Ethical Issues Raised for Marketers to Restrict Marketing of Hazardous Products - Coursework Example

Marketing Ethical issues raised for marketers to restrict marketing of hazardous products In the present scenario marked by high competition, socialdependability and ethics has taken a vital position in an organisation while dealing with different stakeholders. The operation of marketers is restricted by the government through a number of rules and regulation. These rules and regulations prohibit the marketers to manufacture and sell hazardous products in the market. Hence, marketing ethics have become the cornerstone for every business, which offers a visible interface to the customers and stakeholders such as, investors, media, regulatory agencies, trade associations and channel members (Simpson, 2013). Ethics is regarded as principles and values that are directed at administering the verdicts and actions of an entity. It is desired that marketers follow the ethical considerations prevalent in the market and meet the customers’ needs. The renowned companies should encourage their marketing teams to comply with the codes or guidelines by employing various marketing techniques. These techniques should be examined from organisational, societal and individual perspectives (Simpson, 2013). Many companies are observed to disagree with the codes and regulations as those are not regarded essential for business operation. However, the companies should be socially responsible by avoiding the use of unethical principles and employing anti-marketing and hazardous process of manufacturing. Companies should be socially responsible towards the stakeholders and customers. The relationship between companies and the customers is built on the basis of trust and fair deal (Jennings, 2012). Marketing ethics facilitate decisions that are ethically correct and do not entail harmful consequences related to improper marketing activities. The marketers take requirements of the key stakeholders into account and device the marketing strategies accordingly. For example, although Wal-Mart offers its products to the customers at a low price, the business operations have been criticised by several groups of individuals such as, feminists, organized labour, environmentalists and human rights activists. Such criticism has resulted in negative consumer perception, which in turn has questioned the corporate citizenship of Wal-Mart. The strategies undertaken by the company were focused on escalating the interest of stakeholders and customers. Presently, the company concentrates upon its profit and customers, but further focus should be directed at developing better relationship with the stakeholders (Jennings, 2012; Simpson, 2013). As the ethical issues have affected several companies in past, ethics is considered a vital part of every organisation. Marketers strive to comply with the set rule and regulation. On failing to do so, huge losses are incurred. For instance, the tobacco manufacturing companies are banned from using old technologies to manufacture the end product as it can harm the environment and community. The consumer movement against unethical behaviour of the companies has become prominent over the years and has brought alterations in business practices (Jennings, 2012). Similar to the tobacco companies, numerous others have not responded properly to the rules and regulations. In fact, they have disapproved of the alteration and have disregarded the moral value of human life. As a result, initiatives should be taken by the regulators globally in order to educate the marketers regarding their responsibilities towards the society and ethical rules (Sims, 2003; Simpson, 2013). Ethical conflicts in marketing generally occur in two situations. Firstly, conflicts arising due to the difference in needs of the company, society and industry. Secondly, conflicts arise if the interest of organisations and individuals vary. An example for the first situation is related to car manufacturing companies. In this case, cars can be harmful for the environment, but owning a car is a necessity in the present times. Although the automobile industry has a huge effect on the environment and oil prices, manufacturing of cars cannot be stopped as 70% of the households worldwide own a car and have the desire to buy new ones (Sims, 2003). Irrespective of the fact that companies producing cigarettes have adverse effects on society, its production cannot be stopped as people are addicted to its consumption. The tobacco manufacturing companies get away with their responsibility only by displaying a warning on the product package. Even so, they do not take any serious or effective measure for the same. For instance, many marketers involve in false marketing of products at the cost of truth, which is devastating for the customers as well as the companies in long run (Sims, 2003; Simpson, 2013). Few ethical issues relate to the individuals who offer bribes to doctors so that the latter does not sue the former for “using their names while advertising their product by saying that you may consult a doctor” (Schwartz, 2011). There are many