CONTENTS

Sl No Description

1. Acknowledgement

2. What is meant by Advertisement

3. What is Ethics?

4. Ethics of Advertisement : Introduction

5. Ethics & Advertising

6. Ethics of Advertising

7. Some Ethical & Moral principles

8. The Ethics of Behavioral Advertisement

9. Attention, But at What Cost!

10. Benefits of Ethical Advertising

11. Harm done by Unethical Advertising

12. Conclusion

13. Bibliography

1
What do you mean by advertisement?
Advertising is a form of communication that typically attempts to
persuade potential customers to purchase or to consume more of a
particular brand of product or service. “While now central to the
contemporary global economy and the reproduction of global
production networks, it is only quite recently that advertising has been
more than a marginal influence on patterns of sales and production.
The formation of modern advertising was intimately bound up with the
emergence of new forms of monopoly capitalism around the end of the
19th and beginning of the 20th century as one element in corporate
strategies to create, organize and where possible control markets,
especially for mass produced consumer goods. Mass production
necessitated mass consumption, and this in turn required a certain
homogenization of consumer tastes for final products. At its limit, this
involved seeking to create ‘world cultural convergence’, to homogenize
consumer tastes and engineer a ‘convergence of lifestyle, culture and
behaviors among consumer segments across the world’.”

What is ethics?
Ethics is a branch of philosophy which seeks to address questions
about morality, such as what the fundamental semantic, ontological,
and epistemic nature of ethics or morality is (meta-ethics), how moral
values should be determined (normative ethics), how a moral outcome
can be achieved in specific situations (applied ethics), how moral
capacity or moral agency develops and what its nature is (moral
psychology), and what moral values people actually abide by
(descriptive ethics).

INTRODUCTION :

Ethics are a collection of principles of right conduct that shape the

decisions people or organizations make. Practicing ethics in marketing
means deliberately applying standards of fairness, or moral rights and
wrongs, to marketing decision making, behavior, and practice in the
organization.

In a market economy, a business may be expected to act in what it

believes to be its own best interest. The purpose of marketing is to

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create a competitive advantage. An organization achieves an
advantage when it does a better job than its competitors at satisfying
the product and service requirements of its target markets. Those
organizations that develop a competitive advantage are able to satisfy
the needs of both customers and the organization.

As our economic system has become more successful at providing for

needs and wants, there has been greater focus on organizations'
adhering to ethical values rather than simply providing products. This
focus has come about for two reasons. First, when an organization
behaves ethically, customers develop more positive attitudes about
the firm, its products, and its services. When marketing practices
depart from standards that society considers acceptable, the market
process becomes less efficient—sometimes it is even interrupted. Not
employing ethical marketing practices may lead to dissatisfied
customers, bad publicity, a lack of trust, lost business, or, sometimes,
legal action. Thus, most organizations are very sensitive to the needs
and opinions of their

customers and look for ways to protect their long-term interests.

Second, ethical abuses frequently lead to pressure (social or

government) for institutions to assume greater responsibility for their
actions. Since abuses do occur, some people believe that questionable
business practices abound. As a result, consumer interest groups,
professional associations, and self-regulatory groups exert
considerable influence on marketing. Calls for social responsibility have
also subjected marketing practices to a wide range of federal and state
regulations designed to either protect consumer rights or to stimulate
trade.

The Federal Trade Commission (FTC) and other federal and state
government agencies are charged both with enforcing the laws and
creating policies to limit unfair marketing practices. Because regulation
cannot be developed to cover every possible abuse, organizations and
industry groups often develop codes of ethical conduct or rules for
behavior to serve as a guide in decision making. The American
Marketing Association, for example, has developed a code of ethics
(which can be viewed on its Web site at www.ama.org). Self-regulation
not only helps a firm avoid extensive government intervention; it also
permits it to better respond to changes in market conditions. An
organization's long-term success and profitability depends on this
ability to respond.

Several areas of concern in marketing ethics are explored in the

remainder of the article.

3
UNFAIR OR DECEPTIVE MARKETING
PRACTICES
Marketing practices are deceptive if customers believe they will get
more value from a product or service than they actually receive.
Deception, which can take the form of a misrepresentation, omission,
or misleading practice, can occur when working with any element of
the marketing mix. Because consumers are exposed to great
quantities of information about products and firms, they often become
skeptical of marketing claims and selling messages and act to protect
themselves from being deceived. Thus, when a product or service does
not provide expected value, customers will often seek a different
source.

Deceptive pricing practices cause customers to believe that the price

they pay for some unit of value in a product or service is lower than it
really is. The deception might take the form of making false price
comparisons, providing misleading suggested selling prices, omitting
important conditions of the sale, or making very low price offers
available only when other items are purchased as well. Promotion
practices are deceptive when the seller intentionally misstates how a
product is constructed or performs, fails to disclose information
regarding pyramid sales (a sales technique in which a person is
recruited into a plan and then expects to make money by recruiting
other people), or employs bait-and-switch selling techniques (a
technique in which a business offers to sell a product or service, often
at a lower price, in order to attract customers who are then
encouraged to purchase a more expensive item). False or greatly
exaggerated product or service claims are also deceptive. When
packages are intentionally mislabeled as to contents, size, weight, or
use information, that constitutes deceptive packaging. Selling
hazardous or defective products without disclosing the dangers, failing
to perform promised services, and not honoring warranty obligations
are also considered deception.

OFFENSIVE MATERIALS AND

OBJECTIONABLE MARKETING PRACTICES
Marketers control what they say to customers as well as and how and
where they say it. When events, television or radio programming, or
publications sponsored by a marketer, in addition to products or
promotional materials, are perceived as offensive, they often create

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strong negative reactions. For example, some people find advertising
for all products promoting sexual potency to be offensive. Others may
be offended when a promotion employs stereotypical images or uses
sex as an appeal. This is particularly true when a product is being
marketed in other countries, where words and images may carry
different meanings than they do in the host country.

