Ethical Issues in Marketing Mix & Unethical Advertising
Ethical Issues in Marketing Mix & Unethical Advertising
Ethical Issues in Marketing Mix & Unethical Advertising
Marketing ethics refers to the principles and values that guide the behaviour of marketers,
emphasizing honesty, responsibility, fairness, and respect for consumers and society. 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.
While marketing ethics refers to the principles and values that guide the behaviour of
marketers, ethical marketing specifically relates to ethical marketing practices. An example
of ethical marketing is fair pricing and advertisements that do not exaggerate the benefits of
the promoted product.
Ethical marketing is a philosophy and a strategy that seeks to promote honesty, trustworthiness,
fairness, values, and responsibility in all marketing projects and actions. Ethical marketing
includes marketing research, customer segmentation, and the management of all marketing
campaigns.
• Businesses need to have a good understanding and implementation of ethical decision
making when it comes to marketing
• Ethical marketing puts people above profits
• Adoption of marketing ethics principles by the top management is crucial to creating
ethical marketing campaigns
• Marketers are responsible for outcome of the campaigns and advertisements they use,
and they should embrace the essential ethical principles
Unethical marketing practices may include sharing customer information without consent,
making untrue claims about the product, or targeting emotionally vulnerable customers.
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.
Ethical marketing guidelines can vary based on a company's purpose, mission and preferences.
Here are some common principles of ethical marketing:
1. Honesty - One of the most important components of ethical marketing is the idea of
full honesty in marketing communications. It's critical for business leaders and
marketers to convey the truth about a company's products and services in order to
protect the health, well-being and rights of consumers. For example, the Food and Drug
Administration requires companies to include a "Nutrition Facts" label on products that
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
provides a detailed list of a food's ingredients and nutrient content. This ensures that
consumers have full knowledge of what they may eat or drink.
2. Transparency - A concept very similar to honesty, transparency in marketing ethics is
the idea of disclosing the details behind company processes and behavior. It also refers
to the process of having open and honest discussions about ethics. Being upfront and
straightforward about company history, current practices and future goals can help to
keep an organization accountable to its customers and stakeholders. While there is
sometimes proprietary or private information to keep confidential, there can be many
factors of a business to share with audiences. For example, a business may publish
content about product development processes. It's critical for businesses to be
transparent about the following elements of their products and services:
a. Suppliers: Being transparent about who and what the company pays and
supports can help consumers gain a full understanding of the organization's
partners and networks.
b. Pricing: In order to gain customers and build trust, it's usually necessary for
businesses to be transparent about pricing, pricing strategies and any extra fees
that may exist in a transaction.
c. Quality: Expressing the level of quality of a good to audiences can help
consumers to have realistic expectations of the value of their purchases.
d. Features: A component of transparency is being truthful and detailed about the
various features and elements of a company's products or services.
e. Customer satisfaction: Companies may use real reviews or other evidence
from actual customers to build credibility and practice transparency regarding
customer satisfaction.
3. Health and safety - The physical safety of customers is one of the top priorities for
ethical businesses and marketing teams. Marketers can uphold this principle by
educating, protecting the privacy of and respecting the civil and human rights of
consumers. It's also beneficial when they focus on supporting the physical safety and
mental health of employees. They may do this by offering health and wellness benefits
and programs.
4. Legality - Part of ethical marketing is complying with all governmental and
environmental regulations and industry standards. This proves to consumers that a
business is serious about developing excellent quality and services. It also protects the
liability and interests of a business, enabling it to remain in operation.
5. Conscious practices - Companies may decide to engage in conscious practices to
protect communities and the environment. Popular conscious practices include fair
trade and wages and environmentally sustainable processes. Another example is
promoting socially-conscious images in marketing materials
6. Personal behaviour - Part of marketing ethics is ensuring that all marketing team
members abide by high standards of personal ethics. While these standards are
subjective, companies often set strict requirements for their employees about respecting
the rights of others. Ethical team members can practice empathy and honesty in
relationships with customers.
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
• 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.
• Helps avoid legal and reputational risks.
• Brand reputation.
• Contributes to society welfare & environmental sustainability - 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 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 is a great example of ethical marketing.
