Marketing Ethics and Marketing Success - Assignment Example

Marketing Ethics and Marketing Success In order to stay ahead in business it is vital that all issues within the organization are handled according to prescribed norms of ethical practices which should be applicable to all departments including marketing. Marketing is the primary area of concern for all business organizations which either provide a product or service as the end product. It is at this juncture that the actual utility of a product or service is appropriately determined. The consumer has to bear the brunt, if any of the product or services are not up to the mark or low in quality. Any such deficiency, sooner or later is likely to have a rebound effect on the future success or failure of the business organization. Rigorous application of marketing ethics is therefore essential for any short or long term success. ‘Ethics are the moral principles and values that govern the actions and decisions of an individual or group’- (www-rohan.sdsu.edu). Whenever a moral dilemma surfaces during the course of some action, ethics provide the guidelines for taking the appropriate decision. They are unlike law in the pretext that the latter is enforceable in a court of justice while the former are to be practiced conscientiously. Ethical violations can either be intentional or inadvertent (Upshaw, 2005). Intentional violations include conspiracies to defraud, mismanagement for financial gain and cover-ups for illegal actions and the inadvertent violations include regulatory abuse due to ignorance, poor products due to inadequate quality controls and unintended environmental damage (Upshaw, 2005). Historically, in actual situations, however, it has been seen that ethics are sometimes neglected in order to attain short term gains in the volatile consumer market. Ethical practices have frequently been ignored in order to make immediate profits but proved disastrous in the long term. One such example is that of Pfizer Pharmaceuticals Company which has worldwide presence, but has been known to violate business ethics on numerous occasions. The company is one of the giants in research and development on drugs and has come up with innovative products for human as well animal use. Healthcare ethics have a standard which is unparalleled in any other organization as it directly involves playing with human life. Pfizer has been blamed for launching new drugs without issuing warnings of the side effects associated with their use which could prove fatal in individuals prone to such side effects. One of the classical examples of not following marketing ethics has been the promotion of a novel painkiller drug with the brand name ‘Bextra’ which was supposed to efficiently control pain during menstruation and arthritis. Pfizer is traditionally an aggressive marketer of its products and the new drug was promoted intensely by paying high commissions to sales representatives and middlemen who encouraged medical personnel to prescribe the drug aggressively to control pain, both before and after surgery. That the drug had serious cardiovascular side effects which could prove fatal in certain individuals was completely ignored and the company’s literature just mentioned mild rashes as the only side effect (Harris, 2005). The FDA (Food & Drug Administration) later withdrew the drug which was intensely prescribed at one stage after the aggressive marketing campaign of Pfizer. This has not been a single instance with Pfizer as their complete ignorance of ethics in favor of immediate profits has been noticed on other occasions too. One report suggests that the company was responsible for the illegal marketing of the human growth hormone, one of the most tightly regulated substances in connivance with another major pharmaceutical giant, Pharmacia (Weintraub, 2006). The US FDA has clear cut guidelines for not promoting any synthetic human growth hormone product for its anti aging effect in older patients, which was completely ignored by Pfizer. On both instances, in the case of ‘Bextra’ as well as the human growth hormone, it was the company’s own officers who blew the whistle on the unethical marketing practices employed by their parent organization, Pfizer. The public exposure on ‘Bextra’ was made by John Kopchinski, a sales representative who was subsequently fired by Pfizer in 2003 (Rudin, 2009). In case of the growth hormone, the civil whistleblower suit was filed by Dr. Peter Rost, who was a Pharmacia executive who subsequently resigned from this job (Weintraub, 2006). Both these cases, when investigated, revealed that such unethical marketing practices had the approval of the top bosses within the organization who despite their eminent qualifications indulged in such practices driven solely by the motive of making huge monetary gains for the company. The whistle blowers belong to a much lower level in the hierarchy of the organization as is evident from the case histories of these two cases. The sequel of these violations was so severe that it resulted in criminal cases against the company and they had to completely withdraw ‘Bextra’ from the market as well as shelve out one of the biggest fines in history for such unethical practices which amounts to $ 1.19 billion (bx.businessweek.com). They had to shelve out another $ 1 billion on the same day to settle civil cases involving off-label promotion of the ‘Bextra’ as well as three other drugs promoted in the 49 states of the US. This further makes the company liable and prone to lawsuits by all individuals who might have suffered due to the use of such drugs, and likely to compromise future business of the company. The company is engrossed in another legal wrangling of similar nature due to the excessive promotion of the human growth hormone in conjunction with Pharmacia which it acquired in 2003 (Weintraub, 2006). Non pharmaceutical use of the drug was made by a number of practitioners for promoting anti aging effects in people desirous of remaining young, despite aging in years. The drug had been approved only for use in case of stunted growth in children by the FDA. It can be seen from these facts that Pfizer Pharmaceuticals had to suffer enormous financial loss as a result of the unethical decisions taken by the top executives to promote drugs with questionable effects. In addition, there was loss of reputation, which will lower the trust in consumers in subsequent launches of new products by the company in the future, even if they are accompanied with appropriate safety data. Although the company has not been eliminated altogether due to the enormity of its worldwide presence, it had to make changes within the organization which resulted in the establishment of new codes of ethics which the company professes to follow strictly (www.pfizer.com). The company’s website has published a code of business conduct and ethics for Directors which intends to make the concerned persons aware of the ethical concerns and develop mechanisms for identifying unethical conduct. It lays down the rules for each and every person representing the Board of Directors and provides explicit guidelines for ethical practices. The above case proves that indulging in unethical practices does not pay well in the long run, although it may yield temporary profits for the organization. Conscientious people form within the organization as well as the data obtained from the end user can always be used to obtain pertinent information about a product, which may have initially been promoted by keeping a blind eye on some of its disadvantages. The present advances in information and communications technology, wide exposure to the media and the ethics guidelines enforced by law leave no scope for such misadventures in the future. Marketing ethics have therefore assumed primary importance and are being strictly adhered with by some of the most successful organizations in the present era. Works Cited Code of Business Conduct and Ethics for Directors, Pfizer website accessed Nov 27, 2009 at: http://www.pfizer.com/about/corporate_governance/directors_code.jsp Ethical/Legal Framework in Marketing, online article accessed Nov 27, 2009 at: http://www-rohan.sdsu.edu/~renglish/370/notes/chapt04/index.htm Harris, G.2005. F.D.A. Announces Strong Warnings for Painkillers, The New York Times, accessed online Nov 26 at: http://www.ahrp.org/infomail/05/04/08.php Pfizer Broke the Law by Promoting Drugs for Unapproved Uses, online article accessed Nov 28, 2009 at: http://bx.businessweek.com/pfizer/view?url=http%3A%2F%2Fdata.bloomberg.com%2Fbb%2Frssstory%3Fsid%3Da4yV1nYxCGoA Rudin, A. 2009. Pfizer's Ethics Violations Hurt All of Us, online article accessed Nov 27, 2009 at: http://www.customerthink.com/blog/pfizers_ethics_violations_hurt_all_of_us Upshaw,L. 2005. "The Trouble with Food" Ethics and Integrity in Food Marketing, online article accessed Nov 27, 2009 at: http://www.brandbuilding.com/articles-food.html Weintraub, A. 2006. Pfizer's Latest Growing Pains, online article accessed Nov 28, 2009 at: http://www.businessweek.com/technology/content/mar2006/tc20060306_648859.htm Read More