nick duff mkt 650 ethics paper

Exploiting Social Paradigms 1

Running head: EXPLOITING SOCIAL PARADIGMS

Exploiting Social Paradigms: The Ethicality Associated with Cultural Marketing Today

Nicholas C. Duff

Morehead State University


Abstract

In the world of marketing today, there has been an ever-increasing shift in choosing to

take advantage of or exploit social paradigms when it comes to advertising a product and getting

consumers interested enough to purchase. Specifically, marketing teams are choosing to utilize

their research of consumer markets to find those segments that represent lower-income minority

groups who are, therefore, more willing to purchase their products offered at lower prices. In this

study, I will attempt to convey the ethical implications in these practices as well as offer

solutions that could work to re-shape company-wide philosophies towards a consummate belief

in respecting customer values and offering superior customer-service.

Introduction

Ethicality can be a very sensitive topic of which to debate, particularly when it is done-so

with a specific focus on marketing and the ways in which marketing professionals will target and

exploit consumers. It certainly is not new news that companies within a capitalistic market are

going to place a primary focus on profits and on taking the necessary measures to expand the

consumer base so that, you guessed it, profits will continue to rise. However, it is not acceptable

for companies to exploit consumers (specifically from low-income markets) or to disrespect

consumer cultures in order to drive business success. All that this does is establish an

uncomfortable feeling of distrust and skepticism on the part of consumers. Whole-scale changes

have to be made in the marketing ideologies and practices that companies choose to employ.

From the bottom to the top of an organization, we have to get back to treating customers with the

respect and honesty that they deserve; not because it might improve the bottom line, but because

consumers are what allow companies to exist at all and they, therefore, should be treated as

valuable assets. This study aims to look at a brief overview of the ethical issues and


considerations that surround marketers and the companies for which they work, the impact of

culture in marketing practices, specific examples of consumer segments that have been targeted

by unfair advertising, and will offer suggestions for making meaningful changes in the

consumer-company relationship going forward.

The Ethical Issues in Marketing

It is hard to find a more controversial issue in today’s consumer markets than that of the

ethicality (or lack thereof) in the marketing practices of today’s capital giants. Ethical judgments

vary rather widely across individuals as every person has their own views on what constitutes

acceptable selling tactics and what crosses a moral line. This phenomenon, long recognized in

the field of psychology, poses a vexing practical problem in marketing because arriving at a

consensus of opinion concerning the ethics of various controversial marketing practices is often

incredibly difficult and sometimes impossible (Kleiser, Sivadas, Kellaris, & Dahlstrom, 2003).

Whether we are discussing back-door selling, slotting allowances, alcoh-pop drinks, tobacco

promotions, or ambush marketing, there are a vast number of ethical dilemmas in the ways that

marketers are choosing to promote their products and, more specifically, the consumer segments

that they are specifically targeting. It seems that far too often we can so visibly see how

companies are choosing to target minority markets with their advertising, but it is because of this

tactic that a large amount of distrust of powerful firms has blossomed.

Consumers are becoming more and more aware of when they are being exploited and,

thereby, taking it more and more offensively. As stated by Tichy and McGill (2003), a cascade

of public distrust – and disgust – has followed ethical transgressions by some of America’s most

visible business leaders, creating trauma on many fronts, none more critical than the need for

leaders who can raise the level of business ethics – and spread the word in the process. The


previous line cannot be understated, as it is the key to creating an air of honesty and integrity

between consumers and marketers. We are in a time, now, where weak or sleazy self-

aggrandizers cannot carry us safely into the future. We need smart, gutsy leaders with vision and

integrity to get us through the minefields – leaders who can teach others to follow in their

footsteps, hold firm to their values, and proliferate those norms across the organization (Tichy &

McGill, 2003).

To give an example of ethical malpractice in marketing today, let’s look at the

pharmaceutical industry, specifically. Drug companies today are increasingly becoming the

subjects of fierce criticisms from consumers.

They stand accused of focusing on “me too” drugs which confer little clinical benefit

over existing medicines; rushing these to market through cunning clinical trials designed

to make them look better than they are; and suppressing data to the contrary. The industry

is also lambasted for expensive, aggressive and misleading direct-to-consumer

advertising, which sometimes creates conditions to fit the drugs, rather than the other way

around (Weber, 2006).

It is because of actions such as these that there is such little trust of drug companies and the

legitimacy of the products that they are so frequently willing to try to convince us that we need.

