Role of Marketing Ethics in Corporate Governance_Prashanth_13BSPHH010430

8/9/2019 Role of Marketing Ethics in Corporate Governance_Prashanth_13BSPHH010430

1/6

[Type text] Page 1

Corporate governance business

ethics corporate ethics top marketing

advertising law corporate ethics

governance archaic laws competition

code of ethics product development

normative marketing ethics conflict

surrogate advertising corporate acts

ncetyuiopasdeefghjklzxcvbnmqwerty

uiopasdfghjklzxcvbnmqwertyuiopasd

fghjklzxcvbnmqwertyuiopasdfghjklzx

cvbnmqwertyuiopasdfghjklzxcvbnmq

wertyuiopasdfghjklzxcvbnmqwertyui

opasdfghjklzxcvbnmqwertyuiopasdfg

hjklzxcvbnmqwertyuiopasdfghjklzxc

vbnmqwertyuiopasdfghjklzxcvbnmq

wertyuiopasdfghjklzxcvbnmqwertyui

opasdfghjklzxcvbnmqwertyuiopasdfg

Business Ethics and Corporate Governance

Assignment

1/28/2015

Prashanth Balasubramaniyan

13BSPHH010430


2/6

Definition:

Marketing Ethics means a standard by which a Marketing action may be judged ‘right’ or

‘wrong’. A right marketing action is supposed to overall societal gain both in long run and

short run.

•

It can also be defined as how moral standards are applied to marketing

decisions, behaviors and institutions.

• Ethics and law

•

Effect of time

• Tacit and explicit codes of ethics

The issue of marketing ethics is not limited to pro

Yes

Ethical?

No

No Yes

A

Sale of Non-Iodized Salt

D

B

Most Auto rickshaw

fares in Chennai

Metropolitan city

C

Sale of Cigarettes,

Advertising to Children

etc.


3/6

Role of Marketing

• Positive role of marketing

•

Negative role of marketing

•

Voluntary adherence to high marketing ethics

•

Ethics due to market compulsions

• Shift from emphasis on products to process

Ethics in advertising and promotion

Ethical pitfalls in advertising and promotional content include:

a) Issues over truth and honesty: In the 1940s and 1950s, tobacco used to be

advertised as promoting health. Today an advertiser who fails to tell the truth not only

offends against morality but also against the law. However the law permits

"puffery". The difference between mere puffery and fraud is a slippery slope: "The

problem... is the slippery slope by which variations on puffery can descend fairly

quickly to lies."

b) Issues with violence, sex and profanity: Sexual innuendo is a mainstay of

advertising content (see sex in advertising), and yet is also regarded as a form

of sexual harassment. Violence is an issue especially for children's advertising and

advertising likely to be seen by children.

c) Taste and controversy: The advertising of certain products may strongly offend

some people while being in the interests of others. Examples include: feminine

hygiene products, hemorrhoid and constipation medication. The advertising

of condoms has become acceptable in the interests of AIDS- prevention, but are

nevertheless seen by some as promoting promiscuity. Some companies have actually

marketed themselves on the basis of controversial advertising -

see Benetton. Sony has also frequently attracted criticism for unethical content

(portrayals of Jesus which infuriated religious groups; racial innuendo in marketing black and white versions of its PSP product; graffiti adverts in major US cities).

Negative advertising techniques, such as attack ads. In negative advertising, the

advertiser highlights the disadvantages of competitor products rather than the

advantages of their own. The methods are most familiar from the political sphere.

d) Delivery channels: Direct marketing is the most controversial of advertising

channels, particularly when approaches are unsolicited. TV commercials and direct

mail are common examples. Electronic spam and telemarketing push the borders of

ethics and legality more strongly.

