Importance of Ethical Marketing while Designing Marketing Campaigns - Research Proposal Example

IMPORTANCE OF ETHICAL MARKETING WHILE DESIGNING MARKETING CAMPAIGNS Table of Contents IMPORTANCE OF ETHICAL MARKETING WHILE DESIGNING MARKETING CAMPAIGNS 1 Table of Contents 2 1. INTRODUCTION 3 2. LITERATURE REVIEW 6 3. RESEARCH METHODOLOGY 9 4. DATA ANALYSIS 10 5. DISCUSSION 19 6. CONCLUSION AND RECOMMENDATION 21 7. REFERENCES 23 8. APPENDIX 26 1. INTRODUCTION 1.1. OVERVIEW Understanding of the ethics for businesses has been under constant debate. Business ethics refers to the scanning of the business practices with respect the moral aspects of being right or wrong (Drover, Franczak, & Beltramini, 2012). Today, the businesses are not only gauged on the overall ethics of the business, but also each strategic and operational conduct of the business is assessed on the yardsticks of ethics. Marketing function of the business which serves as the combining string between the consumers and the business is also under the stringent examination for its ethical play. Marketing combines the wide array of activities for directly or indirectly influencing customer to prefer particular company’s brand over other available options in the market. Therefore, ethical marketing requires that each activity to attract the customers has adhered to the rights and while restricting away from wrongs. Manget, Roche, and Munnich (2009) found in a survey that more than 50% of the customers prefer green products or the ones that are eco-friendly. The results of the survey reported that information provided to the customer about the importance of ethics and importance that company attributes to such ethical factors are among the most important drivers of this massive growth of ethical consumerism. This implies that marketing which is ethical has a positive impact on the consumer. This positive impact on consumer can have positive translation on the financial results of the company, in addition to building the trust, of the company (Guido, 2009). Hence, this paper aims to assess the importance that businesses in the modern world gives to the ethical consideration in designing its marketing processes. 1.2. BACKGROUND OF THE STUDY There has been almost three decades of research in the matter of effectively guiding the businesses towards the ethical conduct with importance emphasized that it is to define the future attitudes and concern of employees, consumers, businesses, and policy makers (Drover, Franczak, & Beltramini, 2012). Different organizations such as Marketing Association of America, Business Marketing Association (BMA, 2014), and Canadian Marketing Association (CMA, 2014) etc have developed code of ethics to be observed in devising marketing campaigns. List of codes has been determined in order to ensure that marketing is conducted by abiding code of ethical conduct. For example, discrimination prohibition, deceiving information, and harmfulness, etc. Fairness, trust, transparency, responsibility are some of the important aspects that determine the ethical values that must be well integrated in the marketing plan of the business for it to be ethical marketing. Importantly, Arnold (2009) refers that ethical marketing is effective when delivered by the involved person than being a formal document of corporate governance. Hence, this sets the background of the study. Companies defining code of ethics for marketing will be assessed on the basis of the importance given to code by the responsible marketing employees in designing complete marketing plan. As a consequence of such attention to the code of ethics for marketing, the particular type of response from the customer is generated developed. Hence, the response of the customer towards such marketing that has abide to the code of marketing ethics will also be assessed. 1.3. RESEARCH QUESTION Is it important for companies to focus on ethical marketing while designing marketing campaigns? 1.4. RESEARCH OBJECTIVES 1. To find out whether companies have codes of marketing ethics 2. To establish whether companies observe marketing ethics while designing marketing campaigns 3. To assess the impact of ethical marketing to the success of operations of companies 2. LITERATURE REVIEW According to Schwarz, Hunter, & LaFleur (2012), well defined ethical management program of the company is one that is has potential to reflect ethical changes and adaption in the thinking process and behavior of the people in the conducting respective business related jobs. A program that has high value attribution to matters of concern but is confined in the policy documents is itself a failure on the ethical front (Carrigan & Attalla, 2001). As a matter of fact employees being set of specified skilled people are also that are driven by the set of values and culture; therefore, it is important to have direct and strong bonding of employees with the core values on ethics by the business. This relationship is to play a direct role on generating performance of the organization. Therefore, organizations like Pepsi and General Electric etc have not only developed the code of ethics but also methodology that audits the conducts of the marketing for its ethical obligation (Ferrell & Fraedrich, 2014; Cravens & Piercy, 2008). The ethical marketing, in accordance to Nwachukwu et al. (1997), can be gauged on three-variable yardstick. Marketing activity can be declared ethical if it provides an opportunity to the existing and target customers to identify the level of manipulation of information in the marketing activity and technically known as the consumer autonomy. The second factor refers to the consumer sovereignty which is based on the level of