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Marquette University

e-Publications@Marquette
Books by Marquette University Faculty

2005

Ethical Marketing
Patrick E. Murphy
University of Notre Dame

Gene R. Laczniak
Marquette University, eugene.laczniak@marquette.edu

Norman E. Bowie
University of Minnesota - Twin Cities

Thomas A. Klein
University of Toledo

Follow this and additional works at: http://epublications.marquette.edu/marq_fac-book


Part of the Marketing Commons
Recommended Citation
Murphy, Patrick E.; Laczniak, Gene R.; Bowie, Norman E.; and Klein, Thomas A., "Ethical Marketing" (2005). Books by Marquette
University Faculty. Book 39.
http://epublications.marquette.edu/marq_fac-book/39

BASIC ETHICS IN ACTION

Ethical Marketing

PATRICK E. MURPHY
University of Notre Dame

GENE R. LACZNIAK
Marquette University

NORMAN E. BOWIE
University of Minnesota

THOMAS A. KLEIN
University of Toledo

-----PEARSON

Prentice

Hall

Upper Saddle River, New Jersey 07458

Contents

ACKNOWLEDGMENTS

INTRODUCTION

xiii

xv

Chapter One
ETHICAL REASONING AND MARKETING D ECISIONS

Views of Marketing Ethics

A Personal View of Marketing Ethics, 3 An Organizational View:


Corporate Versus Individual Ethics- Is There a Difference? 3 An
Industry View, 5 A Societal View, 5 A Stakeholder View, 6

Principles for Ethical Decision Making

10

ABCs of Marketing Ethics, 10 Maxims for Ethical Marketing, 13

The Importance of Ethical Theory 17


Two Pseudo "Ethical" Approaches 19
Cultural and Ethical/Moral Relativism, 19 Managerial or
Organizational Egoism, 20

Comprehensive Ethical Theories

21

Consequences-based Theories, 21 Duty-based Theories, 25


Contract-based Theories, 28 Virtue-based Ethics, 30

vii

viii

Contents

Religious Models of Marketing Ethics

35

Roman Catholic Social Thought, 35 Jewish Ethical Tradition, 37


Islamic Ethical Tradition, 37 Confucian Ethics, 38 Buddhist
Ethical Imperatives, 38 Hindu Ethics, 40

Other Theoretical Developments in Marketing Ethics 40


The Moral Development Model, 40 Ethical Behavior in
Marketing, 42

Ideas for Ethical Marketing 43


Concluding Comment 47

Chapter Two
Enncs IN RESEARCHING AND SEGMENTING MARKETS 48
Professionalism and Ethics 49
Duties and Obligations of Researchers

50

What Researchers Owe Respondents, 51 1"he Duty Not to Engage


in Deceptive Practices, 53 The Duty Not to Invade Privacy, 55
The Duty to Manifest Concern for Respondents, 57

What Researchers and Clients Owe One Another 58


Forthright Research Designs, 59 Researcher Responsibility to
Clients,60 The Client's Responsibility to the Researcher, 61

What Researchers Owe the Public

62

Incomplete Reporting, 63 Misleading Reporting, 63


Nonobjective Research, 64

Competitive Intelligence Gathering

64

Competitive Intelligence on the Web, 67 How to


Discourage CI, 67 How to Do CI Ethically, 68

Target Markets: Some Special Ethical Concerns 68


Children, 71 Tweens, 72 Teens, 73 Older Consumers, 73
Market Illiterates, 74

Ideas for Ethical Marketing


Concluding Comment 80

75

Chapter Three
PRODUCT MANAGEMENT

Enncs 81

Product Safety 82
Warranties,83 Product Liability Law, 84 Regulation by Federal
Agencies, 86

Product Counterfeiting 90
Socially Controversial Products

92

Cigarettes,92 Alcohol Products, 94 Environmentally


Incompatible Products, 96 Planned Obsolescence, 99
Products in Poor Taste, 102 Not-So-Healthy Foods, 103