pharmaceutical companies who sell medicines to the patients by way of bribing the doctors so that they recommend a particular brand. For example, GlaxoSmithKline China had undertaken the same practise so as to draw greater sales therein. The company’s sales executives had chosen an indirect and unethical way to push sales in the Chinese market. Even so, the China police was able to unearth this unethical practice and the company had to undergo serious investigation. The incident had shattered the organisational image in terms of negative reputation and decline in global sales (Schwartz, 2011; Simpson, 2013). In several situations, business ethics has exhibited a disparity with two other ethical theories such as, deontology and utilitarianism. Both of these concepts were coined by Beauchamp. The theories are explained in the following section. Ethical theories Deontology Deontology is defined as one of the ethical theories that aim at defining the right actions of individuals in respect to moral rules. It basically focuses on rightness of an action and not on its outcome (Sims, 2003; Simpson, 2013). A right act deals with goal of the moral behaviour, which defines foundation of the ethical theory. “Right is independent of the good” is the main slogan for the ethical theory (Boing, n.d.). Deontology in marketing ethics deals with the same action, which is right. Researchers have pointed out the fact that marketing practices are solely dependent on the principles pertaining to consumer satisfaction. Alongside, the practices also create challenges for the society and consumers. In short run, these practices can satisfy customers, but it may entail disastrous future consequences. For instance, the consumers of tobacco are satisfied with supply of the product in short run, but their health is irreparable damaged in long run (Boing, n.d.). The deontological nature of ethics may take different forms in an organisation and is solely based on code of ethics. An organisation’s code of ethics represents the formal nature of deontological approach. Through these codes, the corporation regulates its practices. Hence, the marketers should be aware of the same in order to protect the environment and society from the hazardous products. This ethical theory underlines the fact that marketers should manufacture the right products with the help of technology that do not adversely affect the environment. Thus, right actions are expected from the marketers in any market (Shimp, 2007). Utilitarianism The utilitarian characteristic of marketing indicates to satisfaction of the consumers’ needs, which is the main objective of marketing. So, the most dominant ethical approach in marketing is utilitarian. Additionally, as satisfaction of the individual needs is an irrefutable ideal, marketers entirely ignore the deontological approach of ethics and concentrates on utilitarian approach (Shimp, 2007). Ethics for marketers The ethical norms that the marketers must be follow are stated below: The marketers should not cause any harm to the communities and environment. This statement indicates that marketers should concentrate on activities in which they are experienced and trained so as to add value to an organisation’s growth. The marketers should also adhere to relevant regulations and laws that represent high ethical standards (Shimp, 2007). The marketers must try to build trust among the stakeholders and customers. This statement implies that the products offered must be appropriate for usage and not harmful to children and elderly customers. The marketers should not communicate any misleading or deceptive information related to the products and services offered. These activities help in building good relationship with the customers, who in turn also get the opportunity to put forward their grievances. A fair deal should take place while exchanging products with the customers (Shimp, 2007). The marketers should adopt ethical principles and communicate them to the society so that public is aware of their effort and it also improves the customers’ confidence and integrity. The marketers should be honest and truthful with the stakeholders and customers. They must always communicate the important information and changes regarding the product. They should offer products that can add value to the customers’ needs. The products should not harm sentiment and health of the customers. The marketers should also deliver the promised products and benefits to customers, thereby fulfilling commitments made. The marketers should make the customers aware of the hazardous nature of any product so as to avoid future issues. Such initiatives will highlight on the responsible nature of marketers (Shimp, 2007). Ethical issues raised for marketers in relation to suppliers Ethics refers to principles and values that individuals follow and emphasises on the right and wrong actions undertaken. It is essential in respect of business operation as it defines the moral values of and commitments made by the marketers to their customers. In case of marketplaces, ethics basically refers to rules that the marketers must follow so as to satisfy