Marketing Products in America Marketing in America

¶ … 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.

How Concerns Being Actively Addressed

Gaski (1999) suggests that from a pragmatic standpoint marketing ethics simply establishes normative principles that include "law and economic self-interest" (p. 316). These state that marketing and legal experts should obey the law and do what is simply right because if not, "it will be damaging to your interests in the long run" (p. 316). Gaski also states "as long as there is an expectation of economic loss from bad behavior that should be a deterrent…" (p. 318). However, for this to be realized, managers must identify their self-interest in the organization they work for (Smith, 2000). It is possible that this may include possible litigation and harm to a brand's reputation or brand image, not to mention self-image of the company and members of the company (Smith, 2000).

Perhaps the best solution is to institute "positive ethics" which offers practical "behavioral guidance" for marketing managers, which is not a practice simply stating that bribery might arise in corrective measures (Smith, 2000). Rather as Chonko (1990) notes, it identifies the influence of opportunity, social factors, and an individual's makeup, and notes what behavior is influenced by the opportunity for an individual to engage in any ethical behavior, where "opportunity is a function of organizational culture, professional codes, corporate policy, and punishments" (Smith, p. 7). Guidelines can then be established to encourage positive behaviors only. Positive marketing is much like positive reinforcement, where it encourages marketing managers to look at what behaviors they can attract to influence positive legal and ethical outcomes, especially in the global marketplace and while engaged in domestic marketing within the U.S.

With regard to the Internet, the American Marketing Association has established a Code of Ethics, which allows consumers their rights to privacy, and suggests that information collected from consumers should be used only for purposes expressly stated (Smith, 2000). However, this is not necessarily a legal requirement yet, and putting a legal requirement in place would certainly improve the ethical and legal rights of consumers operating on the Web, rather than enforce the self-interest of marketers operating on the Internet.