Ethics in Marketing by Students in International Marketing at Elmhurst College

Ethics in Marketing

Abstract: Ethics in marketing is taking center stage in todays business. This article summarizes the opinions on marketing ethics expressed by fifteen undergraduate students in an International Marketing course. Students want to create marketing plans that are based on ethical profitability. Todays marketing professionals will find it useful to look at ethics through the eyes of the marketers of the future.

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Ethics in Marketing by Students in International Marketing at Elmhurst College

The world of marketing is in upheaval on many fronts. In the intellectual property area the notion of copyrighting a product and using that exclusivity in marketing it is undergoing significant change. Quite a few innovators are pursuing business models radically different from those commonly practiced. An example is the development of Linux kernel by Linus Torvalds and subsequent distribution of Linux software under a GNU General Public License. This is a radical departure from the common distribution of such products by marketers under copyright protection. On the issue of product liability the decision making surrounding the global recall of Vioxx by Merck & Co. revolves around marketing ethics. Trying to get a handle on current students perception of ethics in marketing I asked the students in my International Marketing upper level undergraduate course to analyze and discuss the ethical issues marketing managers face in their daily work life. I have listed their analyses and opinions below, with my own commentary in italics. It is quite interesting to look at ethics from the eyes of the marketers of tomorrow. They conceptualize that there are issues in marketing that are ethically wrong and then there are issues in marketing that are morally wrong and that both need serious attention. 1. If a company markets its products to an uneducated customer base that is not aware of the serious consequences of a certain product, such as selling cigarettes in developing countries, thats an ethical issue that needs to be addressed. The target market in Rwanda is not aware of the fact that cigarettes are addictive and will most likely cause health problems later in life. They are not aware of these issues; therefore it is morally wrong to sell them cigarettes. First of all, I would never work for a cigarette company but, if I did, I would include in every ad that I run that smoking causes serious health problems. I would make sure its in the language they speak and in terms they understand. I would not sell them to underage youngsters. There is an ethical obligation on companies to go the extra distance to ensure uneducated consumers become aware of the consequences of using products. 2. Pricing AIDS drugs so that many African patients cannot afford them is one of the most awful problems I have ever heard. I do not understand how the CEOs of these companies can go to bed at night. I would make it a rule that these drugs be sold without making a profit in Africa. This caring image carries over to the marketing strategy in the developed world. The company who really cares about people can be my new slogan and Id have the facts to actually back it up. Market the company as a person that really cares about people. 3. Ethics and morality dont stay in the car when you go into your company in the morning. It is very important to always be an example and to always treat people the same way you want to be treated. The leading companies should set an example, even in ethics. 4. Business and ethics often times can contradict each other. I read an article that I found in the ABI/Inform database, titled Children and the Changing World of Advertising, by Elizabeth Moore. This article debates whether it is ethical to advertise to children. It was estimated that children spend an average of 4 hours per day watching television, and can be exposed to as many as 25,000 commercials per year. About 88% of children between 5-14 years old have access to computers and 53% have access to the internet. To me, it seems

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Ethics in Marketing by Students in International Marketing at Elmhurst College