information available with the target market. Third aspect of the assessment is about the harm that a customer can be subject to (Gauzente & Ranchhod, 2001). Owing the increased role of ethical marketing, Gauzente & Ranchhod (2001) in a study developed the given below aspects to be considered for assessing the level of ethics followed in devising the marketing plan: (Gauzente & Ranchhod, 2001) One dimension of understanding the importance given to the ethical marketing in certain business is to understand areas of violation. For example, Schwarz, Hunter, & LaFleur (2012) have defined two categories of ambush marketing or the infringements. First, infringement in the case where the violation with respect to copyrights of any product, design or else. In addition to the legal aspect of the violation, it has strong implications with respect to unethical conduct. The other category of the infringement is ambiguous in nature that is strongly unethical but cannot be held accountable for illegal conduct. The studies have reported the positive relationship of the ethical performance of the firm with its financial results. For example, De Pelsmacker, Driesen, & Rayp (2005) in a study of 808 Belgian consumers concluded the different consumers have different level of readiness to pay extra for the ethical products. Similarly, Trudel and Cotte (2008) also concluded in a study that customers are ready to pay only slightly premium price for the product that is ethically strong. The similar study also revealed that the company is also bound to severe punishments as consumers only prefer such products with huge price reductions. Hence, the ethics in marketing will only fetch limited customers to the business. This also leaves marketing managers in dilemma to strike a balance between the marketing for profits only and marketing with ethics. For example, in order to attract men to a certain advertisement, the marketers are forced have considerable certain level of explicit presence of the women than involving men in such advertisement aimed for men (Grover & Hundal, 2014). Another study revealed that women are more attracted to sustainable consumption than men (Luchs & Mooradian, 2012). As a matter of fact that the brand develop strong trust of the customer for its ethical conduct, there are also evidences that companies have been attractive profits while surpassing such ethical conduct. For example, Body shop is well known for its ethical ethos of not testing product on animals. However, on being sold to L’Oreal, which is profit driven company, there emerged strong clash of ethics. The company expanded to almost 50 countries with more than 2000 shops; despite surpassing the ethical ethos of not testing product on animals (Arnold, 2009). 3. RESEARCH METHODOLOGY The research study has been based on mix method research and have adopted both, qualitative and quantitative, research methodology. This approach of using both methods will allow the researcher to come up with thorough and comprehensive research findings and conclusion (Saunders, Thornhill, & Lewis, 2009; Jankowicz, 2005; Maylor and Blackman, 2005). For qualitative research, the researcher has conducted interviews in order to gather data for the research. On the other hand, for the quantitative research, the researcher has gathered data through questionnaire and have presented the data in the form of charts and tables. The questionnaire consisted of open ended and close ended questions. In order to account the perspective of the managers and the consumers about the ethical marketing, the underlying study developed two phased study. Total sample of 120 was constituted containing 58 men participants and 62 women participants. In the first phase, the questionnaire based data was collected from the consumer participants who constituted 44 men and 47 women participants. In the second phase of the study, interview, based information was collected from the set of 30 marketers. The marketers-set was constituted 14 men and 16 women. Furthermore, the marketers and the consumers set belonged randomly selected 10 companies. 4. DATA ANALYSIS The analysis of the data collected through questionnaire and interview is presented in this section. 4.1. QUESTIONNAIRE DATA The questionnaire based data collected from the customers is presented separately for the men and women in order to develop a concrete understanding of the behavior under the gender construct. Question #1 What do you think ethical marketing is? The above question was open ended question and collected various definitions from customers. Most of the definitions about the ethical marketing revolved on the basic aspect of “What is right and what is wrong.” However, the perception of the right and wrong varied among the customers. For example, some people had the opinion that involving women in advertisements to attract men is non-ethical. On the other hand, some people considered it ethically viable to have women in advertisements for attracting men. Also, some participants referred complete information provision about the product as ethical marketing. On the other hand, small percentage of people only had an idea about the concept of ethics of “should” and shouldn’t”, but was unaware of the role of ethics in marketing. One dimension identified by the people also include that ethics is something that does not harm anyone and so companies in their product or service marketing shall consider about the harmfulness aspect. Hence, on the basis of awareness following results are derived: Importantly, as the small percentage of customers was selected, therefore, the customers unawares of the concept of ethical marketing were given brief information about