and consumer organizations. 

Cultural values and fear of social exclusion also play a role in the development of consumption consciousness. Environmental consciousness, on the other hand, derives from the problems that consumers face, and fear of getting the reaction
of environmental organizations. Hence, today’s consumer feels the need to engage in more environmentally conscious consumption actions, either voluntarily or because they are afraid of reactions (Torlak and Tiltay, 2017:335).

Boycott effectiveness and boycott success are two concepts that there are distinctions between. While boycott effectiveness means “attaining a reduction of sales of the boycotted product”, boycott success means “the achievement of the
boycott’s political objectives”. In this respect, boycotts do not need to be effective to be successful or vice versa.

In terms of personal traits and values, it seems possible to gather consumers under two groups, relativism and idealism. Relativists reject universal ethical rules when making ethical judgments and act taking into account the desired results. On the other hand, idealists accept ethical absolutes and assume that desirable consequences can be obtained with the ‘right’ action. Idealistic individuals abide by ethical values when making ethical judgments. Besides, while the relativistic approach is essentially the theological perspective, the idealism approach is the deontological perspective (Al-Khatib et.al., 1997:754).

Boycott is defined as “occurring when a number of people abstain from purchase of a product, at the same time, as a result of the same egregious act or behavior, but not necessarily for the same reasons” (John and Klein, 2003:1198).

There are four distinct dimensions related to consumer ethics (Vitell et.al., 2005:176; Swaidan et. al., 2003:176):
• Actively benefiting from illegal activities: Actions that consumer benefits at the expense of the seller.
• Passively benefiting from questionable activities: Actions that consumers passively benefit from sellers’ mistakes. Possibly, consumers find the actions in this second dimension more acceptable than the first.
• Actively benefiting from legal but questionable practices: Actions that  consumers actively involve in disputable practices that are not necessarily perceived as illegal.
• No harm/No foul activities: Actions that are not perceived to cause harm to anyone directly.

Environmental consciousness is another important issue in the consumption sphere because it is widely accepted that our consumption patterns are not sustainable in the long term, especially given the many environmental problems arising from production and consumption. Society needs to move towards a more sustainable development path to overcome threats to the environment, public health, and the economy. It is of the essence to change individual consumption patterns among affluent consumers in order to reach a more sustainable society. Hence, there is an increasing focus on how to foster more sustainable consumer behavior in the long term in national and international politics (Groot et.al., 2016: 57). Consumers have started to focus on green issues, because they have begun to affect their homes. Coastal contamination, deforestation, chemical allergies, birth defects, increased skin cancer cases and a host of other illnesses, and unhealthy food with drinking water are common issues in the daily news. This necessarily improves the environmental interest of consumers and therefore environmental consciousness (Ottman, 1993:4).

Studies on consumer’s ethics are gathered under four main categories. These studies are on: (1) particular behaviors regarding ethics, most commonly,
shoplifting and ecologically related consumption, (2) understanding consumers’ ethical decision making process, (3) consumer reaction to the firm’s ethical behavior, and (4) culturally related ethical issues (Al- Khatib et.al., 1995:89-90).

Some unethical (and sometimes illegal, too) practices in retailing can be listed as
follows (Bermanet.al., 2018:62-63):
• Raising the price of scarce products after natural disasters such as hurricanes and earthquakes.
• Not having sufficient products on hand when a sale is advertised.
• Charging high prices in low income areas because consumers there do not have adequate mobility possibilities to go out of their neighborhood to shop.
• Selling alcohol and tobacco products to children.
• Having a salesperson pretend as a market researcher in telemarketing.
• Defaming competitors.
• Selling refurbished products as a new one.
• Pressuring salespeople to sell the most profitable products, even if they are not the best.
• Selling information from the customer database to others.