http://en.wikipedia.org/wiki/Tobaccohttp://en.wikipedia.org/wiki/Pufferyhttp://en.wikipedia.org/wiki/Pufferyhttp://en.wikipedia.org/wiki/Fraudhttp://en.wikipedia.org/wiki/Slippery_slopehttp://en.wikipedia.org/wiki/Sexual_innuendohttp://en.wikipedia.org/wiki/Sex_in_advertisinghttp://en.wikipedia.org/wiki/Sexual_harassmenthttp://en.wikipedia.org/wiki/Feminine_hygienehttp://en.wikipedia.org/wiki/Feminine_hygienehttp://en.wikipedia.org/wiki/Hemorrhoidhttp://en.wikipedia.org/wiki/Constipationhttp://en.wikipedia.org/wiki/Condomshttp://en.wikipedia.org/wiki/AIDShttp://en.wikipedia.org/wiki/Promiscuityhttp://en.wikipedia.org/wiki/Benetton_Grouphttp://en.wikipedia.org/wiki/Sonyhttp://en.wikipedia.org/wiki/Negative_advertisinghttp://en.wikipedia.org/wiki/Attack_adhttp://en.wikipedia.org/wiki/Direct_marketinghttp://en.wikipedia.org/wiki/Spam_(electronic)http://en.wikipedia.org/wiki/Telemarketinghttp://en.wikipedia.org/wiki/Telemarketinghttp://en.wikipedia.org/wiki/Spam_(electronic)http://en.wikipedia.org/wiki/Direct_marketinghttp://en.wikipedia.org/wiki/Attack_adhttp://en.wikipedia.org/wiki/Negative_advertisinghttp://en.wikipedia.org/wiki/Sonyhttp://en.wikipedia.org/wiki/Benetton_Grouphttp://en.wikipedia.org/wiki/Promiscuityhttp://en.wikipedia.org/wiki/AIDShttp://en.wikipedia.org/wiki/Condomshttp://en.wikipedia.org/wiki/Constipationhttp://en.wikipedia.org/wiki/Hemorrhoidhttp://en.wikipedia.org/wiki/Feminine_hygienehttp://en.wikipedia.org/wiki/Feminine_hygienehttp://en.wikipedia.org/wiki/Sexual_harassmenthttp://en.wikipedia.org/wiki/Sex_in_advertisinghttp://en.wikipedia.org/wiki/Sexual_innuendohttp://en.wikipedia.org/wiki/Slippery_slopehttp://en.wikipedia.org/wiki/Fraudhttp://en.wikipedia.org/wiki/Pufferyhttp://en.wikipedia.org/wiki/Pufferyhttp://en.wikipedia.org/wiki/Tobacco


4/6

Shills and astroturfers are examples of ways for delivering a marketing message under

the guise of independent product reviews and endorsements, or creating supposedly

independent watchdog or review organisations. For example, fake reviews can be

published on Amazon. Shills are primarily for message-delivery, but they can also be

used to drive up prices in auctions, such as Ebay auctions.

Native advertising is the blurring of lines between advertising and content.

Deceptive Advertising and Ethics:

Another breach of marketing ethics has to do with the use of deceptive advertising. This form

of advertising is not specific to one target market, and can sometimes go unnoticed by the

public. There are a number of different ways in which deceptive marketing can be presented

to consumers; one of these methods is accomplished through the use of humor. In a study

conducted by Hassib Shabbir and Des Thwaites, 238 advertisements were assessed and

73.5% of them were found to have used deceptive marketing practices. Of thoseadvertisements that were conducted deceptively, 74.5% of them used humor as a masking

device in order to mislead potential customers. Part of what drives this study is the idea that

humor provides an escape or relief from some kind of human constraint, and that some

advertisers intend to take advantage of this by deceptively advertising a product that can

potentially alleviate that constraint through humor. Through the study it was also found that

all types of humor are used to deceive consumers, and that there are certain types of humor

that are used when making certain deceptive claims.

It is important to understand that humor is not the only method that is used to deter

consumer’s minds from what a product actually offers. Before making impor tant purchases,

one should always conduct their own research in order to gain a better understanding of what

it is they are investing in.

Use of ethics as a marketing tactic:

Business ethics has been an increasing concern among larger companies, at least since the

1990s. Major corporations increasingly fear the damage to their image associated with press

revelations of unethical practices. Marketers have been among the fastest to perceive the

market's preference for ethical companies, often moving faster to take advantage of this shift

in consumer taste. This results in the expropriation of ethics itself as a selling point or a

component of a corporate image.

E.g: The Body Shop is an example of a company which marketed itself and its entire product

range solely on an ethical message.

Greenwash is an example of a strategy used to make a company appear ethical when its

unethical practices continue.

