ETHICS AND MORALS

The words 'ethics' and 'morals' are frequently used interchangeably. For the
purposes of making decisions, however, it is helpful to think of them differently.

Morals refer to behavior customary in our culture or society. Morals may change as
you move from one society to the next.

Ethics refer to your personal standards of right and wrong. Ethics do not change as
you move from one society to the next.

Fundamental issues in the ethics of marketing

Frameworks of analysis for marketing ethical

Possible frameworks:

• Value-oriented framework, analyzing ethical problems on the basis of the

values which they infringe (e.g. honesty, autonomy, privacy, transparency).
An example of such an approach is the AMA Statement of Ethics.[1]
• Stakeholder-oriented framework, analysing ethical problems on the basis of
whom they affect (e.g. consumers, competitors, society as a whole).
• Process-oriented framework, analysing ethical problems in terms of the
categories used by marketing specialists (e.g. research, price, promotion,
placement).

None of these frameworks allows, by itself, a convenient and complete categorization

of the great variety of issues in marketing ethics.

Power-based analysis

Contrary to popular impressions, not all marketing is adversarial, and not all
marketing is stacked in favour of the marketer. In marketing, the relationship
between producer/consumer or buyer/seller can be adversarial or cooperative. For an
example of cooperative marketing, see relationship marketing. If the marketing
situation is adversarial, another dimension of difference emerges, describing the
power balance between producer/consumer or buyer/seller. Power may be
concentrated with the producer (caveat emptor), but factors such as over-supply or
legislation can shift the power towards the consumer (caveat vendor). Identifying
where the power in the relationship lies and whether the power balance is relevant at
all are important to understanding the background to an ethical dilemma in
marketing ethics.[2]

Specific issues in marketing ethics

Market research

Ethical danger points in market research include:

• Invasion of privacy.
• Stereotyping.
Stereotyping occurs because any analysis of real populations needs to make
approximations and place individuals into groups. However if conducted
irresponsibly, stereotyping can lead to a variety of ethical undesirable results. In the
AMA Statement of Ethics, stereotyping is countered by the obligation to show respect
("acknowledge the basic human dignity of all stakeholders").[5]

Market audience

Ethical danger points include:

• Targeting the vulnerable (e.g. children, the elderly).

• Excluding potential customers from the market: selective marketing is used to
discourage demand from undesirable market sectors or disenfranchise them
altogether.

Examples of unethical market exclusion[6] or selective marketing are past industry

attitudes to the gay, ethnic minority and obese ("plus-size") markets. Contrary to the
popular myth that ethics and profits do not mix, the tapping of these markets has
proved highly profitable. For example, 20% of US clothing sales are now plus-size.[7]
Another example is the selective marketing of health care, so that unprofitable
sectors (i.e. the elderly) will not attempt to take benefits to which they are entitled.[8]
A further example of market exclusion is the pharmaceutical industry's exclusion of
developing countries from AIDS drugs.[9]

Examples of marketing which unethically targets the elderly include: living trusts,
time share fraud, mass marketing fraud[10] and others.[11] The elderly hold a
disproportionate amount of the world's wealth and are therefore the target of
financial exploitation.[12]

In the case of children, the main products are unhealthy food, fashionware and
entertainment goods. Children are a lucrative market: "...children 12 and under
spend more than $11 billion of their own money and influence family spending
decisions worth another $165 billion"[13], but are not capable of resisting or
understanding marketing tactics at younger ages ("children don't understand
persuasive intent until they are eight or nine years old"[13]). At older ages competitive
feelings towards other children are stronger than financial sense. The practice of
extending children's marketing from television to the schoolground is also
controversial (see marketing in schools). The following is a select list of online
articles:

• Sharon Beder, Marketing to Children (University of Wollongong, 1998).

• Miriam H. Zoll, Psychologists Challenge Ethics Of Marketing To Children
(American News Service, 2000)
• Donnell Alexander and Aliza Dichter, Ads And Kids: How Young Is Too Young?
• Rebecca Clay, Advertising to children: Is it ethical? (Monitor on Psychology,
Volume 31, No. 8 Sept. 2000)
• Media Awareness Network, How marketers target kids

Other vulnerable audiences include emerging markets in developing countries,

where the public may not be sufficiently aware of skilled marketing ploys transferred
from developed countries, and where, conversely, marketers may not be aware how
excessively powerful their tactics may be. See Nestle infant milk formula scandal.
Another vulnerable group are mentally unstable consumers.[14] The definition of
vulnerability is also problematic: for example, when should endebtedness be seen as
a vulnerability and when should "cheap" loan providers be seen as loan sharks,
unethically exploiting the economically disadvantaged?

