Ethical And Socially Responsible Marketing Analysis
Read “Ethical Issues in Marketing: An Application for Understanding Ethical Decision Making” see attached
Write a 350- to 575-word analysis and evaluation of a company’s effectiveness in the following areas:
- Distinguish between social responsibility, ethical, and legal issues and their effect on marketing.
- Relate the triple bottom line to an organization’s sustainability.
- Analyze consumer influence on ethical behavior in marketing.
- Assess the value of communicating ethical behavior to the public.
- Conclude how ethical issues influence legal issues in marketing
Attachment Reference: Parilti, N., Kulter Demirgunes, B., & Ozsacmaci, B. (2014). Ethical issues in marketing: An application for understanding ethical decision making. Marmara University Journal of Economic and Administrative Sciences, 36(2), 275–298.
ETHICAL ISSUES IN MARKETING: AN APPLICATION FOR UNDERSTANDING ETHICAL DECISION MAKING
Nurettin PARILTI*, Banu KÜLTER DEMİRGÜNEŞ**, Bülent ÖZSAÇMACI
In recent years business ethics and social responsibility have gained great im portance in marketing practices, especially in societal marketing practices. Business es infinitely struggle to indicate their contributions to society. Consumers consciously evaluate this contribution. Manipulated consumer choices and unethical marketing applications can affect purchasing behavior. Particularly intense competition, glo balization and societal consciousness transform businesses into social organizations and lead them into marketing efforts offering social value. Although business ethics and social responsibility o f businesses have gained more attention in recent years, defining consumers’ perceptions on ethical issues is still minimal. This study presents an empirical research o f consumer perceptions on ethical issues. Reflection o f this perception on purchasing behavior is also another important issue to be considered.
The aim o f this study is to investigate the factors related with ethical issues in marketing practices and to reveal possible influences o f these factors on consumers’ ethical decision making. The main objective o f the study is to find out consumers’ perceptions on businesses’ ethical issues such as misleading advertising, deceptive packaging and to reveal the impact o f these issues on their ethical purchasing behav ior or ethical decision making. It also reveals which criteria is more important for ethical decision making.
This study reveals that consumers reflect their ethical perceptions on their purchasing behavior. Each ethical issue has been found to be a positive effect on pur chasing behavior. Businesses’ practices on packaging has been indicated as the most effective ethical issue on purchasing behavior. The study is considered to be a signifi cant outcome for businesses to direct their advertising, packaging and other activities.
Prof. Dr. Gazi University, Faculty of Economics and Administrative Sciences, Department of Management. www.nurettinparilti(5)gmail.com
Assistant Prof. Ahi Evran University, Faculty of Economics and Administrative Sciences, Department of Management. www.banukulter2000(5)vahoo.com Assistant Prof. Çankaya University, Department of Foreign Trade. www.bozsacmaci(5>cankava.edu.tr
Nurettin PARILTI * Banu KÜLTER DEMİRGÜNEŞ * Bülent ÖZSAÇMAC1
Keywords: Marketing Ethic, Social Responsibility, Purchasing Behavior.
JEL Classification: M14, M31.