Liberation marketing is another strategy whereby a product can masquerade behind an image

that appeals to a range of values, including ethical values related to lifestyle and anti-consumerism.

http://en.wikipedia.org/wiki/Shillhttp://en.wikipedia.org/wiki/Astroturfinghttp://en.wikipedia.org/wiki/Ebayhttp://en.wikipedia.org/wiki/Native_advertisinghttp://en.wikipedia.org/wiki/The_Body_Shophttp://en.wikipedia.org/wiki/Greenwashhttp://en.wikipedia.org/w/index.php?title=Liberation_marketing&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Liberation_marketing&action=edit&redlink=1http://en.wikipedia.org/wiki/Greenwashhttp://en.wikipedia.org/wiki/The_Body_Shophttp://en.wikipedia.org/wiki/Native_advertisinghttp://en.wikipedia.org/wiki/Ebayhttp://en.wikipedia.org/wiki/Astroturfinghttp://en.wikipedia.org/wiki/Shill


5/6

"Liberation marketing takes the old mass culture critique — consumerism as conformity —

fully into account, acknowledges it, addresses it, and solves it. Liberation marketing imagines

consumers breaking free from the old enforcers of order, tearing loose from the shackles with

which capitalism has bound us, escaping the routine of bureaucracy and hierarchy, getting in

touch with our true selves, and finally, finding authenticity, that holiest of consumer grails."

A list of known unethical or controversial marketing strategies:

Anti-competitive practices

Bait and switch

Planned obsolescence

Pyramid scheme

Vendor lock-in / Vendor lock-out

Viral marketing / guerilla marketing

Subliminal advertising

Controversial marketing strategies associated with the internet:

Embrace, extend and extinguish

Search engine optimisation

Spamdexing

Spyware / Adware

Areas of Marketing Ethics

• In product development -Withholding critical information such as performance, risk

associated and also fail to inform customers about existing condition and changes in

product quality that could affect purchase decision

•

In pricing-Common ethical issues are price fixing, destructive pricing. Organizationshave right to price their product to earn a reasonable profit, but issues may crop up

when they seek to earn high profits at the expense of its customers.

• In placing (distribution)-Withholding critical information such as performance, risk

associated and also fail to inform customers about existing condition and changes in

product quality that could affect purchase decision .Serious issues with regard to

distribution include manipulating a product availability for price gaining. Eg – Milk

Powder shortage

http://en.wikipedia.org/wiki/Anti-competitive_practiceshttp://en.wikipedia.org/wiki/Bait_and_switchhttp://en.wikipedia.org/wiki/Planned_obsolescencehttp://en.wikipedia.org/wiki/Pyramid_schemehttp://en.wikipedia.org/wiki/Vendor_lock-inhttp://en.wikipedia.org/w/index.php?title=Vendor_lock-out&action=edit&redlink=1http://en.wikipedia.org/wiki/Viral_marketinghttp://en.wikipedia.org/wiki/Guerilla_marketinghttp://en.wikipedia.org/wiki/Subliminal_advertisinghttp://en.wikipedia.org/wiki/Embrace,_extend_and_extinguishhttp://en.wikipedia.org/wiki/Search_engine_optimisationhttp://en.wikipedia.org/wiki/Spamdexinghttp://en.wikipedia.org/wiki/Spywarehttp://en.wikipedia.org/wiki/Adwarehttp://en.wikipedia.org/wiki/Adwarehttp://en.wikipedia.org/wiki/Spywarehttp://en.wikipedia.org/wiki/Spamdexinghttp://en.wikipedia.org/wiki/Search_engine_optimisationhttp://en.wikipedia.org/wiki/Embrace,_extend_and_extinguishhttp://en.wikipedia.org/wiki/Subliminal_advertisinghttp://en.wikipedia.org/wiki/Guerilla_marketinghttp://en.wikipedia.org/wiki/Viral_marketinghttp://en.wikipedia.org/w/index.php?title=Vendor_lock-out&action=edit&redlink=1http://en.wikipedia.org/wiki/Vendor_lock-inhttp://en.wikipedia.org/wiki/Pyramid_schemehttp://en.wikipedia.org/wiki/Planned_obsolescencehttp://en.wikipedia.org/wiki/Bait_and_switchhttp://en.wikipedia.org/wiki/Anti-competitive_practices


6/6

• In promotions (advertising)- It can create ethical issues in many ways among themfalse or misleading advertising and manipulative or deceptive sales promotions,

tactics and publicity.

• In other promotional activities (i.e other than advertising)

Improving Ethical Conduct in Marketing

Sometimes organizations become bad barrels it is not because the individuals and their

unethical behavior but because of the pressures to survive and succeed create conditions that

rewards unethical behavior.

Organizations that wish to improve their ethics should implement a strong ethics and

compliance program and encourage organization wide commitment to an ethical culture,

– Code of Conduct

– Ethics officers

– System for anonymous reporting

• Eg - Telecom has appointed a independent person as an ethical

officer where employees can talk, report any misconduct.

• has a employ toll free number “hotline” to provide any advice to

employees who believe they face an ethical issue

Documents

Role of Marketing Ethics in Corporate Governance_Prashanth_13BSPHH010430