that it is very easy to access children through any of these media portals. Even if it is wrong to advertise to children, I think that a lot of the companies cannot hold back from easy accessibility to children. In addition, it was estimated that children account for up to $24 billion in direct spending each year and have an influence on $500 billion in family purchases. The debate seems to be that the children cannot comprehend and evaluate the selling and marketing messages. It was also debated that children lack the power to resist persuasive claims. Also, the blending of advertisements in entertainment is increasing which leads me to believe that it will not go away. Others, however, have said that these problems have been overstated and that by advertising they are giving more information to the children and the parents in order to make more informed choices. Most of the arguments against advertising to children are based on the fact that children are vulnerable. This may be true, but I believe that ultimately it is the parents responsibility to help their children make well-informed decisions and teach their children that they should not always believe what they hear. Children tend to have a more positive view about advertising than older, more experienced people. This is why I believe that the responsibility lies mainly with the parents to help teach their children about the messages behind the advertising. I think that it would be very hard to stop companies from advertising to children because of the possible market that it opens up. However, I do not think that cigarettes, alcohol, or other potentially harmful products should be advertised to children at all. It is difficult to cut out all advertising, especially because some products are potentially harmless. Role of parents is stressed here as being important in dealing with the messages from the marketing world. The student presents the view that a message that is informative from a marketers standpoint might be viewed as being exploitative by others. 5. The ethical issues a marketing manager might face are just as described in the question: a marketing manager may be faced with fibbing a little to get their product off the ground, like Coca Cola with Dasani in England. They may be faced with the challenge of placing a value on a persons life; how much money should we get in order to help save someones life? I believe that all of these ethical issues need to be addressed immediately, for the companies sake. Coca Cola, for example, sold tap water in bottles in England. That might not have had any adverse affect on peoples lives, but once the people of England found out that they were drinking expensive tap water, they thought less of Coca Cola for not being completely honest. There is a fine line between telling people what they dont want to know, and what they should know. The Dasani problem was stupid in my opinion, it was an easy way for Coca Cola to make money, and in the end it hurt the company. In the AIDS drugs being priced so high, many people everywhere cannot use them because of insurance issues. Yes, the bulk of the AIDS epidemic is in Africa, but even in the U.S. the medicine is not available to everyone. If I were a marketing manager faced with this ethical issue, I would devote my time to looking for a way to help in Africa much more than under-pricing the drugs and losing profit. I would look into finding a way to globalize the company in Africa. This way the African people would have a chance to work for decent wages, and they would have company benefits, such as educational seminars on what company they work for, what products the company makes and what they are used for. Education is a huge step in helping with the AIDS epidemic; its a problem that will take a long time to solve, but I feel that starting anywhere will help. I know that as a marketing manager one must think about everything. I feel that ethics need to be a top priority when it comes to selling. If there is

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Ethics in Marketing by Students in International Marketing at Elmhurst College

any dirt on a company, small or large, it will reflect poorly on the company and sales will drop. I would much rather work for a company that produces quality, and gains profit from an honest days work, than for a company that is deceitful. With everything in life, one must think outside the box; there is always a way to make things right. The burden is on the marketer. If she searches hard, she WILL find an ethical and profitable way! 6. The major ethical issue facing an international marketing manager is respecting the cultural and political environment of foreign countries. Each country is so diverse, any manager assuming that he can continue doing business with no change to practices or standards will eventually alienate there potential market. Many countries do not have labor laws protecting citizens from unfair business practices. It is a managers job to find ways to make money without violating a country. Governments in many countries accept bribes as regular business practices or allow certain companies room within the law for a share of the profits. It can be difficult to do business in these countries without participating in normal government practices. An ethical manager must comprehend the consequences the company would face at home by engaging in illegal acts despite being in a foreign country, and act accordingly. When discussing marketing in this day and age the topic of ethics always arises. Whether it is a false claim that a company has made or the high prices of a certain product/ service, ethics is a hot topic now more than ever. People have diverse views on ethics and what constitutes ethical behavior versus unethical behavior. But one thing is for sure, everyone has one, and in marketing it is crucial that you find a way to take everyones opinion into consideration. Its a difficult job, but thats why marketing managers get paid the Big Bucks. 7. One issue that could arise when marketing a certain product is that of making false claims. Companies are notorious for doing this in the United States and it could possibly take years any type of government agency to find out. If false claims or untruths were told in a foreign country and the company behind these lies knew about them and never mentioned anything, people of that country would undoubtedly question the validity of, not only that company, but of anything that maybe associated with it. Those repercussions could have significant impact on the financial position of more than one company. This is just one of the ethical issues that a marketing professional could face when marketing in a foreign land. If this action is held up to public scrutiny, will I still feel that it is what I should have done and how I should have done it? (Cleveland, H. 1972. The Future Executive, 104. New York: Harper Row.) This student presents the notion that the implications of unethical behavior by an individual or a company extend much beyond its own borders. 8. Marketing and Environment. Humans have had a great impact on the environment, and those impacts affect both humans and other animals. Pollution to the environment has three forms: Adding toxic materials to it. Rearranging it for our own purposes. Removing pertinent parts from it such as by mining, forestry, oil, and gas industries. As marketing managers we can deal with this by understanding that it is it important to promote positive impact on the environment such as by fostering use of renewable
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Ethics in Marketing by Students in International Marketing at Elmhurst College

