SAGE Brief Guide to Marketing Ethics

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    Preface

    Commerce is by its very nature a normative enterprise. It is concerned with creating value for owners and other constituencies, ranging from the firm's immediate stakeholders, such as employees, customers, and suppliers, to the entire society within which the business operates. As a field of study, business ethics aims to specify the principles under which businesses must operate to behave ethically. Thus, business ethics focuses on issues such as those that have recently attracted so much public scrutiny: executive compensation, honesty in accounting, transparency, treatment of stakeholders, and respect for the environment. These are, in fact, perennial questions that accompany the long history of human economic activity and that will also be present through an indeterminate future.

    Marketing ethics is the systematic study of how moral standards are applied to marketing decisions, behaviors, and institutions. Because marketing is a process inherent to most organizations, marketing ethics should be viewed as a subset of business ethics; thus, much of what is written about business ethics applies to marketing ethics as well. When the words “marketing ethics” appear in the general media or business press, the reports typically describe a marketing strategy, tactic, or policy that some constituency feels is “unfair” or “exploitive” or “deceptive.” Often, the subsequent discussion turns to how marketing practices might become more consumer-friendly, socially compatible, or put in philosophical terms, how marketing might be normatively improved.

    Format

    This guide to marketing ethics provides key terms and concepts related to marketing ethics in a short, easy-to-use format. It is intended to act as a companion for marketing courses or as a reference for students and practitioners who would like to learn more about the basics of ethical marketing.

    The text is divided into five sections that contain important keywords that relate to those sections: Business Ethics, Ethics and the Marketing Mix, Ethics and the Promotional Mix, and Special Topics in Marketing Ethics. Each keyword entry is written by a scholar drawn from the fields of business and marketing ethics and is a comprehensive essay on such crucial topics as ethical issues in pricing, green marketing, and deceptive advertising. Each essay includes a list of references and suggested readings for each article so that readers can find more information on issues of particular interest to them. The AMA Code of Ethics is included in the Appendix of the book as a reference for current and future practitioners.

    Acknowledgments

    We would like to acknowledge and thank Robert Kolb, editor of SAGE's award-winning Encyclopedia of Business Ethics and Society, whose contributions provided the foundation for this companion text.

    We also wish to thank the reviewers, who assisted in finalizing the content for this text. They are:

    • Bruce A. Huhmann, New Mexico State University
    • Michael J. Messina, Gannon University
    • Herbert Sherman, Long Island University-Brooklyn Campus
    • Brent Smith, Saint Joseph's University
    —The Editors of SAGE
  • Appendix: AMA Statement of Ethics

    Ethical Norms and Values for Marketers
    Preamble

    The American Marketing Association commits itself to promoting the highest standard of professional ethical norms and values for its members (practitioners, academics and students). Norms are established standards of conduct that are expected and maintained by society and/or professional organizations. Values represent the collective conception of what communities find desirable, important and morally proper. Values also serve as the criteria for evaluating our own personal actions and the actions of others. As marketers, we recognize that we not only serve our organizations but also act as stewards of society in creating, facilitating and executing the transactions that are part of the greater economy. In this role, marketers are expected to embrace the highest professional ethical norms and the ethical values implied by our responsibility toward multiple stakeholders (e.g., customers, employees, investors, peers, channel members, regulators and the host community).

    Ethical Norms

    As Marketers, we must:

    • Do no harm. This means consciously avoiding harmful actions or omissions by embodying high ethical standards and adhering to all applicable laws and regulations in the choices we make.
    • Foster trust in the marketing system. This means striving for good faith and fair dealing so as to contribute toward the efficacy of the exchange process as well as avoiding deception in product design, pricing, communication, and delivery of distribution.
    • Embrace ethical values. This means building relationships and enhancing consumer confidence in the integrity of marketing by affirming these core values: honesty, responsibility, fairness, respect, transparency and citizenship.
    Ethical Values

    Honesty—to be forthright in dealings with customers and stakeholders. To this end, we will:

    • Strive to be truthful in all situations and at all times.
    • Offer products of value that do what we claim in our communications.
    • Stand behind our products if they fail to deliver their claimed benefits.
    • Honor our explicit and implicit commitments and promises.

    Responsibility—to accept the consequences of our marketing decisions and strategies. To this end, we will:

    • Strive to serve the needs of customers.
    • Avoid using coercion with all stakeholders.
    • Acknowledge the social obligations to stakeholders that come with increased marketing and economic power.
    • Recognize our special commitments to vulnerable market segments such as children, seniors, the economically impoverished, market illiterates and others who may be substantially disadvantaged.
    • Consider environmental stewardship in our decision-making.

    Fairness—to balance justly the needs of the buyer with the interests of the seller. To this end, we will:

    • Represent products in a clear way in selling, advertising and other forms of communication; this includes the avoidance of false, misleading and deceptive promotion.
    • Reject manipulations and sales tactics that harm customer trust. Refuse to engage in price fixing, predatory pricing, price gouging or “bait-and-switch” tactics.
    • Avoid knowing participation in conflicts of interest. Seek to protect the private information of customers, employees and partners.

    Respect—to acknowledge the basic human dignity of all stakeholders. To this end, we will:

    • Value individual differences and avoid stereotyping customers or depicting demographic groups (e.g., gender, race, sexual orientation) in a negative or dehumanizing way.
    • Listen to the needs of customers and make all reasonable efforts to monitor and improve their satisfaction on an ongoing basis. Make every effort to understand and respectfully treat buyers, suppliers, intermediaries and distributors from all cultures.
    • Acknowledge the contributions of others, such as consultants, employees and coworkers, to marketing endeavors.
    • Treat everyone, including our competitors, as we would wish to be treated.

    Transparency—to create a spirit of openness in marketing operations. To this end, we will:

    • Strive to communicate clearly with all constituencies.
    • Accept constructive criticism from customers and other stakeholders.
    • Explain and take appropriate action regarding significant product or service risks, component substitutions or other foreseeable eventualities that could affect customers or their perception of the purchase decision.
    • Disclose list prices and terms of financing as well as available price deals and adjustments.

    Citizenship—to fulfill the economic, legal, philanthropic and societal responsibilities that serve stakeholders. To this end, we will:

    • Strive to protect the ecological environment in the execution of marketing campaigns.
    • Give back to the community through volunteerism and charitable donations. Contribute to the overall betterment of marketing and its reputation.
    • Urge supply chain members to ensure that trade is fair for all participants, including producers in developing countries.
    Implementation

    We expect AMA members 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. We recognize that every industry sector and marketing sub-discipline (e.g., marketing research, e-commerce, Internet selling, direct marketing, and advertising) has its own specific ethical issues that require policies and commentary. An array of such codes can be accessed through links on the AMA Web site. Consistent with the principle of subsidiarity (solving issues at the level where the expertise resides), we encourage all such groups to develop and/or refine their industry and discipline-specific codes of ethics to supplement these guiding ethical norms and values.

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