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Chapter 15
Marketing Ethics
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–1
The nature of ethics
• Ethics is the study of what we ‘should do’ or what in
particular circumstances is morally right or wrong.
• Dictionary definitions of ethics use phrases such as
‘a set of moral principles’, the science of morals’,
rules of conduct’. Ethics is the study of the
rightness or wrongness of people’s actions.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–2
Alternative approaches to ethics
• Rules approach
• Rules-based ethics (deontological approach)
suggests an action is ethically sound if it complies
with certain ‘rules of behaviour’, such as ‘always
tell customers the truth’, regardless of the outcome.
• This school of ethical thinking focuses on actions
themselves, rather than on their consequences.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–3
Alternative approaches to ethics
• Outcomes approach
• Outcome-based ethics (teleological approach)
suggests an action is ethically sound if it produces
a ‘good’ outcome rather than a ‘bad’ one.
• This school of ethical thinking holds that the
standard for judging actions is the total amount of
good or bad outcomes that flow from them.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–4
Ethics in business
relative or absolute?
• Business thinking suggests that the ethics of
particular actions can only be judged in the relative
rather than the absolute sense.
• Business practices that are considered ethically
wrong in one culture may be quite commonplace
and considered acceptable in another.
• E.g. the dividing line between a gift an a bribe.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–5
Ethical dilemmas
• A common ethical dilemma faced by marketers is
that of not being able to see the ‘forest for the
trees’.
• A structured sequence of steps can be taken to
overcome this difficulty and assist in arriving at a
well-informed decision.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–6
Ethical decision framework
• Insert Fig 15.1 page 490
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–7
Code of conduct websites
• Australian Marketing Institute (AMI)
• www.ami.org.au
• Advertising Federation of Australia (AFA)
• www.afa.org.au
• Australian Association of National Advertisers (AANA)
• www.aana.com.au
• Australian Direct Marketing Association (ADMA)
• www.adma.com.au
• Market Research Society of Australia (MRSA)
• www.mrsa.com.au
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–8
Product quality—an ethical dilemma
• No product is perfect, but what if we know our
product has defects that might affect its
performance or product life?
• Should we lie or cover up the truth?
• Who will be the winner and loser?
• Would you be happy if someone made the decision
you were contemplating?
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–9
Common ethical dilemmas
• Product testing: Common before a launch.
• Planned obsolescence: Deliberate design (short
life).
• Deceptive packaging: Exaggerating the appeal.
• Labelling information: Information on the package.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–10
Common ethical dilemmas
•
Pricing of refills/replacement parts: Spare parts.
•
Deceptive pricing: What are we really paying/saving?
•
Buyers’ access to discounts: Range of pricing varies.
•
Exaggeration in advertising: Exaggerating the product.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–11
Common ethical dilemmas
• Product placement: Product used by actors or in
shows.
• Use of sex in advertising: Sex sells (does it work?).
• Advertising to children: Interpretive skill levels.
• Promotion as entertainment: Product or brand as
part of entertainment.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–12
Common ethical dilemmas
• Appeals to prejudice: prejudice in appeal choice.
• Over-promising: promises made that may not be
able to be kept.
• Privacy: obtaining contact details and using them
for marketing success.
• Sharing information with third parties: sharing
sensitive information about customers.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–13
Common ethical dilemmas
• Selling under the guise of research: research
information collected for the purpose of selling.
• Ambush marketing: piggyback promotions.
• Enticing customers with gifts and entertainment:
when is a gift simply an expression of appreciation
and when is it a bribe?
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–14
Common ethical dilemmas
• Recruitment of competitor staff: hiring competitors’
staff (usually to gain intelligence).
• Keeping stakeholders informed: stakeholders have
a right to know what is happening within your firm,
but information in the wrong hands can be harmful.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
15–15