When people feel that products or appeals are offensive, they may
pressure vendors to stop carrying the product. Thus, all promotional
messages must be carefully screened and tested, and communication
media, programming, and editorial content selected to match the
tastes and interests of targeted customers. Beyond the target
audience, however, marketers should understand that there are others
who are not customers who might receive their appeals and see their
images and be offended.

Direct marketing is also undergoing closer examination. Objectionable

practices range from minor irritants, such as the timing and frequency
of sales letters or commercials, to those that are offensive or even
illegal. Among examples of practices that may raise ethical questions
are persistent and high-pressure selling, annoying telemarketing calls,
and television commercials that are too long or run too frequently.
Marketing appeals created to take advantage of young or
inexperienced consumers or senior citizens— including
advertisements, sales appeals disguised as contests, junk mail
(including electronic mail), and the use and exchange of mailing lists—
may also pose ethical questions. In addition to being subject to
consumer-protection laws and regulations, the Direct Marketing
Association provides a list of voluntary ethical guidelines for companies
engaged in direct marketing .

ETHICAL PRODUCT AND DISTRIBUTION

PRACTICES
Several product-related issues raise questions about ethics in
marketing, most often concerning the quality of products and services
provided. Among the most frequently voiced complaints are ones
about products that are unsafe, that are of poor quality in construction
or content, that do not contain what is promoted, or that go out of
style or become obsolete before they actually need replacing. An
organization that markets poor-quality or unsafe products is taking the
chance that it will develop a reputation for poor products or service. In
addition, it may be putting itself in jeopardy for product claims or legal
action. Sometimes, however, frequent changes in product features or
performance, such as those that often occur in the computer industry,

5
make previous models of products obsolete. Such changes can be
misinterpreted as planned obsolescence.

Ethical questions may also arise in the distribution process.

Because sales performance is the most common way in which
marketing representatives and sales personnel are evaluated,
performance pressures exist that may lead to ethical dilemmas. For
example, pressuring vendors to buy more than they need and pushing
items that will result in higher commissions are temptations. Exerting
influence to cause vendors to reduce display space for competitors'
products, promising shipment when knowing delivery is not possible by
the promised date, or paying vendors to carry a firm's product rather
than one of its competitors are also unethical.

Research is another area in which ethical is sues may arise.

Information gathered from research can be important to the successful
marketing of products or services. Consumers, however, may view
organizations' efforts to gather data from them as invading their
privacy. They are resistant to give out personal information that might
cause them to become a marketing target or to receive product or
sales information. When data about products or consumers are
exaggerated to make a selling point, or research questions are written
to obtain a specific result, consumers are misled. Without self-imposed
ethical standards in the research process, management will likely
make decisions based on inaccurate information.

DOES MARKETING OVERFOCUS ON

MATERIALISM?
Consumers develop an identity in the market place that is shaped both
by who they are and by what they see themselves as becoming. There
is evidence that the way consumers view themselves influences their
purchasing behavior. This identity is often reflected in the brands or
products they consume or the way in which they lead their lives.

The proliferation of information about products and services

complicates decision making. Sometimes consumer desires to achieve
or maintain a certain lifestyle or image results in their purchasing more
than they need or can afford. Does marketing create these wants?
Clearly, appeals exist that are designed to cause people to purchase
more than they need or can afford. Unsolicited offers of credit cards
with high limits or high interest rates, advertising appeals touting the
psychological benefits of conspicuous con sumption, and promotions
that seek to stimulate unrecognized needs are often cited as examples
of these excesses.

6
SPECIAL ETHICAL ISSUES IN MARKETING
TO CHILDREN
Children are an important marketing target for certain products.
Because their knowledge about products, the media, and selling
strategies is usually not as well developed as that of adults, children
are likely to be more vulnerable to psychological appeals and strong
images. Thus, ethical questions sometimes arise when they are
exposed to questionable marketing tactics and messages. For
example, studies linking relationships between tobacco and alcohol
marketing with youth consumption resulted in increased public
pressure directly leading to the regulation of marketing for those
products.

The proliferation of direct marketing and use of the Internet to market

to children also raises ethical issues. Sometimes a few unscrupulous
marketers design sites so that children are able to bypass adult
supervision or control; sometimes they present objectionable materials
to underage consumers or pressure them to buy items or provide
credit card numbers. When this happens, it is likely that social pressure
and subsequent regulation will result. Likewise, programming for
children and youth in the mass media has been under scrutiny for
many years.

In the United States, marketing to children is closely controlled.

Federal regulations place limits on the types of marketing that can be
directed to children, and marketing activities are monitored by the
Better Business Bureau, the Federal Trade Commission, consumer and
parental groups, and the broadcast networks. These guidelines provide
clear direction to marketers.

ETHICAL ISSUES IN MARKETING TO

MINORITIES
The United States is a society of ever-increasing diversity. Markets are
broken into segments in which people share some similar
characteristics. Ethical issues arise when marketing tactics are
designed specifically to exploit or manipulate a minority market
segment. Offensive practices may take the form of negative or
stereotypical representations of minorities, associating the
consumption of harmful or questionable products with a particular
minority segment, and demeaning portrayals of a race or group.
Ethical questions may also arise when high-pressure selling is directed
at a group, when higher prices are charged for products sold to

7
minorities, or even when stores provide poorer service in
neighborhoods with a high population of minority customers. Such
practices will likely result in a bad public image and lost sales for the
marketer.

Unlike the legal protections in place to protect children from harmful

practices, there have been few efforts to protect minority customers.
When targeting minorities, firms must evaluate whether the targeted
population is susceptible to appeals because of their minority status.
The firm must assess marketing efforts to determine whether ethical
behavior would cause them to change their marketing practices.

