Ethical Issues Affecting Each Component of the Marketing Mix Ethical issues in businesses among other related issues like conflicts or success revolves around relationships. In today’s business world, it has become inevitable to built strong and effectives between all the key players in businesses. Key player in this case include shareholders, investors, customers, suppliers and managers who are responsible for the development of strategies aimed at attaining success (Carroll et al 403). The board of directors in every business has the mandate of giving direction and oversight making sure that the business does not stray from its course and remains relevant in achieving its objectives in a socially acceptable, legally acceptable and ethical manner. In many instances of unethical business conduct, there exists a certain degree of compliancy and knowing corporation which acts to perpetuate the acceptance of such conduct. Importantly, most ethical issues come into existence due to conflicts in belief patterns and value conflicts regarding what is wrong or what is right.
This occurs because ethical standards are a derivative of deeply-rooted personal believes and societal morals which may not be universally agreed upon. Ethical issues exist in all functional areas of the businesses including; finance, accounting, production, marketing, operations and even management. They involve practices like product safety, human resource management, plant safety, business practices and environmental problems among others (Carroll et al 412). The elements of the marketing mix are important aspects of the business which can be evaluated in the light of ethical issues. Marketing mix encompasses all the major areas of decision making affecting the marketing process and when carefully blended, desirable results for the organization are obtained. Marketing mix is important for all businesses as it shapes the function of marketing in both non-profit making and profit making organizations. As marketing managers make decisions about the overall process of marketing, they have to consider the specific elements of the marketing mix which include price, promotion, product and place and in other instances they are even supposed to consider the sub-elements in each element in order to satisfy the wants and needs of the customers.
Marketing mix holds a special place in businesses in that it is the hub identifying the best and suitable marketing strategy. Its purpose is balancing all the elements in order to come up with an ideal mix of all the controllable variables. As the markets demands change, the marketing mix also has to be changed in a manner which allows alignment with the goals and objectives of the organization. The external environment therefore plays a critical role in necessitating alterations and other changes in the marketing mix. One of the most fluctuating variables of the external environment is the customer; whose preferences and tastes change swiftly among other factors like brand loyalty (Stone 51). Given the importance of the marketing mix and the fact that all important aspects of the business revolves around it, it becomes a rather sensitive area in ensuring that regardless of the ambitions of the business, the management does not go overboard to affect its relationships with the other stakeholders who have any form of interest in the business (Tittle 12).
Ethical issues usually arise when some of these relationships are affected or the moral fiber as defined by law or the society in which this business exists is coarsened. This means that the business has a responsibility of providing the society with good made adhering to all ethical issues and also of high quality. In looking closely at all the elements of the marketing mix and how ethical issues can affect them, it is important to point out that the essence of the businesses is not only to maximize profits but also to take care of consumers of the products, the employees and the environment. The product, which is one of the elements of the marketing mix, is a sensitive component with regard to ethical issues (Swarbrooke and Horner 30). The whole product life cycle is vulnerable to ethical issue right from the development to its elimination. Ethical issues may arise from product packaging. Since businesses survival depends on attracting and retaining customers, some businesses use packages which do not actually represent what they are offering.
This may be in terms of underweight packaging or the use of colorful packages which do not really depict what’s inside. Ethical issues may also arise from the product testing especially for products like medication which must have many guidelines. Testing products on people is unethical and is prohibited by most societies. Cases of selling of banned goods are also many and this also involves the crossing of many ethical lines. It is highly recommended to ensure that all products entering the market are safe. Although “safe” in this case is subject to diverse interpretation, it is recommended that businesses disclose all the known harmful effect of product. This also touches on the sensitive issue of genetically modified products which must be clearly labeled to warn the buyers. A very good example of ethical issues arising from particular products was coke’s crisis of 1999 to 2001. In this case, ethical dimensions were explored when people fell ill after consuming this soft drink.
Much controversy also surrounded this case because school children fell ill after consuming this drink as the company had signed school contracts as a means of promoting the drink among the school children. The company took responsibility and recalled over 5 million cans under recommendation from the Belgium Ministry of Health. This ethical issues also touches on possible ethical issues which might arise in promotion as another factor in marketing mix. Pricing, which is one of the most regulated areas in marketing, has many possible unethical practices which might even not include illegality. There is price discrimination; transfer pricing, legal prohibitions, predatory pricing, and government price-fixing among other factors which might draw attention of ethical issues as far as ethical issues are concerned. There should be valid reasons governing the increase of prices of products to avoid taking advantage of the customer. The subjective and emotional nature of pricing avails many avenues of misunderstanding between the buyer and seller which might cause ethical problems. Common issues of this nature involve failure to disclose the actual price of the product and price fixing.
