CHAPTER 4
MARKETING
ETHICS
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
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Marketing Ethics
LEARNING OBJECTIVES
LO1
LO2
LO3
LO4
LO5
Identify the ethical values marketers should
embrace.
Distinguish between ethics and social
responsibility.
Identify the four steps in ethical decision making.
Describe how ethics can be integrated into a
firm’s marketing strategy.
Describe the ways in which corporate social
responsibility programs help various
stakeholders.
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Fishing
©MARKA/Alamy
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Firm Goals
Greed and short
term profit seeking
Serious long term
consequences
Javier Pierini/Getty Images
Creating value
over the long run
Long term
success
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The Scope of Marketing Ethics
Business
Ethics
Marketing
Ethics
http://www.youtube.com/watch?v=mLlKHjYeQ7I
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Attitudes About the
Ethical Standards of Various Professions
Why do you feel
marketers
(advertising
practitioners &
salespeople) rank so
low on this scale?
What can marketers
do to improve their
ranking?
Source: From Honesty/Ethics in Professions. Copyright © 2013 Gallup, Inc.
All rights reserved. The content is used with permission; however, Gallup retains all rights of republication.
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Citibank Addresses Identity Theft
Why is this a
good customer
issue to address?
Why are these
ads effective?
http://www.youtube.com/watch?v=KERwnA8VfFM
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Creating an Ethical Climate
in the Workplace
Values
• Establish
• Share
• Understand
Rules
• Management commitment
• Employee dedication
Controls
Stockbyte/Getty Images
• Reward
• Punishment
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American Marketing Association
Code of Ethics
Generally accepted code in marketing
Flows from general norms
of conduct to specific values
Subareas within marketing have their own code of
ethics to deal with specific issues
AMA Website
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The Influence of Personal Ethics
Photo Disc/Getty Images
Genetics
©Digital Vision Ltd.
Family
Corbis/Jupiter images
©Royalty-Free/CORBIS
Religion
Getty Images
Values
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Why People Act Unethically
What makes people take
actions that create so much
harm?
Are all the individuals who
engage in questionable
behavior just plain immoral or
unethical?
Decisions often have conflicting outcomes, where both options
have positive and negative consequences
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Domestic Surveillance Debate
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Competing Outcomes
Dangerous flaw in
new model
Delay
production
Continue
production
Delayed
revenue
Potential
injury to
consumers
Possible
layoffs
Loss of
revenue
Digital Vision/Getty Images
Loss of
bonuses
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Socially Responsible
Socially Irresponsible
Ethical
Both ethical and
socially
responsible
Ethical firm not involved
with the larger
community
Unethical
The Link Between Ethics and
Corporate Social Responsibility
Questionable firm
practices, yet donates a
lot to the community
Neither ethical nor
socially responsible
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A Framework for
Ethical Decision Making
Step 1
• Identify
Issues
Step 2
• Gather
information
and identify
stakeholders
Step 3
• Brainstorm
and evaluate
alternatives
Step 4
• Choose a
course of
action
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Step One: Identify Issues
Using
results to
mislead or
even harm
the public
Marketing
research
firm issues
Hiding the
real
purpose of
the study
Data
collection
methods
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Step Two: Gather Information
and Identify Stakeholders
Identify all ethical issues
and relevant legal
information
Identify all relevant
stakeholders and get
their input on any
identified ethical issues
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Step Three: Brainstorm
and Evaluate Alternatives
Halt the market
research project?
Make responses
anonymous?
Instituting training on
the AMA Code of
Ethics for all
researchers
Ryan McVay/Getty Images
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Step Four: Choose a Course of Action
Weigh the alternatives
Take a course of action
Digital Vision/Getty Images
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CHECK YOURSELF
1. Identify the stages in the ethical decisionmaking framework.
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Integrating Ethics Into
Marketing Strategy
Planning Phase
Implementation Phase
Control Phase
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Planning Phase
The mission or vision
statement sets the
overall ethical tone for
planning.
Mission statements
can be used as a
means to guide a
firm’s SWOT analysis.