the concept with some example. This briefing was aimed at to continue the interview process with the same set of people. Question #2 Do you think companies whose products you are buying were ethical in their marketing? The female respondent were very positive about the ethical marketing in their preferred companies. However, men, on the other hand, in a greater majority refused the fact that companies have been ethical in their marketing activities. Hence, men and women went in considerably contrasting dimensions. The lack of ethics in the marketing was mainly attributed to the level of information provided in the marketing activities. Question #3 Do you think companies should be more ethical in their marketing activities? If, not then why? Most of the men and women were convinced of the fact that companies are required to have increased attention to the ethics in their marketing activities. The customers with the opinion that companies that have ethically viable marketing do not need to increase their attention held opinion companies start charging excess premium with this cause. Question #4 How much would you pay extra for the ethical product? The response from participants about the increased prices appear to have a reflection of all the customers view. For the three price ranges, it was observed that most of the customers were found to be ready for paying 10-25% additionally. As the price range moved towards the higher side, the consumers readiness to offer companies additional compensation started to reduce. Importantly, men more men to pay a slight increase in the price. However, readiness among women was higher as the price increased between 25-75%. Question #5 Which is the most important factor to be considered in ethical marketing? And why? Wider range of factors was identified by different participants. Men were more focussed about the information related factors. Greater information was preferred due to the reason that it allows consumers to assess the value for the proposition. Women had preference for increased number of factors. Some women focussed on the importance of giving attention to gender exploitation and unnecessary adding men or women element in the advertisement aimed for women and men respectively. Another important factor valued by the women customers is about doing responsible marketing and not indirectly influencing customers to change their preference that actually does not fit for their requirement. Third, most preferred factors that must be given attention in the marketing by companies in the view of women customers is about the fairness and valuing the trust of customers. Hence, men considered the importance to be given to the practical information while women were more attracted to the emotional factors. Question #6 To what extent, the level of ethical considerations affects your choice of brand? The above results develop the interesting information about the potential of variation in the consumer’s behavior. Women are expected to be influenced by a small to medium change in the preference of the brands with additional attention to ethical consideration. Men, on the other hand, are less influenced. However, men are also expected to have a dramatic change in the overall preference for the brand due to ethical consideration. 4.2. INTERVIEW SUMMARY The interviews were conducted by the three marketing people (of different managerial level) from each of ten selected companies. As an ice breaker, the respondents were asked about the consideration to ethics given by the company. All managers unanimously agreed that their companies have attention to ethical marketing in their respective possible ways. In response to the question about the level of difference between the policy and practice, the responses were interesting. Most of them were convinced of the fact that 100% ethical conduct is not considered effective. For example, one manager stated that McDonald cannot maintain its sales and growth by loudly declaring their product as dangerous to health. Similarly, one manager stated that marketing requires generating stimuli among the target audience for the purchase decision of a certain product. It may be unethical in the view of the some to arouse impulse for making purchase decision. Without it is hard to sell the products and service. In the modern challenging world, survival is dependents on making product or service the need of the customer. However, each company attempts to strike different balances in different marketing activities. With respect to question that companies have a preference for profits over ethics or ethics over profits, managers had mixed views on this aspect. Some mentioned that their companies have more concern for ethics than profits. However, managers also mentioned that such scenarios are only preferred in cases where concern for ethics is expected to bring the greater profits in the future. The other set of managers was more convinced that the ultimate goal of the organization is the profitability and for the purpose ethics in marketing become secondary. In such case, the managers cited that companies are more affected by the sales targets that are to determine the company success and growth for a certain period. Managers agreed on the fact that consumers also do not always positively respond to all the marketing activities. Attention to the ethical marketing requires reducing certain elements or content from the marketing activity. This in turn reduces the element of attraction as compared to rival. Also, total ethical marketing would give the customer the impression that product or service is not the right fit and moves on to the competitors. Another manager cited that