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5 Principles of Ethical Marketing Explained: Finding The Right Balance.

Ethical marketing practises are only becoming more important as the years go on. With buyers being more astute when it comes to products and services on offer from a range of providers. We discuss the issues that arise when deciding if marketing efforts are ethical or not, examples of different marketing strategies and how your business can avoid any costly mistakes!

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Wikipedia defines marketing ethics as an area of applied ethics that deals with the moral principles behind the operation and regulation of marketing. In essence, ‘ethical marketing’ is not a defined set of rules one can abide by in the world of traditional marketing.

Being ethical is often down to individual moral judgement, but most commonly covers social responsibility, environmental awareness, avoiding fraudulent claims, stereotyping and a business' target audiences.

Ethical marketing practices are more important than ever with buyers being more astute when it comes to products and services on offer from a range of providers. As a result of the information being readily available to potential buyers through content marketing and social media promotion, ensuring that your message is impactful became highly important.

Can you identify the benefits that are going to make a buyer engage with you and not a competitor? Or are you finding yourself needing to create benefits and messages that do not necessarily exist/relate to your offering?

In this article, we discuss the issues that arise when deciding if marketing efforts are ethical or not, examples of different marketing strategies and how your business can avoid any costly mistakes.

Marketing Laws

Around the world, governing bodies set a number of marketing and advertising regulations to help protect consumers and ensure that businesses are operating morally.

One example is the UK’s Marketing and advertising laws which state all advertising must be legal, decent, truthful and include accurate descriptions of products or services. In addition, no campaign must encourage illegal, unsafe or anti-social behaviour. These laws are enforced by ASA (The Advertising Standards Authority)

In America, the FTC (Federal Trade Commission) is an agency independent of the US government that enforces the antitrust law and advocates consumer protection. The FTC state that claims in any marketing content must be truthful and based on evidence.

These bodies are quick to call out and prosecute even the biggest companies breaking the law. For example, in March of 2016, the Federal Trade Commission filed a lawsuit against Volkswagen. The FTC claimed that VW had been deceiving its customers with an advertising campaign promoting ‘clean’ diesel vehicles with lower emissions.

A more comical example occurred when Red Bull was sued in 2014 for their slogan ‘Red Bull gives you wings since the product did not actually give its consumers wings. Red Bull would have almost certainly won the suit but settled to avoid costs.

Ethically Unethical: Marketing Ethics

There are no clear-cut rules for ethical marketing, which can make it difficult for marketers to know what is and isn't acceptable. False advertising, promoting dangerous activities, and protecting consumers from misinformation is covered by some guidelines, but there are many other aspects of marketing that are not regulated. Ultimately, it is up to the public to decide whether or not a campaign is successful.

An example of where the line often gets blurred is in implementing modern-day business practices.

In recent times, consumers expect businesses to be green. Having to find the perfect balance of being environmentally sustainable and socially responsible, without producing an obvious marketing ploy. This is often a big issue to tackle.

With many brands setting out to give back to deprived communities, it begs the question: Do these companies really care? If the balance between taking genuine responsibility and wanting to generate publicity is not right, public outroar can destroy a brand's reputation.

Greenwashing

Greenwashing is where businesses market a product or service as environmentally friendly when in reality it is not. This also applies to previously established products & services that have been re-branded to be ‘green’ or ‘eco-friendly’ when realistically, they are not.

No matter which way you look at it, greenwashing a product is unethical. A consumer may make purchasing decisions based on environmental factors, which if proven untrue, could create a huge backlash and result in fines.

Another ethical question presents itself when products are newly labelled as ‘eco-friendly’ or ‘green’ without changing the product. Whilst the product may have always been ‘green’, is actively claiming its environmental responsibility taking advantage of eco-conscious consumers? Could this also be implying that manufacturing methods/ingredients/materials have been changed when it’s really only the sticker that’s been updated?

As discussed, modern buyer expectations can be daunting and potentially just too long-winded to implement in a timely manner. Changes needed to a product or service for it to meet new buyer expectations don’t often come under the remit of marketing teams. however, they are expected to prevent the backlash. Greenwashing is often a quick and easy option to save a brand from falling to the knees of a more sustainable and environmentally friendly alternative.

Moral Dilemmas

Marketers often face moral dilemmas. For example, some campaigns may make false claims or implications that are not true. In the pharmaceutical industry, when patents for drugs expire, any licenced company can manufacture these drugs.

The real issue arrives in the marketing tactics used by big pharmaceutical brands. The companies offering products such as Sudafed, Lemsip, Nurofen and other branded OTC drugs run TV and online ad campaigns. There is also a lot of imagery plastered around stores, especially in the UK.

Whilst these companies don’t make any false claims, the heavy promotion of drugs manufactured by larger companies may make them superior to smaller options, whilst in reality, the ingredients are identical.

Should brands present facts with total transparency when compared to generic offerings? In addition, are these companies taking advantage of the vulnerable and ill consumer, or just promoting their product that brings the best margins?

Another dilemma within the pharmaceutical industry is its product claims. As an example, some brands claim that cough syrup helps soothe coughs when in reality it’s made to soothe throats (often giving the impression that the cough has calmed down and feels less painful). Most people will see the positive effects of their cough by using syrup. However, the cough is actually still just as bad as before.

Examples like this show how blurred the line really is.

Consumer vs Business Buyers

With B2C marketing and advertising, you may think that brand loyalty plays a huge factor in the decision-making process of consumers (which it often does), but you may be surprised to hear that B2B companies often rely on brand loyalty even more due to large ramifications if the wrong choice is made.

Let's say that a consumer is loyal to Apple. If they then buy a Samsung phone at the start of a new contract, what are the consequences? The consumer is now stuck with a phone that they may not like for a year, a £500 - £1000 mistake they will learn from.

In the second case, a decision Maker in a large health insurance company chooses a certain developer agency to produce their app, but the app is delivered broken. What are the consequences?

Their customers may not be able to make claims on their insurance, legal action may be taken and the Decision Maker is likely fired. Concurrently, the reputation of the company is damaged and losses could occur if customers switch to a competitor.

The risks of changing providers for business buyers and getting it wrong are far greater than if a consumer makes the same mistake, meaning that marketing and advertising for companies targeting business buyers absolutely need to be honest, and accurate and make no false claims surrounding its cost savings or features.

Protect Yourself: Marketing for Business

After reading the last 1,300 words, you may be sick of hearing ‘marketing ethics’. However, it is important to discuss how businesses may need to adapt their marketing efforts to fall in line with ethical practices.

Luckily, it is hard to find examples of B2B businesses overstepping their boundaries when it comes to ethical marketing. This is mainly down to the routes to market used by B2B companies.

Marketing tools, such as Telemarketing and Email Marketing are effective as they allow you to communicate the benefits of your products and/or services directly to prospects.

If you’re interested in finding out more about how The Lead Gen Specialists’ range of B2B Lead Generation mechanisms can generate high quality leads for your sales team efficiently, and ethically, make an enquiry today!

Call 03332 400 054 or email enquiries@leadgenspecialists.co.uk

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