Good ethics are a cornerstone of sustainable marketing. In the long run, unethical marketing harms customers and society as a whole. Further, it eventually damages a company’s reputation and effectiveness, jeopardizing its very survival. Thus, the sustainable marketing goals of long-term consumer and business welfare can be achieved only through ethical marketing conduct.

Conscientious marketers face many moral dilemmas. The best thing to do is often unclear. Because not all managers have fine moral sensitivity, companies need to develop corporate marketing ethics policies—broad guidelines that everyone in the organization must follow. These policies should cover distributor relations, advertising standards, customer service, pricing, product development, and general ethical standards.

The finest guidelines cannot resolve all the difficult ethical situations the marketer faces. Table 20.1 lists some difficult ethical issues marketers could face during their careers. If marketers choose immediate-sales-producing actions in all of these cases, their marketing behavior might well be described as immoral or even amoral. If they refuse to go along with any of the actions, they might be ineffective as marketing managers and unhappy because of the constant moral tension. Managers need a set of principles that will help them figure out the moral importance of each situation and decide how far they can go in good conscience.

Table 20.1

Some Morally Difficult Situations in Marketing

But what principle should guide companies and marketing managers on issues of ethics and social responsibility? One philosophy is that the free market and the legal system should decide such issues. Under this principle, companies and their managers are not responsible for making moral judgments. Companies can in good conscience do whatever the market and legal systems allow. However, history provides an endless list of examples of company actions that were legal but highly irresponsible.

A second philosophy puts responsibility not on the system but in the hands of individual companies and managers. This more enlightened philosophy suggests that a company should have a social conscience. Companies and managers should apply high standards of ethics and morality when making corporate decisions, regardless of “what the system allows.”

Each company and marketing manager must work out a philosophy of socially responsible and ethical behavior. Under the societal marketing concept, each manager must look beyond what is legal and allowed and develop standards based on personal integrity, corporate conscience, and long-run consumer welfare.

Dealing with issues of ethics and social responsibility in a proactive, open, and forthright way helps to build and maintain strong customer relationships based on honesty and trust. For example, think about SC Johnson, maker of familiar home-products brands such as Pledge, Shout, Windex, Ziploc, and Saran Wrap. SC Johnson believes deeply that “Integrity is part of our DNA. It’s been our family way since 1886.” Based on that belief, the company has a long tradition of doing what’s right, even at the expense of sales. Just one example involves Saran Wrap, a longtime market leader and one of SC Johnson’s best-known and biggest brands:23

For more than 50 years, Saran Wrap was made with polyvinylidene chloride (PVDC), an ingredient responsible for the product’s two major differentiating features: impenetrable odor barrier qualities and superior microwavability. Without PVDC, Saran Wrap would have been no better than competing wraps by Glad and Reynolds, which did not contain PVDC. In the early 2000s, however, regulators, environmentalists, and consumers began to voice concerns about materials containing chlorine, specifically polyvinyl chloride (PVC). In fact, SC Johnson’s own Greenlist analysis—by which it rates product ingredients based on their impact on environmental and human health—confirmed the hazards of PVCs, and the company quickly pledged to eliminate them from its products and packaging.

But SC Johnson took things a step further. In 2004, it also eliminated PVDCs, even though that important ingredient had not yet come under scrutiny. The company developed a PVDC-free polyethylene version of Saran Wrap, an admittedly less effective product. Sure enough, Saran Wrap’s market share dropped from 18 percent in 2004 to only 11 percent today. Over the years, however, even though such decisions have sometimes hurt sales, they have helped SC Johnson to earn and keep the trust of customers. “I don’t regret the decision,” says SC Johnson’s CEO. “Despite the cost, it was the right thing to do, and . . . I sleep better at night because of it. We gained a surer sense of who we are as a company and what we want SC Johnson to represent.”

