Marketing ethics, audit and objectives
Ethics?
Ethics are moral principles that guide people (in respect) of what
is right or wrong
Marketing ethics
Marketing ethics refer to the moral principles that guide a firm’s
marketing activities. Unethical marketing behaviour takes place when
marketing activities do not follow moral principles.
Regulations
In many countries, governments have set up rules or guidelines for
ethical marketing known as Ethical code of marketing practice. These
codes mainly include:
Regulation of advertisements which must be decent, honest
and truthful.
Consumer protection on prices and products. For example, prices
must be displayed or a 500ml bottle must not contain 450ml of
content.
Monitoring of unfair practices such as unfair price fixing by powerful
firms to exit small firms
Examples of unethical marketing practices
Bait and switch
Bait and switch is one of the most common unethical practices. It
consists of attracting customers (the bait) by advertising very cheap
products which are available only to the first few buyers. Other
customers, once attracted, have to switch to more expensive
alternatives. Budget airlines, mobile phones retailers and estate
agents frequently use bait and switch techniques
Health fraud advertisements
These are unproven promises of quick medical cures such as losing
10 kilos in 10 days, or ….
Get rich quick schemes
These are schemes that are promoted to offer people the opportunity
to become rich quickly without telling them of the high adverse risk.
Product misrepresentation
This takes place when firms use brand names similar to well known
trademarks such as:
Ransonic which is very near to panasonic
JNC which is very near to JVC
…….
Marketing audit?
A marketing audit is an examination or review of the current
marketing situation of a business.
It identifies the strengths, weaknesses, opportunities and threats in
relation to the business marketing activities.
The audit also analyzes the degree of competition in the industry or
market.
Audit tools?
A marketing audit can be conducted by:
•Marketing SWOT analysis and
•Porter’s five forces competition analysis
Examples of marketing SWOT
Strengths:
Effective promotion
Strong brands
Weaknesses: Small product range
Poor distribution networks
Opportunities: Possible expansion in new market
Growing demand due to economic recovery
Threats: growing competition
new laws forcing changes in production method
Read p148 for more examples
Porter’s five forces: HL
Dealt in Module 6
Marketing objectives
Marketing objectives are targets which a business is trying to achieve
through its marketing activities. They are often more effective if they
are SMART, i.e.
Specific
Measurable
Agreed
Realistic
Time related
Market objectives commonly focus on certain areas:
Growth: To increase market share by 10% next year.
Profitability: To increase profit by 5% in the next 3 years.
Market leadership: to have 75% of the market share in 5 years.
Product development: To launch at least one new product in the next
5 years
Market development: to enter the Iphone market in two years