the customers and stakeholders effectively. Here, the stakeholders include suppliers, employees, investors, creditors and the general public. These rules assist the marketers to take right decisions in the marketplace and carry out a fair deal with suppliers and customers. Hence, ethical marketing forms a normative approach that can be defined as practices that majorly emphasise on trustworthy, transparent, responsible and organizational policies related to marketing. It also explains the marketers’ actions towards the customers and stakeholders (Homburg, Krohmer and Workman, 2004). Currently, marketing ethics is quite vital for every organisation as customers and stakeholders have become conscious regarding the practices followed and products offered by companies. They are very particular about utility of the products and its harmful effects. Apart from that, the suppliers of raw materials have immense importance in successful operation of a company. If raw materials are not supplied at the right time, then the production process may come to a halt. It is observed that the renowned companies do not maintain ethical relationship with their suppliers (Homburg, Krohmer and Workman, 2004). When the companies’ bargaining power increases, they switch suppliers and demand for low prices. These ethical issues often give rise to bad relationship with the suppliers. Such ethical issues must be resolved by the companies so as to continue an uninterrupted business (Jennings, 2012). The marketers should respect and trust their suppliers as well as customers. Hence, marketing ethics have appeared to become a key organisational issue at the customer or supplier level (Vargo and Lusch, 2004; Homburg, Krohmer and Workman, 2004). Marketing ethics concentrates on standards and principles that are defined by acceptable marketing behaviours. Such behaviour is determined by the government and regulatory authorities in order to control the marketing activity of companies and safeguard the interests of customers and stakeholders. These rules are codified as laws so that marketers fulfil the expectations of society; and in this particular case, marketing ethics is defined by the regulatory and legal issues. The ethical marketing principles and practices are the cornerstone for instilling trust among the customers and stakeholders (Murphy, et al., 2005; Vargo and Lusch, 2004; Homburg, Krohmer and Workman, 2004). The approach of research undertaken by the marketing professors and practitioners are different. For example, in the first approach ethics of followed by the individuals are highlighted. The moral philosophies and personal values form a foundation for ethical decision making in marketing. Qualities such as, fairness, honesty, citizenship and responsibility, are regarded as the values that aim at guiding complex marketing decisions of organizations. The second approach highlights the organisational perspective and aims at predicting and establishing organizational codes, training and values (Murphy, et al., 2005; Vargo and Lusch, 2004). Marketing ethics is controversial in nature. There is no universally accepted approach present for resolving questions relating to ethics. The ethical issues aim at addressing a particular situation, problem or opportunity, which allows a group, individual or organization to select among a set of actions. These actions are evaluated as wrong and right. According to the stakeholders and organizations, ethical issues in marketing should be identified and resolved. As ethics in marketing deals with certain subjective moral selections, decision making pertaining to moral standards is required, thereby defining and eliminating the ethics issues (Murphy, et al., 2005; Vargo and Lusch, 2004). The suppliers of big multinationals face several problems due to changing decisions of the latter. The multinationals randomly changes the suppliers for obtaining raw materials at the cheapest rate and in this manner, they exploit their authority that is unethical in business. As they seek lower price, the raw material is purchased from the small suppliers. Marketers should rectify their behaviours by way of following rules and regulation set by the government. However, several groups in society, which include the government, have defined ethical and legal issues strictly and have undertaken practical approaches to cope up with the issues. For example, the government worldwide has used millions of blogs on internet containing the official code of ethics and regulation. Nonetheless, numerous firms such as, Audi, have individual blogs (Homburg, Krohmer and Workman, 2004). The blogs are supported by the stakeholders as they seek more information regarding the ethical codes and formation of ethical committees in a company. Companies worldwide have been motivated to avoid misconduct through adoption of the ethical compliance programs. In other words, ethics entails several rewards for the organizations, which aim at nurturing and managing requirements of the ethical activities (Homburg, Krohmer and Workman, 2004). Ethical theories In the contemporary world of management, utilitarianism is