Multimedia Marketing/Marketing.iso/market/chapter1.8p

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SECTION 1.8 Ethics in Marketing Managemet

INSTRUCTIONS Answer this question for yourself:
             "How can marketing managers operate ethically?"

EXAMPLE

A packing company has a large sales force. One senior sales
representative has long been one of the stars in the sales force--
consistently leading the others in sales and profits. But over the
last few years, this individual has slowed down considerably. He
appears to be calling only on large-easy-to-sell customers and
neglecting new product development.

Would it be ethical to fire this individual? To demote him
to a lesser territory? He has been a loyal and productive
employee for years. Should he be rewarded for this or should
he be punished for his lack of effort? This case brings out a
number of ethical issues--the subject matter of this section.

DETAILS
Ethical issues often arise in marketing. Ethics refers to what is
morally good, right or wrong, according to accepted standards of
behavior. A department store employee, for example, might not try
to sell an expensive vacuum cleaner to a low income consumer,
because he believes that the ethical thing to do is to demonstrate
an inexpensive model. An advertising agency manager might not use
overly thin models in television commercials because he feels that
this induces young girls into eating disorders. An executive for a
supermarket chain might open stores in depressed areas because
there are few good stores there.

The field of ethics is related to the rules of acceptable actions
that one employs as a guide for day-to-day behavior. In marketing,
ethical conduct is based on dealings with other parties and is
guided by moral principles and codes of personal conduct. Basically,
it relates to what is good behavior.

Marketing ethics is sometimes a cloudy issue because different
individuals have different ideas as to what is ethical. There are
no fixed answers to most ethical questions and marketers must
select a standard of conduct that fits both their personal codes
and their environments. To some degree, marketers learn ethical
values from their culture. They also learn these values from the
specific company for which they work. Each firm has a culture which
includes a set of ethical standards.

The sales force for one auto dealership may have an ethical code that
says "Anything goes--say whatever you want as long as you get the
sale". Most new employees will quickly learn this code or leave the
company. Another auto dealership could have the opposite code and
strive for customer satisfaction.

The marketing concept can provide some ethical guidelines. This
philosophy indicates that marketers should make decisions that
result in customer satisfaction and company profits. Numerous
marketers feel that when they provide customer satisfaction they
are meeting the needs of others, not just their own needs, and
that this is ethical. Likewise, generating profits fulfills the
needs of stockholders and represents ethical conduct.

PROBLEM 1

Basically, ethical values among marketing managers:

A. Are learned in institutions of higher learning.
B. Tend to be instinctive, rather than learned.
C. Are not based upon personal codes of conduct.
D. Vary from one individual to another

WORKED

Ideas about what is ethical in marketing differ widely from one
person to another. Some marketing personnel feel that it is not
dishonest to take small items such as pens and writing paper from
the office for personal use at home. Others feel the opposite. Some
advertising personnel use very slim models to sell clothing. Others
believe that this is unethical, since it may contribute to anorexia
and bulemia (food disorders) among girls and young women. Some
product managers introduce new models every year, just to make old
models appear to be obsolete and to increase sales. Other managers,
avoid this pracatice, on ethical grounds.

ANSWER D

INSTRUCTIONS Answer this question for yourself:
             "How can marketing managers operate ethically?"

EXAMPLE

A packing company has a large sales force. One senior sales
representative has long been one of the stars in the sales force--
consistently leading the others in sales and profits. But over the
last few years, this individual has slowed down considerably. He
appears to be calling only on large-easy-to-sell customers and
neglecting new product development.

Would it be ethical to fire this individual? To demote him
to a lesser territory? He has been a loyal and productive
employee for years. Should he be rewarded for this or should
he be punished for his lack of effort? This case brings out a
number of ethical issues--the subject matter of this section.

DETAILS
There are a number of ethical theories available to guide marketing
managers. Marketing managers can find that some of these theories
can be useful guides (not necessarily specific rules) in guiding
them to morally correct conduct. They normally discover, however,
that ethics is not a science but an art. A theory which may seem
to be very acceptable to one manager may violate the principles
of another. Sometimes, a combination of ethical theories helps
particular managers in such cases.