A February 2005 Kaiser Family Foundation poll of 1,200 Americans found that 70 percent

agreed that drug companies put profits ahead of people (Weber, 2006).

Yet another aspect of the ethical dilemmas in marketing deals with marketing research.

The crux of the typical moral argument against deception in research is the contention that

regardless of the anticipated research ends, it is always wrong to mislead research participants

because deception represents a clear violation of the individual’s basic right to informed consent


and it shatters the trust inherent in the implicit contractual relationship between the researcher

and participant (Kimmel & Smith, 2001). Yet again we find ourselves referencing the concept of

the trust and the importance that it plays in consumer marketing. Whether it’s a customer in a

store looking at a product or a consumer who has agreed to aid in company research so that

organizations know which products to produce, marketers should respect their potential

purchasers. And what is the best way for companies to show respect to their buyers? By

promoting honest dialogue and implementing selling strategies based upon appreciation and

value of the customer’s time and business.

The Role of Culture in Marketing Practices

According to Kotler and Keller (2012):

“Culture is the fundamental determinant of a person’s wants and behavior. Through

family and other key institutions, a child growing up in the United States is exposed to

values such as achievement and success, activity, efficiency and practicality, progress,

material comfort, individualism, freedom, external comfort, humanitarianism, and

youthfulness.”

Where we grow up, the livelihood to which we grow accustomed, and the inherent values that

are instilled within us based upon our backgrounds is what ultimately determines where and in

what we find worth. Children who grow up in lesser developed countries will undoubtedly have

a much different view of self, their relationships with others, and traditions. It is because of these

differences that marketers have to attend so closely to the cultural values in every country and

with every nationality with which they hope to successfully market their products.

Culture plays a very important role in defining ethics standards because dissimilar

cultures socialize their people differently, according to what is (and, just as importantly, what is


not) acceptable behavior (Pires & Stanton, 2002). The international environment is often

recognized as attracting more difficulties for marketers because their ‘ethics’ parameters are

likely not to match the notion of ‘good’ in the foreign country where they wish to operate. This

results in a problem because it directly compromises successful international market penetration.

The key idea that marketers have to understand is that culture has a major impact on the

exchange process as a whole. Individuals from similar cultural backgrounds have a ‘collective

mental programming’ which is part of their conditioning that they share with other members of

their nation, region, or group, but not with members of other nations, regions, or groups

(Armstrong, 1996). To truly be successful international marketers, marketing professionals have

to be able to sell their product based upon a foundation of understanding of the foreign culture’s

law, respect for individuality, rights of property, religion, national identity and loyalty, and

values and customs (Armstrong, 1996).

Advances in communication, technology, and transportation have facilitated rapid

globalization and, as a result, more firms are conducting business outside of their domestic

borders. Due to this, business executives from an assortment of backgrounds and cultures have

been brought together and given the opportunity to foster entrepreneurial relationships built

around mutual respect for one another’s values. It is imperative in today’s world for

multinational businesspeople to be sensitive to these values, cultures, and ethical standards of

other countries. Given the increasing globalization of firms and the growing interdependencies

among countries far and wide, the need for clearer comprehension of cultural influences on

ethical and organizational practices has never been greater (Paul, Roy, & Mukhopadhyay, 2006).

For any companies that are striving towards globalization of their brands, it becomes absolutely

vital that executives clearly explain their expectations and any underlying assumptions at the


forefront of any business negotiations. Furthermore, it may prove very beneficial for business

executives to organize training programs for managers from participating countries which will

promote developing and reinforcing a formal or an informal common code of ethics (Paul, Roy,

& Mukhopadhyay, 2006). Doing so will work to minimize any instances of subsequent

misunderstanding or any unintended (what may be seen as) disrespectful business actions.