PAZARLAMADA ETİK KONULAR: ETİK KARAR ALMA ÜZERİNE BİR UYGULAMA
Son yıllarda işletme etiği ve sosyal sorumluluk kavramları pazarlama alanın da özellikle de sosyal pazarlama faaliyetlerinde büyük önem kazanmıştır, işletmeler, topluma yönelik çabalarını göstermek için büyük bir uğraş vermektedirler. Tüketiciler ise söz konusu çabaları ve katkıları bilinçli olarak değerlendirmektedirler. Manipiile edilmiş tüketici tercihleri ve etik olmayan pazarlama uygulamaları, tüketicilerin satın alma davranışım etkileyebilmektedir. Özellikle yoğun rekabet, küreselleşme ve sosyal bilinçlenme, işletmeleri birer sosyal örgüt konumuna dönüştürmekte ve sosyal değer sunan pazarlama çabalarına öncülük etmektedir. Son yılarda işletmelerin etik ve sos yal sorumlulukları önem kazanmasına rağmen, tüketicilerin etik konular ile ilgili al gılarını tanımlamak konusunda eksiklikler söz konusudur. Bu çalışma, tüketicilerin etik konular ile ilgili algılarını deneysel bir şekilde sunmaktadır. Söz konusu algının, satın alma davranışına yansıması ise düşünülmesi gereken bir diğer önemli unsurdur
Bu çalışmanın amacı, işletmenin pazarlama faaliyetlerinde, etik konusu ile ilgili olabilecek faktörleri belirterek, söz konusu faktörlerin tüketicilerin etik karar verme sürecindeki olası etkilerini ortaya koymaktır. Tüketicilerin aldatıcı (yanıltıcı) reklam, aldatıcı paketleme, gibi konularda algılarını öğrenmek ve bu meselelerin on ların satın alma davranışlarında ya da etik karar verme süreçlerinde etkisini tespit etmek amaçlanmaktadır. Çalışma aynı zamanda hangi unsurun etik karar vermede daha önemli olduğunu ortaya koymaktadır.
Çalışmanın sonucunda tüketicilerin etik konulara yönelik algılarını, satın alma davranışlarına yansıttıkları ortaya çıkmaktadır. Her bir etik meselenin satın alma davranışı üzerinde pozitif bir etkisi söz konusudur, işletmelerin paketleme faa liyetleri konusundaki uygulamaları satın alma davranışı üzerinde en etkili unsur ol maktadır. Çalışmanın işletmelere reklam, paketleme, çevreyi ve tüketiciyi önemseme gibi konularda yol gösterebileceği düşünülmektedir
Anahtar kelimeler: Pazarlama Etiği, Sosyal Sorumluluk, Satın Alma Davra nışı.
JEL Sınıflaması: M14, M31.
1. Introduction Marketing management is an art and science of choosing target markets and
getting, keeping and growing customers through creating, delivering, and communi-
eating superior customer value1. From this definition we can say that the concept of customer value settled to the center of the contemporary marketing efforts. According to American Marketing Association (AMA), value represents the collective concep tion of what communities find desirable, important and morally proper. Companies should specifically include a conscious attempt about relating moral principles to all their business practices by the means of dealing and caring about all its stakeholders (customers, employees, suppliers and, local communities) as a result of ethical behav ior and social responsibility.
In the modem economic environment companies are stressed with the commu nication practices to make sure that customers get the accurate marketing message. Some of the companies may attempt unethical ways (e.g. producing low quality prod ucts, unfair pricing, misleading advertising, deceptive packaging) to take the lead in the competition challenge and influence consumers’ purchasing behavior to gather a bigger piece from the market share. The concept of consumerism takes place as a social force to protect consumer interests in the marketplace by organizing consumer pressures on business2. Consumerism is the public demand both for refinement in marketing practices to make them more informative, more responsive, more sincere, more truthful and more efficient, and for a new concern with factors other than pri vately consumed goods and services that determine the quality of life3.
On the other hand, a growing number of customers are becoming aware of the ethical implications of the products they buy and are adapting their purchasing behavior accordingly4. Ethical consumer behavior is a popular concept, which can be described as ‘decision-making, purchases and other consumption experiences that are affected by the consumer’s ethical concerns5. Through ethical concerns, consumers can communicate their attitudes or perceptions towards companies or marketing prac titioners into expressed purchasing decisions. A socially-responsible company will surely care about customers, employees, suppliers, the local community, society, and the environment.
The overall objective of this study is to investigate factors related with business ethics and to reveal possible influences of these factors on consumers’ ethical deci-
1 M. Ahmad, et.al. “Ethical Evaluation of Pharmaceutical Marketing in Pakistan”, Acta Bio- ethica, 17(2), 2011, pp. 215-224.
2 H. Ismail and M.EA.K. Panni, “Consumers Perceptions on the Consumerism Issues and Their Influence on Their Purchasing Behavior: A View from Malaysian Food Industry”, Journal of Legal, Ethical and Regulatory Issues, 11(1), 2008, pp. 43-64.