The 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.

• The Body Shop is an example of a company which marketed itself and its
entire product range solely on an ethical message, although its products were
deceptively characterized and its history was marked by misrepresentations
[1]. "The Body Shop's only real product is honesty..." (Jon Entine in an ethics
audit of the company).[23] However the story of the Body Shop ended with
increasing criticism of a gap between its morals and its practices.[24]
• 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.[25]

"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." (Thomas Frank)[26]

Further issues in marketing ethics

Marketing ethics overlaps with environmental ethics in respect of waste problems

associated with the packaging of products.[27]

Some, such as members of the advocacy group No Free Lunch, have argued that
marketing by pharmaceutical companies is negatively impacting physicians'
prescribing practices, influencing them to prescribe the marketed drugs rather than
others which may be cheaper or better for the patient.[28]

Ethically thinking is responding to situations that deal with principles concerning

human behavior in respect to the appropriateness and inappropriateness of certain
communication and to the decency and indecency of the intention and results of
such actions. In other words, ethics are distinctions between right and wrong.
Businesses are confronted with ethical decision making every day, and whether
employees decide to use ethics as a guiding force when conducting business is
something that business leaders, such as managers, need to instill. Marketers are
ethically responsible for what is marketed and the image that a product portrays.
With that said, marketers need to understand what good ethics are and how to
incorporate good ethics in various marketing campaigns to better reach a targeted
audience and to gain trust from customers. Marketing ethics, regardless of the
product offered or the market targeted, sets the guidelines for which good marketing
is practiced. When companies create high ethical standards upon which to approach
marketing they are participating in ethical marketing. To market ethically and
effectively one should be reminded that all marketing decisions and efforts are
necessary to meet and suit the needs of customers, suppliers, and business partners.
Ethical behavior should be enforced throughout out company culture and through
company practices.

Marketing strategy

The main theoretical issue here is the debate between free markets and regulated
markets. In a truly free market, any participant can make or change the rules.
However when new rules are invented which shift power too suddenly or too far,
other participants may respond with accusations of unethical behaviour, rather than
modifying their own behaviour to suit (which they might not be able to anyway).
Most markets are not fully free: the real debate is as to the appropriate extent of
regulation.

Case: California electricity crisis, which demonstrates how constant innovation of

new marketing strategies by companies such as Enron outwitted the regulatory
bodies and caused substantial harm to consumers and competitors.

A list of known unethical or controversial marketing strategies:

• bait and switch

• pyramid scheme
• planned obsolescence
• vendor lock-in / vendor lock-out
• viral marketing / guerilla marketing
• anti-competitive practices

Controversial marketing strategies associated with the internet:

• search engine optimisation

• spamdexing
• embrace, extend and extinguish
• spyware / adware

Ethical Decision-Making in International Markets:

Wayne A. Label, Texas A&M International University

Most of the empirical as well as conceptional work in the
field of international marketing ethics focuses on the question
of differing ethical values. It is often assumed that marketers’
decisions in ethically relevant situations can be explained by
cultural differences and differing value structures. The paramount
problem in international marketing ethics is mainly
seen in the question: What is ethical?We argue that phenomena
that resemble social traps in international marketing
might have an influence on marketers’ decisions independent
of culture and ethical values. Accordingly, the main question
would shift to: How to be ethical in situations where you do
not know the actions of the other marketers while these
actions have an impact on the economic well-being of your
company?
Business ethics is a relatively young field of study, and
international dimensions of business ethics have scarcely
been raised, much less adequately addressed. Consequently,
it is important for more rigorous inquiries into global ethical
issues to be undertaken. Unless the field of ethics is expanded
to explicitly address issues arising from globalization, many
unanticipated, possibly undesirable consequences may
result.

How to be ethical in situations where you do

not know the actions of the other marketers while these
actions have an impact on the economic well-being of your
company?
Business ethics is a relatively young field of study, and
international dimensions of business ethics have scarcely
been raised, much less adequately addressed This study examines the importance of
the underlying characteristics of moral issues and how they directly affect accounting
students' ethical decision-making process (moral sensitivity, moral judgment and
moral intentions). A four stage model presented by Rest (1986) and expanded by
Jones' (1991) was used to measure the moral decision-making process. The study
highlights the results of a sample of 110 accounting majors in a small business
college in the USA. The research suggests that moral intensity appeared to have two
dimensions: "perceived corporate concern” and "perceived
involvement effect”. These dimensions did not significantly
predict moral sensitivity. However, when they were combined with moral sensitivity
they did significantly predict the students' moral judgment. Likewise, moral judgment
and the dimensions of moral intensity significantly predicted accounting students'
moral intentions. The findings presented here extend current understanding of the
influence of the moral intensity components on the moral decision-making process.
The results can also be used to enhance ethics coursework and training programs in
educational and industrial settings.

