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Ethical issues in marketing, advertising, and sales
Minette Drumwright
Marketing. The word is often used derisively even though it describes one of the primary fields of business. Marketing is perhaps the most visible and most criticized aspect of business. Some have argued that criticisms of marketing—especially its most visible component, advertising—are in fact criticisms of capitalism and the market system itself (Phillips 1997). Many sarcastically say “marketing ethics” is an oxymoron, and advertising ethics has been referred to as the “ultimate oxymoron” (Beltramini 2003). Delving into ethical questions is difficult for any profession because it raises complex, debatable, and often uncomfortable issues. However, such an analysis is vital to the responsible, ethical practice of marketing, and it is fundamental to understanding marketing and business more generally as a profession whose managers are “agents of society’s interest” (Khurana and Nohria 2008: 76).
This chapter begins with definitions of marketing and marketing ethics and then, in the second section, examines key criticisms of marketing, especially those related to advertising and personal selling. A third section proceeds to discuss concepts and frameworks helpful in understanding why ethical behavior in marketing is challenging and then suggests ways to encourage responsible, ethical marketing.
Marketing, ethics, and marketing ethics
The American Marketing Association defines marketing as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (American Marketing Association 2013). Marketing refers to “everything done to promote a brand, e.g., creating the product, pricing it, placing it where it can be bought, and promoting it” (Thornson and Rodgers 2012: 4). These activities are generally referred to as the “4 Ps: product, price, place, and promotion” (Kotler and Keller 2012; Thornson and Rodgers 2012). Advertising and personal selling are subfields of the fourth “P,” promotion.
Advertising traditionally has been defined as paid messages from an identified sponsor using mass media to persuade an audience (Thornson and Rodgers 2012). However, digital media have broadened and blurred the definition of advertising. Companies typically do not pay for advertising messages sent through social media platforms, and digital media provide opportunities to customize messages in ways that traditional mass media do not. On the other hand, personal selling involves face-to-face persuasion to sell a product (Anderson et al. 2007). Promotion also encompasses a variety of other communication approaches such as public relations and sales promotions. Public relations encompasses management and communication activities designed to enhance long-term mutual understanding, good will, and support between a company and its publics (Smith 2002), while sales promotions are incentives that organizations use to change temporarily the perceived value of a market offering (e.g., coupons, contests, price discounts) (Shultz, Robinson, and Petrison 1998). The various aspects of the fourth “P,” promotion, are the most visible and most criticized aspects of marketing.
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The other three “Ps”—product, price, and place (or distribution)—also raise many ethical issues. Moreover, marketing typically involves strategies integrating the “4 Ps” in a variety of ways depending on the objective, the target audience, and the context. A practice that might seem neutral on its face and unproblematic in one context might be unethical and highly problematic in another. Marketing can have unintended consequences. The complexity of marketing can make it difficult to draw the line between responsible ethical marketing conduct and irresponsible unethical marketing conduct. Drawing such a line sometimes depends upon one’s prior beliefs about responsibility.
The focus of this chapter is on identifying and understanding potential criticisms of marketing and the related ethical issues with the hope of encouraging responsible ethical marketing practices that can mitigate marketing’s potentially negative effects. However, one should note that marketing makes, or at least has the potential to make, many positive contributions to consumers and to the larger economic system (Wilke and Moore 1999, 2014). Benefits to consumers are intertwined with the notion of “customer focus” or “customer orientation,” which is the heart of effective marketing. “Customer focus” is premised on defining an organization’s strategic vision broadly in terms of customer needs rather than narrowly in terms of product attributes (Levitt 1960). As such, marketing can provide consumers with quality products and services that they need and want that are priced appropriately (Wilke and Moore 1999, 2014). Marketing also provides consumers with information about those products and services and makes them available for purchase in places consumers find convenient. Marketing’s potential benefits to the overall economic system are numerous and integral to a society’s economic prosperity (Wilke and Moore 1999, 2014). Along with providing employment and incomes for many people, marketing fosters innovation and plays a key role in enhancing the overall standard of living. Internationally, marketing contributes to a nation’s balance of trade, and, in seeking new markets, marketing can be a force for international development. However, the fact that marketing can be a profound force for good does not lessen the importance of examining it critically with an eye to potential ethical problems and ways to mitigate them.
Marketing ethics is the “systematic study of how moral standards are applied to marketing decisions, behaviors, and institutions” (Laczniak and Murphy 1993: x). One definition of ethical marketing refers to “practices that emphasize transparent, trustworthy, and responsible personal and/or organizational marketing policies and actions that exhibit integrity as well as fairness to consumers and other stakeholders” (Murphy et al. 2012: 4). A fundamental mistake is to assume that because something is legal, it is ethical, or that if something is unethical, it will be made illegal (Drumwright 1993). Too often ethics and law are blended, and the latter comes to define the former. The relationship between law and ethics requires clarification. Although laws ultimately reflect ethical judgments, and societies often make illegal what they consider most unethical, ethics often involves judgments about issues that have not been addressed in law. Marketing law is a subset of marketing ethics. It does not and cannot encompass all of marketing ethics. Ivan L. Preston observed that for marketers who believe the law is sufficient, “ethics never really starts” (1994: 128).