3 S.A. Sherlaker, Marketing Management, (6th ed). Himalaya Publishing House, 1999. 4 R. Harrison et.al. The Ethical Consumer, London: Sage Publications, 2005; T. Mason,
“The Importance of Being Ethical”, Marketing, 2000, pp. 27; RJ. McGoldrick, and O.M. Freestone, “Ethical Product Premiums: Antecedents and Extent of Consumers’ Willing ness to Pay”, International Review of Retail, Distribution and Consumer Research, 18(2), 2008, pp. 185-201.
5 E. Cooper-Martin and M.B. Holbrook, “Ethical Consumption Experiences and Ethical Space” Advances in Consumer Research, 20, 1993, pp. 113-118.
Nurettin PARILTI * Banu KÜLTER DEMİRGÜNEŞ * Bülent ÖZSAÇMACI
sion making. The main objective of the study is to find out consumers’ perceptions on businesses’ ethical issues such as misleading advertising, unfair pricing, deceptive packaging, caring about consumers and environmental issues and to reveal the impact of these issues on their ethical purchasing behavior or ethical decision making.
2. Literature Review When a marketing practitioner or a scholar interested with marketing ethics, at
least they need to know about Corporate Social Responsibility (CSR), ethical issues in marketing, ethical decision making process, and ethical purchasing behavior and con sumerism concepts. In the following sections related with literature review, authors will explain about each aspect in length.
2.1. Business Ethics Both marketing practitioners and scholars approach ethics concept from dif
ferent perspectives. One perspective is that ethics is about being moral individual and personal values which are the key elements to ethical decisions in marketing. Ethical features such as honesty, fairness, responsibility, and citizenship are assumed to be values that can guide complex marketing decisions in the context of an organization. On the other hand, approaching ethics from an organizational perspective assumes that establishing organizational values, codes, and training is necessary to provide consis tent and shared approaches to making ethical decisions6. Kotier (1997)7 approached this subject from a different point of view (best long-term interests of consumers and society) and called as, “societal marketing”. According to Kotier, marketers should build social and ethical considerations into their marketing practices.
Ethics has been termed the study and philosophy of human conduct, with an emphasis on the determination of right and wrong. For marketers, ethics in the work place refers to rules (standards, principles) governing the conduct of organizational members and the consequences of marketing decisions8. Ethics is defined as an in quiry into the nature and grounds of morality where morality means moral judgments, standards, and rules of conduct9. Murphy et al., (2005)10 mentioned ethical marketing as, practices that emphasize transparent, trustworthy, and responsible personal and
6 O.C. Ferrell and L. Ferrell, “Ethics and Marketing Education.” Marketing Education Re view, 14 (3), 2005, pp. 71-79.
7 Philip Kotier, Marketing Management: Analysis, Planning, Implementation and Con trol, 9th ed., Prentice Hall, Inc., Englewood Cliffs, NJ. 1997.
8 O.C. Ferrell, “A Framework for Understanding Organizational Ethics: New Challenges for Business Schools and Corporate Leaders”. R.A. Peterson and O.C. Ferrell, (eds.) Armonk, New York: M.E. Sharpe, 2005, pp. 3-17.
9 J. Tsalikis and D. Fritzsch, “Business Ethics: A Literature Review with a Focus on Market ing Ethics” Journal of Business Ethics, 8(2), 1989, pp. 695-743.
10 Patrick E. Murphy et.al. Ethical Marketing, Upper Saddle River, NJ: Pearson Education, 2005.
organizational marketing policies and actions that exhibit integrity as well as fairness to consumers and other stakeholders.
The literature in marketing and business ethics has grown even more volu minous and diversified after 1970s. Most of the models that have emerged are the products of scholars in psychology or related disciplines, including organizational behavior and marketing11. However, many researchers have worked on marketing ethics era and developed several theories12. Mayo and Marks (1990)13 also focused their research on the influences of deontological and teleological evaluations on the ethical judgments of marketing researchers as well as the relationship between ethical judgments and ethical intentions.