incorporating attraction and ethics in one game equally increases cost. This requires premium pricing and customers often turn down from paying premium prices. Though some people are ready to pay premium pricing, but such people constitute only chunk of the entire target audience or customer base of the organization. The final question enquired about the ethical conduct of the marketing being audited in the companies revealed that few companies only pay desirable attention towards it. According to the managers most of the companies have defined systems for it. However, it is often taken as the formality. Some managers held view that the audits are only considered, and the ethical concerns only get increased attention when the marketing activities does not gain success in the winning wider range of customers or attract goods sales. Conditions when marketing activity proves to be a success, considerable violation over intentionally overlooked. Managers also held the view that organizations deliberately overlook the small non-ethical activities in the marketing perspective to ensure that managers in play field are not discouraged by the constant lash back in the name of the ethics. 5. DISCUSSION This section provides the discussion with respect to the ethical marketing in reference to the data collected from the consumers and the marketing managers of the organizations. In line with the research literature, the responses from the above study also found that consumers reward those companies that given attention to the ethical marketing (De Pelsmacker, Driesen, & Rayp, 2005). Both marketers and consumers value the well-developed program that provides the guideline for the ethical marketing conduct. Importantly the concept of ethics varies from person to person. Despite variation, the idea of ethics generated from consumers has alignment to the concept determined by the Nwachukwu et al. (1997). Customers even if does not have familiarity with technical jargons, still value the freedom for making choice, complete information and unnecessary indirect influence. On the other hand, managers also have the realization that ethics varies from person to person that allows companies to go to a certain extent that may be considered as the breach of the ethics from one’s person’s point of view while acceptable from other’s view. It is similar to the ambiguous infringement that does not have support from law to be sued (Schwarz, Hunter, & LaFleur, 2012). Importantly, both managers and the consumers both have realization that ethics in the marketing activities have the potential for the growth and improvement. However, both managers and the consumers also agree on the fact that increased attention to the ethical factors along with maintaining the other attributes will increase the price to be charged for the product or service. While customers’ readiness reduces to pay a premium for ethical conduct reduces after certain extent. Managers of the company also consider this factor effective and declare it a reason for not investing extensively in increasing the ethical viability of the marketing campaign. A research from WSJ has also determined that organizations must invest in the ethical marketing; however, there is a limit beyond which the ethical marketing reduces its magnetic power to attract customers (Trudel and Cotte, 2008). Hence, there are certain aspects that can be well defined as an ethical necessity for the marketing conduct. However, these are very limited factors. Most of the ethical factors lie on the grey area and so cannot be determined as hard and fast rule. Hence, organizational management and the consumers constantly strive to strike the right balance between the ethical consideration in attracting consumers for attractive profits and meeting the ethical requirement. Also, the consumers have a greater interest in the ethic abide marketing campaign; however, it does not offer complete ground for the decision making. Customer considers decision making as an important factor but not only factor in making purchase decision. Marketers also take advantage and learning from this fact in designing and defining the strategic and operational marketing plan. 6. CONCLUSION AND RECOMMENDATION 6.1. CONCLUSION Ethics simply refer to the moral principles that determine the dos and don’ts for an individual and a group of people. Businesses or organizations being set of people driving action to generate value for other people also require to have set well defined ethics that are not only defined, but also practiced. Marketing that has taken a strategic imperative in the modern business world is also assessed on the basis of the ethical conduct in presenting its proposed value of goods and services to the target audience. Increased attention to ethics in the modern business world has given rise to the ethical marketing requirements. Researcher and scholars have developed an array of discussion in regard to the ethical marketing. Additionally, the underlying paper has developed a research study where consumers and managers perspective of ethical marketing was developed. The results concluded that ethics in marketing is well acknowledged by the marketers and customers. As a matter of fact, each person has a different perception that determines the limit of the level of ethical consideration to be abided by the companies in their marketing conduct. Importantly, managers and consumers have realization of the power of ethical consideration in changing the customers mind. However, both have also the agreed on the fact that extreme of the ethical consideration may also result in the changing consumers’ preference for the product the product and also against the product. This change in the consumers’ mind is results due to change in the value proposition, prices and change in the fit between the consumer and product and/ or service. 