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Many of the general criticisms of marketing are primarily criticisms of the fourth “P,” promotion (or marketing communication). Criticisms of the other three “Ps”—product, price, place—often involve their intersection with promotion. For example, the ethical issues related to marketers’ primary responsibilities for the first “P”—product—often revolve around whether marketing communications truthfully portray the product’s features and benefits (Chonko 1995) and whether salespeople provide truthful information about the product and adequate instruction concerning correct usage of the product (Boedecker et al. 1991).1 Regarding the second “P”—price—marketers’ responsibilities intersect with communication around issues related to whether prices and any other customer costs are clearly, fully, and accurately conveyed in marketing communication.2 Ethical issues related to the third “P”—place (or distribution)—typically involve the manner in which a sales force interacts with and sells to various members of the distribution channel. Since other ethical issues related to distribution are often influenced or controlled by other members of the distribution channel, this chapter focuses primarily on general criticisms of marketing tied to marketing communications—particularly advertising and personal selling. An analysis of decades of criticism reveals some common themes, some of which are reviewed below. Themes sometimes overlap with one another, but each has been raised as a distinct criticism of marketing.
Marketing is deceptive
One of the most obvious criticisms is that marketing can be deceptive—that marketers “lie, do not fully disclose relevant information, and are guilty of . . . extreme embellishment” (Murphy and Bloom 1990: 73). As such, marketing communication is the focus of much legal regulation. However, regulations are frequently vague and subject to interpretation, and they are often under-enforced because of regulatory constraints or regulators who disagree with their content. In any event, regulations set only the moral minimum with regard to ethical questions. Most regulation of commercial speech in the US focuses on ensuring that advertising messages are not deceptive or misleading. Advertising claims must be truthful and substantiated, which means that the marketer must have proof that the claims are true. Marketing law scholars Rebecca Tushnet and Eric Goldman state the essence of advertising law:
No matter who the challenger is and no matter what the forum, the basic target of false advertising law is the same: deception that tends to make consumers more likely to buy what the advertiser is selling (or less likely to buy the competitors’ products or services).
(2012: 160–161)
Providing consumers with truthful information upon which to make sound purchasing decisions is not the only rationale for regulation of commercial speech. Assuring that companies compete on the basis of truthful information also contributes to a level playing field for competitors in which responsible ethical marketers who provide truthful information are not penalized. Unethical competitors who falsely claim product benefits in their advertising typically have an advantage, at least in the short term, over truthful marketers. To some degree, the playing field is leveled by having a criterion, such as truthfulness, to which all must adhere.
Determining what is ethical is usually more complicated than determining what is legal, and this is true for marketing. However, in marketing, even determining what is legal can be quite complicated and making responsible, ethical behavior difficult. As such, it is important first to understand the legal aspects of marketing. In determining whether a commercial message is misleading, regulatory agencies (e.g., the Federal Trade Commission, the Food and Drug Administration) and courts typically consider whether the “overall effect” or the “net impression” of an advertisement conveys a material fact in a manner that would mislead a reasonable consumer (Tushnet and Goldman 2012). A material fact is one that matters in the decision to purchase the product or service. A misleading portrayal of a material fact may be an explicit statement, or it may be implied by text, visuals, or a combination of the two. It may be misleading by what is omitted as well as by what is stated. As such, it is possible for a statement that is technically true to be misleading (e.g., something important is omitted). It is also possible that a false statement may not mislead (e.g., a reasonable person would not believe it, or it might not matter in purchasing). The “reasonable-person” standard takes into account the sophistication of the audience. For example, a doctor or nurse might not be misled by information that would mislead patients. Puffery represents the prototypical case of a false statement that is not deceptive because it does not state a fact that a reasonable person would believe (e.g., buy this pillow because it is as soft as a cloud). Puffery, which is legal, is defined as “advertising or other sales presentations that praise the product or service with subjective opinions, superlatives, or exaggerations, vaguely and generally, stating no specific facts” (Preston 1975: 17). According to the law, puffery is not deceptive because of one or more of the following characteristics: it is general and vague, subjective, impossible to measure or verify, or exaggerates in a way that no reasonable consumer would believe (Tushnet and Goldman 2012). Note that US advertising law regulates facts—not opinions. However, some scholars argue that puffery, nonetheless, makes misleading promises (e.g., Preston 1975, 1994; Prosser 1971). Ivan Preston (1975: 29) referred to puffery as “soft core” deception whose “continued existence in the mass media shows that advertisers think it effective with a substantial portion of the public in obtaining reliance and altering purchase decisions.” Marketers, no doubt, have a legal and an ethical obligation to be truthful. This is especially important because companies oftentimes have information about the quality of products that consumers do not have. As one can see, however, truthfulness is legally complex. The ethical marketer cannot assume that the law will be sufficient in determining responsible ethical behavior in marketing.
