Marketing Ethics

By

Mosad Saber Abd El-Rahman

DBA_1st year_2nd Term Assignment no. 4

Presented to

Prof. Dr. Ehab Mohamed Abouaish

The Commerce College Cairo University April, 2013

Paper adapted from referenced sources

CONTENTS
1. PART 1: Basics, Definition and concepts .......................................................................... 2 1.1 Marketing Ethics Importance .................................................................................... 2 1.2 Marketing Ethics Definition...................................................................................... 2 1.3 Statement of Ethics Example .................................................................................... 3 a) Ethical Norms ............................................................................................................. 3 b) Ethical Values ............................................................................................................ 4 c) Implementation ........................................................................................................... 4 1.4 Ethical theory in marketing ....................................................................................... 4 1.5 The Domain of Marketing Ethics .............................................................................. 5 2. PART 2: Current Research streams................................................................................... 7 2.1 Ethical contexts and employee job responses in the hotel industry ................................ 7 2.2 A transcendent code of ethics for marketing professionals ........................................... 7 2.3 Marketing Ethics from an Internal Organizational Prospective ..................................... 8 2.4 Ethical governance .................................................................................................. 9 2.5 An ethical basis for relationship marketing: a virtue ethics perspective .......................... 9 3. PART 3: Applications ................................................................................................... 10 3.1 Applying Islamic Business Ethics ........................................................................... 10 3.2 Ethics at Apple Company ....................................................................................... 10 3.3 Etisalat Misr aggressive completion to Mobinil ........................................................ 10 4. REFERENCES ............................................................................................................ 11

Marketing Ethics

1. PART 1: Basics, Definition and concepts 1.1 Marketing Ethics Importance Ferrell (2005) discussed the importance of the term "Marketing ethics" depending marketings interface with many diverse stakeholders. He argued that "the marketing is a key functional area in the business organization that provides a visible interface with not only customers, but other stakeholders such as the media, investors, regulatory agencies, channel members, trade associations, as well as others."

In regard to understand the domain of marketing ethics , Ferrell (2005) argued that examining marketing ethics from limited point of view doesnt provide the comprehensive view as from each of individual, organizational, and societal perspective. 1.2 Marketing Ethics Definition Many references and sources stated that ethics is very important part in marketing activities. One of these references is Dibb.et al (2001) who stated that ethics as relate to moral evaluations of decisions and actions as right or wrong on the basis of commonly accepted principles of behavior. Where he defined the marketing ethics as are the moral principles that define right or wrong behavior in marketing. On the other hand, Vitell and Hunt (1986) defined marketing ethics as inquiry
Marketing Ethics
2

into the nature and grounds of moral judgments, standards, and rules of conduct relating to marketing decisions and marketing situations. In addition, there are three main factors required to provide ethical decision in marketing, these factors are: individual factors, organization relationship and opportunity (Dibb, Simkin, Pride and Ferrell, 2001).

so it is understood from survey of many sites and sources that the ethical marketing is important in decisions that depends on the moral side. and this morality issues affects on all marketing and related process activities or steps starting from sourcing of raw materials, staff employment and product

advertising and pricing.

the morality in many situations depends on personal perception which is different from one to one . this creates some challenges for firms that desired to apply ethical marketing in relation to their customers.

1.3 Statement of Ethics Example The American Marketing Association (AMA) statement of ethics is one of the most famous statements of ethics, this statement outlines three main pillars for ethics in marketing, and these pillars are:

a) Ethical Norms Which put some constrains on marketers to don't harm or to avoid harmful actions and to employ ethical standards in their work. Also they must foster trust in the marketing system. In addition to that they must embrace ethical values through: honesty, responsibility, fairness, respect, transparency and citizenship.
Marketing Ethics
3

b) Ethical Values This part consisting of six elements, the first one is honesty which means dealing with customers in straightforward way, the second one is the responsibility in accepting the market consequences; the third is the fairness in justification between the need of buyers and interest of sellers. The fourth element in ethical values is the respect which represents good manner to deal with all stockholders; the fifth element is transparency to create spirit of openness in market space. The sixth and last element is the Citizenship to achieve each of economic, legal, and societal responsibilities that serve stakeholders.

c) Implementation AMA encourages the members as marketers to be courageous and proactive in leading and/or aiding their organizations in the fulfillment of the explicit and implicit promises made to those stakeholders. They also consider that each marketing sub-discipline such as marketing research, e-commerce, Internet selling, direct marketing, and advertising has different marketing ethics that needed to be molded in policies and procedural stamp. Then this will provide each sub-discipline ethical code that can be followed in future.

