Nature and Scope of Marketing Ethics

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Nature and Scope of Marketing Ethics

O.C. Ferrell, Ph.D.

Professor of Marketing
Creative Enterprise Scholar

The Robert O. Anderson School
And Graduate School of Management
MSC05 3090
1 University of New Mexico
Albuquerque, NM 87131-0001

Phone: (505) 277-3468

Nature and Scope of Marketing Ethics

Marketing ethics is viewed as important because of marketing’s interface with many diverse stakeholders. Marketing is a key functional area in the business organization that provides a visible interface with not only customers, but other stakeholders such as the media, investors, regulatory agencies, channel members, trade associations, as well as others. It is important when addressing marketing ethics to recognize that it should be examined from an individual, organizational, and societal perspective. Examining marketing ethics from a narrow issue perspective does not provide foundational background that provides a complete understanding of the domain of marketing ethics. The purpose of this chapter is to define, examine the nature and scope, identify issues, provide a decision-making framework, and trace the historical development of marketing ethics from a practice and academic perspective.

Ethics has been termed the study and philosophy of human conduct, with an emphasis on the determination of right and wrong. For marketers, ethics in the workplace refers to rules (standards, principles) governing the conduct of organizational members and the consequences of marketing decisions (Ferrell, 2005). Therefore, ethical marketing from a normative perspective approach is defined as “practices that emphasize transparent, trustworthy, and responsible personal and organizational marketing policies and actions that exhibit integrity as well as fairness to consumers and other stakeholders (Murphy, Laczniak, Bowie and Klein, 2005). Marketing ethics focuses on principles and standards that define acceptable marketing conduct, as determined by various stakeholders and the organization responsible for marketing activities. While many of the basic principles have been codified as laws and regulations to require marketers to conform to society’s expectations of conduct, marketing ethics goes beyond legal and regulatory issues. Ethical marketing practices and principles are core building blocks in establishing trust, which help build long-term marketing relationships. In addition, the boundary-spanning nature of marketing (i.e. sales, advertising, and distribution) presents many of the ethical issues faced in business today.

Both marketing practitioners and marketing professors approach ethics from different perspectives. For example, one perspective is that ethics is about being a moral individual and that personal values and moral philosophies are the key to ethical decisions in marketing. Virtues such as honesty, fairness, responsibility, and citizenship are assumed to be values that can guide complex marketing decisions in the context of an organization. On the other hand, approaching ethics from an organizational perspective assumes that establishing organizational values, codes, and training is necessary to provide consistent and shared approaches to making ethical decisions (Ferrell and Ferrell, 2005).

Substantive Domain
The relationship between a customer and an organization exists because of mutual expectations built on trust, good faith, and fair dealing in their interaction. In fact, there is an implied covenant of good faith and fair dealing, and performance cannot simply be a matter of the firm’s own discretion (Ferrell, 2004). Not only is this an ethical requirement but it has been legally enforced in some states. The implied covenant of good faith and fair dealing is to enforce the contract or transaction in a manner consistent with the parties’ reasonable expectations (1998 WL 1991608 Mich. App.)...
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