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Marketing is unfair
United States law requires marketing and advertising to be non-deceptive and non-misleading, but fair marketing and advertising typically go beyond the law and require ethical and responsible behavior by marketers. A broad concept, “fairness” encompasses behavior that is just and equitable. Marketers often have more information about product quality and more power in the exchange relationship than individual customers, which is referred to as the asymmetric power of marketing (Wilke and Moore 1999, 2014). To be “fair” also involves refraining from abusing power. Fair marketing is in opposition to a perspective known as caveat emptor (“let the buyer beware”). Caveat emptor puts the burden on consumers to be cautious rather than on marketers to be responsible. Fair marketing compels marketers to be forthright about any trade-offs, risks, or uncertainties involved in the products and services that they are promoting. Fair marketing prompts marketers to take into account any vulnerabilities of their target consumers that would hinder those consumers in making independent, competent, and informed decisions, and to refrain from appeals that would have detrimental effects on a target. In certain circumstances, some consumers (e.g., children, the elderly, the illiterate, the poor) may not have the skills, the capabilities, or the dispositions to make choices about products and services, particularly those that might be harmful. For example, is it fair for a state lottery to target low-income consumers, who can be easily lured by high dollar payouts, rather than affluent consumers for whom the price is trivial? Is it fair to target a less educated group who may not understand the odds of winning? Is it fair for a company with high sugar, high fat food products to target young children? At times, the problem may not be so much with a single ad or marketing campaign, but with the aggregate effects of many ads that differentially target a potentially vulnerable group. As an example, in Baltimore, 76 percent of the billboards in low-income areas advertised alcohol and cigarettes as compared with 20 percent in middle and upper income areas (Brenkert 1998). Determining what is fair may involve both examining individual marketing initiatives and assessing the aggregate effects of marketing.
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New media raise novel questions about fair marketing, and many of these questions are intertwined with issues of consumer autonomy; the ability of consumers to make independent informed decisions without undue influence or excessive power exerted by the marketer. For example, is it fair for marketers to target children with “advergames”—videogames designed specifically with the objective of promoting a brand or product (Cicchirillo 2014)—on websites? Advergames often incorporate elements designed to prompt children to play them for extended periods of time. As a result, children may be exposed to promotional messages in advergames for ten to fifteen minutes—creating a much more intense marketing exposure than a 30-second television commercial. Advergames affect product awareness, product attitudes, and product choice (Hernandez and Chapa 2010; Moore and Rideout 2007). Moreover, research has demonstrated that children often cannot distinguish entertainment from persuasion in advergames or in other forms of online marketing such as websites and viral marketing (Cicchirillo 2014; Eastin et al. 2006). Monica Hernandez and Sindy Chapa (2010) found that the emotional aspects of playing advergames positively affected the product attitudes and snack choices of adolescents. Fair marketing should take into account the limitations of children and adolescents and the potentially problematic characteristics of the medium that can diminish the autonomy of young consumers.
Other issues of fairness revolve around whether the marketer is clearly identified as the sponsor of a commercial message, and these also raise questions of consumer autonomy. For example, native advertising is an emerging form of digital advertising that looks as if it is content originating from digital publishers, but it actually comes from and is controlled by advertisers. The underlying premise of native advertising (perhaps more appropriately named “camouflaged advertising”) is that online readers will be more likely to respond positively to digital marketing tactics that mimic content rather than appear as advertising. Typically, great care is taken by advertisers to camouflage native advertising so that it truly looks “native.” Such tactics are problematic from a fairness perspective in that they compromise consumer autonomy by obscuring the commercial nature of the message. A defense of advertising has long been that people know that a message is advertising and can take the commercial nature of the message into consideration in evaluating the claims.
“Stealth marketing” or “undercover marketing” is another technique in which products are marketed to people who are unaware that they are the target of marketing. As with native advertising, these tactics are unfair in that they compromise consumer autonomy by concealing the commercial nature of the interaction. For example, in introducing the Ford Focus, Ford gave opinion leaders in some markets free cars with the understanding that they could use the cars for six months provided that they would promote them to their friends and acquaintances without revealing their agreement and relationship with Ford (Murphy et al. 2005). As another example, Sony Ericsson, in an effort to market its phone camera, hired actors to pose as tourists who demonstrated the camera and generated interest among other unsuspecting tourists (Vranica 2002). Similarly, while serving as Wal-Mart’s public relations counsel, Edelman Public Relations retained a retired couple to roam the country in an RV and park overnight in Wal-Mart parking lots (Gogoi 2006). All through their travels they created highly favorable videos about Wal-Mart, which they posted online on a blog without disclosing their relationship to Edelman or Wal-Mart. As this example illustrates, stealth marketing occurs online as well as through in-person contacts; irrespective of the context, non-disclosure results in both unfairness and a lack of respect for consumer autonomy. The couple appeared to be a part of an online grassroots movement called “Working Families for Wal-Mart,” which was created by Edelman. When companies hire people to pose as consumers who are a part of a grassroots movement, the technique is referred to as “astroturfing,” indicating that it is a fake grassroots movement (Bienkov 2012). This relates to the more general problem of fake online reviews. In 2013, New York Attorney General Eric Schneiderman announced that nineteen companies had been fined more than $350,000 and had agreed to stop posting fake online reviews of their products and services (Streitfeld 2013).
