Marketing ethics and legal considerations in American business

¶ … Marketing Products in America

Marketing in America

Marketing Ethics and Legalities

Marketing ethics is a field addressing the standards and ideals defining acceptable conduct in the market (Murphy et al., 2005). Typically this will occur within the context of an organization (Murphy et al., 2005) although it also applies to the activities of the organization in the marketplace whether that is domestic or an international marketplace. Usually ethical issues and unethical issues are easily distinguished, with unethical activities arising from the pressure to measure up to performance objectives (Murphy et al., 2005) or pressure instituted by leaders within an organization to meet certain organizational goals or standards.

Marketing is not simply a matter or product development and promotion; rather it includes a balance of legal and ethical considerations to create a balanced corporate setting for an effective marketing strategy. Ethical considerations typically impact the culture of an organization and customer expectations (Smith, 2000). An example of an ethical failure includes former senior executives at Ogilvy & Mather Advertising, who served over a year in prison because they overbilled the government for an ad campaign that was intended to warn children regarding the danger of drug use (Murphy et al., 2005). Sometimes unethical marketing is simply a matter of confusing marketing; one example is the marketing campaign Blockbuster initiated when it stated its "End of Late Fees" campaign, which led consumers to believe they would no longer have late fees; what consumers did not realize was they were paying the cost of the DVD if they did not return the cassette within the allotted time (Meyer, 2005). Failure to consider the legal consideration of marketing in America can lead to poor sales and business calamity. This paper discusses the legal and ethical considerations of marketing in American including a review of (1) unfair business practices and (2) ethical and legal considerations in online business.

Examples of unfair business practices include lowering prices to below market value to drive competitors out of the market (Smith, 2000). This is one example of unfair business practices; yet another is defamation, where competitors' products are viewed as inferior (Smith, 2000). Still other marketing strategies deemed unethical and unfair include not paying attention to customers in favor of self-interest (Smith, 2000). Sometimes this presents in the form of a marketing "mistake" as in the case of "New Coke" where a business exploited a short-term opportunity and exited the market quickly, to limit self-interest and put a constraint "on unethical conduct, as in the case of New Coke" (Smith, P. 4; Gaski, p. 328). Even large companies are at risk for corporate moral and ethical failures. Ethical problems and legal considerations are as old as business itself however; as Smith (2000) notes, "Roman philosopher Cicero's De Officiis discusses the moral duties of merchants" because merchants had social responsibilities they often failed to see through to fruition.

With regard to online marketing strategies, digital media, RSS feeds, and hyperlinks all offer new and fierce marketing strategies to U.S. based businesses (Smith, 2000). Ethical questions have come about in this new landscape. For example, questions such as freedom of press arise when legal entities are questioned as to whether marketing programs defame certain competitors (Smith, 2000). Marketing strategists have to be cautious about what they say so as to be sure to be ethical and legal when claiming certain things about their product, and those of the competitor.

Other legal considerations when marketing online include rights to publication and copyright. There are many considerations when publicizing material online. Trademark, patents, copyright laws and many other legalities must be considered. Rights to privacy and confidentiality are perhaps the number one consideration marketers have to think about with regard to ethical and legal consideration. To succeed in a marketing campaign, most strategists will collect information about their consumers. This might be as simple as collecting a "cookie" or reference number regarding the computer users ID each time they visit a site. Most sites however, also collect data on visitors or buyers via information collected from purchases, surveys or web forms.

Many ethical businesses will offer statements or opt-out or opt-in programs that state the consumers information will be kept confidential. Sometimes there are clauses in these confidentiality statements however, that allow the marketing strategist to sell the client's information to select buyers, including affiliates of the company. This can become a legal or ethical problem in a marketing campaign.

Conclusion

Marketing ethics is a complex arena involving integrity and many legal considerations. Businesses have an obligation to protect consumers and potential clients, as well as to maintain a culture that promotes fair business practices. Marketing strategy is about attracting clients in a fair and valuable manner, which ultimately will bolster business in the long-term, and keep clients coming back for more.

References:

Chonko, Lawrence B. 1995. Ethical decision making in marketing. Thousand Oaks, CA: Sage.

Gaski, J.F. 1999. Does marketing ethics really have anything to say? A critical inventory of the literature. Journal of business ethics, 18 (feb), 315-34.

Meyer, C.E. (2005). "Blockbuster sued over return policy," The Washington Post, Feb. 19,

Retrieved: http://www.washingtonpost.com/wp-dyn/articles/A36767-2005Feb18.html

Murphy, P.E., Laczniak, G.R, Bowie, N.E., & T.A. Klein. 2005. Ethical Marketing, Upper

Saddle River N.J., Pearson Prentice Hall.

Smith, N.C. 2000. Ethical guidelines for marketing practice: A reply to Gaski & some observations on the role of normative marketing ethics. Centre for Marketing Working Paper No. 00-701. Retrieved: http://www.london.edu/facultyandresearch/research/docs/00-701.pdf

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