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Ethics in Marketing

Ethics in Marketing

Marketing professionals with a backbone reap great rewards, including a solid career with the potential for advancement. But the high road is not always the easiest path to take.

“You know right from wrong,” says Laura Hartman, professor of business ethics at the DePaul University College of Commerce and author of Business Ethics: Decision-Making for Personal Integrity & Social Responsibility. “What’s tough is standing up for it. Sometimes, it takes a lot of courage to be ethical.”

Making moral decisions also requires intelligence and forethought. It’s easy, say professionals in the field, to fudge the truth to make a sale and believe the bottom line will be the better for it. Try telling that to those who were marketing Enron, the defunct Texas-based energy company marred by accounting fraud and cover-ups. “Someone was selling the deal,” says Victoria Crittenden, chairperson of the MBA Core Faculty at Boston College. “We just don’t hear about it.” But just because the marketing arm of an organization doesn’t get as much attention as the finance group, does not mean marketers have free reign.

In fact, everyone in business is wise to develop moral fibers, because ethical problems often lead to legal problems, which bite into profits -- not to mention your career ladder. The first step to confronting any dilemma is recognizing the moral dimension of it. Only then can you properly weigh the pros and cons of your options. Here are common ethical dilemmas you’re likely to face as a marketing professional and steps to keep your reputation intact:

Ethical Dilemma: How Far Can You Go in Stealth Marketing?

Scenario: An actor hired by a particular company poses as an ordinary Joe and strikes up a conversation with a potential consumer to praise the company’s product or service. Is this fair?

Case Study: Don’t think this could actually happen? Think again, says Hartman, who wrote about Sony Ericsson hiring actors posing as tourists to go to the Empire State Building to ask other visitors to take photos of them with the brand’s cameras. Then, the actors talked up the product. She cites other examples such as companies having publicity hires write recommendations for goods and services on various Web sites without disclosing their employer. These maneuvers, known as stealth marketing, are a hotly debated topic in the industry. Where should you stand?

Plan of Action: With an ever more sophisticated clientele, companies are quickly learning that transparency rules today’s marketplace. Therefore, experts say your only choice is to be honest and forthright. If you want consumers to sample your product in a natural setting, you can still have them do so. Just let them know who you are and why you’d like to talk to them. If the product is a good one, then your honesty should in no way diminish it.

Ethical Dilemma: Can You Sell Customer Information?

Scenario: When customers shop your online store, they leave an electronic trail that provides lots of information -- from their name and address to the types of goods that interest them when they search the site. A partner company would like to buy the data from you. Should you make the sale? Do you even have the right to use that information in house?

Case Study: Telemarketers and junk email are a part of everyday life. There’s no question that someone is passing around contact information. Companies are always looking to get in touch with customers and find out about purchasing patterns, says H. David Hennessey, professor of marketing at Babson College. Using consumer information is a privacy and fairness issue if not a legal one, he adds, because many people think their purchases are anonymous or somehow protected.

Plan of Action: Consult the company’s code of ethics to determine if standards have already been set about how much information you can use internally and externally, says Hennessey. He suggests you put together a group to create a policy about the acceptable ways to use information consumers share with you. Consider privacy law and the American Marketing Association’s set of standards when determining your code of conduct, say experts. Sometimes, the easiest and most effective way to confront such questions is simply to put yourself in your client’s shoes. Would you consider the use an invasion of privacy or betrayal?

Ethical Dilemma: Should You Recall a Flawed Product?

Scenario: You discover a flaw in one of your products, but telling the public might affect sales. What should you do?

Case Study: Many a company has had to grapple with this problem. Think of what must go into the decision to recall cars. Pet food makers had to react to the fact that some food was tainted and killing beloved cats and dogs. In 2006, some consumers of Bausch & Lomb’s ReNu with MoistureLoc contact lens solution suffered from a fungal eye infection, and the company’s marketers were criticized for reacting slowly and being close-lipped. Although extreme, these examples highlight the importance of gaining and maintaining consumers’ trust.

Plan of Action: Marketing 101 taught you that your main priority should always be to focus on the positives of the products and services you offer. However, you have to remember that stakeholders in your company aren’t just the financiers who birthed the enterprise but are also the consumers who keep its heart beating. “If profit maximization is going to lead the decision maker down the wrong path, that’s not right,” says Kirk Davidson, professor of corporate social responsibility and marketing at Mount St. Mary’s University in Emmitsburg, Maryland. “You can achieve satisfactory profits and do the right thing.”

Any industry expert will tell you -- just as they did Bausch & Lomb in 2006 -- if your product is in any way harmful, you must be honest, ask forgiveness and take action immediately. Take a page from Johnson & Johnson’s handbook. The company’s handling of the Tylenol tragedy in 1982, when seven people in Chicago died as a result of ingesting cyanide-laced Tylenol Extra-Strength capsules, is considered the best example of how to handle a product liability issue. The company swiftly pulled the products from the shelves and quelled the nerves of its consumers.

Ethical Dilemma: What’s Appropriate in Comparison Marketing?

Scenario: You’d like to put out an ad for your client that compares his product to the competition. How far can you go?

Case Study: Once you start looking for examples of comparison marketing, you will find them everywhere. Makers of acne medication pit an image of a client using one product, say Proactiv, versus photos of the same person using a rival product to show which zaps more zits. Phone companies are notorious for comparing their services and charges to those of a rival in television ads.

Plan of Action: There’s nothing wrong with wanting to show up the competition -- as long as you don’t step over the line. Be sure that everything you are publicly saying in favor of your company or product and against your competitor is actually true. Test the goods yourself before committing to any promotional materials. Double and triple check the facts. The bottom line is that inaccuracies in such comparison marketing undoubtedly lead to a courtroom, where your rivals will call you out on your errors. You could lose the big bucks, not to mention the respect of an otherwise trusting public.

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