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Within the United States, the Federal Trade Commission (FTC) has long held that consumers have a right to know the sponsor of a commercial message. As an example, a 1968 FTC advisory demanded that “advertorials,” print ads that were designed to look like editorials, must clearly disclose that they were advertising, not editorial (Federal Trade Commission 2013). Likewise, the FTC opposed door-to-door salespeople who posed as pollsters to get a foot in the door and an audience with consumers. The FTC has recently clarified that advertisers, whether online or not, have an obligation to tell readers that a message is promotional and that a speaker has a connection to the promoted brand (Friel and Bohorquez 2015).
Another issue of fairness involves disclosing conflicts of interest. This issue is especially relevant in personal selling. Fair marketers try to avoid even the appearance of a conflict of interest, and when one exists, they should disclose it. Issues related to disclosing conflicts of interest have been highlighted recently in drug and medical device industries in which doctors, who are called “key opinion leaders,” have been paid by companies to promote drugs and medical device products to other doctors through a variety of marketing techniques without sufficient disclosures (Dhillon 2015).
Marketing is manipulative
Manipulation, like unfairness, is largely not regulated by law. Marketing has long been criticized for manipulating consumers and persuading them to buy products that have detrimental effects (e.g., cigarettes, alcohol, junk food) or things that they do not need (e.g., luxurious automobiles, expensive designer clothing, lavish homes) (Murphy and Bloom 1990). Manipulation and unfairness are distinct criticisms, yet they remain conceptually similar since both undermine consumer autonomy. At the heart of the criticism related to manipulation is concern about the inappropriate use of persuasion. Though it may be difficult to differentiate the informative and the persuasive, marketing scholars often adopt such a distinction arguing that a marketing message that informs with facts is generally not controversial. However, the appropriateness of persuasive tactics—e.g., emotional appeals, certain types of visual images—is debated. Some scholars have gone so far as to claim that all informative marketing messages are ethical, and all persuasive marketing messages are unethical (e.g., Santilli 1983). The premise is that persuasive marketing undermines the rational cognitive processes through which people determine what their needs and desires are and actually creates needs and desires (Galbraith 1958, 1967; Braybrooke 1969). Persuasive advertising prompts consumers to act upon desires that are not their own, and it undermines their ability to recognize and neutralize marketing’s manipulative power (Nwachukwu et al. 1997). For example, ads using emotion to play excessively on the anxieties and fears of consumers (e.g., ads targeting a vulnerable audience with scare tactics based on non-rational appeals) have been resoundingly criticized for undermining consumer autonomy (Hyman and Tansey 1990).
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Others have insisted that marketing does not undermine consumer autonomy in any significant way (e.g., Bishop 2000; Hayek 1961). For example, in response to John Kenneth Galbraith’s (1958) claim that marketing creates needs and desires, F.A. Hayek (1961: 346) asserted “that a great part of the wants which are still unsatisfied in modern society are not wants which would be experienced spontaneously by the individual left to himself, but are wants which are created by the process by which they are satisfied.” He suggested further that few needs are independent of the social environment, and most needs, including “probably all our esthetic feelings” for things like literature, are “acquired tastes” (346). As such, the fact that needs and desires are stimulated by marketing does not mean that they are not important or legitimate. As another example, with respect to advertising, John Bishop (2000) asserted that consumers have choice regarding their exposure to image ads, that they are free to accept or reject the images in the ads, and free to choose whether or not to buy the product. According to Bishop, any desires that image ads might create are not unconscious or irrational, and, as such, consumer autonomy is not undermined. Bishop’s argument represents a typical defense of marketing and advertising—“that consumers knowingly interpret visual or text-based messages, selectively choose meanings and resist rhetorical persuasion” (Borgerson and Schroeder 2005: 258). There is some evidence that individuals often believe that they personally are immune to marketing even when they believe that others are influenced by it. For example, in a survey of physicians, M. A. Steinman et al. (2001) found that a majority of respondents (61 percent) said that pharmaceutical marketing did not influence their own prescribing, but only 16 percent felt that other physicians were similarly unaffected (see also Orlowski and Wateska 1992; Schulz et al. 2013). As such, some scholars have referred to individuals’ claims that they are beyond influence by marketing as the myth of immunity to persuasion (Pollay 1986).
However one comes out on this theoretical debate, from a practical perspective the stance against persuasion is problematic for multiple reasons. First, distinguishing between information and persuasion can be difficult, and most ads are a combination of both. In fact, one could argue that it is often necessary to use a form of persuasion (e.g., appealing to a desire or pleasure) to catch a viewer’s attention in order to then impart information. Second, persuasion is often needed in advertising and marketing of social causes (i.e., social marketing) to motivate people to change their behavior (e.g., to refrain from texting and driving, to recycle, to avoid drinking and driving). Would we want to deny social marketers the use of persuasion? Few ethicists would likely say “yes.” As such, it is difficult to condemn persuasion in and of itself. In marketing, one must ask, “When does persuasion become ethically problematic?” Is it the target (e.g., children vs. adults), or the type of message strategy (e.g., fear and anxiety vs. hope and optimism), or the media (e.g., mass media vs. personal selling vs. direct mail), or whether the sponsor is clearly identified (native advertising in digital media vs. traditional mass-media advertising), or perhaps even the product (potentially harmful products, services, or ideas vs. unobjectionable products, services, or ideas)?