ETHICAL ISSUES SURROUNDING THE

PORTRAYAL OF WOMEN IN MARKETING
EFFORTS
As society changes, so do the images of and roles assumed by people,
regardless of race, sex, or occupation. Women have been portrayed in
a variety of ways over the years. When marketers present those
images as overly conventional, formulaic, or oversimplified, people
may view them as stereotypical and offensive.

Examples of demeaning stereotypes include those in which women are

presented as less intelligent, submissive to or obsessed with men,
unable to assume leadership roles or make decisions, or skimpily
dressed in order to appeal to the sexual interests of males. Harmful
stereotypes include those portraying women as obsessed with their
appearance or conforming to some ideal of size, weight, or beauty.
When images are considered demeaning or harmful, they will work to
the detriment of the organization. Advertisements, in particular, should
be evaluated to be sure that the images projected are not offensive.

Ethical Issues in Marketing:

Introduction: Marketing, in contemporary times, has seen a tumultuous

change in the way it's conducted in developing countries. The oft cited
dictum that only change is constant in the marketing genre is an
apposite one. Just as the media of social communication themselves
have enormous influence everywhere, so advertising and marketing,
using media as their vehicles, are pervasive, powerful forces shaping
attitudes and behavior in today's world. Four reasons are attributed to
the fugacious nature of the way marketing practices are being carried
out in developing countries 1. The role of Information and
Communication technologies: As ICTs evolve so do marketing

8
practices. If yesterday it was television that revolutionized the way
advertisements could create a lasting impact on the consumer, then
today the internet and phone text messages are doing just that. 2. The
world today is an increasingly global village: Social and ethnic
boundaries are fast falling in the wake of cable television and the like.
3. Rapid economic expansions in countries like China and India have
meant that marketers have to quickly respond to the changing socio-
economic scenarios. Millions of people have entered the middle class
and millions more are poised to do so. For marketers, the
consequences can be mind boggling-as incomes and spending powers
rise, marketers have to respond to increasing demands from
consumers. 4. Better and improved marketing research has meant that
the entire populace is not seen in totality but rather as a congeries of
different types of consumers.

The Upshot: But the outcome of such developments is that a number

of ethical issues have arisen. While the globe is indeed becoming a
smaller place, marketers have to bear in mind national, local and
cultural sensitivities. Very often, in the hope of tapping a larger
consumer base, marketers jump headlong in new markets without
keeping in mind ethnic and social issues typical to certain areas. While
marketers do have to act with celerity in gaining footholds in emerging
markets such as China and India, care has to be taken in ensuring that
the mores, etiquettes of the land are not encroached upon. The
incorporation of newer technologies has meant that a number of issues
such as invasion of privacy and credibility have arisen. Ergo, in these
rapidly changing circumstances, marketers and consumers alike face a
nimiety of ethical issues that have to be addressed. This paper looks at
some of the ethical issues in the developing countries context.

Exploiting Social Paradigms In the hopes of making a fast buck,

marketers often resort to exploiting social paradigms typical to certain
areas. In India, for example, a large multinational corporation ran an ad
campaign that depicted a young woman who because of her dark facial
complexion was unable to find jobs. But as the ad showed, as soon as
the woman started using the facial whiteness cream manufactured by
the corporation, she got the job of her choice. Needless to say, there
was a big backlash against it and the ad campaign had to be scrapped.
On an ethical standpoint, marketers have to exercise restraint in
exploiting such social paradigms to their commercial advantage.

Surrogate Advertisements In India alcohol and cigarette

advertisements were banned outright some years back. However,
alcohol and cigarette companies alike are using the avenue of
surrogate advertisements to press forward their case. For the viewer

9
though, the 'subtle' pointer towards the real deal is enough as the
surrogate advertisements leave no ambiguity in their minds.

Subliminal Advertisements One of the most controversial and

ethical issues in advertising is regarding subliminal advertisements.
Inserting subliminal messages in an advertisement is an inherently
misleading action. It is an attempt to manipulate a person's thinking
without the person realizing that any such manipulation is occurring.
The west has had its fair share of subliminal advertisements related
hullabaloos primarily because the advertisement, marketing and
regulating media themselves have been quite active in raising such
issues. During the US Presidential elections of 2000, it came to light
that a political advertisement for George W. Bush subliminally flashed
the word 'RATS' when criticizing Al Gore's prescription medicine plan.
While the ad maker denied that the quickly flashed word was a
subliminal message designed to surreptitiously sling mud at Gore,
many others, however, concluded that 'RATS' was indeed inserted with
the intention of secretly causing viewers' to associate vermin with Al
Gore. In line with the techniques of subliminal messaging, the
questionable word appeared on the screen for only a microsecond
(1/30th of a second), passing by so fast that it was almost
unrecognizable to the conscious mind-especially when passively lulled
by television. According to the theory of subliminal advertising the
image would, indeed, register in a viewer's subconscious mind, thereby
causing the viewer to negatively associate Al Gore with a rodent. The
effects of subliminal advertisements are real and financially significant.
Each year, consumers spend roughly $US50 million for self-help tapes
embedded with subliminal messages that are supposed to teach a
person a foreign language while they sleep, or help them lose weight,
or quit smoking. Additionally, some stores embed subliminal messages
in their background music in an effort to discourage shoplifting. Time
magazine reported in 1979 that messages such as 'I am an honest
person' and 'Stealing is dishonest' were being utilized in over fifty
department stores. One department store utilizing the hidden
messages reported a savings of $US600, 000 by reducing theft 37
percent during a nine month period. So, if subliminal messages
evidently work in self-help tapes and embedded in department store
music, it certainly seams reasonable that they would also work and
perhaps even work better in a visual medium such as television. In
developing countries the regulating watchdogs and related
establishments are still in stages of latency so that the possibility that
viewers who would be subject to such measures would probably never
ever know that they were the focus of such procedures. The Ethical
Issue of 'Creating Demand' In the words of Pope John Paul II,
advertising also can be, and often is, a tool of the phenomenon of
consumerism. Sometimes advertisers speak of it as part of their task to

10
'create' needs for products and services - that is, to cause people to
feel and act upon desires for items and services they would ordinarily
not need. A piquant issue arises when consumerist attitudes and
values are transmitted by communications media and advertising to
developing countries, where they exacerbate socio-economic problems
and harm the poor. While a judicious use of advertising can stimulate
developing countries to improve their standard of living, serious harm
can be done to them if advertising and commercial pressure become
so irresponsible that communities seeking to rise from poverty to a
reasonable standard of living are persuaded to seek this progress by
satisfying wants that have been artificially created. The result of this is
that they waste their resources and neglect their real needs, and
genuine development falls behind.

