How does Unethical Marketing Affect Consumers and Society?

With the gradual rise of the world economic level, marketing began to fill all people's lives. Outstanding corporate marketing has brought great benefits to the society and consumers. However, the problem of lousy marketing ethics in the society has a certain negative impact. This paper elaborates a number of aspects of unethical behavior that enterprises do, analyze two levels marketing in a number of aspects of unethical behavior to make specific exposition, in the marketing of moral problems of the two levels of reasons for analysis, finally to the existing enterprises and consumers to put forward the construction of ethical marketing suggestions.

What is Marketing Ethics?

Marketing ethics has two dimensions: positive and normative ethics. According to Laczniak and Murphy (2016), “Positive ethics describes what marketing managers actually do regarding ethical situation” (Laczniak & Murphy, 2016, p. 69). Positive ethics reflects the actual behaviors that marketers do, which happens everyday in the market. Two phenomenons in the market may suppress each other, for example, unethical marketing behaviors against positive corporate ethics. Understanding and analyzing the behavior of marketers is an important part of positive ethics, because marketers are the source of marketing behavior (Laczniak & Murphy, 2016). Normative ethics is an ideal ethical model and a goal that marketers should pursue. Therefore, we can only get close to our ideal model if we do well on what we are doing. In brief, normative ethics can only achieving by understanding positive ethics. Since there is a certain gap between reality and ideal, finding out the difference between them can improve the situation of marketing ethics.

Analysis of Problems in Marketing Ethics

The problems of marketing ethics run through all the marketing activities, because marketing activities are based on market research to consumers. Therefore, every segment may tempt enterprises to make unethical behavior to gain more benefits. Volkan, Umit and Fatih state that marketing ethics is “related to 4P-issues such as unsafe products, deceptive pricing, deceptive advertising or bribery, discrimination in distribution (as cited in Smith and Quelch, 1993, p. 13). From this we know that the unethical problems of enterprises can be reflected in different facets. The ethical problems on products, pricing, promotion and research will be discussed in detail below, also analyze how they affect consumers and society.

Ethical Problems in Products

The basic social responsibility of enterprises is to provide qualified products and services for consumers. However, some enterprises excessively pursue economic interests and use inferior or unqualified materials to process products, or the products themselves are harmful. For example, the Supreme Court in Florida adjudicated R.J. Reynolds Company and Philip Morris USA for millions dollars because they affirmed cigarettes (as their product) cause death of lung cancers to their consumers. Cigarettes have always been a typical example of unethical marketing because cigarette commodities are harmful to human body. It is a problem that the sale of cigarettes is unethical. In this example, Florida has adjudged that cigarette companies are guilty. Hence in real life, such conflicts are still unfolding, which corrupting the social atmosphere and the health of consumers.

Ethical Problems in Pricing

It is reasonable for enterprises to price their product according to their own product positioning. However, consumers do not understand the differences between the cost of manufactured products and the final cost that consumers spend. Therefore, whether an enterprise can provide a real and reasonable price is a test of corporate ethics. Kostis has concluded the following:

The study concluded that the majority of the companies in our sample do believe that pricing is associated with ethical considerations. More specifically, the pricing practices that were reported to lead to non-ethical behavior refer to the determination of prices that lead to excessive profits or take advantage of a customer's needs. Pricing below cost is also perceived to be a non-ethical pricing practice. (p.167)

Excessive high or low pricing will damage marketing balance, and it is unreasonable to use the price demanded by consumers to pricing. For example, a company sells cheap but not good quality bicycles for low-income people, seemingly helping low-income people, but actually using the mentality of consumers to buy low-price products to promote these bicycles. Hence this is an example of unethical marketing behavior in pricing.

Ethical Problems in Promotion

Promotion can stimulate consumers to purchase in a short time, thus some enterprises may use this opportunity to make unethical behaviors, deceive consumers and profit from it. For example, enterprise may raise products’ original price then take discounts, which is equivalent to the original price before the discount. This is a common promotion deception in the market. Businessmen take advantages of the gap which consumers always get the untimely information of price.