Some of the more widely-employed theories are:

1. Idealism--which states that there are certain universal and
   abstract moral rules that must always be followed. One rule,
   for instance is not to behave in a way that would be harmful
   if everyone behaved in that way.

2. Stoicicism--which relates that persons should endure hardship
   and personal sacrifice and should avoid overly-emotional
   behavior. They believe that individuals should sacrifice
   personal need satisfaction to the needs of others.

3. Libertarianism--which indicates that individuals should do
   what they can to protect the liberty and freedom of others.
   It relates that it is unethical to interfere with these
   freedoms.

4. Hedonism--which indicates that individuals should pursue what
   they personally desire--that individual goals are guides to
   ethical behavior. However, hedonists feel that if people really
   think about what their personal goals are, they will agree that
   achievements such as world peace and the alleviation of hunger
   and other forms of human suffering are their real goals.

5. Utititarianism--which promotes the idea of "the greatest good
   for the greatest number" as morally desirable. The word "good"
   in this context, means satisfaction.

6. Judeo-Christianity--which proposes that authority for ethical
   behavior derives from God. This theory presents a number of
   rules for correct behavior that God has prescribed, as in the
   ten commandments. This theory stresses an attitude of caring
   for others and providing for their needs.

7. Instrumentalism--which proposes that there are no abstract moral
   principles. Rather, individuals should adjust their behavior to
   the situation which exists at the time the ethical decision must
   be made. Believers in this theory think that what is "right"
   should be based on judgement and intuition.

8. Hegelianism--which indicates that moral behavior is that which
   agrees with the customs and laws of the society in which the
   decision-maker lives. Believers in this theory are likely to
   propose obeying the law or not going against the group, in
   deciding what is proper. Often they will confer with other members
   of groups that are important to them, such as co-workers, and
   seek advice on ethical problems from them.

PROBLEM 2

A marketing manager for a heating and cooling equipment wholesaler
feels that he should not interfere in the personal lives of employees,
as by monitering their extra-marital affairs and drug consumption.

A. He is a Hedonist.
B. He is a Libertarian.
C. He is a Utilitarian.
D. He is an Instrumentalist.

WORKED

A marketing manger for a heating and cooling equipment wholesaler
feels that he should not interfere in the personal lives of employees,
as by monitering their extra-marital affairs and drug consumption.
Based on this, it would appear that he is a Libertarian.

ANSWER B

INSTRUCTIONS Answer this question for yourself:
             "How can marketing managers operate ethically?"

EXAMPLE

A packing company has a large sales force. One senior sales
representative has long been one of the stars in the sales force--
consistently leading the others in sales and profits. But over the
last few years, this individual has slowed down considerably. He
appears to be calling only on large-easy-to-sell customers and
neglecting new product development.

Would it be ethical to fire this individual? To demote him
to a lesser territory? He has been a loyal and productive
employee for years. Should he be rewarded for this or should
he be punished for his lack of effort? This case brings out a
number of ethical issues--the subject matter of this section.

DETAILS
Every ethical theory has practical applications. Some of these are:

. An Idealist product manager might avoid the production of inferior
quality products since this could harm consumer standards of living
if all companies did this.

.A Stoic marketing manager might work long hours to improve the
profit position of her company. She would make decisions designed
to improve sales and decrease profits.

.A  Libertarian sales manager may rule out pencil-and-paper
honesty tests for potential salespersons, feeling that such
testing infringes on the right of the individual for privacy.

.A Hedonist marketing manager might make a strong effort to preserve
the dignity of co-workers. She would make a special effort to avoid
hurting the feelings of others.