The brand’s philosophy is all about being green, so ethical marketing is a natural part of the
strategy. Besides sharing awareness of environment-friendly practices, Patagonia also
promotes anti-consumerism. 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. Instead of
encouraging consumers to buy more on Black Friday, Patagonia asked them to take a pledge
to reduce consumption (see below). The campaign raised the awareness of the environmental
impacts of consumerism in the industry and encouraged many to consider the effect of their
purchases. 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.
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
ETHICAL ISSUES IN MARKETING
Many ethical problems can arise as companies carry out their marketing campaigns. Here are
some common examples:
1. 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 behaviour. 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.
2. 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. Misleading marketing can come in varying forms like
inconsistent messaging or misleading promotions. These results in inaccurate claims
about the product or service offering. Using modern marketing ethics, you get to create
awareness and be transparent in your marketing process. Success in business doesn’t
always have to be about profitability but more about building trust and establishing
healthy relationships with your customers.
3. Forceful Selling - Selling products (or services) to an audience that doesn’t want
them - Forceful selling exploits human emotions to make a sale. Marketers only care
about getting the product sold, regardless of customers' needs. Websites with pop-ups
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
such as "No, I don't want to save time" and "I'm smart already and don't need this
resource" are prime examples of forceful selling. By triggering emotional guilt, they
dissuade visitors from clicking the close button or leaving the page without subscribing.
Some marketers focus on generating more revenue. To do that, they’d launch their
products into multiple markets even when such market audiences are not their customer
persona. The primary goal is to stumble on some audience who are willing to buy their
product or service offering. However, these tactics don’t cut it — and you’d end up
hurting your marketing process in the long run. To eliminate this issue, you’ve got to
see your products as solutions. Therefore, you need to focus on solving your customer’s
needs instead of making sales. You also need to avoid the trap of broadcasting half-
truths. Half-truths translate to half-lies and it won’t cut it in the long run.
4. Relying on guesswork and assumptions - Nowadays, making assumptions is just as
bad as selling to the wrong audience. As a general rule of thumb, you should avoid
selling to everyone. A product (or service) designed for everyone is a perfect fit for no
one. A modern marketer should start and end with credible data. Anything short of that
leads to guesswork and assumptions — and that’s not good for your business. Speaking
of data, you can analyze data by opting for some tools like PPC Signal, specifically
developed for Google Ads campaigns. The PPC Signal tool uses a data-
driven approach to provide information about your campaign. It helps you keep a close
eye on your campaign, especially if you’re running multiple campaigns from a single
account. With the tool, you get to have information about any anomaly in your
campaign. And that will help you save more time and resources in the long run.
Information is represented in the form of signals, and there are filters to help you narrow
down your search. The image below shows you what the PPC Signal dashboard looks
like.
5. Lack of transparency: Privacy issues have been a matter of controversy in the last
decade as customers are becoming more aware of the various breaches in customer
privacy within organizations. As a marketer, you need to take a close look at privacy
concerns and come up with ways of securing the data of your customers. It’s quite easy
to cross the privacy line, and that’s why you need to provide some degree of
transparency for your business.
6. Perpetuating stereotypes (without even realizing it): There are times when marketers
target some specific stereotypes even without realizing it. Before launching a campaign,
you’d have some good data so as not to fall into the trap of putting personal bias into
your launch process. There is a fine line between demographic targeting and
stereotyping — and you have to carefully stay clear of that line. 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.
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
FACTORS INFLUENCING ETHICAL DECISION MAKING IN MARKETING
Ferrell and Gresham (1985: 87-96) have classified these into three major types:
(i) Individual Factors: These include the marketer's knowledge, beliefs, values,
attitudes and intentions influenced by the moral prescriptions and standards
transmitted by family, education, and the cultural milieu.
(ii) Reference Groups: The marketer's reference groups may include the managers,
peers, competitors, and any other influencing the marketer's intentions. The degree
of marketer's distance from these groups will influence his/her ethical or unethical
intentions. How one's reference groups may influence one's intentions can be
exemplified with an article entitled "It's OK, Son, Everybody Does It," by Jack
Griffin published in the Chicago Sun Times.