preferred over any other ethical theories because it follows the philosophies and economies of capitalism. According to the general definition of marketing, the most important factor is customer satisfaction. In order to satisfy the customers’ needs, the marketers are expected to follow rules and regulations relating to ethics. The marketers should identify needs of the customers and try to improve the products and services offered accordingly so as to fulfil demands of the unsatisfied ones. Similarly, the marketers should also maintain a good relationship with the small and big suppliers as they also form part of an organisation indirectly. The marketers should limit the number of suppliers in order to reduce competition and unethical practices. As a result, marketers need to frame right policies so as to establish a successful relationship with the suppliers (Freeman, 1984; Homburg, Krohmer and Workman, 2004). Deontology is rarely used as ethical theories for marketing as it is mostly employed for justifying controversies. The difference between utilitarianism and deontology is that the former is concerned about the whole society and the latter caters to individual needs. For example, Nestle had focused on the third world countries to hold campaigns against HIV virus. Nestle stopped the mothers from breast feeding their children so as to avoid dissemination of the HIV viruses (Freeman, 1984; Homburg, Krohmer and Workman, 2004). However, such initiative was regarded as a restriction on a natural gift for the children. Deontology is argued upon because it solely concerns the benefit of an individual; in this case, Nestle was benefitted owing to the transition from breast milk to the milk products. This initiative had created ethical issues and the company had to encounter severe consequences in South Africa. Then again, Nestle also misled the suppliers of raw material of the milk products so as to obtain those items at lower prices (Freeman, 1984; Homburg, Krohmer and Workman, 2004). Ethical codes for marketers The ethical practices for the marketers are detailed below. The marketers should continue a fair trade with the suppliers in order to maintain a good relationship with them (Homburg, Krohmer and Workman, 2004). The needs of sellers and buyers should match for maintaining fairness in trade. Here, the seller refers to marketers, whereas the buyer is customers. The marketers should not exploit their power while bargaining with small suppliers for availing the raw materials at a cheap rate. The products should be clearly defined to the customers through advertisement, which is the main mode of communication. The advertisements clarify information pertaining to the products, which enables the marketer to avoid future challenges regarding ethical issues and minimize false and deceptive promotions. If the marketer has a bad reputation in the market due to hazardous products offered and declining sales, then the suppliers appear reluctant to deliver raw materials as payments may not made (Homburg, Krohmer and Workman, 2004). The unethical behaviour of the marketers related to payment of the raw materials is common in every industry. Therefore, in order to avoid these unethical practices, the marketers should make payments at the right time (Homburg, Krohmer and Workman, 2004). The delay of payments to suppliers is a form of ethical issue in a company. The marketers should respect their stakeholders for acknowledging human dignity. The marketers should also value the individuals’ sentiments and avoid stereotyping customers in a negative manner. This will increase trust of the customers, suppliers and the public on the companies. When the bargaining power of the companies increases, they get the power to switch to other suppliers and demand for lower prices than usual. Through this unethical; practise they exploit their power and reputation negatively. Hence, these issues should be resolved by the marketers so that they can continue an uninterrupted business (Homburg, Krohmer and Workman, 2004). Reference list Boing, no date. Ethical Business Conduct Guidelines. Boeing. pp. 1- 45. Freeman, R.E., 1984. Strategic Management: A Stakeholder Approach. Boston: Pitman. Homburg, C., Krohmer, H. and Workman, J. P., 2004. A Strategy Implementation Perspective of Market Orientation. Journal of Business Research, 57, pp. 1331-1340. Jennings , M., 2012. Business Ethics Case Studies and Selected Readings. Connecticut: South Western Cengage Learning. Murphy, P.E., Laczniak, G.R., Bowie, N.E. and Klein, T.A., 2005. Ethical Marketing. New Jersey: Pearson Prentice-Hall. Schwartz, M., 2011. Corporate Social Responsibility: An Ethical Approach. Moorebank: NewSouth Books. Shimp, T., 2007. Integrated Marketing Communications in Advertising and Promotion. California: Thomson Southwestern. Simpson, J., 2013. Corporate Governance, Ethics and CSR. London : Kogan Page Limited. Sims, R., 2003. Ethics and Corporate Social Responsibility: Why Giants Fall. Connecticut: Praeger Publishers. Vargo, S. L. and Lusch. R. F., 2004. Evolving to a New Dominant Logic for Marketing. Journal of Marketing, 68, pp. 1-17. Read More