resources and less-polluting products and services. The implication here is that marketers need to consciously incorporate environmental impact when writing product or service requirements or when dealing with the development organization. 9. Marketing and Use of Animals. Companies use animals in order to: Test cosmetics, medication, or other products. Learn through experimentation. Teach. Entertainment We first have to figure out whether it matters if the animals experience discomfort or death. Does it matter if the animal is taken from its natural habitat? We need a framework in order to discuss this and find ways of dealing with this issue or figure out a better way of experimenting with new products without using animals. This supports the classical ethical behavior towards all species argument. 10. Marketing and human social causes. It is a reality that there are economically disadvantaged people and communities. Not everyone is born with the same benefits and opportunities to succeed. So a marketer has to consider the long-term benefit to society. This is a very difficult issue to deal with. Is our company benefiting the surrounding area where our business is located? Are we providing assistance in the community to build a strong and educational community not only for us but for our kids? There is an implication here that a marketer has a special role to play in promoting long term benefits in the areas where the company does business. 11. Marketing and Religious causes. Marketing decisions and non-religious purchases should not be based on religious reasons that lack an ethical basis. Doing so would be religious discrimination. A valid ethical issue to support is the right for each person to choose and practice her own beliefs as long as they don't infringe on other people's rights. This mentions that marketing decisions are sometimes driven by religious reasons, but attempts to draw a distinction between those with an underlying ethical justification versus those that do not. 12. Advertising ethics. There is a very slim line between ethical and unethical business practices. Especially in marketing this line is visible as some countries may allow some marketing practices and others may see them as unlawful and unethical. Some of the problems that exist today are: Advertising to children Usage of sexual or seductive messages in order to gain more attention and product recognition Subliminal messages Indirect information Use of exaggerated claims (puffery) Withholding the truth or advertising partial truth in messages Taking advantage of lack of laws that forbid some messages and claims Marketing managers face some of these problems daily. I personally would like to avoid anything that may be portrayed as unethical because this reflects negatively on the whole
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Ethics in Marketing by Students in International Marketing at Elmhurst College