1.4 Ethical theory in marketing Vitell and Hunt (1986) discussed the general theory of marketing ethics by discussing the two major ethical theories in moral philosophy that are deontological and teleological theories, also they argued that the efforts done in the area of marketing ethics are guidelines to assist marketers to work in
Marketing Ethics
4

mortal and ethical way. According to Vitell and Hunt (1986), deontological and teleological theories are normative and should be used to the extent of marketers' positive perceptions for marketing ethics issues.

Beside normative marketing ethics as discussed above there are two others types of marketing ethics which are descriptive marketing ethics and analytical marketing ethics. 1.5 The Domain of Marketing Ethics

Fry and Polonsky (2004) stated that the ethical decisions are not the only outcomes from applying marketing ethics but also to avoid the negative impact of unintended consequences of marketing activities, to achieve that marketers should consider all stakeholders in the business model. On the other hand a successful marketing strategy has not always been associated with meeting the needs and demands of all stakeholders (Miller and Lewis, 1991). Another prospective from Vargo and Lusch (2004) considered a new emerging logic of marketing which exists to provide both social and economic processes, including a network of relationships to provide skills and knowledge to all stakeholders. When the accepted rules may not apply, this considered as a difference between ethical decision and ordinal decision, also the emphasis on some person's value when he make some ethical decision presents another difference between ethical and ordinal decision. An ethical dilemma evolves when the choice between alternative actions with moral content is unclear. Whether a specific behavior is right or wrong, ethical
Marketing Ethics
5

or unethical is often determined by the concerned stakeholders and an individuals personal ethics. Consequently, values, judgments, and complex situations all play a critical role in ethical decision making (Ferrell, 2005). My comment here is that there are many marketing decisions that are may evolve ethics to be taken such as: firms may use packaging for products that exaggerate the benefits, "advertising puff" may be used as on ethical marketing tool. These decisions are part of the domain of marketing ethics.

Marketing Ethics

2. PART 2: Current Research streams 2.1 Ethical contexts and employee job responses in the hotel industry Cheng et al (2013) argued that the hotel industry faces continual ethical dilemmas that present important, interesting and complex challenges. They conducted this research in Taiwan to fulfill two main objectives. The first was to investigate the relationship between ethical context and job satisfaction and to examine the moderating role of work values and the mediating role of perceived organizational support in the relationship between ethical context and job satisfaction. The second objective was to examine the influence of these same variables on turnover intention. A survey of Taiwanese hotel employees showed that ethical context was a significant predictor of job satisfaction and turnover intention and that work values and perceived organizational support moderate and mediate respectively the relationship between an ethical context and job responses. These data suggested ways by which hotels can deal with ethical context, perceived organizational support, and employee work values to increase job satisfaction and decrease the turnover intention of employees. 2.2 A transcendent code of ethics for marketing professionals One of the most recent researches in the area of marketing ethics is this research which conducted by Dinah and Milton (2013), this research tries to develop a single code of ethics that could be used regardless of the venue or specialty of the marketing professional.

The research reviews a wide variety of codes of business ethics, marketing ethics, model codes, and professional ethics. This review found that while there are some differences in how the codal principles are presented, there are
Marketing Ethics
7

sufficient similarities in the codes principles of professional conduct to merit the consideration of a single code of marketing ethics.

The research uses the more broadly known theories of ethics, and the most current codes of professional marketing ethics such as American Marketing Association (AMA), the American Association of Advertising Agencies (AAAA), and the Sales and Marketing Executives International (SMEI). The findings of this research is that the authors determined the most important principles of ethics required to shape a single code of professional conduct for marketing students, educators and practitioners regardless of their area of specialty.

2.3 Marketing Ethics from an Internal Organizational Prospective Powell (2011) discussed in commentary research the nexus between ethical corporate marketing, ethical corporate identity and corporate social responsibility from an internal organizational perspective. Where the commentary is contextualized within the interrelated domains of corporate marketing, ethical corporate marketing, ethical corporate identity and corporate social responsibility (CSR), its specific focus is on internal organizational concerns and problems with ethical alignment. The purpose is to provide an overview of relevant research and to suggest some future research agendas. In this research, Powell (2011) found that while highlighting the need for a fundamental reappraisal of marketing at the organizational level, it outlines potential problems and pitfalls with internal organizational ethical alignment, between employees and their organization's ethical corporate identity.
Marketing Ethics
8

2.4 Ethical governance Agatiello (2008) discussed the ethical governance beyond good practices and standards to explore a new paradigm that formed in increasing manner as he described it as-interwoven international system that of ethical governance.

He argued that governments are abandoning many of their activities through deregulation, privatization, concession, outsourcing or sheer desertion, even in sensitive areas like food and drug control, public health and personal security.