Marketing is intrusive
Issues of intrusiveness in marketing typically involve invasion of personal privacy. One definition of privacy is “the right to be let alone, or freedom from interference or intrusion,” and information privacy is defined as the “right to have some control over how your personal information is collected and used” (International Association of Privacy Professionals). As stated, concerns about privacy, particularly in the digital age, are wide ranging, and marketing is germane to only a part of the concerns, but it is not a trivial part. Marketing’s potential to intrude on privacy has increased exponentially as media and messages have proliferated and become more tailored to individuals (e.g., telemarketing, internet-based advertising, email marketing, social media). Technological advancements enabling behavioral targeting have exacerbated concerns about invading consumers’ privacy. Behavioral targeting allows electronic publishers and marketers to collect a wide range of personal information from consumers’ online activities. Marketers buy these data and use them in identifying target markets for their campaigns. Invasions of privacy occur when consumers’ personal data are collected (i.e., “mined”) or sold without their knowledge. In a sense, these concerns are not new. Point-of-sale data have long been gathered from physical transactions, and magazines have long sold their subscribers’ addresses to other marketers. However, some scholars have asserted that privacy issues in the online environment are fundamentally different in nature and scope from privacy issues in traditional environments (Ashworth and Free 2006). For example, cookies, spyware, adware, and online forums enable marketers to access a richer and more personal set of information (on consumers’ browsing patterns, purchases, dates and times of activities, even keystroke behavior) than what would be available through traditional point-of-sale data. In addition, online data can be collected without consumers knowing or being able to avoid the data collection.
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In the US, for example, FTC Chairwoman Edith Ramirez recently called for “an effective and meaningful” system “that would let consumers signal with their browsers . . . that they do not want their online behavior monitored for marketing purposes” (Guynn 2013). There have been some industry attempts at self-regulation that have fallen short. The FTC also has urged the mobile industry to include “do not track” features in software and apps on smartphones and tablets because consumers increasingly access the Internet through these devices (Wyatt 2013). The Children’s Online Privacy Protection Act regulates behavioral tracking of children under 13 years of age. Marketers must secure parental permission to collect a child’s personal information and must disclose how the information will be used. Most people would agree that marketers have an ethical obligation to permit consumers to opt out of data collection, secure their permission before collecting data, and inform them of the uses of the data. The debate and the problem begin with the implementation. For example, are the conditions and uses of data stated in clear and understandable terms, and are consumers’ identities protected when they permit their data to be collected? Most consumers know that this is not easily accomplished. Who reads all the warnings; and if one does, does one truly understand them, or have confidence that the conditions agreed to will be honored?
Despite strong concerns on the part of privacy experts and regulators, there is some evidence that consumers are relatively unconcerned about privacy. For example, Sableman et al. (2013) found that consumers in the US were willing to trade-off or ignore concerns about privacy in digital media in order to have ad content that was personally relevant. Likewise, advertising practitioners in the Middle East and North Africa reported that consumers in their markets were largely unconcerned about privacy issues and “drunk on their new found power to express their sentiments” with digital media (Drumwright and Kamal 2015: 11). These findings are in keeping with reports that consumers from both less and more affluent countries were generally inclined to set aside privacy concerns in order “to get a good product for a good price” (Belk et al. 2005: 282). That said, we do not always defer to consumers’ concerns (or lack thereof) as the sole arbiter of whether there should be regulations or standards of ethics.
Marketing also has the potential for troubling environmental impacts. It can intrude upon the natural environment with excessive use of outdoor media. It can also clutter the airwaves and electronic media. The shift from traditional to electronic media highlights the increased opportunities that today’s marketers have to spam and create excessive electronic advertising clutter now more than ever before. Technology has provided some market solutions such as ad-blocking software, but, as digital media platforms evolve, new opportunities arise for marketers to create electronic clutter.
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Marketing is wasteful
Charges that marketing communication is wasteful typically involve two topics: the sheer volume of money that companies spend on marketing to differentiate their offerings and communicate persuasive messages in a competitive marketplace, and, second, marketing’s impact on the natural environment. Companies have been called to task for spending money on marketing that perhaps would be better spent on other things such as research and development. As an example, in 2013, nine out of the ten largest pharmaceutical companies spent more on marketing than on research and development (Swanson 2015). The drug companies spent $24 billion on marketing to doctors, in which personal selling expenditures dominated, and $3 billion marketing to consumers largely through direct-to-consumer advertising. In response, some scholars argue that marketing is necessary to provide product knowledge, enlarge the market, and engender acceptance for new products and services (Wilke and Moore 1999, 2014). They also point to the potential benefits of an enlarged market such as lower prices and reduced distribution costs.