Other acts pertaining pricing include dumping which is the selling of goods at a loss with the aim of increasing market share but do away with competitors and bid rigging. A case which was well explored was that of Ryanair which is an airline company. This company was faced by much controversy due to their pricing and advertising. Bodies like Advertising Standards Authority claimed that this airline company did not advertise the actual prices it was charging. Further criticism was raised because of the fact that, they were charging very low prices with the intent of spoiling the market opportunities for other players and resulted to great losses in the 2008/2009 financial year even for British airways. Although many of these companies claimed that it was due to increased fuel prices, Ryanair was the root cause because it did not hike the prices accordingly.
Promotion employs different strategies like mass selling, personal selling and sales promotion to ensure the target market is informed of the existence of this product and the benefits if using such product (Fraedrich et al 24). Since it involves modes of persuasive communication and the fact that it involves visibility advertising, it is frequently criticized part in marketing. One true fact about advertising is the fact that the earliest use of advertising was based on genuine reasons and practices which had no ethical issues. Currently however, many issues are coming up which has forced governments and other bodies to introduce regulations to avoid misleading of customers. The content in the promotions must meet high standards of advertisement maintaining truth and honesty. Honesty issues were well explored in the early 1950s when the advertisement of tobacco came under much criticism as it was being alleged in advertisements that is promotes health (Carroll et al 5). This of course was found to be untrue and laws were set regarding false advertising.
This is a very good example of unethical conduct which arose due to promotion and attracted a lot of attention from the press and government. It therefore became paramount that all the promoters tell the truth about their products to avoid offence against morality and also the law. Advertisements especially those which will be seen by children must not contain aspects of sex, violence or profanity as they might cross many ethical lines. Still in promotion, it is considered ethically inappropriate and illegal to promote products through negative advertising strategies such as attack advertising. Adverts should not directly attack the disadvantages of the competitor’s goods but should focus on advantages of their own. With advent of the internet, other forms of advertisement have also emerged some of which are considered unethical in nature.
These include spam advertisements among other pop up windows which are unsolicited. Direct mail may also infringe on personal rights and therefore cross some ethical lines. The last element of the market mix to be considered is place. Place in this case covers many aspects leading to availing the product to the target market (Shimizu 13). Any product or service is of no value to the customer if it is not available at the right time and place. Ethical issues in the place element arise due to conflicts in the intermediaries of the distribution channel. The relationships in the channel of distribution cause much ethics related issues and these are brought mainly by power imbalance in these relationships.
Ethical issues may come in as a result of listing fees which may be hiked and provide a discrepancy between the operations of large suppliers and small suppliers. Corruption also comes in as a relevant ethical issue which can come in to the supply chain. Violation of the workers’ rights and the use of child labor and other practices like production in sweat shops or ignoring the safety, health or environmental standards can present an ethical problem in the element of place. Sweatshops have been a subject to much controversy in global business ethics. Examples of large corporations which have been implicated in this issue include Reebok, Gap and Nike. Wal-Mart’s case however has been much publicized where employees have been overworked or forced to work for extra hours without pay.
Although Wal-Mart has been constantly denying this, there is mounting evidence especially from cases filed in 2005 which suggest that according to the company policy overtime should not be paid. The 1996 Wal-Mart Lee collection was also publicized when it was found that, many of these clothes were made in Honduras in sweatshops with worker laboring for up to 20 hours per day. Discrepancies in pricing of the same item from one place to another are also other forms of unethical acts arising in the element of place. At such a time when there is heightened capitalization of the economy, ethical issues have become critical and the consumer can no longer be ignored. All decisions regarding marketing planning must therefore uphold high ethical standards. Unethical corporate have the capability of inflicting much suffering to investors, employees and consumers.
Carroll, Archie, and Buchholtz, Ann. Business and Society: Ethics and Stakeholder Management. Ohio: Cengage Learning, 2008. Fraedrich, John, Ferrell O. C., Linda Ferrell. Business Ethics: Ethical Decision Making and Cases. Ohio: Cengage Learning, 2009 Shimizu, Koichi. Advertising Theory and Strategies.16th ed, Souseisha Book Company: 2009. Stone, Phil. Make marketing work for you: boost your profits with proven marketing techniques. Small business. Oxford: How to Books Ltd, 2001. Swarbrooke, John, and Horner, Susan. Consumer behavior in tourism. Oxford: Butterworth-Heinemann, 2007 Tittle, Peg. Ethical issues in business: inquiries, cases, and readings. New York: Broadview Press, 2000.
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