As with environmentalism, the issue of ethics presents special challenges for international marketers. Business standards and practices vary a great deal from one country to the next. For example, bribes and kickbacks are illegal for U.S. firms, and various treaties against bribery and corruption have been signed and ratified by more than 60 countries. Yet these are still standard business practices in many countries. The World Bank estimates that bribes totaling more than $1 trillion per year are paid out worldwide. One study showed that the most flagrant bribe-paying firms were from Indonesia, Mexico, China, and Russia. Other countries where corruption is common include Sierra Leone, Kenya, and Yemen. The least corrupt were companies from Australia, Denmark, Finland, and Japan.24 The question arises as to whether a company must lower its ethical standards to compete effectively in countries with lower standards. The answer is no. Companies should make a commitment to a common set of shared standards worldwide.

Many industrial and professional associations have suggested codes of ethics, and many companies are now adopting their own codes. For example, the American Marketing Association, an international association of marketing managers and scholars, developed a code of ethics that calls on marketers to adopt the following ethical norms:25

• Do no harm. This means consciously avoiding harmful actions or omissions by embodying high ethical standards and adhering to all applicable laws and regulations in the choices we make.

• Foster trust in the marketing system. This means striving for good faith and fair dealing so as to contribute toward the efficacy of the exchange process as well as avoiding deception in product design, pricing, communication, and delivery or distribution.

• Embrace ethical values. This means building relationships and enhancing consumer confidence in the integrity of marketing by affirming these core values: honesty, responsibility, fairness, respect, transparency, and citizenship.

Companies are also developing programs to teach managers about important ethical issues and help them find the proper responses. They hold ethics workshops and seminars and create ethics committees. Furthermore, most major U.S. companies have appointed high-level ethics officers to champion ethical issues and help resolve ethics problems and concerns facing employees. And most companies have established their own codes of ethical conduct.

Google is a good example. Its official Google Code of Conduct is the mechanism by which the company puts its well-known “Don’t be evil” motto into practice. The detailed code’s core message is simple: Google employees (known inside as “Googlers”) must earn users’ faith and trust by holding themselves to the highest possible standards of ethical business conduct. The Google Code of Conduct is “about providing our users unbiased access to information, focusing on their needs, and giving them the best products and services that we can. But it’s also about doing the right thing more generally—following the law, acting honorably, and treating each other with respect.”

Google requires all Googlers—from board members to the newest employee—to take personal responsibility for practicing both the spirit and letter of the code and encouraging other Googlers to do the same. It urges employees to report violations to their managers, to human resources representatives, or using an Ethics & Compliance hotline. “If you have a question or ever think that one of your fellow Googlers or the company as a whole may be falling short of our commitment, don’t be silent,” states the code. “We want—and need—to hear from you.”26

Still, written codes and ethics programs do not ensure ethical behavior. Ethics and social responsibility require a total corporate commitment. They must be a component of the overall corporate culture. As the Google Code of Conduct concludes: “It’s impossible to spell out every possible ethical scenario we might face. Instead, we rely on one another’s good judgment to uphold a high standard of integrity for ourselves and our company. Remember . . . don’t be evil. If you see something that isn’t right, speak up!”

At the foundation of marketing is the belief that companies that fulfill the needs and wants of customers will thrive. Companies that fail to meet customer needs or that intentionally or unintentionally harm customers, others in society, or future generations will decline.

Says one observer, “Sustainability is an emerging business megatrend, like electrification and mass production, that will profoundly affect companies’ competitiveness and even their survival.” Says another, “increasingly, companies and leaders will be assessed not only on immediate results but also on . . . the ultimate effects their actions have on societal well-being. This trend has been coming in small ways for years but now is surging. So pick up your recycled cup of fair-trade coffee, and get ready.”27

Sustainable companies are those that create value for customers through socially, environmentally, and ethically responsible actions. Sustainable marketing goes beyond caring for the needs and wants of today’s customers. It means having concern for tomorrow’s customers in ensuring the survival and success of the business, shareholders, employees, and the broader world in which they all live. It means pursuing the mission of shared value and a triple bottom line: people, planet, profits. Sustainable marketing provides the context in which companies can engage customers and build profitable relationships with them by creating value for customers in order to capture value from customers in return—now and in the future.