Marketing’s effect on the natural environment is dramatic and involves a wide range of issues from excessive product packaging to planned obsolescence. Excessive product packaging wastes natural resources and unduly contributes to landfills. “Planned obsolescence” is a strategy for reducing the time between product purchases by prompting consumers to replace functioning products with newer, more fashionable versions of the product. This criticism has been made of a wide range of products from fashion clothing to technology products such as the Apple iPhone, whose new versions sometimes require consumers to buy a new set of accessories. Planned obsolescence contributes to landfills as consumers discard functioning products. It also contributes to consumerism and the related false values that are discussed in more detail below. Defenders of marketing point to its role in the continued improvement of products and in enhancing the quality of product benefit bundles (Wilke and Moore 1999, 2014).
Marketing creates and perpetuates false values
Marketing’s power to create false values is premised on marketing’s ability not only to persuade but also to influence culture, and it typically results from the aggregate effects of many marketing messages and campaigns. There have been a host of specific criticisms, but one of the most prevalent involves marketing’s role in creating excessive materialism among consumers. These charges typically are tied to marketing’s role in molding what is referred to as a “consumer culture” or “consumerism,” a perspective that encourages the acquisition of goods and services in ever-increasing and seemingly unending amounts (Swagler 1994). Marketing, and especially mass-media advertising, have been accused of contributing to consumerism by elevating consumption over other social values, socializing individuals as consumers rather than citizens, and using products and services to fulfill social needs such as friendship. Excessive materialism has been identified as the source of many negative effects not only on culture but also on consumers: an unending treadmill of working and spending, a general dissatisfaction with their lives, and a state of what has been termed “affluenza”—a painful, contagious, socially transmitted condition of overload, debt, anxiety, and waste resulting from the dogged pursuit of more (deGraff et al. 2001). Consumerism is controversial enough in the US and in other countries with similar cultural values. It becomes even more problematic in societies with different cultural values in which it is seen as an assault on their values (Drumwright and Kamal 2015).
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A number of charges revolve around marketing’s, and especially advertising’s, ability to create, or at least reinforce, problematic stereotypes. Through the manner in which various groups are portrayed, marketing and advertising can selectively reinforce stereotypes about sex, gender, race, age, occupation, or groups such as people with disabilities in a manner that is harmful to the group. This argument hinges on the “gross imbalance of the images presented” (Bishop 2000: 381). Often, the most disadvantaged and marginalized groups have been the victims of stereotyping. For example, in the first half of the twentieth century, African Americans were portrayed in ads and other marketing materials as domestic servants (e.g., Aunt Jemima, Uncle Ben) (Sheehan 2014). Stereotypes do not need to be negative to be problematic. In a study of magazine advertising, Charles Taylor et al. (2005) found that Asian Americans were portrayed as the stereotype of the “model minority”—successful, serious, hardworking, and technologically sophisticated. The authors pointed to the manner in which even a positive stereotype can do a disservice to group members and have harmful effects, including damaging the self esteem of group members, limiting their opportunities, furthering their marginalization, and reinforcing and perpetuating stereotypes. In addition, the underrepresentation or invisibility of a group in advertising can contribute to feelings of marginalization and cause group members to view themselves as cultural outsiders (Sheehan 2014).
Debate and commentary about advertising’s aggregate effects on cultural values have a long history and cut across academic disciplines (e.g., Bishop 1949; Galbraith 1958, 1967; Leiser 1979; Pontifical Council for Social Communications 1997; Sheehan 2014). Pollay (1986) characterized this scholarship as “a major indictment of advertising” (31) that was “shocking” in its “veritable absence of perceived positive influence” of advertising (19). Beyond academic debate, marketing practitioners often have difficulty taking these concerns about the aggregate effects of marketing seriously (Lantos 1987; Drumwright and Murphy 2004). For example, Drumwright and Murphy (2004) found that the advertising practitioners in their sample were least likely to recognize societal-level ethical issues. The real culprits responsible for these effects are other parties—peers, parents, regulators, media (Lantos 1987). Others have asserted that marketing influences values even if only by choosing to reinforce some images rather than others (Drumwright 2007).3
Conceptual and theoretical perspectives on marketing ethics
Having considered the major criticisms of marketing, we now turn to scholarship that focuses on these topics in a more general way and provides insights into both problems and solutions.
Behavioral ethics and moral myopia
A relatively new field of research called behavioral ethics focuses on understanding why people make the unethical and ethical decisions that they do (Bazerman and Tenbrunsel 2011; Gino 2013; Prentice 2014; Drumwright et al. 2015). Drawing on research that cuts across contexts, it focuses on the cognitive limitations, social and organizational pressures, and situational factors that can make it difficult for even well intentioned people to act as ethically as they would like. Specific to marketing, Drumwright and Murphy (2004) found that advertising practitioners can fall prey to “moral myopia.” If advertising practitioners cannot see ethical issues clearly, or at all, it is hard to avoid ethical problems. Moral myopia is often reinforced and perpetuated by moral muteness, the unwillingness to talk about ethical issues. Moral myopia and moral muteness are often caused by a variety of rationalizations: “the client is always right,” “what is legal, is moral,” and “consumers are smart” (therefore, we could not mislead them if we tried). Marketing practitioners can also develop what Drumwright and Kamal (2015) referred to as “moral immunities” in which experienced practitioners become accustomed to unethical behavior over time to the point that it does not bother them and they accept it as status quo. As such, they continue to role-model unethical behavior, which serves to influence others, especially more junior workers, to engage in unethical behavior. Factors related to behavioral ethics hinder moral awareness and moral decision making. Marketers who are aware of these factors and their vulnerabilities to them are more likely to live in sync with their ethical values.