Predatory Pricing In developing nations where the bulk of the

populace is still employed in small and medium enterprises, the use of
predatory pricing by large multinational corporations in order to wipe
out competition is an ethical issue. While proponents of no holds
barred pricing would attribute this to an unfettered free market, the
fact remains that the larger issue is the threat of wiping out the
livelihood of a large number of people. In India, a related issue is the
entry of western discount stores that might eventually threaten the
existence of millions of people employed in traditional mom-and-pop
stores. Wal-Mart's 'takeover of small towns' in the U.S.A. is also a
related concern. Countries like India need to take a leaf out of the
China book-China opened its market to these stores in 1991 and only
recently allowed 100% foreign direct investment (FDI) in such
ventures.

False and Misleading Advertisements Then there is the issue of

false and downright disingenuous advertisements. While in itself this is
an important ethical issue, an extension of this is the question of
credibility. Nowadays, newspaper columns are rife with advertisements
which blatantly compare features of brands with those of their
competitors. Citing the opinion of 'experts', these advertisements claim
their brands to be quantitatively and qualitatively better than those of
their rivals. In India a leading car manufacturer had to recall its ad
campaign when it incorrectly stated that one of its car models was
superior to that of its competitor's.

Post Purchase Dissonance-What you see is not often what you get
Since very often what companies claim their products or services
deliver is not what the consumers actually get, the issue of post
purchase dissonance arises. There are two more non-contrasting
viewpoints on this issue. One states the typical examples of Tele-
Shopping Networks (TSN) and the internet. Since there is no element of

11
tangibility, the consumer would typically end up getting an end
product which he/she didn't literally ask for. The other viewpoint states
that such establishments would be punished by market forces since in
today's world the consumer is undoubtedly the king. But in associating
such concerns to the game play of market forces, the larger ethical
issue is unfortunately trivialized. Depicting groups in stereotyped roles
All too often, marketing contributes to the invidious stereotyping of
particular groups that places them at a disadvantage in relation to
others. Women and children unfortunately end up being cast as
stereotypes in ad campaigns the world over. Often, the role of women
in business or professional life is depicted as a masculine caricature, a
denial of the specific gifts of feminine insight, compassion, and
understanding. In India, which has traditionally been a patriarchal
society, tremendous cultural changes have been brought in with the
advent of cable television and the exposure to western content. Urban
women are enjoying more freedom than they've had before. Yet,
promotional campaigns of certain firms still show the Indian woman of
yore-a fallback to a time when women did not enjoy the freedoms they
have today. The Über kid In India, objections have been raised against
advertisements that showed mothers benchmarking their children to
the so called 'super-kid'- one who excels in studies and sports alike
simply because he consumes a particular health drink.

Promotion of Alcohol, Tobacco-Creating Demand for Vice

Cigarettes are one of the most heavily marketed products in China and
other developing nations. An increasing percentage of those marketing
dollars is dedicated to what are probably the most sophisticated
consumer marketing databases in the business world. Tobacco
advertising is no longer just the province of multi-million dollar ad
budgets pushing the Marlboro Man, Joe Camel's phallic face or the
women in the Virginia Slims' ads who have 'come a long way.' It is
equally the province of direct marketers, pushing free packs to
targeted prospects and mailing slick magazines-published by tobacco
companies-to influence the behavior and retain the loyalty of tens of
millions of smokers And the problem is pandemic-is is prevalent in both
developing as well as developed countries alike. In the US for example,
cigarette smoking is responsible for the deaths of almost half a million
people a year. Tobacco use is responsible for more than one in six
deaths in the United States. Smoking accounts for 30% of all cancer
deaths. It is a major cause of heart disease, and it is associated with
conditions ranging from colds and gastric ulcers to chronic bronchitis,
emphysema and vascular disease. Smoking caused an estimated
264,087 male and 178, 311 female deaths in the United States each
year from 1995 to 1999. The U.S. Congress Office of Technology
Assessment estimates the cost of smoking (direct and indirect) to the
economy at $150 billion a year. Each day more than 3,000 teenagers

12
in the U.S. become addicted to cigarettes. The tobacco industry argues
that its advertising is not aimed at recruiting these young new
smokers. Its representatives say, disingenuously, that advertising by
individual tobacco companies' targets adults only and serve only to
encourage regular smokers to switch brands or to retain brand loyalty.
However it has been seen that perception of cigarette brand
advertising actually is higher among young smokers and that changes
in market share resulting from advertising occur mainly in this
segment. Cigarette advertising thus undoubtedly encourages youth to
smoke. In a survey conducted by the Journal of the American Medical
Association, it was stated that the success of the tobacco industry is
dependent on recruiting people who don't believe that tobacco kills-
thus enticing children, developing nations populations, and
disadvantaged members of society to smoke is the only way for
tobacco companies to make up for the number of smokers who quit or
die

Intrusive Promotions A number of companies offer a plethora of

freebies in terms of services and add-ons, however all these come with
the proverbial strings attached. These are particularly true for telecom
and internet services related companies. Mobile network providers in
India for example are notorious for literally bombarding the users with
promotional text messages. Many a times these companies share
customer data with other companies without the explicit permission of
the customers themselves. The issue at hand is such measures
compromise the confidentiality of company-client relationships and
trivialize the privacy concerns of the customers.