A General Theory of Marketing Ethics

Almost all the theoretical efforts in the area of marketing ethics have been
normative, not positive. Th1at is, almost all theoretical works have focused on
developing guidelines or rules to assist marketers in their efforts to behave in an
ethical fashion. In contrast, the model developed in this article is descriptive, not
prescriptive. It attempts to explain the decision-making process for problem
situations having ethical con-tent. The article begins with a discussion and evaluation
of the two major normative ethical theories in moral philosophy. deontological
theories and teleological theories. Although these theories are normative, to the
extent that people actually follow their prescriptions, any positive theory of
marketing ethics must incorporate them. The article then develops a positive theory
of marketing ethics and uses that theory to help explain some of the empirical r The
general theory of marketing ethics, first published in the
Journal of Macromarketing by Hunt and Vitell (1986), has
been the focus of much discussion and empirical testing. As
a result, the theory was revised in 1993. This article
overviews the 1993 revision of the model and addresses
three questions that are often asked by those who use the
model in the classroom and/or in research: (1) What is the
justification for using normative ethical theory as a starting
point for positing a positive ethical theory? (2) Is the Hunt-
Vitell (H-V) model a causal model, that is, is each concept
in the model a construct to be measured? (3) How, specifically,
can the H-V theory be used to teach marketing and
business ethics?
Keywords: ethics; theory; Hunt-Vitell model; empirical tests;
teaching ethics
First appearing in the Journal of Macromarketing in Hunt
and Vitell (1986), the general theory of marketing ethics
traces to when the first author started teaching at the
University of Wisconsin in January 1969. At that time, he
assumed responsibility for developing a new course—later
given the label macromarketing—that was to focus on subjects
such as ethics, marketing systems, public policy, and
social responsibility. In the early 1970s, teaching materials in
the area of marketing ethics devoted extensive attention to the
presumed existence of an “ethics gap” between marketers and
other members of society, which resulted from marketers and
others in society having different ethical frameworks. Using
normative theories from moral philosophy, several class discussions
in the macromarketing course focused on what kinds
of investigations would be appropriate for determining
whether, in fact, there existed an ethics gap and whether this
gap resulted from marketers having ethical frameworks that
differed from others in society. These discussions, though
lively, were educationally unproductive, because (it seemed to
the first author) of the lack of a positive theory to guide
thoughtful, systematic analyses of ethical issues.
In preparation for teaching the macromarketing class in
the fall semester of 1974, a rudimentary outline of a theory
of ethical decision making was developed in an effort to
make class discussion more productive. If people actually
followed the suggestions and advice of moral philosophers,
it was reasoned, then integrating philosophers’ deontological
and teleological theories could provide a framework for
a positive theory of ethics. Students responded favorably to
the theory and, over a period of several years, it grew richer
in detail. In 1980, the first author joined the faculty at Texas
Tech University, and in the fall of 1981, the second author—
then a doctoral student in Texas Tech’s PhD program—took
Texas Tech’s version of the macromarketing course. He
became interested in testing the theory in his dissertation.
Over the next few years, we jointly worked on the theory,
and our efforts resulted in a version of it being presented at
the Macromarketing Conference held in Vancouver, Canada,
in 1984. We then developed a revised version that ultimately—
after much give and take with reviewers—was published in
the Journal of Macromarketing in 1986.
By the late 1980s, consistent with our intentions, many
scholars began using the theory for teaching ethics and for
guiding empirical research. By the early 1990s, because we
did not give the theory a name in the original article, scholars
in the ethics literature began referring to it as, simply, the
Hunt-Vitell (or H-V) theory (or model) of ethics. Scholars
also began pointing out that most of the theory was really
applicable to ethical decision making in general, not just to
decisions in marketing or business. Their comments and the
positive findings of empirical researchers led us to a revised
model that was published in Hunt and Vitell (1993).
The purpose of this article is to update the original, 1986,
article. Specifically, we first overview the 1993 revision of
the theory and model. We then address three questions that
are often asked by those who use the model in the classroom
and/or in research: (1) What is the justification for using
normative ethical theory as a starting point for positing a
positive ethical theory? (2) Is the H-V model a causal model,
that is, is each concept in the model a construct to be measured?
(3) How, specifically, can the H-V theory be used to
teach marketing and business ethics?
1esearch that has been conducted in the area of marketing ethics