The different changes that are happening in the society greatly affect the norms and practices of people, especially those that are involved in the business sector. The existence of globalization has paved the way for business organization to expand their marketing operations outside their local countries and try targeting new consumers that are situated in foreign nations. However, in doing so, business organizations have to take into consideration the differences among nations, especially when it comes to values, beliefs, culture, legal system, and many others.
In line with this, respecting and properly addressing the differences among countries also entails properly applying the decisions and business strategy of the company in such a way that it upholds business ethics. Business ethics refers to the applied or professional ethics that is used in order to identify the morality or rightness of a decision or action in ethical issues that arise in business organizations (Crane & Matten, 2007).
In line with this, the case study of the British American Tobacco Australia (BATA) in marketing their Winfield brand in Asia should carefully consider the ethical implications of their market expansion to the welfare of the consumers in that part of the world and also the overall effects of it in the robustness of the company. Brief Summary of the Case Study The British American Tobacco Australia (BATA) is maker of Winfield, an Australian brand of cigarette. Winfield is available in countries such as: Australia, New Zealand, Pacific Islands, UK, and Europe.
The main competitive advantage of Winfield as compared with other brands is the reputation that it has wherein it boost quality along with the concept of ‘more for less’, without being regarded as a ‘cheap’ brand. The brand has showed strong financial growth starting from its launch in Australia and other international market place. However, the stricter tobacco advertising restrictions has made it difficult for the organization to market and communicate to the consumers in order to sell Winfield.
Due to this, the organization decided to enter the Asian market because their tobacco laws are not as strict as compared with the United States and Australia. BATA wants to maximize the potential of the Asian market before it begins banning cigarette advertising and tobacco smoking. In order to expand in the Asian market, BATA has to practice the multi-domestic marketing strategy. The multi-domestic marketing strategy entails that business organizations have to tailor made a marketing standard that adheres to the culture and personal preference of the target foreign market of the company (Kurtz, 2008).
In relation to this, business organizations also have the ability to maintain the standard quality of the product by making sure that despite the differences in the marketing strategy, it still adheres to the core value and objective of the brand (Kitchen & Schultz, 2001). Ethical Issues BATA has to address different issues when it comes to entering the Asian market. First, the organization has to identify as to what degree standardize policy on cigarette advertising and promotion has to be applied across borders.
Second, BATA needs to find ways in order to establish a balance between ensuring ethical marketing activities and still gaining from the freedom of communication in some international market places. BATA has to reconcile whether a global marketing strategy or multi-domestic marketing strategy is the most effective marketing model that will benefit the organization (Kurtz, 2008). The organization has to face the ethical issue that comes with marketing and selling their cigarettes in the Asian market.
BATA has to deal with the ethical dilemma that marketing Winfield in Asia might place the lives of people in danger because of ill effects of tobacco smoking. In addition, the organization also has to take into consideration the exposure of the marketing of Winfield to minors. Moreover, the reputation of the company should also be given utmost consideration because their image of giving quality products with a desire to give satisfaction to customers might be threatened by a wrong marketing move. Formulation of Alternative or Possible Solution
In order to properly address the ethical issues that exist and others more that might arise, BATA has to analyze their decisions and actions through the Social Contract Theory (SCT). The Social Contract Theory pertains to a wide range of theories that try to explain the idea of how people willingly give a part of their right in order to form the state with the main purpose of ensuring social order. Every individual has their own respective rights, which they freely surrender a portion of to a higher authority usually the government, in order to prevent chaos and preserve order in the society (Crane & Matten, 2007).
In the context of international business ethics, the Social Contract Theory allows the establishment of a framework that will help address the ethical issues in relation with Winfield. The Social Contract Theory solves ethical issue by means of the following: (1) establish core principles that are related to the organization; (2) provides recommendations for various communities; (3) examine the appropriateness of marketing practices; (4) enables the theoretical foundation of norms and values (Crane & Matten, 2007).
Based on the Social Contract Theory, the possible solution entails BATA should identify specific and effective core value system for the organization. In order to properly identify the decisions and actions that the organization recognizes as ethical or unethical an outline of the core value system of the organization is necessary. Another important step is for the organization to implement the multi-domestic marketing strategy that will give importance to the specific preferences of different foreign markets.
The organization has to tailor-made their marketing strategy to the needs of respective foreign countries. The appropriateness of the marketing practices of the organization should also be assured by means of establishing a separate department in the organization that will oversee that the marketing of Winfield adheres to the culture, preferences, and law of the foreign market it is being catered. Moreover, the norms and values of the company should be uphold by means of making marketing ads and other promotional materials that targets adults rather than minors.
In addition, BATA should place warnings about the ill effects of smoking to the health of people in the very packaging of Winfield and also, in their marketing campaigns even if the law of the foreign country does not require such. BATA has to protect the reputation of the organization and one effective way of doing so is by effectively practicing corporate responsibility (Blownfield & Murray, 2008).
The organization has to be mindful of their duties and responsibilities to their consumers and the society as a whole. Recommendation The Utilitarian approach to ethics is a kind of normative ethics that assesses the morality or rightness of action based on its outcome. In utilitarianism, a decision or action is ethical when it yields the greatest benefit for the greatest number of people (Crane & Matten, 2007).
Based on utilitarianism, BATA has to give importance to the welfare of their consumers and not only the organization’s profit in order to make their business processes ethical. By means of establishing the core value system of the organization and also by making sure that the promotion of Winfield is focus on adults together with the corresponding health warning, BATA can be able to give the greatest benefit or happiness to almost all stakeholders that are involve.
The organization will gain more profit and further develop their company by means of entering the Asian market. In addition, BATA’s greater corporate responsibility will further boost the reputation of the company. In the side of the consumers, they will have more variation when it comes to cigarette choices. The consumers are also properly informed by the company of the health risks of smoking, which will give them informed-consent on deciding whether they will smoke or not. References Blowfield, M.
, & Murray A. (2008). Corporate Responsibility: A Critical Introduction. New York: Oxford University Press. Crane, A. & Matten, D. (2007). Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. New York: Oxford University Press. Kitchen, P. J. , & Schultz, D. E. (2001). Raising the Corporate Umbrella: Corporate Communication in the 21st Century. New York: Palgrave Macmillan. Kurtz, D. L. (2008). Contemporary Marketing. New York: Cengage Learning.