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Ethical Problems in Marketing Research

We have mentioned earlier that marketing behavior is based on market research, so consumers’ information has become an essential part of marketing research. Even some consumers might realized parts of their personal information are public for marketers, however the harmfulness of extensive access of their information hasn’t been paid attention (Upadhyaya, 2012). Abhilasha S. Upadhyaya who is a lecturer raised an example of unethical research, “Computer cookie, which are completely unsolicited electronic tracing devices that provide up-to-the-minute Web utilization record of consumers’ shopping behaviors” (p. 286). The vulnerability of network privacy gives enterprises the opportunity to process consumer sensitive information. Cookie records help companies get information about consumers. However, as Palmer (2005) also mentioned,

In the case of cookies and related information gathering technologies this point can perhaps be made even more clearly, since here we are often unaware of the very existence of the practice involved and thus of the companies and kinds of marketing connected with them. (p. 274)

Thus, consumers largely do not aware which information of them has been used for any commercial purposes. It is also more difficult for consumers to distinguish between positive and negative businesses in the market. The benefits gain from violating consumer privacy are short-lived, and the harm caused by this kind of behaviors is huge. Therefore, respecting consumer privacy will be an significant key to ethical marketing.

Reasons Cause Problems of Marketing Ethics

After understanding the existence of unethical marketing in the market, we can find out the reasons of immoral problems in order to solve them pertinently. Due to the integration of enterprises and society, the reasons of the problems can be divided into two aspects: internal factors and external factors.

Internal Factors Which Lead to Unethical Marketing

Insufficient ethical level of marketers. Marketers are the links between enterprises and consumers, thus it is particularly important for marketers to abide by the spirit of correct ethics.

“The American Marketing Association (AMA) is committed to ethical and professional conduct. This association has chalked out the Code of Ethics for the Marketing Professionals” (Mohamed, 2013, p. 3704). It also proves that the American market has certain ethical standards for marketers. When a society has requirements for corporate ethics standards, only those enterprises that meet the standards can obtain the support of most consumers. However, many people want to take a 'shortcut', which will not help them but will have certain impacts on consumers and society. Building their profits on the sacrifice of other people violates the moral concept of fair human rights. The unethical behaviors of marketing personnel such as obsolete marketing concepts, not focusing on consumers, seeking self-interest, etc.

Insufficient internal management of enterprises. A good leader is the cornerstone of an enterprise's success. The negative atmosphere of business leaders will seriously affect society, consumers and businesses themselves. The moral preference of the core management in an enterprise will directly affect the its morality. “ In 2007, a tobacco CEO said that if it was proven

to his satisfaction that cigarettes cause cancer, he’d probably shut (the company) down immediately to get a better hole on things. Their web site now admits that cigarettes cause cancer, but they’re still open for business” (Mohamed, 2013, p. 3706). The tobacco CEO didn’t take any actions, even the harm of cigarettes was conformed. Since, an honest, trustworthy and ethical CEO of will lead enterprises to an more ethical enterprise development path.

External Factors Which Lead to Unethical Marketing

Consumers’ issues. Consumers are not only external factors of enterprises, but also uncontrollable factors of enterprises. However, this does not mean that marketers will not behave immorally towards consumers. The poor self-protection consciousness of consumers also makes bad marketing possible. The main manifestation is that consumers lack the ability to identify bad marketing because of the influence of their knowledge and culture. “The net result is that services consumers will tend to rely more heavily on salespersons for advice, suggestions and recommendations of what is suitable for their service purchase (as cited in Crosby, et al., 1990; Dubinsky and Redulius, 1980; Shostack, 1977). Therefore, we know that consumers have no intuitive contact with service products and intangible products, and because they do not understand the products themselves, thus increasing the opportunities for the service industry to engage in unethical behaviors (Rao & Snusorn, 1997).