(iii) Opportunity: Occurrence of unethical behaviour in marketing activities will be
positively influenced given scope or opportunities available for the same. For
example, diminution of punishment and rewards for gains through unethical
behaviour will increase unethical behaviour. Conversely, setting of ethical codes
raises the standards of ethical behaviour.
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
Unethical practices in Promotion Include:
1. Forceful Selling – Selling products or services to an audience that actually doesn’t want
them
2. Bait-and-Switch Promotion – It occurs when a prospective buyer is enticed by an
advertised deal that seems attractive (bait); however, deal does not exist or is inferior
in terms of quality or specifications where the buyer is then presented with upsell.
3. Unethical advertising
4. Bribery
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
UNETHICAL ADVERTISING
Advertising is a tool that helps sell- Everyone knows this. The catch is, in order to make a good
ad, it needs to add to the product, or at the very least, show the product in its best light. The
goal of advertising is to convince consumers to spend their money on whatever is being
advertised. The line between ethical and unethical advertising can be blurry especially when
trying to look at the issue through the eyes of an entire society. The question is, when does
convincing consumers turn into deceiving them.
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
of people’s trust. In the worst-case scenario, it would be intentional, but many companies can
be genuinely unaware that they are making ethical missteps in their ad campaigns. Unethical
advertising is everywhere, from the toothpaste commercial featuring a dentist recommending
the product to the weight-loss ads that overpromise drastic results. Aside from the fact that
these ads are unethical (i.e. they are making false statements), they are also part of bigger
problems, such as:
• The lack of regulation on advertising allows companies to make misleading statements,
particularly online
• The effects these ads can have on younger audiences
• The gradual growth of mistrust in advertising and marketing in general
• The consequences of these ads on consumers, who experience frustration and
disappointment
• (Online) shopping addiction and the financial instability associated with it
• The struggle of small businesses who are unable to compete with companies using
unethical advertising tactics
Unethical advertising lies at the core of why people don’t trust brands anymore, which is in
itself a snowball effect bound to take its toll on everyone: advertisers and consumers alike.
Think of it: when people feel lied to or overly sold to, they block out (mentally or using browser
extensions) all advertising. Consequently, advertisers end up spending a lot of money on ads
that will be ignored or not even shown to the right people. Add this on top of click
fraud (a multi-billion dollar issue plaguing the digital advertising world) and you can easily see
how unethical advertising can have a huge, negative impact at an almost preposterous scale.
Ethical advertising contains truth, not absolute truth, but socially accepted truth. It has to be
right in its approach and claims. It is immoral for an advertiser to deceive his customers. Laws
in most countries are strict against untruth in advertisements. It is bad for the society to use the
techniques of advertising which are manipulative, exploitative and corrupt in nature.
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
promoted everything from bottled water to soda under the umbrella of the brand name
'Kingfisher.
2. Puffery Advertising - Puffery as a legal term refers to promotional statements and claims
that express subjective rather than objective views, such that no reasonable person would
take literally. Puffery does not create any warranty or guarantee for the consumer. When
an advertiser relies on subjective rather than objective claims, they are puffing up their
products. Statements like “best tasting coffee” cannot be confirmed objectively.
The claim - Starbucks is the best coffee and that makes it the best coffee for you. This
claim is dishonest because you can’t measure the quality of coffee to be the best and it is
a matter of opinion.
3. Exaggerated Claims: Some advertisers use exaggerated claims about a product’s quality
or popularity. A Slogan like “get coverage everywhere on earth” advertises features that
cannot be delivered. Vim – One drop challenge. Vodafone Essar - "Wherever you go our
network follows."
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
4. False and Misleading Claims - Many products make false claims or gives misleading
information about the product, which is unethical. Mentioning wrong statistics like “10
lakh copies sold every year.” Products claiming loss of weight, growth of hair, etc. False
claims of winning awards. Mentioning “Made in USA” when it actually is a home
production.
6. Women used as sex symbols for promoting products - Women in advertising have often
been portrayed as sex object. This type of advertising contributes to a sexist culture.
8. Children in Advertising – Children are easily persuaded and have a large pull on today’s
market. Children lack the knowledge and skills to evaluate the advertising claims.