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Consumer sovereignty and ethical checks
With regard to the problems of consumer autonomy, Smith (1995) proposed a consumer sovereignty test that individual marketing practitioners can use in assessing their campaigns. It prompts a marketer to ask three questions about the campaign in question:
1 Do consumers have the capability to make an independent and competent decision, or do they have vulnerabilities that limit their capacities (e.g., age, education, income)?
2 Do consumers have sufficient information to make a competent, independent decision?
3 Do consumers have a choice and the opportunity to change their minds without excessive switching costs?
If the answer to any of the above questions is no, then marketers must rethink their plans. The consumer sovereignty test is helpful in identifying consumer limitations and vulnerabilities and serving as an antidote to a marketer’s tendency toward an attitude of caveat emptor (let the buyer beware).
Other scholars have suggested checklists as well. Some have recommended that marketing practitioners use a checklist of ethical questions based on comprehensive ethical theories. For example, Patrick Murphy et al. (2005) proposed a set of questions that test the ethics of a marketing campaign. For example, will major damages to people or organizations result from the action (the consequences test)? Is the action contrary to widely accepted moral obligations (e.g., duties of fidelity, duties of gratitude, duties of justice)? While it is helpful to analyze how ethical theories would play out in a given situation, using ethical theories does not necessarily resolve all ethical issues. For example, how does one know which ethical theory to use in a given situation? What should one do when different ethical theories lead to different actions?
Stakeholder marketing
Craig Smith, Minette Drumwright, and Mary Gentile (2010) have argued that marketers have learned the lesson of customer orientation so well that they have created a whole new set of problems. They pointed out that marketers tend to have 1) a single-minded focus on the customer to the exclusion of other stakeholders; 2) an overly narrow definition of the customer and his or her needs; and 3) a failure to recognize the changed societal context of business in which companies must consider multiple stakeholders to thrive. As such, some marketers view the customer only as a “consumer”—a commercial entity seeking to satisfy short-term material needs via consumption behaviors. The authors asserted that some companies are myopic in that they do not view customers as citizens, parents, employees, community members, or people who have a long-term stake in the future of the planet.
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The authors cited also argued for embedding stakeholder management in marketing practice. Such practice calls for a more sophisticated understanding of consumption that takes into consideration a wider set of stakeholders, including groups that managers often see as adversaries (activists, scientists, politicians, and the local community) (Freeman et al. 2007). Collaborating with these stakeholders potentially could help marketers develop foresight regarding future market trends, and it could prompt innovation. For example, rather than initially resisting their critics, what if food manufacturers and fast food retailers had responded to their critics by leading the way in providing new healthy food options? Smith et al. (2010) recommended that marketers map stakeholders, determine their salience or importance, research stakeholder issues and expectations, engage stakeholders, measure impact, and embed a stakeholder orientation in marketing practice. Stakeholder marketing involves far more than market research: it encompasses interacting with stakeholders, listening to them, and collaborating with them to generate mutually beneficial solutions.
Another approach that prompts companies to think about multiple stakeholders is referred to as the “quadruple bottom line” (Drumwright 2007). It augments and expands the “triple bottom line,” which advocates of corporate social responsibility have long recommended. The triple bottom line encompasses 1) the traditional financial bottom line, 2) a social bottom line that focuses on stakeholder relationships with the immediate community, and 3) an environmental bottom line that involves assessing the business’s impact on the natural environment. The fourth bottom line is cultural, and it assesses a firm’s impact on the culture or cultures within which it operates. For example, in one study, advertising practitioners in the Middle East and North Africa expressed concern about the effect of marketing campaigns imported from other parts of the world and adapted by expatriate workers who had little understanding of the local culture (Drumwright and Kamal 2015). They perceived that these campaigns were diluting the indigenous culture. The quadruple-bottom-line approach seems especially relevant for marketers in that it puts social issues related to criticisms of marketing (e.g., creating false values) on the agenda.
The notion of alternative bottom lines has been criticized for being vague and for dealing with dimensions that cannot be aggregated in the same way as a financial bottom line (Norman and MacDonald 2004). For example, the social bottom line typically encompasses information such as employee turnover and satisfaction, customer satisfaction, and pending law suits by employees or other stakeholders. These diverse measures cannot be aggregated into a single standard indicator that can be compared across companies. Furthermore, Wayne Norman and Chris MacDonald (2004: 249) asserted that “it would be impossible to formulate a sound and relatively uncontroversial methodology to calculate a social bottom line.” Despite these doubts about the coherency of “alternative bottom lines,” many scholars still invoke these notions as a means of elevating aspects of company performance other than the financial dimension.
