2  ETHICS IN MARKETING MEANS DELIBERATELY APPLYING STANDARDS OF FAIRNESS OR MORAL RIGHTS AND WRONGS TO MARKETING DECISION MAKING,BEHAVIOUR AND PRACTICE IN AN ORGANIZATION.  BASIC PRINCIPLES AND VALUES THAT GOVERN THE BUSINESS PRACTICES OF THOSE ENGAGED IN PROMOTING PRODUCTS OR SERVICES TO CUSTOMERS.

BENEFITS OF ETHICAL MARKETING :  WHEN AN ORGANIZATION BEHAVES ETHICALLY,CUSTOMERS DEVELOP MORE POSITIVE ATTITUDES ABOUT THE FIRM,ITS PRODUCTS AND ITS SERVICES.  IT BUILDS TRUST.  IT BUILDS MORE RELATIONSHIP WITH PEOPLE WHOSE LIVES YOU ARE MAKING BETTER.  ETHICAL ABUSES FREQUENTLY LEAD TO PRESSURE (SOCIAL OR GOVERNMENT) FOR INSTITUTIONS TO ASSUME GREATER RESPONSIBILITY FOR THEIR ACTIONS.AS A RESULT THEY MAKE ONLY QUALITY PRODUCTS AND PROVIDE BETTER SERVICES.  IT CAUSES ABOUT AN EFFECT OF VIRAL MARKETING. 3

ETHICAL AND LEGAL FRAMEWORK IN MARKETING:  ETHICS DEALS WITH PERSONAL MORAL PRINCIPLES AND VALUES.  LAW’S ARE SOCIETIES VALUES AND STANDARDS THAT ARE ENFORCEABLE IN THE COURTS.  THERE ARE NUMEROUS SITUATIONS WHERE JUDGEMENT PLAYS A LARGE ROLE IN DEFINING ETHICAL AND LEGAL BOUNDARIES. 4

5 Areas of Marketing Ethics Ethics & Product Decision Ethics & Promotion Decision Ethics & Distribution Ethics & Pricing Decision

ETHICS AND PRODUCT DECISIONS:  Marketing executives face with a lot of ethical problems related to planning and application of product strategies. For example, in new product development process, since ethics and legal subjects are discussed less than it is needed, faulty products are put on the market and so these products damage consumers. This grows out of seeing product security as engineering problem in most cases. Similarly, some product areas such as especially toys for children are sensitive to the ethical problems. For this reason, ethical way of thinking should come into all levels of marketing from engineering to customer support. 6

ETHICS AND PRICING DECISIONS:  Pricing is probably one of the most difficult areas of marketing when it is analyzed from the ethical point of view. Ethically, price should be equal or proportional to benefit which is taken by the consumers.  When monopolistic power is had, it is seen that unreasonable price increase is set. Other ethical issues related to pricing include non- price price increases, misleading price reduction, price advertisements which can be misleading or considered as deceitful and their limits are not explained well.  The practices of price fixing that affect the structure of competition, predatory pricing which aims to have monopolistic position, discriminatory pricing, pricing applications of products according to the products’ unit or quantity basis and practicing of misleading pricing methods. 7

ETHICS AND DISTRIBUTION DECISIONS:  Ethical issues related to place grow out of enterprises, which form channel of distribution, have different needs and goals. At power relationship in the channel, if channel members to put their power which they have into bad use, this may cause an ethical problem. For example, a powerful manufacturer may force retailer to conduct in different ways in subjects such as choice of retailer locations, minimum order size, product mix selection, restriction on alternative supply resources and arrangement of physical condition in retailer’s location. pricing of intermediary enterprise, advertisement number, procurement credits to the consumers, and with their sales policy in subjects as regional and customer restrictions. 8

ETHICS AND PROMOTION DECISIONS: Ethical issues related to promotion can be analysed under two headings as advertising and personal selling. Advertisements are one of the ways of marketing which is criticised most from an ethical point of view. Unilateral advertising message, preconceived advertising messages, advertisements breaking programmes are criticized. 9

CHARACTERISTICS OF ETHICAL MARKETERS:  THEY KNOW THERE IS A PROCESS AND THEY ARE READY TO FOLLOW THE PROCESS.  THEY KNOW THE IMPORTANCE OF TRUST AND ARE READY TO BUILD IT.  THEY DO CARE ABOUT THE CONSUMERS AND THEY LOVE TO GIVE VALUE THAN MAKE MONEY. 10

11 Social Responsibility Plays an important role in ethical marketing

Social Responsibility Marketing/corporate Citizenship Marketing Ethics Cause-Related Marketing Strategic Philanthropy

An organization’s obligation to maximize its positive impact and minimize its negative impact on society.

The adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders.

Ethical Issue – An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical.

The practice of linking products to a particular social cause on an ongoing or short-term basis.

17 The synergistic use of organizational core competencies and resources to address key stakeholders’ interests and achieve both organizational and social benefits.

Factors in Ethical Decision-Making:

Acting with honesty and integrity Interacting honestly with government Protecting Company's assets and reputation Protecting and respecting Company's guests Promoting the greater good

Open communication & coaching Ethics training Clear channels of communication Follow-up support Enforce standards and impose penalties Part of overall marketing strategy

 Introduction/adaptation of new products  More user-friendly  Transparency/openness  Management responsibility  Predict long-term effects  Balancing society’s demands

25