Marketing ethics is systematic study of how moral standards are applied to marketing decisions, behaviors, and institutions. Because marketing is the process inherent to most organizations, marketing ethics should be viewed as the subset of business ethics; thus, much of what is written about business ethics applies to marketing ethics as well.
At outset, it is also useful to distinguish between positive and normative marketing ethics. Positive marketing ethics looks at marketing practices from standpoint of “what is.” For example, specifying percentage of organizations that have codes of ethical marketing practice or tracking number of violations that deal with deceptive advertising would be examples of positive marketing ethics. In contrast, normative marketing ethics deals with how marketing ought to operate according to some moral standard or theory.
The sort of moral standards (or theories) applied to marketing situations involve usual moral frameworks commonly applied when evaluating business ethics (e.g., utilitarianism, duty-based theories, virtue ethics). When words “marketing ethics” appear in general media or business press, reports typically describe the marketing strategy, tactic, or policy that some constituency feels is “unfair” or “exploitive” or “deceptive.” Often, subsequent discussion turns to how marketing practices might become more consumer-friendly, socially compatible, or put in philosophical terms, how marketing might be normatively improved.
Normative marketing practices might be defined as those that emphasize transparent, trustworthy, and responsible personal and/or organizational marketing policies and actions, and exhibit integrity as well as fairness to consumers and other stakeholders. In true spirit of normative ethical standards, this definition provides certain virtues and values (e.g., trust, fairness) to which marketing practitioners ought to aspire. However, definition also raises myriad questions. What do we mean by transparent? Does that mean no trade secrets are ever allowed? What is essential nature of integrity?
Does it mostly involve keeping organizational promises to customers or is it broader than that? What is nature of fairness, and who decides what standard of fairness is to be applied? Should it be consumers, company at focus, regulatory agencies, or the broader cross-section of society? What stakeholder interests should be taken into consideration, and how should they be weighted? As one can see from these questions, area of normative marketing ethics is likely to generate considerable controversy because there are differing views among various parties about what constitutes “proper” behavior in marketing.
Because marketing is organizational process focused directly on exchange, ethical issues in marketing have existed since inception of trade. The Roman philosopher Cicero counseled merchants to avoid raising prices too high in times of shortage, lest they alienate their customers, who might shun them when supplies were more abundant. However, analysis of marketing ethics from the more systematic and analytical standpoint has only begun to develop in past 40 years. Since mid-1960s, literature on marketing ethics has grown substantially. A recent 2005 ABI/Inform literature search using term marketing ethics as its search query generated the list of more than 400 citations to literature—all of which presumably addressed marketing ethics in some ...