Copyright, trademark violations Copyright and trademark violations

are ubiquitous throughout the developing world. One of the major
grouses of multinational corporations in countries like China and India
is the lack of a robust legal framework that harshly penalizes violators.
Data piracy is a major concern in South East nations and millions of
illegal compact discs are made in such countries which cost software,
music and movie companies billions of dollars.

Advertisements as Mirrors of prevailing norms Marketers clam

that advertising simply mirrors the attitudes and values of the
surrounding culture. No doubt advertising, like the media of social
communications in general, does act as a mirror. But, also like media
in general, it is a mirror that helps shape the reality it reflects, and
sometimes it presents a distorted image of reality. Advertisers are
selective about the values and attitudes to be fostered and
encouraged, promoting some while ignoring others. This selectivity
does not impart credence to the notion that advertising does no more
than reflect the surrounding culture. For example, the absence from

13
advertising of certain racial and ethnic groups in some multi-racial or
multi-ethnic societies can help to create problems of image and
identity, especially among those neglected, and the almost inevitable
impression in commercial advertising that an abundance of
possessions leads to happiness and fulfillment can be both misleading
and frustrating. Advertising also has an indirect but powerful impact on
society through its influence on media. Many publications and
broadcasting operations depend on advertising revenue for survival.
This often is true of religious media as well as commercial media. For
their part, advertisers naturally seek to reach audiences; and the
media, striving to deliver audiences to advertisers, must shape their
content so to attract audiences of the size and demographic
composition sought. This economic dependency of media and the
power it confers upon advertisers carries with it serious responsibilities
for both.

The Ethical issue of Political marketing Political advertising can

support and assist the working of the democratic process, but it
also can obstruct it. This happens when, for example, the costs of
advertising limit political competition to wealthy candidates or groups,
or require that office-seekers compromise their integrity and
independence by over-dependence on special interests for funds. Such
obstruction of the democratic process also happens when, instead of
being a vehicle for honest expositions of candidates' views and
records, political advertising seeks to distort the views and records of
opponents and unjustly attacks their reputations. It happens when
advertising appeals more to people's emotions and base instincts-to
selfishness, bias and hostility toward others, to racial and ethnic
prejudice and the like- rather than to a reasoned sense of justice and
the good of all. Ethical Issues in Internet, e-commerce The Internet is
quickly becoming a major conduit for business. On-line business has
raised a host of new issues such as honesty and responsibility,
accountability, privacy and confidentiality, protection of data (i.e.
credit card numbers), freedom from invasiveness (i.e. so-called sticky
websites that automatically track and retain customer contact and
information), quality of the goods delivered, disclosure and reliability of
information, sources of goods, Internet economics vs. traditional
economics, impacts of global Internet business, employment through
the net (local and global telecommuting), web advertising, competition
on the Internet (hacking into data, falsification of data), public
information and financial disclosure (investor relations on the Internet),
and others.

1. The Small Print: The major ethical issues facing business over the
internet are the ones regarding the small print i.e. the policy notices or
practices on websites. These issues include: A) Usage of obfuscating

14
and vague language B) The policy may be hard to find or difficult to
read and understand. C) It may not contain all the disclosures D) May
fail to provide a contact address or procedures for dealing with
complaints, corrections, or conflict resolution E) It may not have clear
access requirements or procedures for verifying a valid requester
before granting access. F) May not be linked to or displayed on every
page where information is collected

2. World Wide Web versus the Wild Wild Web: To many, the
utopian concept of the internet is that of a valueless zone-a free
network that is outside the purview of human control and restrain. But
we feel that line of reasoning is flawed. The internet is the progeny of
civil society. This means that the World Wide Web is not the wild wild
Web, but instead a place where values in the broadest sense should
take a part in shaping content and services. This is recognition that the
Internet is not something apart from civil society, but increasingly a
fundamental component of it.

3. Ownership and Responsibility: The internet is largely a boundary

less network. The involvement in content of companies hosting
information is highly debatable. There are two sides to the proverbial
coin: The Internet as a medium supports all kind of contents. By
espousing the principle of allowing anyone to post any material on the
net as a means of furthering information exchange is extended by
many as the raison d'etre of absolving the hosts of complicity of
posting the material. In India, a major debate between the erudite
arose when the CEO of the Indian chapter (bazee) of ebay.com was
arrested over charges of allowing the exchange of video clips showing
explicit scenes. The sympathizers of the site owners cited the fact that
the websites are merely enabling people to exchange data over a
common platform. What information is exchanged does not fall under
the purview of the responsibilities of the website managers. The
opposing view was the hosts cannot turn a blind eye to the activities
being carried out through the medium of their site. We feel that
although, given the nature of the Internet, they cannot possibly be
expected to pre-check content, once they receive a notification or a
complaint about something they are carrying or hosting, they have to
take a view. Thus if one is attempting to bring a sense of ethics to the
Internet in any particular instance, it is essential to know who has the
control and the responsibility. Increasingly the debate about the
content of the Internet is not national but global, not by specialists but
by the general populace. There is a real need for this debate to be
stimulated and structured and for it to lead to 'solutions' which are
focused, practical and urgent.

15
Conclusion-Good Marketing Citizens All in all, it can be seen that
ethical issues in marketing in the context of developing countries is
highly sensitive to cultural, social and ethnical issues. The larger issue
is thus not merely an occidental versus an oriental one. For the
marketing fraternity to be a good ethical citizen, the onus lie on
themselves-for indeed, marketers have to stop indulging in unethical
practices and start respecting local mores and values.

a) Ethical issues in Marketing ; Marketing ethics deals with the

moral principles behind the operation and regulation of marketing.
Possible fundamental frameworks of analysis for marketing audit are:

Value-oriented framework, ethical problems on the basis of the

values which they infringe e.g. honesty, autonomy, privacy,
transparency.