.A Utilitarian who is a product planner for a furniture producer
might believe that it is better to produce low-priced furniture
for large numbers of low-income consumers than to produce a
smaller amount of high priced furniture for the wealthy.;

.A sales representative who follows the Judeo-Christian theory
could make a strong attempt to determine the needs of each of
his prospects and then work diligently to permit accomplishment
of these needs. The representative might pass up the opportunity
to sell an expensive item, but would advise the prospect to buy
a less expensive product that would be more need satisfying.

.An instrumentalist has to decide whether to fire an employee
who was once very productive but now has slowed down. The manager
might decide not to terminate the employee because this does not
"seem to be right".

.A Hegelian store manager might consult his company's written
code of ethics for guidance when deciding whether or not to
use advertising that espouses buying products purely for the sake
of prestige.

All of these theories  have meaning to some individuals. Each
manager is in a position to decide which (or which combination) is
best in his or her case.

PROBLEM 3

A Hegelian sales manager wonders what he should do about an aging
senior sales representative whose productivity has fallen considerably
over the past two years. A likely action would be:

A. Discharge the sales rep.
B. Talk with the sales rep. and see if ways can be found to improve
   his productivity.
C. Ask other sales managers for advice.
D. Strive for the greatest good for the greatest number.

WORKED

A Hegelian sales manager wonders what he should do about an aging
senior sales representative whose productivity has fallen considerably
over the past two years. A likely action would be to ask other sales
managers for advice. Hegelians often feel that beliefs of important
groups to which they belong are good sources of ethical guidance.
They seek ethical insights from those groups that seem best qualified.

ANSWER  C

INSTRUCTIONS Answer this question for yourself:
             "How can marketing managers operate ethically?"

EXAMPLE

A packing company has a large sales force. One senior sales
representative has long been one of the stars in the sales force--
consistently leading the others in sales and profits. But over the
last few years, this individual has slowed down considerably. He
appears to be calling only on large-easy-to-sell customers and
neglecting new product development.

Would it be ethical to fire this individual? To demote him
to a lesser territory? He has been a loyal and productive
employee for years. Should he be rewarded for this or should
he be punished for his lack of effort? This case brings out a
number of ethical issues--the subject matter of this section.
DETAILS

There are various ways of solving ethical problems. These are the
law, industry self regulation, and informed self interest. No one
of these is inherently best. Often a combination of them is the
superior choice.

One way of solving ethical problems is simply to obey the law.
Companies that do this are pursuing the fundamental rules of
society. But, a company can obey the law and still be guilty of
treating others unethically. Generally, the law sets only minimal
standards of behavior, specifying actions that society has
prohibited. It does not spell out what is considered to be highly-
ethical behavior, however.

Some industries use self regulation to promulgate ethical behavior.
They have written codes of ethics to guide mangers. Better Business
Bureaus investigate charges of unethical and illegal practices and
try to alter these when they are discovered. The American Association
of Broadcasters will not accept some advertisements that they feel
are in bad taste. However, none of these groups has legal power
to enforce their decisions. Generally, they must rely on their
ability to persuade others to stop unethical behavior.

Some marketers feel that informed self interest is the answer to
ethical problems. They realize that they are very dependent upon
others, such as consumers, the government, and the public at large
for their existence and growth. If marketers create hostility with
these groups, they face loss of revenues, loss of esteem ad goodwill,
increased legal costs, and other damaging effects. These marketers
realize that ethical behavior is in their own self interest.

PROBLEM 4

A weakness of industry self regulation, as a device to promote better
ethics is:

A. There is no legal power to enforce the rules.
B. The rules are likely to discriminate against some firms.
C. The rules are often unfair to consumers.
D. The rules are normally too restrictive

WORKED

A weakness of industry self regulation, as a device to promote better
ethics is that legal power to enforce the rules does not exist.
Industry self regulation is not enforcable, in a legal sense. There
is no law that requires that companies can be forced to obey codes
of conduct. Hence, representatives of the trade association or other
collective group normally rely upon their persuasive powers. They
can, of course, threaten to expunge offending companies from the
association. This threat can be a potent force, as many firms feel
that they must have representation in the trade association, for
their own well-being.

ANSWER A