Exploiting this innocence is one of the most common unethical marketing practices.
9. Subliminal Advertising – Advertising that uses images, sounds, and content that the
conscious mind is not aware of, in order to influence people and make them attracted to a
product for purchasing. Subliminal advertising is manipulative because it acts on us
without our knowledge or consent.
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
10.
11.
12.
13.
14. Advertising products that are banned by Law or broadcasting media – For
example, Advertising of alcohol and tobacco which are banned by Broadcasting
Media.
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
EFFECTS OF ADVERTISING ON VALUES AND LIFE STYLES
Advertisements affect the value systems and life styles of people. Values refer to what one
values most. All of us have a value system. In our country, simple living, spiritualism, chastity,
generosity, etc., are certain values we hold dear to our hearts. Life styles refer to a person’s
pattern of living as expressed in his/her activities, interests, appearance and opinions.
Advertisements, chiefly aimed at commercial profits, cannot but stress materialistic value
systems as opposed to spiritual values. Buy before stock closes, you can afford one more TV
go for a bigger refrigerator; own a posh suburban flat; a luggage you would like to be seen
with. All these catchy advertisements simply emphasize adding more and more to one’s
possessions. They make people neglect certain finer elements in life — spiritual pursuit,
appreciation of nature, poetry, listening to music, being polite and patriotic fervor.
Measures for curbing unsocial and unethical advertising are listed below.
1. A Statute designed to discourage fraud in advertising.
2. A better Business Bureau, an organization of businessmen, for the purpose of
discouraging unfair commercial practices.
3. Code to govern advertising copy by Association of National Advertisers.
4. Several reputed publishers in print media should keeping a strict vigil over their
advertisements.
5. The Information & Broadcasting Ministry should also keep a close watch over the
advertisements in radio and television.
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
• Paying attention to the complaints coming from consumers about their product
advertisements.
• Maintaining transparency throughout the company and their systems.
• Always Being Honest - It might not always be possible to be 100% honest. However,
don’t stretch the truth, omit facts, or twist words just to make your message more
attractive. Honesty is key if you want to get genuine results and have a good standing
with customers, so make sure your campaigns avoid anything that could be interpreted
as deceptive.
• Not Discriminating - Discriminatory ads often have a strong negative impact and should
be avoided at all costs. Respect your customers and make sure that your campaigns are
respectful of all races, genders, ages, etc.
• Being Responsible - Just because something is legal, it doesn’t mean it’s ethical. When
it comes to your advertising, remember that you are ultimately responsible for the
message you’re sending out, so make sure that it’s one that is respectful and responsible.
• Adhering to the Law - It goes without saying, but make sure your advertising adheres
to all applicable laws and regulations. It’s best to double-check with a lawyer or legal
team before running any campaigns to ensure that you’re in line with all necessary rules
and regulations.
Ethical advertising requires that if you promote the benefits of your product, you must also reveal
any significant risks or side effects. Alcohol, cigarettes and tobacco should never be advertised as
consumption. Advertisements for social causes are ethical and are accepted by the people and
should be shown frequently in order to provide direction to the society towards progressive change.
Make sure that your campaigns are always honest, responsible, respectful, and legal.
In order to ensure ethics in advertising, in India we have the Advertising Standards Council of India
(ASCI), which has one major aim—to maintain and enhance the public’s confidence in advertising.
The ASCI sees to it that all advertisements conform to certain basic principles, like honest
representations. This implies that the ads should convey a truthful and honest message to the
consumers and even to competitors. Advertisements should also remain within the bounds of
generally accepted standards of public decency and propriety and be non-offensive to the public.
Ads should not be used indiscriminately for the promotion of any products which may be harmful
to society or any individual. There should not be any plagiarism in advertisements which means
that the advertisements should be original in their creativity and subject matter. According to the
ASCI, advertisers are encouraged to show ads which promote safe practices, eg. Wearing of
helmets, using seatbelts while driving, not using mobile phones while driving etc.
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
Example of Unethical Advertisement & ASCI Decision:
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
LEGAL ASPECTS OF ADVERTISING
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU
Ms. Preeti Goel, Assistant Professor, Maharaja Agrasen Institute of Management Studies, GGSIPU