· Stakeholder-orientated framework , analyzing ethical problems

on the basis of whom they affect e.g. consumers, competitors, society
as a whole

· Process-orientated framework, analyzing ethical problems in

terms of the categories used by marketing specialists e.g. research,
price, promotion, placement

Specific issues in marketing ethics:

Ø Market research: ethical danger points in marketing research

include:

- Invasion of privacy

- Stereotyping

Ø Market audience: ethical danger points include

- targeting the vulnerable e.g. children, the elderly

- Excluding potential customers from the market: selective marketing

is used to discourage demand from undesirable market sectors or
disenfranchise them altogether.

Ø Pricing ethics: list of unethical pricing practice:

- Price fixing

- Price skimming

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- Price discrimination

- Price wars

- Bid rigging

- Dumping

Ø Advertising and promotion: ethical pitfall:

- Issues over truth and honesty

- Issues with violence, sex and profanity

- Taste and controversy - Negative advertising

CONCLUSION
Because marketing decisions often require specialized knowledge,
ethical issues are often more complicated than those faced in personal
life— and effective decision making requires consistency. Because
each business situation is different, and not all decisions are simple,
many organizations have embraced ethical codes of conduct and rules
of professional ethics to guide managers and employees. However,
sometimes self-regulation proves insufficient to protect the interest of
customers, organizations, or society. At that point, pressures for
regulation and enactment of legislation to protect the interests of all
parties in the exchange process will likely occur.

This research examines marketing ethics in the legal industry, the

software industry, and Wal-Mart. In the first two cases, larger firms use
marketing ethics as an artificial concept to gain a competitive edge
over smaller firms in their respective industries. In the final case, Wal-
Mart uses marketing ethics as an artificial concept for promotional
reasons in its fight for market share in the discount retail market. Each
case highlights the relationship between operating in an oligopolistic or
imperfect market and the use of ethics as an artificial concept.

Ethics is sometimes used as an artificial concept to gain a competitive

advantage. The question to examine involves the circumstances that
make business people and business institutions act in unethical-ways.
What are the underlying circumstances or market environments in
which firms try to use "'ethics" as nothing more than a marketing tool
to gain advantage over their competitors?
17
As an artificial business concept, ethics is not the domain of illegal or
'gray area" firms operating at the fringes of the marketplace. On the
contrary, every segment of business activity uses ethics in this
manner, regardless of financial or market circumstances (Sethi, 1994,
p. 804). Often the same firm that is co=ended for donating money to a
charity on Monday might have one of its subsidiaries or divisions
hauled into court to pay a pollution fine on Tuesday.

While efficient markets may prompt firms to act smart, they do not nec

...
reasingly see themselves and their profession as a professional service
industry. They see marketing prohibitions not in an ethical light but as
restraint of trade, thereby helping the older firms retain an artificial
competitive edge. The software-industry shares something with the
legal industry. The law is as old as civilization, but the consumer-
oriented commercial software industry has been in existence fewer
than 30 years. However, like the large established law firms, the larger
software firms with markets to protect have begun to establish ethical
guidelines for their industry. At the beginning of the decade, industry
giants such as Microsoft, Ashton-Tate, and Lotus (now owned by IBM)
formed the Software Business Practices Council. The purpose of this
council is to reform what its members call widespread, misleading, and
sometimes unethical marketing and accounting practices. These
practices ""adversely affect the credibility and health of our industry,"
a council statement says ("'Software Firms", 1990, October 10, p. Bl). If
industry product announcements and launch dates, financial data, and
marketing sales plans were to remain credible with consumers, the
larger firms believed an industry code of ethics was nee

MARKETING ETHICS AND THEIR IMPACT

Business ethics refer to moral principles which should govern business
activites. Business ethics provide a code of conduct for the managers.
The purpose of business ethics is to guide the markrting in performing
their jobs Ethics are concered with what is right andn what is wrong in
human behavior . They lay down norms of behavior to be observed by
the business . A few examples of good ethics are :

(1)To charge fair prices from the customers.

(2)To use fair weights for measurement of the commodities.

(3)To pay taxes to the Government honestly.

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(4)To earn reasonable profits.

The purpose of business ethics is to regulate both , objective

( ends) of business and the means adopted to achieve the
objective . According to Garrat , “ Ethics is the science of
judging specifically human ends and the relationship of means to
those ends . In some way , it is also the art of controlling means
so that they will serve specifically human ends.” Thus , ethics
cover all possible areas of business – ends and ,means must be
justifiable as per norms of the society . A business practice
which is against the moral principles laid down by the society is
termed as unethical . A few examples of unethical behavior on
the part of business are as follows :

(1)Hoarding and black marketing of goods.

(2)False claim in an ad.

(3)Exploitation of consumers.

(4)Offering pay – off (bribes) to government of official and

politicians to get under favour.

(5)Evasion of taxes.

Significance of Marketing Ethics

Business ethics are relate to the behavior of business men

and managers in a business situation . The manager has to
evaluate the impact of his actions on customers , workers,
investors and society at large in terms of business ethics. If
the managers is just and fair in his behavior will be deemed to
be ethical behavior whether he personally likes or not.

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 As a part of society , business is responsible to act credibly
and behave ethically . the significance of business ethics has
arisen in the modern age because of the impact of marketing
practices on customers , employees , industry managers and
the society as discussed below :

(1) Customers : The customers of the business expect fair

treatment . A business following social ethics will work in
the interest of customers and will desist from undesirable
practices such as hording , black – marketing , adulteration
, etc.

(2) Employees : The employees have their trade unions

and can pressurize the business management to pursue
those which conductive to healthy relations . It is unethical
to deny the workers fair wages and other benefits
employment , while the company charges their coast from
customers.