Targeting Minority Groups

Targeting minorities is increasingly seen as a form of exploitation on the part of

marketers. In regard to the bottled water industry as an example, a recent study found that Latino

parents are three times more likely to choose bottled water over tap water for their children. But

why is this? Hispanic children, according to the New York Department of Health, are at a

significantly higher risk of obesity than other groups. Parents who are aware of this trend fall

victim to the bottled water industries who use this information to convince Hispanic consumers

that their bottled water is ‘healthier’ and ‘purified’, thus manipulating the concerned parents into

spending more to get it. Along the same lines, marketing groups for soda companies will see the

‘higher risk of obesity’ statistic on Hispanics as a sign that they can convince Hispanic

consumers to buy more of their products. “Marketing for sugary drinks also may be targeted

disproportionately more often to minority and low-income youth who consume more of these

products and are at higher risk of obesity and related diseases (Whitman, 2011).” Furthermore,

beverage companies spent over 948 million dollars in advertising sugary drinks and energy

drinks in 2010 (Whitman, 2011), a trend primarily aimed at low income families who see their

products as nothing more than pleasing beverages that can be purchased at a cheap price. Many

do not even realize that they are being targeted by these soft drink and energy drink companies;


marketers are aware that based upon Hispanic health patterns, they are an easy sell if the

companies can provide a sweetened product at the lowest possible price.

Yet another minority group within the United States that we frequently see targeted by

marketing firms is the African American population, specifically those younger and living within

urban areas. In February of 1989, R. J. Reynolds introduced a new menthol cigarette called

Uptown into a Philadelphia test market composed primarily of young urban black consumers.

This move by the company immediately prompted public interest groups to bombard RJR with

complaints as well as moral outcries over what these groups perceived to be RJR’s blatant

exploitation of an already disadvantaged consumer group (Sautter & Oretskin, 1997).

Furthermore, these protestors believed that companies such as RJR should not contribute to the

further demise of the urban black community’s health standards by so evidently playing on the

knowledge of the higher degree of smoking-related illnesses found within the black population.

In Senate hearings since which have examined the targeting of minorities by alcohol and tobacco

companies, opponent’s arguments center around the mindset that minorities are more vulnerable

and/or easy manipulated than other groups in society with respect to the advertising efforts of

PHP (Potentially Harmful Products) marketers. Put another way, protestors are essentially stating

that PHP advertisements are capable of creating a need in minority markets that did not or would

not exist without exposure to such ads. Why is this? Companies do extensive research on

consumer markets before they ever decide on a marketing strategy. They are aware of the

consumers that make up the lower-income tiers of the market and who also comprise the

segments of the market that have the most alcohol and tobacco related illnesses. In knowing this,

both alcohol and tobacco companies will choose to distribute their products in and around these

markets because doing so provides the greatest opportunity for the companies to make profits.


Now let us take a look at multi-level marketing and the inherent un-ethicality associated

with it. Multi-level marketing (MLM), also known as network marketing, refers to the practice of

distributing, selling, or supplying products or services through various levels of independent

agents (contractors, distributors, etc.). These agents are, then, paid commissions, bonuses,

discounts, dividends, or other forms of consideration in return for selling products or services

and/or for recruiting other agents (Koehn, 2001). Classic examples of these types of companies

include Mary Kay, Avon and Amway. The vulnerability with to those who choose to get

involved with these types of companies centers around endless-chain distributing. Endless-chain

distributor schemes ask people to make an investment and, in return, grant them a license to

recruit others who, in turn, recruit still others into the scheme. Put another way, the investor is

essentially paying for the opportunity to receive compensation, but only when his or her recruit

brings others into the scheme. Such types of business activity take advantage of segments of the

population who are in need of a job and must work from home (typically younger mothers from

minority backgrounds). Pyramid schemes are fraudulent because they typically promise a large

return in return for a small investment (Koehn, 2001). Those who join early often do not make a

great deal of money and those who come in late make even less or sometimes even lose money

because there simply are not enough remaining people left to recruit. Because of this, the

corporation makes off with your initial investment and then you make even less in return in

trying to recruit business for said company.

Making a Change for the Better

Building off of the concept of trust, consumers want and need to see companies who are

socially responsible and who will put the investments from consumers to good use by not only

improving the customer-service experience, but by making decisions that will positively impact


humanity as a whole. What does this mean exactly? As consumers, we certainly want to be

treated with respect and we want to feel confident that in giving a company our business, that

same company will invest in providing us with continually improving customer service in

conjunction with reliable products. However, even beyond that, a great way for a company to

build upon my trust is for me to see that said company is about more than just making a profit.

Socially responsible corporate conduct and policies can further marketing and business goals

exponentially if they are managed from a strategic marketing perspective and if the marketing

tools and techniques utilized are used in projects to promote good causes (Ven, 2008). This could

mean donating a portion of proceeds to charity, investing in a playground renovation project, or

hiring veterans in need of finding work. Doing so brings an almost human-like image or vibe to a

company and it establishes a consumer belief that your company truly cares.

