Ethical and Social
Aspects of
Marketing
Dr Vasudha Avinash
Introduction
Marketing operates outside the firm
It responds to that outside environment and in turn is acted on by environmental influences
Relationships with employees, suppliers, the government, consumers, and society as a whole
frame the social issues marketers must address.
The way that marketers deal with these social issues has a significant effect on their firm’s
eventual success
The diverse social issues that marketers face can be divided into two major categories:
marketing ethics and social responsibility
Marketing Ethics
and Ethical Issues
Marketing Ethics –
Marketers’ standards of
conduct and moral values
Ethics concern matters of
right and wrong
Ten Steps Appoint Appoint a senior-level ethics compliance officer.
to Improve Set up Set up an ethics code capable of detecting and preventing misconduct.
Standards Distribute
Distribute a written code of ethics to employees, subsidiaries, and associated
companies and require all business partners to abide by it.
of Business Conduct Conduct regular ethics training programs to communicate standards and procedures.
Ethics Establish Establish systems to monitor misconduct and report grievances.
Establish Establish consistent punishment guidelines to enforce standards and codes.
Encourage an open-door policy, allowing employees to report cases of misconduct
Encourage
without fear of retaliation.
Prohibit employees with a track record of misconduct from holding positions with
Prohibit
substantial discretionary authority.
Promote Promote ethically aware and responsible managers.
Monitor Continually monitor effectiveness of all ethics-related programs.
Ethics in Marketing Research
Invasion of personal privacy has become a critical issue in marketing
research
The proliferation of databases, the selling of address lists, and the ease with
which consumer information can be gathered through Internet technology have
increased public concern
Promise of cash or gifts in return for marketing information
Privacy issues because of Internet
Ethics in Product Strategy
Product quality, planned obsolescence, brand similarity, and
packaging
Packaging practices that might be considered misleading, deceptive,
or unethical
Ethics in Distribution
1. What is the appropriate degree of control over the distribution
channel?
2. Should a company distribute its products in marginally profitable
outlets that have no alternative source of supply?
Some automobile manufacturers force dealers to purchase parts,
materials, and supplementary services citing channel ownership
Ethics in Promotion
Promotion raises many ethical questions because it is the most direct link between a
firm and its customers
Personal selling has always been a target of criticism and jokes about
untrustworthiness
Bombay HC ruled in favor of HUL in Sebamed ad case, where Sebamed, where it was
restrained from further infringing on the brands owned by HUL
Marketing to children/college students has been under close scrutiny for many years
Ethics in Pricing
Pricing is probably the most regulated aspect of a firm’s marketing strategy
Most unethical price behavior is also illegal
Should some customers pay more for merchandise if distribution costs are higher
in their areas?
Do marketers have an obligation to warn vendors and customers of impending
changes in price, discount, or return policies?
Credit Card Information Disclosure – small letters, credit worthiness
Social Responsibility
Social responsibility -Marketing philosophies, policies, procedures,
and actions that have the enhancement of society’s welfare as a primary
objective
“While ethical business practices are vital to a firm’s long-term
survival and growth, social responsibility raises the bar even higher”
Four Step Pyramid
of Social
Responsibility
Personal Selling and Sales Promotion
Personal Selling is described as a promotional tool where a sales
representative, presents the product before the potential customers
and informs them about its quality and functioning by directly visiting
them
Sales Promotion, on the other hand, uses schemes, offers, and
incentives for short term to boost the sales
Individual-to-individual conversation between a buyer and a seller
Purpose is to convince the buyer to accept the seller’s point of view or
to convince the buyer to take a particular action
Classified as a promotional tool
Consists of human contact and communication that is personal and
Personal Selling oral instead of communication through the mass media
The job of the salesperson may be to persuade, sell, or simply inform
Personal Selling is fairly costly
The salesperson has to be trained in developing and conveying the
message
Time may also be spent travelling
The salesperson can tailor his/her presentation to suit the needs of the
customers, unlike advertising
Advantages of Personal Selling
Personal selling helps to reduce marketing costs
Personal selling reduces the cost of production
Personal selling helps to introduce new
products and innovations to the market
Personal selling facilitates consumption
The Personal Selling Process
Types of Personal Selling
There are three basic categories of selling positions:
1. Order taking
2. Order getting
3. Sales support positions
Physical
Appearance
Good
Integrity and
Communicati
Honesty
on Skills
Mental
Dependability
Ability
Education
The Qualities of Empathy and
Experience
a Good
Salesperson
Initiative Enthusiasm
Courtesy
Sales Promotion
Sales Promotions are tools, which help the company increase the sales volume
Promotions are generally used as a short — term measures only and help
increase sales
Sales promotion is mainly intended to make advertising and personal selling
more effective
They are complementary and supplementary activities
Factors of Sales Promotion
Sales promotion is more accepted by top management of
companies as an effective sales tool;
More product-level managers are qualified to use sales
promotion tools;
Product managers are under greater pressure to increase
their sales;
The number of brands has increased and there is very little
difference between competing brands;
Competitors use sales promotion frequently;
Both final consumers and intermediaries have become more
deal-oriented, i.e., they are demanding better deals from the
producers;
Advertising efficiency has declined because of rising costs
and clutter.
Importance of Sales Promotion
Lowers the unit cost
Provides sales support
Faster product acceptance
Better control
Limitations of Sales Promotion
1. It is felt that sales promotion is utilized to sell a sub-optimal product;
2. The discounts are not genuine, since the price of the product has
already been raised;
3. Since it is a short-term measure, the result is also short-term. When
concessions are taken back, the demand falls;
4. If it is used too often, consumers will tend to get put off.
Major Sales Promotion Tools
Sales promotion tools fall into three basic categories:
1. Consumer promotion;
2. Trade premium;
3. Conditional premium.