Deontological (or rule-based) theories and teleological (or consequential) the ories are the two broad categories of normative ethics theory. Deontological theories assume that a set of universal rules define what is right. These rules are “means”-ori- ented and accepted as guidelines for action. Fundamental to deontological theories is the inherent rightness of the behavior. Teleological theories, on the other hand, address the rightness or wrongness of an action on the basis of its consequences. One formulation of this type of theory is utilitarianism, which emphasizes creating the maximum benefits for the largest number of people, while incurring the least amount of damages14.
Another study focused on the influences of organizational ethical culture, and locus of control on deontological norms, and ethical perceptions15. Singhapakdi and Yiteli (1996)16 in their research, also examine the impact of the intensity of a moral issue on perceptions of an ethical problem and intentions. They explored the aspects of moral intensity investigated are the extent of consequences, social consensus, the probability of effect, temporal immediacy, proximity, and the concentration of effect.
In the long run, ethics and social responsibility issues should have positive impacts on the success of an organization. A responsible and ethical business practice
11 H. Tseng et.al. “Modem Business Ethics Research: Concepts, Theories, and Relation ships” Journal of Business Ethics, 91(4), 2009, pp.587-597.
12 S.D. Hunt and S.A. Vitell, “General Theory of Marketing Ethics” Journal of Macro Mar keting, 6(1), 1986, pp. 5-16; A.J. Dubinsky and B. Loken, “Analyzing Ethical Decision Making in Marketing”, Journal of Business Research, 19(2), 1989, pp. 83- 107; O.C. Ferrell et.al. “A Synthesis of Ethical Decision Models for Marketing”. Journal of Micro- marketing, Fall, 1989, pp. 55-64.
13 Michael A. Mayo et.al. “An Empirical Investigation of a General Theory of Marketing Ethics”, Journal of the Academy of Marketing Science, 18, 1990, pp. 163-171.
14 James Y.L. Thong and Chee-Sing Yap, “Testing an Ethical Decision-Making Theory: The Case of Softlifting”, Journal of Management Information Systems. 15(1), 1998 pp 213-237.
15 Anusom Singhapakdi and Scott J. Vitell, “Marketing Ethics: Factors Influencing Percep tions of Ethical Problems and Alternatives.” Journal of Macro Marketing 10 1990 pp 4-18.
16 Singhapakdi and Vitell, ibid, pp.4-18.
Nurettin PARILTI * Banu KÜLTER DEMİRGÜNEŞ * Bülent ÖZSAÇMACI
concludes in better customer and employee relations. This is why ethical judgments are made by consumers as well, and these judgments are likely to influence the con sumers’ acceptance or rejection of a company’s products17.
Marketing ethics and social responsibility issues are relating to the concepts of business ethics, community investment, environment, governances, human rights, market place and workplace. Corporate social responsibility is related to the social contract between business and the society11*. Steiner (1972) elucidated the concept of social contract as: “At any one time in any society there is a set of generally accepted relationships, obligations and duties between the major institutions and the people.” The concept of corporate social responsibility (CSR) is viewed as a comprehensive set of policies, practices and programs that are integrated into business operations, supply chains, and decision-making processes throughout the company and includes responsibility for current and past actions as well as future impacts. CSR goes beyond charity and requires that a responsible company take into full account of the impact on all stakeholders and on the environment when making decisions19.
Murray and Vogel (1997)20 found that CSR actions significantly predict pur chase intentions. Consumers’ purchase intentions were related to whether the compa ny’s ethics record exceeded their expectation. It is revealed that consumers expressed willingness to pay more for ethically made products21. A model of consumer influ ence (in terms of special interest groups and boycotts) on CSR is proposed by Smith (2001). Researchers also coined the term of corporate societal marketing to describe a range of ten activities that have economic and noneconomic objectives and influence social welfare. They show that questionable or unfair business practices may create serious penalties for the companies. Unethical firm behavior may damage firm repu tation and decrease consumer trust22.