Unethical behavior significantly increases the cost of doing business.
- Frank Sonnenberg
Ethics is not always the first thing that comes to mind when discussing marketing strategies. Yet, it is one of the main pillars of sustainable marketing. Without good ethics, companies are unlikely to survive in the long run. In this explanation, you will learn why ethics is essential and which ethical issues businesses tend to face. Let's dive right in.
Marketing Ethics Definition
Marketing ethics is about being honest, fair and respectful when selling products or services. It means not lying or tricking people into buying things and treating them with respect and dignity. Unethical marketing not only harms customers and society in the long run but also ruins the company's reputation and puts its existence under threat.
Marketing ethics refers to the principles and values that guide the behavior of marketers, emphasizing honesty, responsibility, fairness, and respect for consumers and society.
What is Ethical Marketing?
While marketing ethics refers to the principles and values that guide the behavior of marketers, ethical marketing specifically relates to promotional ethical marketing practices. An example of ethical marketing is fair pricing and advertisements that do not exaggerate the benefits of the promoted product. Unethical marketing practices may include sharing customer information without consent, making untrue claims about the product, or targeting emotionally vulnerable customers.
A company that produces organic, environmentally-friendly cleaning products claims on its website that all its ingredients are natural and non-toxic and that the packaging is biodegradable. This is an example of ethical marketing because the company provides consumers with truthful information.
It's important to note that the line between ethical and unethical marketing is not always evident. Some marketing messages may seem highly relevant to a target group but offend others. Also, not all corrupt marketing practices are considered illegal. Maintaining ethics depends more on the company's social conscience than state rules and regulations.
A company's ethical marketing principles are also known as a Code of Ethics. Codes of Ethics vary among companies and industries. For example, Apple's ethical principles include honesty, respect, confidentiality, and compliance, while BMW values responsibility, mutual respect, and trust.
Ethical Marketing Principles
Ethical marketing follows five main principles:
Customers are more likely to return and make more purchases if the product has fair pricing and good quality, resulting in recurring income for the company. They will also recommend friends and family who might become the business's potential customers.
Build Customer Loyalty
People are averse to lies and trickery. A company can make fraudulent claims to get more sales, but as soon as customers realise they are being lied to, they will turn against the business and never purchase from it again. The only way to win customer loyalty is to be authentic by delivering the exact products and services as advertised.
Attract and Retain Talents
Businesses associated with good causes and social issues are more appealing to jobseekers as people not only look for a job with a good salary but one that makes the world a better place. Companies that maintain marketing ethics also have a higher retention rate, as their employees don't experience the guilt of lying to customers.
Maintain Interest of Stakeholders
Ethical marketing practices increase employees', shareholders', and partners' confidence in the business and convince them to continue investing in or maintaining the relationship with the company.
Importance of Ethics in Marketing
The importance of ethics in marketing lies in the fact that it helps avoid legal and reputational risks. Additionally, it builds customer trust and credibility, leading to increased loyalty, customer retention, and brand reputation. Ethical marketing can also contribute to the well-being of society and the environment by promoting sustainable practices and supporting social causes, which can ultimately enhance the long-term sustainability and profitability of the business.
Unethical marketing practices, conversely, can have serious consequences for companies, such as lawsuits, fines, loss of customers, and damage to brand image. In today's digital age, where consumers have access to a wealth of information and can easily share their experiences online, companies that engage in unethical marketing practices are likely to face negative publicity and backlash, which can quickly spiral out of control and cause irreparable harm to the brand.
Ethical Marketing Examples
Ethical marketing is the application of the ethical principles of the company to its marketing strategy. It involves promoting products and services honestly, fairly, and socially responsibly. Consumers today are increasingly aware of social and environmental issues and are more likely to support companies that align with their values. Here are some examples of ethical marketing campaigns
Patagonia "Dont Buy This Jakcet" Campaign
Patagonia, an outdoor clothing and gear company, built its brand around sustainability and social responsibility. Patagonia's marketing campaigns emphasize its commitment to environmental protection, fair labor practices, and transparency in its supply chain.
In 2011, Patagonia ran an advertising campaign that urged customers not to buy their jackets unless they really needed them as a way to promote sustainable consumption. The company was honest with its customers about the environmental impact of its products and encouraged them to consider the true cost of their purchases.5
Levi Strauss & Co's "Water<Less" and "WashLess" Campaigns
Levi Strauss & Co launched the "Water<Less" and "Wash Less" campaigns to raise awareness about the environmental impact of denim production. The company was transparent about the fact that it takes about 3,800 liters of water to produce one pair of jeans and encouraged customers to wash their jeans less frequently and in cold water to conserve water.
The Body Shop's "Forever Against Animal Testing" campaign
The Body Shop launched the "Forever Against Animal Testing" campaign in 2017, which aimed to end animal testing in the cosmetics industry. The company was open about the fact that many cosmetic ingredients are still tested on animals, despite the availability of alternative methods. The campaign encouraged customers to sign a petition to ban animal testing in the industry and raised awareness about the issue.6
Ethical Issues in Marketing
Many ethical problems can arise as companies carry out their marketing campaigns. Here are some common examples:
Unethical Marketing Research
Unethical marketing research refers to gathering information from consumers or competitors without their knowledge or consent. It can include practices such as spying, lying, or misleading participants, leading to ethical and legal issues for companies that engage in such behavior.
Nowadays, technology allows businesses to collect, store and use customer information in marketing campaigns. While this helps match the right product with the right customer more quickly, individual freedom might be violated.
A company that produces a new beverage hires a market research firm to conduct a taste test study. The research firm pays participants to taste the beverage and give their feedback but doesn't disclose that the beverage contains a high level of caffeine, which can cause negative side effects. This is an example of unethical marketing research because the research firm didn't provide informed consent to the participants and deliberately misled them to obtain biased feedback on the product.
There's also the problem of stereotypes when companies conduct preliminary research and make general assumptions about their customers - such as women prefer cooking or men enjoy watching sports. This no longer fits today's culture and can cause frustration among audiences who don't belong to these categories.
Deceptive Advertising
This is the case where companies make certain claims about a product or service that they can't live up to. Deception in marketing often leads to severe consequences.
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