PRESTIGE INSTITUTE OF MANAGEMENT

“PRESENTATON ON ETHICS IN MARKETING”

PREARED BY:

KARTIK PARASHAR

WHAT IS ETHICS ?It is a system of moral principles. They affect how people make decisions and

lead their lives.

Ethics is concerned with what is good for individuals and society and is also described as moral philosophy.

The term is derived from the Greek word ethos which can mean custom, habit, character or disposition.

WHAT IS ETHICAL MARKRTING? Ethical marketing is less of a marketing strategy and more of a philosophy that

informs all marketing efforts.

It seeks to promote honesty, fairness, and responsibility in all advertising.

Ethics is a notoriously difficult subject because everyone has subjective judgments about what is “right” and what is “wrong.”

For this reason, ethical marketing is not a hard and fast list of rules, but a general set of guidelines to assist companies as they evaluate new marketing strategies.

IMPORTANCE OF ETHICS IN MARKETING

Ethical behaviour and corporate social responsibility can bring significant benefits to a business. For example, they may:

attract customers to the firm's products, thereby boosting sales and profits

make employees want to stay with the business, reduce labour turnover and therefore increase productivity

attract more employees wanting to work for the business, reduce recruitment costs and enable the company

to get the most talented employees

attract investors and keep the company's share price high, thereby protecting the business from takeover.

STRATEGIES OF ETHICAL MARKETING• Over the long term, an ethical marketing strategy is effective because customers

derive the benefits they expect from using the products or services which company offers.

SOME OF THE ETHICAL MARKETING STRATEGY ARE:

Safety• An ethical marketing strategy does not encourage or advertise unsafe

applications for a product. If your company offers products that are hazardous under certain conditions, an ethical marketing strategy highlights the dangers and gives clear instructions on how to avoid them.

Deception• Deceptive marketing practices are unethical. They include claiming qualities for a

product that the product doesn't have, advertising lifestyles that a product doesn't support and claiming a product satisfies a particular need when the product is unrelated to it.

Market Manipulation• A company employing an ethical market strategy does not engage in

manipulation of the markets. An ethical strategy analyses the target markets for information on how many items customers are likely to buy and makes sure there is an adequate supply. Creating artificial shortages as a tool for driving demand is unethical.

Pricing• Pricing signals for an ethical marketing strategy are derived from studies that

indicate what customers in a target market are willing to pay and the costs of manufacturing and distributing a product. It is unethical to set prices above an appropriate level to increase profits beyond the strategic plan or below such a level to drive competitors out of the market.

ADVANTAGES OF ETHICAL MARKETING

• Goodwill and Publicity

One of the major advantages of behaving in an ethical manner is the opportunity to foster a sense of goodwill among the general public toward your business.

Customers are increasingly concerned with using products produced in an environmentally sustainable manner and where the producers are paid a fair wage for their work

Cntd……..• Shareholders and Investors• In most cases, it will be important to shareholders that your business is managed

in an ethical fashion.

• Transparent accounting practices and an engaging, consultative relationship with your shareholders will encourage confidence in your business.

• Investors will be more willing to put capital into a business that they can see is ethically managed, because there is less chance that the business will be founded on unsafe practices.

Cntd…….• Competitive Edge

Ethical behaviour can serve to differentiate your brand from those of your competitors if you operate in an oversubscribed market, offering you a competitive edge.

Identifying your product and business practices as being founded on strong ethical principles makes your product or service more attractive to consumers -- a good example of this model would be the Body Shop, a cosmetics company whose products are not tested on animals.

Cntd………• Moral Obligations

• A powerful argument in favour of running the business in an ethical manner, aside from the financial benefits that can be gained, are the moral obligations the business has toward the community.

• A successful business takes from the community in the form of profits, which are distributed among its employees, directors and shareholders in wages and dividends.