©M Hruby
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Newman’s Own
Donating over $200 million since 1982
©Newman’s Own, Inc.
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Implementation Phase
Should the firm be relocating
production to another country?
Should the firm be targeting
this market with this product?
Should the firm be selling
its product in this market
in this manner?
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Control Phase
1. Check
successful
implementation
2. React to change
Barbara Penoyar/Getty Images
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Most Sweeping Overhaul
of Business Deregulation
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CHECK YOURSELF
1. What ethical questions should a marketing
manager consider at each stage of the
marketing plan?
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Corporate Social Responsibility
• Employees
• Their families
• Partners
• Competitors
• Current
customers
• Potential
customers
Employees
Customers
Marketplace
Society
• Community
• Environment
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Sampling of Major Companies’
CSR Programs
Source: Adapted from http://money.cnn.com/magazines/fortune/most-admired/.
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CHECK YOURSELF
1. How has corporate social responsibility evolved
since the turn of the twenty-first century?
2. Provide examples of each of the stakeholders
that firms should consider in their corporate
social responsibility efforts.
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Appendix 4A
Understanding Ethics Using Scenarios
Scenario 1: R.J. Reynolds: Promotions to the Youth Market
Scenario 2: Car Manufacturer Gives Bribes for Contracts
Scenario 3: Retailers Lack Ethical Guidelines
Scenario 4: Giving Credit Where Credit Isn’t Due
Scenario 5: The Jeweler’s Tarnished Image
Scenario 6: No Wonder It’s So Good
Scenario 7: Bright Baby’s Bright Idea
Scenario 8: Money from Mailing Lists
Scenario 9: The Blogging CEO
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Scenario 1: R.J. Reynolds
What are the ethical
issues
Mailings to young
adults
Candy flavored
cigarettes
Is it wrong? Why or
why not?
Back to list of scenarios
©Brand X Pictures/Punch Stock
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Scenario 2: Car Manufacturer
Should the manufacturer
discontinue its operations
with the countries that were
unlawfully bribed to buy its
cars?
Are financial fines sufficient
to repair the problem?
How can companies be
sure the commissions they
earn are true commissions
and not a bribe?
©Imagine China
Back to list of scenarios
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Scenario 3: Retailers Lack
Ethical Guidelines
What are the ethical
issues
Liquid library/Dynamic
Graphics/Jupiter Images
Should Renata follow
Marilyn’s advice and
save her job?
Back to list of scenarios
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Scenario 4: Giving Credit
Where Credit Isn’t Due
Is this an
inappropriate target
market?
Could you argue that
the firm provides a
valuable service to
this market?
©Royalty-Free/Corbis
Back to list of scenarios
Would you advise the
cataloger to pursue
this new strategy?
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Scenario 5: The Jeweler’s
Tarnished Image
Is the manufacturer
responsible for the
acts of independent
sales people?
How do you feel the
Billing’s should
respond?
GRANTLAND® Copyright Grantland Enterprises; www.grantland.net
Back to list of scenarios
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Scenario 6: No Wonder It’s So Good
Relax with
Enjoy Cola
Is the legal non
disclosure of the
alcohol content and
ethical issue?
Should the firm be
required to disclose
the alcohol content?
Nick Koudis/Getty Images
What would you do if
you were Mia?
Back to list of scenarios
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Scenario 7: Bright Baby’s Bright Idea
Is the potential for injury
enough to merit removal
of the product from the
market?
Do you feel it is ethical
to move the product to a
less regulated market?
What would you have
advised the CEO?
Caroline Woodham/Getty Images
Back to list of scenarios
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Scenario 8: Money from Mailing Lists
Should Mangold continue to
use the Marketing Metrix
mailing list?
Should he tell his new
customers how he got their
names?
Do customers need to give
consent before companies
collect information on their
online behavior?
Back to list of scenarios
©Brand X Pictures/PunchStock
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Scenario 9: The Blogging CEO
Should Burdick be
allowed to praise his
company anonymously?
Should he be allowed to
attack his competitors?
How would you feel if
you knew a blogger had
personal interests in the
topic?
Back to list of scenarios
©Royalty-Free/CORBIS
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