Agatiello (2008) suggested that it is through principles-based policymaking and management that many queries such as what are the boundaries of limited corporate liability? Is ethical governance just wishful thinking? These queries can be addressed in serious as we may have reached the point of no return already. 2.5 An ethical basis for relationship marketing: a virtue ethics perspective As the relationship marketing approach is customer satisfaction and customer retention from one hand, on the other hand; Murphy et al (2007) conducted this research to deliver an ethical framework or foundation for this relationship marketing using a virtue ethics approach.

Murphy et al (2007) found that some specific virtues which are trust, commitment and diligence are related or paired to the ethical relationship marketing approach that has three main stages establishing, sustaining and reinforcing.
Marketing Ethics
9

3. PART 3: Applications 3.1 Applying Islamic Business Ethics Ismaeel and Blaim (2012) developed an application in real life to use the Islamic Sharia rules to explore the opportunities of using halal regulation and certification as a mechanism for applying Islamic business ethics in contemporary world. 3.2 Ethics at Apple Company The values is one pillar of marketing ethics as discussed before, so as organizational values are determined by upper management within the company. Apple Company has a set of core company values that the new chief executive officer has set for the company. One of Apples core organizational values is We dont settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when were wrong and the courage to change. Apple has been set on organizational values from the beginning. 3.3 Etisalat Misr aggressive completion to Mobinil In my own opinion, one of the most important unethical marketing game, that held in Egypt 2012, when Saweras posted his inopportune post on facebook, this post was picture for bearded Muslim man. A lot of Egyptian Muslims got angry. Etisalat Misr takes this opportunity to make promotions and spread unethical word of mouth through Egyptian community, the result was customer switching from Mobinil to Etisalat Misr. Nowadays, Etisalat Misr presents Mobinil as modest and boring telco- operator through unethical advertising using Mobinil's color (Orange).
Marketing Ethics
10

4. REFERENCES Dibb, S., Simkin, L., Pride, W.M., & Ferrell, O.C. (2001). "Marketing concepts and strategies". New York: Houghton Mifflin Co. Dinah Payne, Milton Pressley, (2013) "A transcendent code of ethics for marketing professionals", International Journal of Law and Management, Vol. 55 Iss: 1, pp.55 - 73 Ferrell, O.C. 2005. A Framework for Understanding Organizational Ethics, in Business Ethics: New Challenges for Business Schools and Corporate Leaders. R.A. Peterson and O.C. Ferrell, (eds.) Armonk, New York: M.E. Sharpe, 3-17. Fry, M. and M.J. Polonsky. 2004. Examining the Unintended Consequences of Marketing, Journal of Business Research, Vol. 57, 1303-1306. Jacques Nantel, William A. Weeks, (1996) "Marketing ethics: is there more to it than the utilitarian approach?", European Journal of Marketing, Vol. 30 Iss: 5, pp.9 19 Miller, R.L. and W.F. Lewis. 1991. A Stakeholder Approach to Marketing Management Using the Value Exchange Models, European Journa l of Marketing, Vol. 25, No. 8, 55-68. Muatasim Ismaeel, Katharina Blaim, (2012) "Toward applied Islamic business ethics: responsible halal business", Journal of Management Development, Vol. 31 Iss: 10, pp.1090 1100 Osvaldo R. Agatiello, (2008) "Ethical governance: beyond good practices and standards", Management Decision, Vol. 46 Iss: 8, pp.1132 1145 Patrick E. Murphy, Gene R. Laczniak, Graham Wood, (2007) "An ethical basis for relationship marketing: a virtue ethics perspective", European Journal of Marketing, Vol. 41 Iss: 1/2, pp.37 57 Pi-Yueh Chenga, Jen-Te Yangb, Chin-Sheng Wanc, Mei-Chin Chud, (2013) " Ethical contexts and employee job responses in the hotel industry: The roles of work values and perceived organizational support" International Journal of Hospitality Management 34 (2013) 108115 Shaun M. Powell, (2011) "The nexus between ethical corporate marketing, ethical corporate identity and corporate social responsibility: An internal organizational perspective", European Journal of Marketing, Vol. 45 Iss: 9/10, pp.1365 1379 Vargo, S.L. and R.F. Lusch. 2004. Evolving to a New Dominant Logic for
Marketing Ethics
11

Marketing. Journal of Marketing, Vol. 68 (January 2004): 1-17. Vitell, S.J., Hunt, D.S. (1986). "A general theory of marketing ethics". Journal of Macromarketing. 5-16. Marketing Power, 2013. Statement of Ethics. Available at:
http://www.marketingpower.com/AboutAMA/Pages/Statement of Ethics.aspx

[Accessed 2 April 2013].

Marketing Ethics

12