(3) Industry : Business firms compete with each other for

economic resources and for greater share of the market .
Business ethics require them to follow fair trade practices
resulting into healthy competition among the business
units.

(4) Managers : Business ethics serve as a clue to the

business manager as to what type of response is expect in
a given situation . he can adjust his actions accordingly
and live harmoniously with various interest groups . This
will enhance the image of the business.

(5) Society : Ethics are a part of the social environment of the

country . If a business is a careful about the ethical
standards , the whole society is benefited.

Ethics of Advertisement: An Introduction

Advertising ethics in my view also includes truthfulness and
fairness, which includes the nature of the audience and the
nature of the product. Over the next few months I would like
to open a dialogue on questions regarding children’s

20
advertising, multicultural marketing and other challenges
presented by taste and decency. Please join in the
discussion by leaving comments below.

1. Truthfulness in Advertising

Even today, some advertising is simply and deliberately

untrue. Generally speaking, though, the problem of truth in
advertising is somewhat more subtle: it is not that
advertising says what is overtly false, but that it can distort
the truth by implying things that are not so or withholding
relevant facts. As Pope John Paul II points out, on both the
individual and social levels, truth and freedom are
inseparable; without truth as the basis, starting point and
criterion of discernment, judgment, choice and action, there
can be no authentic exercise of freedom. The Catechism of
the Catholic Church, quoting the Second Vatican Council,
insists that the content of communication be "true and —
within the limits set by justice and charity — complete"; the
content should, moreover, be communicated "honestly and
properly."

To be sure, advertising, like other forms of expression, has

its own conventions and forms of stylization, and these must
be taken into account when discussing truthfulness. People
take for granted some rhetorical and symbolic exaggeration
in advertising; within the limits of recognized and accepted
practice, this can be allowable.

But it is a fundamental principle that advertising may not

deliberately seek to deceive, whether it does that by what it
says, by what it implies, or by what it fails to say. "The
proper exercise of the right to information demands that the
content of what is communicated be true and, within the
limits set by justice and charity, complete. ... Included here
is the obligation to avoid any manipulation of truth for any
reason."

2. The Dignity of the Human Person

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There is an "imperative requirement" that advertising
"respect the human person, his right duty to make a
responsible choice, his interior freedom; all these goods
would be violated if man's lower inclinations were to be
exploited, or his capacity to reflect and decide
compromised."

These abuses are not merely hypothetical possibilities but

realities in much advertising today. Advertising can violate
the dignity of the human person both through its content —
what is advertised, the manner in which it is advertised —
and through the impact it seeks to make upon its audience.
We have spoken already of such things as appeals to lust,
vanity, envy and greed, and of techniques that manipulate
and exploit human weakness. In such circumstances,
advertisements readily become "vehicles of a deformed
outlook on life, on the family, on religion and on morality —
an outlook that does not respect the true dignity and destiny
of the human person."

This problem is especially acute where particularly

vulnerable groups or classes of persons are concerned:
children and young people, the elderly, the poor, the
culturally disadvantaged.

Much advertising directed at children apparently tries to

exploit their credulity and suggestibility, in the hope that
they will put pressure on their parents to buy products of no
real benefit to them. Advertising like this offends against the
dignity and rights of both children and parents; it intrudes
upon the parent-child relationship and seeks to manipulate it
to its own base ends. Also, some of the comparatively little
advertising directed specifically to the elderly or culturally
disadvantaged seems designed to play upon their fears so as
to persuade them to allocate some of their limited resources
to goods or services of dubious value.

3. Advertising and Social Responsibility

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Social responsibility is such a broad concept that we can
note here only a few of the many issues and concerns
relevant under this heading to the question of advertising.

The ecological issue is one. Advertising that fosters a lavish

life style which wastes resources and despoils the
environment offends against important ecological concerns.

Harm Done by Unethical Advertising

There is nothing intrinsically good or intrinsically evil about
advertising. It is a tool, an instrument: it can be used well,
and it can be used badly. If it can have, and sometimes does
have, beneficial results such as those just described, it also
can, and often does, have a negative, harmful impact on
individuals and society.

Communio et Progressio contains this summary statement of

the problem: "If harmful or utterly useless goods are touted
to the public, if false assertions are made about goods for
sale, if less than admirable human tendencies are exploited,
those responsible for such advertising harm society and
forfeit their good name and credibility. More than this,
unremitting pressure to buy articles of luxury can arouse
false wants that hurt both individuals and families by making
them ignore what they really need. And those forms of
advertising which, without shame, exploit the sexual
instincts simply to make money or which seek to penetrate
into the subconscious recesses of the mind in a way that
threatens the freedom of the individual ... must be shunned."

a) Economic Harms of Advertising

Advertising can betray its role as a source of information by
misrepresentation and by withholding relevant facts.
Sometimes, too, the information function of media can be
subverted by advertisers' pressure upon publications or

23
programs not to treat of questions that might prove
embarrassing or inconvenient.

More often, though, advertising is used not simply to inform

but to persuade and motivate — to convince people to act in
certain ways: buy certain products or services, patronize
certain institutions, and the like. This is where particular
abuses can occur.

The practice of "brand"-related advertising can raise serious

problems. Often there are only negligible differences among
similar products of different brands, and advertising may
attempt to move people to act on the basis of irrational
motives ("brand loyalty," status, fashion, "sex appeal," etc.)
instead of presenting differences in product quality and price
as bases for rational choice.

Advertising also can be, and often is, a tool of the

"phenomenon of consumerism," as Pope John Paul II
delineated it when he said: "It is not wrong to want to live
better; what is wrong is a style of life which is presumed to
be better when it is directed toward ?having' rather than ?
being', and which wants to have more, not in order to be
more but in order to spend life in enjoyment as an end in
itself." Sometimes advertisers speak of it as part of their task
to "create" needs for products and services — that is, to
cause people to feel and act upon cravings for items and
services they do not need. "If ... a direct appeal is made to
his instincts — while ignoring in various ways the reality of
the person as intelligent and free — then consumer attitudes
and life-styles can be created which are objectively improper
and often damaging to his physical and spiritual health."