Concluding remarks
Marketing often pushes the boundaries of what is familiar and acceptable. That is often what makes it work. In such a context, however, making ethical judgments can be particularly challenging. Scholarship on marketing ethics also faces challenges. Its difficulties range from framing normative judgments to defining the object and scope of investigation. The amount of academic research on marketing ethics has not been commensurate with its importance. The scope of ethics in marketing is so broad and encompassing that research is thin and inconclusive in important areas, and some areas have received far greater attention than others. Research on marketing ethics has been investigated largely through a micro-macro approach (Drumwright 2007). Much of the micro-level research is descriptive and focuses on consumers’ perceptions of whether individual ads, campaigns, or specific advertising techniques are ethical. While consumers’ perceptions can certainly be informative, one has to wonder if consumer perceptions are sufficient to illuminate the ethics that should guide marketers’ actions and if it is sufficient to focus on perceptions of individual ads, campaigns, and techniques without considering their aggregate effects. Much of the research on macro issues in marketing has consisted of commentary and debate regarding marketing’s impact on society. There is a need for more empirical research using expanded multidisciplinary research approaches to capture longitudinal effects that may not be directly observable. The intermediate or meso level of organizations or groups of organizations generates its own issues such as organizational culture, climate, systems, policies, and practices and their effects on marketing ethics. These topics have been generally under researched.
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Practice and research related to marketing ethics must encompass an awareness of all three levels.4 It is often not enough to analyze the ethics of an individual ad, selling technique, or campaign at the micro level of a single marketing initiative. A marketing initiative must also be assessed in terms of the impact of many similar campaigns targeting the same group or groups. The meso level is particularly important in that it shapes behavior at the micro level, and without meso-level collaboration of groups of organizations, it is impossible to influence macro-level criticisms of marketing.
Marketing professionals, scholars, critics, and ethicists may disagree about what constitutes responsible, ethical marketing and where to draw the line between responsible, ethical marketing and irresponsible, unethical marketing. Disagreement is not the problem; failure to recognize the ethical questions that marketing raises is.
Essential readings
For an examination of ethical marketing as it applies to the four “Ps,” see Patrick E. Murphy, Gene R. Laczniak, Norman E. Bowie, and Thomas A. Klein, Ethical Marketing: Basic Ethics in Action (2005). Comprehensive models of ethical decision making in marketing are presented by Shelby D. Hunt and Scott Vitell, “A General Theory of Marketing Ethics: A Revision and Three Questions” (2006) and O.C. Ferrell, “A Framework for Understanding Organizational Ethics” (2005). For a classic debate regarding the criticisms of advertising, see Richard W. Pollay, “The Distorted Mirror: Reflections on the Unintended Consequences of Advertising” (1986) and Morris B. Holbrook, “Mirror, Mirror on the Wall, What’s Unfair in the Reflections on Advertising?” (1987). For an understanding of behavioral ethics and advertising, see Minette Drumwright and Patrick E. Murphy, “How Advertising Practitioners View Ethics: Moral Muteness, Moral Myopia, and Moral Imagination” (2004) and Minette E. Drumwright and Sara Kamal “Habitus, Doxa, and Ethics: Insights from Advertising in Emerging Markets in the Middle East and North Africa” (2015). For international perspectives on marketing ethics, see Patrick E. Murphy, Gene R. Laczniak, and Andrea Prothero, Ethics in Marketing: International Cases and Perspectives (2012).
For further reading in this volume on complementary considerations in management ethics, see Chapter 26, Theoretical issues in management ethics. On the topic of “moral myopia,” one may consult the discussion of moral blindness in Chapter 4, Teaching business ethics: current practice and future directions, and that on moral awareness in Chapter 27, The ethics of managers and employees. A critical assessment of ethical expertise is offered in Chapter 3, Theory and method in business ethics. For further reading on the conceptual issues of regulation and business activity, see Chapter 21, Regulation, rent seeking, and business ethics. For a wide-ranging examination of market innovation, see Chapter 19, Creativity, innovation, and the production of wealth. On questions of norms in and across divergent cultures, see Chapter 33, Cross-cultural management ethics in multinational commerce.
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Notes
1 Marketers’ responsibilities for product issues that do not intersect with promotion, such as product safety, are typically in collaboration with other business functions, such as product design and engineering.
2 Marketers’ responsibilities for pricing issues such as dynamic pricing (e.g., peak load or surge pricing) or price gouging are often in collaboration with business functions such as finance or accounting, or they may actually be controlled by other members of the distribution channel.
3 For an examination of the role that marketing played in reinforcing racism, see the video produced by the Jim Crow Museum (www.youtube.com/watch?v=yf7jAF2Tk40).
4 For models of ethical decision making that portray the three levels, see Ferrell and Gresham (1985), Hunt and Vitell (1986, 2006), Ferrell, Gresham, and Fraedrich (1989) and Ferrell (2005).
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