6.2. RECOMMENDATION The information collected from the literature review and the results of the underlying study have to offer considerable recommendations to the business. As a matter of fact, those consumers show greater concern for the ethical standard considered in the products and service of the organization. Moreover, similar consideration goes for the development of marketing activities of the organization; however, consumers finally consider the ethical marketing as one component of the overall value proposition offered from the company. Therefore, organizations shall not account entire marketing strategy to revolve around the ethical considerations. This also implies that the organization can also devise combinations in marketing strategies, each targeting different set of customers. Ethically sensitive customers shall be engaged in marketing activity has the greater element of the ethics while the customers which have less consideration to the ethical factor are ready to compromise ethics to a certain level for other benefits shall be attracted with value proposition that has more mix of the other elements. Alongside organizations must determine that level of ethics that itself and its customers can forgo. Delineation of this factor self is more important as such things cannot be taught. 7. REFERENCES Arnold, C. (2009). Ethical marketing and the new consumer. UK: John Wiley & Sons. BMA. (2014). BMA code of ethics. Available from http://www.marketing.org/i4a/pages/index.cfm?pageid=3286#.UyKe6D_6Pis [Accessed 12 March 2014] Carrigan, M., & Attalla, A. (2001). The myth of the ethical consumer–do ethics matter in purchase behaviour?. Journal of consumer marketing, vol. 18, no. 7, pp. 560-578. CMA. (2014). Code of ethics and standards of practice. Available from http://www.the-cma.org/regulatory/code-of-ethics [Accessed 12 March 2014] Cravens, D. W., & Piercy, N. F. (2008). Strategic Marketing. McGraw-Hill/Irwin De Pelsmacker, P., Driesen, L., & Rayp, G. (2005). Do Consumers Care about Ethics? Willingness to Pay for Fair‐Trade Coffee. Journal of consumer affairs, vol. 39, no. 2, pp. 363-385. Drover, W., Franczak, J., & Beltramini, R. F. (2012). A 30-Year Historical Examination of Ethical Concerns Regarding Business Ethics: Who’s Concerned?. Journal of business ethics, vol. 111, no. 4, pp. 431-438. Ferrell, O. C., & Fraedrich, J. (2014). Business Ethics: Ethical Decision Making & Cases. Cengage Learning. Gauzente, C., & Ranchhod, A. (2001). Ethical marketing for competitive advantage on the internet. Academy of Marketing Science Review, vol. 2001, no. 10, pp. 1-8. Grover, S., & Hundal, B. S. (2014). A sociocultural examination of gender role: a study of projection of women in advertisements. GURUKUL, vol. 54. Available from http://gkv.ac.in/wp-content/uploads/2012/11/Final-GBR.pdf#page=57 [Accessed 12 March 2014] Guido, G. (2009). Behind ethical consumption: purchasing motives and marketing strategies for organic food products, non-GMOs, bio-fuels. Germany: Peter Lang. Jankowicz, A. (2005). Business Research Projects, London: Thomson Learning. Luchs, M. G., & Mooradian, T. A. (2012). Sex, personality, and sustainable consumer behaviour: Elucidating the gender effect. Journal of Consumer Policy, vol. 35, no. 1, pp. 127-144. Manget, J., Roche, C., & Münnich, F. (2009). Capturing the green advantage for consumer companies. Boston: The Boston Consulting Group. Available from https://www.bcg.com/documents/file15407.pdf [Accessed 12 March 2014] Maylor, H, & Blackman, K. (2005), Research Business & Management, Basingstoke, UK: Palgrave Macmillan. Nwachukwu, S. L., Vitell Jr, S. J., Gilbert, F. W., & Barnes, J. H. (1997). Ethics and social responsibility in marketing: an examination of the ethical evaluation of advertising strategies. Journal of Business Research, vol. 39, no. 2, pp. 107-118. Saunders, M, Thornhill, A, & Lewis, P. (2009). Research Method for Business Students,  London: Financial Times Prentice Hall. Schwarz, E. C., Hunter, J. D., & LaFleur, A. (2012). Advanced theory and practice in sport marketing. Oxon: Routledge. Trudel, R., and Cotte, J. (2008). Does being ethical pay? Available from http://online.wsj.com/news/articles/SB121018735490274425 [Accessed 12 March 2014] 8. APPENDIX SECTION A: FOR MANAGERS TYPE: OPEN ENDED QUESTIONS Question # 1 Does your company consider ethical consideration in marketing activities? Question # 2 To what extent do you think the practices are declared as standards but are not practiced? Question # 3 Your company prefers ethics over profits or profits over ethics? Question # 4 How do the consumers respond to the ethical marketing? Question # 5 Does your company conduct audit of marketing activities for their ethical conduct? SECTION B: FOR CONSUMERS TYPE: OPEN AND CLOSED ENDED QUESTIONS QUESTION # 1 What do you think ethical marketing is? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ QUESTION # 2 Do you think companies whose products you are buying were ethical in their marketing? YES NO QUESTION #3 Do you think companies should be more ethical in their marketing activities? If, not then why? YES NO ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ QUESTION #4 How much would you pay extra for the ethical product? 10- 25% 25-75% 70-100% QUESTION #5 Which is the most important factor to be considered in ethical marketing? __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ QUESTION #6 To what extent, the level of ethical considerations affects your choice of brand? 10- 25% 25-75% 70-100% Read More