This is a serious abuse, an affront to human dignity and the

common good when it occurs in affluent societies. But the
abuse is still more grave when consumerist attitudes and
values are transmitted by communications media and
advertising to developing countries, where they exacerbate
socio-economic problems and harm the poor. "It is true that
a judicious use of advertising can stimulate developing

24
countries to improve their standard of living. But serious
harm can be done them if advertising and commercial
pressure become so irresponsible that communities seeking
to rise from poverty to a reasonable standard of living are
persuaded to seek this progress by satisfying wants that
have been artificially created. The result of this is that they
waste their resources and neglect their real needs, and
genuine development falls behind."

Similarly, the task of countries attempting to develop types

of market economies that serve human needs and interests
after decades under centralized, state-controlled systems is
made more difficult by advertising that promotes
consumerist attitudes and values offensive to human dignity
and the common good. The problem is particularly acute
when, as often happens, the dignity and welfare of society's
poorer and weaker members are at stake. It is necessary
always to bear in mind that there are "goods which by their
very nature cannot and must not be bought or sold" and to
avoid "an ?idolatry' of the market" that, aided and abetted
by advertising, ignores this crucial fact.

b) Harms of Political Advertising

Political advertising can support and assist the working of
the democratic process, but it also can obstruct it. This
happens when, for example, the costs of advertising limit
political competition to wealthy candidates or groups, or
require that office-seekers compromise their integrity and
independence by over-dependence on special interests for
funds.

Such obstruction of the democratic process also happens

when, instead of being a vehicle for honest expositions of
candidates' views and records, political advertising seeks to
distort the views and records of opponents and unjustly
attacks their reputations. It happens when advertising
appeals more to people's emotions and base instincts — to
selfishness, bias and hostility toward others, to racial and

25
ethnic prejudice and the like — rather than to a reasoned
sense of justice and the good of all.

c) Cultural Harms of Advertising

Advertising also can have a corrupting influence upon
culture and cultural values. We have spoken of the economic
harm that can be done to developing nations by advertising
that fosters consumerism and destructive patterns of
consumption. Consider also the cultural injury done to these
nations and their peoples by advertising whose content and
methods, reflecting those prevalent in the first world, are at
war with sound traditional values in indigenous cultures.
Today this kind of "domination and manipulation" via media
rightly is "a concern of developing nations in relation to
developed ones," as well as a "concern of minorities within
particular nations."

The indirect but powerful influence exerted by advertising

upon the media of social communications that depend on
revenues from this source points to another sort of cultural
concern. In the competition to attract ever larger audiences
and deliver them to advertisers, communicators can find
themselves tempted — in fact pressured, subtly or not so
subtly — to set aside high artistic and moral standards and
lapse into superficiality, tawdriness and moral squalor.

Communicators also can find themselves tempted to ignore

the educational and social needs of certain segments of the
audience — the very young, the very old, the poor — who do
not match the demographic patterns (age, education,
income, habits of buying and consuming, etc.) of the kinds of
audiences advertisers want to reach. In this way the tone
and indeed the level of moral responsibility of the
communications media in general are lowered.

All too often, advertising contributes to the invidious

stereotyping of particular groups that places them at a
disadvantage in relation to others. This often is true of the
way advertising treats women; and the exploitation of

26
women, both in and by advertising, is a frequent, deplorable
abuse. "How often are they treated not as persons with an
inviolable dignity but as objects whose purpose is to satisfy
others' appetite for pleasure or for power? How often is the
role of woman as wife and mother undervalued or even
ridiculed? How often is the role of women in business or
professional life depicted as a masculine caricature, a denial
of the specific gifts of feminine insight, compassion, and
understanding, which so greatly contribute to the ?
civilization of love'?"

d) Moral and Religious Harms of Advertising

Advertising can be tasteful and in conformity with high moral
standards, and occasionally even morally uplifting, but it also
can be vulgar and morally degrading. Frequently it
deliberately appeals to such motives as envy, status seeking
and lust. Today, too, some advertisers consciously seek to
shock and titillate by exploiting content of a morbid,
perverse, pornographic nature.

What this Pontifical Council said several years ago about

pornography and violence in the media is no less true of
certain forms of advertising:

"As reflections of the dark side of human nature marred by

sin, pornography and the exaltation of violence are age-old
realities of the human condition. In the past quarter century,
however, they have taken on new dimensions and have
become serious social problems. At a time of widespread
and unfortunate confusion about moral norms, the
communications media have made pornography and
violence accessible to a vastly expanded audience, including
young people and even children, and a problem which at one
time was confined mainly to wealthy countries has now
begun, via the communications media, to corrupt moral
values in developing nations."

27
We note, too, certain special problems relating to advertising
that treats of religion or pertains to specific issues with a
moral dimension.

In cases of the first sort, commercial advertisers sometimes

include religious themes or use religious images or
personages to sell products. It is possible to do this in
tasteful, acceptable ways, but the practice is obnoxious and
offensive when it involves exploiting religion or treating it
flippantly.

In cases of the second sort, advertising sometimes is used to

promote products and inculcate attitudes and forms of
behavior contrary to moral norms. That is the case, for
instance, with the advertising of contraceptives,
abortifacients and products harmful to health, and with
government-sponsored advertising campaigns for artificial
birth control, so-called "safe sex", and similar practices.

28
 Bibliography
1. www.google .co.in
2. www.yahoo.com
3. www.wikipedia.org
4. Chris Moore of Ogilvy & Mather
5. Philip kotler
6. Advertising Management: Rajeev Batra, John G.
Myers & David A. Aaker: Prentice Hall India.

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