Contents

Ethical Branding Concerns

104
Breaking Brand Promises, 105 Abusing Brands' Powers of
Meaning Creation, 105 Questionable Behavior in Defense of
the Brand's Reputation, 106 Underlying Causes of Unethical
Branding, 106

Ethical Branding Practices 107


Ethical Product Management 107
How to Evaluate Ethics in Product Management 109
Ideas for Ethical Marketing 110
Concluding Comment 112

Chapter Four
ETHICAL ISSUES IN D ISTRIBUTION CHANNELS AND PRICING

Channel of Distribution Issues

114

116

Overarching Ethical Concerns, 118 Ethics' in Purchasing/ Supply


Management/ Procurement,120 Ethics in Channel
Management, 125 Ethics in Wholesaling, 129 Ethics in
Franchising, 130 Ethics in Retailing, 132 Ethics in
Logistics Management, 137

Pricing Issues

137
Ethics in Price Setting, 140

Ideas for Ethical Marketing 147


Concluding Comment 149

Chapter Five
ETHICS IN ADVERTISING AND ON THE INTERNET

The Power and Complexity of Advertising


Advertising and Society 153

151
152

Criticisms of Advertising, 154 Defenses for Advertising, 155

Regulating Advertising Practices 157


Ethics and the Advertising Industry 159
Ethical Issues Facing Advertising 159
Persuasion and Advertising, 159 Emphasizing Insignificant
Differences, 161 Agency-Client Relations, 162 Advertisers'
Ethical Responsibility to Audiences, 163 The Role of the Media
in AdvertiSing Ethics, 167

Ethics in Internet Advertising and Marketing

170

Intrusiveness, l71 Online Privacy, 171 Promotion of


Questionable Products, 173 Issues of Consumer Ethics, 175

Positive Developments and Future Challenges for Ethics


in Advertising 175

ix

Contents

Advertisers and Ethical Principles in Action 177


Ethical Principles for Advertising, 178

Ideas for Ethical Marketing 179


Concluding Comment 183

Chapter Six
186
Why Personal Selling Presents Particularly Difficult Ethical
Questions 189
Selling and the Law 191

PERSONAL SELLING ETHICS

Federal Regulations, 191 State and Local Regulations, 192

The Gray Areas of Selling 193


Company Assets, 193 Relationship with Cus omers, 193
Relationships with Competitors, 195 Relationships with Fellow
Workers and Supervisors, 195 Conflicts mInterest, 196 Gifts
and Entertainment, 196 Bribery and Facilitation, 198 When
Sales Reps Are Most Pressured to Compromise Their Ethics, 200

Sales Management Ethics

201

Managing Sales Territories, 201 Setting Sales Quotas, 201


Controlling Sales Messages, 202 Sexual Harassment, 203

Direct Marketing and Selling 204


Irritation, Unfairness, and Deception, 204 Invasions of
Privacy, 204 Perceived Pressure, 205 Response of Direct
Marketers, 205

Ideas for Ethical Marketing 205


A Framework to Evaluate Sales Ethics
Concluding Comment 211

210

Chapter Seven
212
Organizing for Marketing Ethics Implementation 214

IMPLEMENTING AND AUDITING ETHICAL MARKETING

Formal Corporate Policies, 214

Corporate Culture: The Informal Organization 222


Enacting Ethical Marketing Policies 225
Implementation Responsibilities, 225 Implementation Tasks, 228

The Concept of an Ethical Audit 231


Types of Ethical Audits, 231 Company Examples of Ethical
Audits, 232 Questions on Functional Areas, 232 Using the
Ethical Audit, 233

Contents

Ideas for Ethical Marketing 234


Closing Comments 235
Appendix 7A: Marketing Functions Audit 241
Appendix 7B: Ethical Compliance Audit 245
Appendix 7C: Ethical Climate Audit 247
NOTES

248

ABOUT THE AUTHORS

INDEX

260

258

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