Ethical problems in marketing revolve around marketing professionals balancing their

duties and responsibilities toward the parties involved in the exchange process (Lund, 2000). In

other words, marketers have to be able to find the appropriate balance of, for instance, providing

honest competitive pricing related to their products and still meeting the profit goals set forth by

the company itself. Low and Davenport (2008) contend that both fair trade and ethical trade

movements increasingly need to rely on strategies for bottom-up change, meaning placing a

premier focus on serving the customer with reputable employees and a quality product. This

individualistic approach, referred to as ‘shopping for a better world’, must be augmented by

more collectivist approaches to affect transformative change; in particular, this means

establishing more mission-driven organizations led by professionals with a mindset and desire

towards developing affinity relationships with customers that reflect and promote fair and ethical

trade. For change to truly take place, there has to be commitment to change and towards a


restructure of operations so that the company mission towards ethical actions from the bottom to

the top of the organization are clearly seen (this includes product sourcing and product sales).

We (as consumers) need to grow to expect more from companies than just a tangible

product that we can purchase at a semi-reasonable price. It has to go much deeper than that if we

want to see a global shift in marketing practices and establish a true sense of trust and good-will

between marketers and consumers. Stakeholders and the market in general expect firms to

respond to ethically charged issues through their marketing practices and other behaviors (Martin

& Johnson, 2007). Examples of ethically-charged issues to which firms have been called upon to

respond include worldwide poverty and the spread of disease, global warming, natural resource

depletion, and the massive accrual of man-made waste (Taylor et al., 2007). As evidenced clearly

in the marketplace, firms respond to these and a host of other normative concerns along a

continuum with their activities and practices; instead of seeing companies addressing these issues

only when it is convenient or only when a chance for a profit is made visible, we need to see a

shift towards ethical over-conformity. Ethical over-conformity reflects situations where a firm

exceeds stakeholder expectations by adopting marketing programs and training behaviors that go

above and beyond what society has determined is acceptable (Martin & Johnson, 2007). Perhaps

this means donating products or committing a certain percentage of sales each year to disaster-

relief efforts, restructuring company operations to reduce paper use and, thereby, helping the

environment, or offering free company career fairs in low-income communities worked by

professionals who can offer interview tips, resume reviews, and general career advice.

Furthermore, we want to be able to clearly see that companies are making efforts to improve

their ethical marketing conduct. This means a company developing or restructuring employee-

training programs that place a specific emphasis on ethical conduct, hiring and using managers


who have demonstrated a commitment to running an organization in which people are treated the

right way, and (when necessary) reprimanding those employing unethical practices and teaching

them how to conduct themselves in a manner that reflects the company’s drive towards equality

and respect (Bodkin & Stevenson, 2007).

Conclusions

Ultimately, regardless of the groups or the minorities that may be targeted (because let’s

be honest, we are all targeted my marketers in one form or another), companies have to instill a

change in philosophies within their companies and devote themselves to promoting products and

services fair and honestly. This must be done in a manner that not only establishes trust and

mutual-respect, but that demonstrates a company-wide commitment to building a company-

customer relationship based upon an understanding of what people value and how those values

can be best represented and respected in marketing efforts. Extending upon this point, marketing

professionals and the corporations for which they work have to help foster changes in society as

a whole. It sounds like a pretty daunting to task to put on marketers, but what I really mean is

that corporations have to begin to put people before profits. The wonderful thing about it is that

if consumers see that you (as a company) are donating to charities, assisting in disaster relief

efforts, and implementing environmental renewal/protection programs, consumers are going to

naturally develop a greater appreciation for you and products that you offer, thus improving the

standing of the company.

We live in a society where we so often see people being targeted and taken advantage of

when the opportunity to make money is on the line; Hispanics being targeted by soft drink

companies, blacks being targeted by cigarette companies, stay-at-home moms being targeted by

multi-level marketing firms. We have to, as people, come to expect more of ourselves and, as


consumers, expect more from the companies from whom we so willingly do business.

Consumers have to become more knowledgeable and aware of oppressive advertising and have

the fortitude to let companies know when the ethicality of their marketing is unacceptable. From

a corporate standpoint, executives must hire and train leaders who can and will instill a

company-wide philosophy of valuing consumers by showing them that their customs and beliefs

are valued too. It does not have to be a game of deceit and manipulation; all it takes is a

willingness from marketers and consumers alike to expect more of ourselves and to demand

mutual respect.


References

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