company. I can only imagine what will happen with Coca Cola sales (not only Dasani) in UK after discovering that the Dasani brand is just plain tap water. It is easy to say that some unethical decisions can be lucrative but this situation usually doesnt last very long and when it is discovered by media and publicity, it hits the company very hard. Managers need to ask themselves a question Is it worth in the long run to do this, and risk companys image for a short term high profits? I personally am against unethical practices, because the image and the longevity of the company is the priority. For me it is important to keep consumers and establish a lifelong relationship with them. Marketing can be done the legal and ethical way, and we have multiple examples of companies who are leaders in the market but dont engage in such practices. This student brings up the notion of marketing as establishing a lifelong relationship and views ethics in that context. 13. Researchers at Merck & Co. believe that a drug they have developed for animals might be an effective treatment for human river blindness, a debilitating illness that affects hundreds of poor people in the Third World. The process of development and testing, however, will be enormously costly. A question that comes up is: Should the company devote critical resources to developing the drug, knowing that, even if it were medically successful, it would yield little financial return? The way I would deal with this issue is: Yes, the concept of doing good in the real world is very complex but Merck & Co. is a company whose products are essential to human life and health. Even though the process of producing this product will be very costly they should bring it to the market. Another issue that might come up is: can the people in the Third World countries afford to buy it? They should offer it for the minimum acceptable price where they dont come out losing but where they dont gain enormous profits either. Also they should ask for sponsorship from other companies who are interested in the development of the Third World countries. That way maybe they can lower their cost on development and testing of the product. This student deals with the complex subject of developing products with high R&D costs but pricing it so many in the world benefit from it. The notion of obtaining sponsorship for offsetting costs is an interesting one. 14. There are several ethical issues that marketers face in foreign countries. Some examples would be cutting costs by cutting quality drastically enough to where the products could break and cause damage to the consumer, for example cars that roll easily or have parts that explode easily or manufacturing a companys products in factories that use child labor and failing to disclose such information. A similar ethical issue can arise with ethical pharmaceuticals where a product is developed for a certain illness and tested and approved, and then it is discovered later that the product has harmful side effects. I would deal with these issues by maintaining a strong quality control program that checks every aspect of the product for health, safety, and effectiveness, and try to maintain an attitude that does not put profits over people, because that seems to be where most of these ethical issues stem from, when companies consider profits more important than public health and safety. 15. One issue a marketing manager might face is with foreign customs officials in countries where bribing is common place. There are a couple of options when faced with this issue. Usually the corrupt foreign customs holds on to the high value items since the more the
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Ethics in Marketing by Students in International Marketing at Elmhurst College

value of the items the higher the bribe will be. If this is the case and you are shipping something that contains intellectual property value, for example a CD with software on it, you can claim the value of the items as the physical value of the CD around $2 and the software should go through without a problem. This is something I would do; try to play with the numbers to get past customs faster rather than bribing them, therefore eliminating the problem without bribes. This student presents a view that one type of ethical violation is preferable to another. 16. Ethical issues are always difficult ones to combat. For example, suppose an automaker like GM would have to recall one line of their cars in China. It would cost them a lot of money to do a recall of that size. In addition to that they would probably lose consumer confidence especially as they are new in the market. Some people would probably not trust the company as much if it did a recall. First of all GM should try to figure out if doing to the recall would be a good thing or would it hurt the company and many lives as well. Would GM want to be held liable in case something goes wrong with a car that was supposed to be recalled and was not? I dont think so; I would go ahead and do the recall even if it meant that some consumers would therefore no longer buy GM, because the risk would be too great to take that chance. 17. There is a difference between operating within the boundaries of the law and the boundaries of ethics, because the law doesnt always consider ethics. As a marketing manager, you will experience ethical issues like: deciding between making more profit for the company or making the product more affordable pricing strategies that hurt the consumer but are profitable selling a product that is bad for consumers health a product that is bad for the environment having a very low cost strategy that hurts the local established small companies false advertising sacrificing the conditions for workers in order to cut cost Those are the ethical issues that marketing managers have to deal with on daily basis. I think that as long as youre doing more overall good than evil to the society as a whole, youll be fine. Also, I think its better to inform the public of things you dont necessarily have to, because it could backfire later on and people might turn away from you and buy from your competitor. Ethics are very important for a company if they want to keep a good image, especially in todays world were the competition is getting more intense every day. As the above opinions illustrate students are keenly aware of the multidimensional nature of ethics in the global marketplace. They are interested in creating marketing plans that can withstand scrutiny under an ethics microscope, and want to implement them with ethical profitability in mind. This thinking should reinforce our confidence in the future of corporate America.

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Ethics in Marketing by Students in International Marketing at Elmhurst College

This article is based on a collection of min-essays written by students of International Marketing at Elmhurst College. The contact for the article is Dr. Gurram Gopal Assistant Professor of Business Administration Center for Business and Economics Elmhurst College 190 Prospect Avenue Elmhurst, IL 60126 email: ggopal@elmhurst.edu ph: (630) 617 3108

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