The Concept of Ethics in Marketing and How It Relates to Members of the UK Food and Beverage Industry - Coursework Example

ID Number: 12845757 Marketing and Responsibility, MK285 Industry Assessment Report Word Count: 2,486 Contents Introduction 3 Industry Reportson Honesty Marketing in the Food and Beverage Industry 4 Theory of Ethics and Misleading the Public 5 Ethical Responsibility of Marketing Managers 7 Proposal on How Unilever Marketing Managers can Promote Honesty in Marketing 8 Strategic Concerns of Honest Marketing 8 Competitive Aspects of Honest Marketing 9 Technical Components of Honesty and the Marketing Unit 10 Conclusion 10 Bibliography 12 Introduction One of the fundamental principles of every modern society is trust. We all need to build and maintain trust by undertaking honest interactions and presenting information in good faith. This is an obligation that everyone owes to his fellow individual and to the world at large. Integrity and honest judgment is a hallmark of all professions and it is now an essential part of the professional ethic of every institution and organisation (Ferrell & Fraedrich, 2014). Therefore, it is imperative for honesty and transparency to be an inherent and important part of advertising and marketing (Todnem & Burnes, 2012). Viewed differently, the ethic of honesty and transparency is steeped in the obligation not to mislead the public (Quatro & Sims, 2012). Therefore, there is the need for organisations and entities to work within a framework of truth and honesty. The deception of consumers has come up as a common act in numerous situations and contexts. There have been several situations where consumers have received false and misleading information that has culminated in numerous lawsuits and other forms of conflicts relating to consumers and organisations. The food and beverage industry is no exception. The purpose of this paper is to critically analyse and review the concept of ethics in marketing and how it relates to members of the UK food and beverage industry, with an emphasis on Unilever. The paper will critically evaluate industry reports and major matters relating to the different sectors in the industry and also help to evaluate the ethical obligations and responsibility of marketing managers. This will be followed by a proposal on how marketing managers can help to deal with the issue of deception and misleading marketing in the food and beverage industry. Industry Reports on Honesty Marketing in the Food and Beverage Industry The British Food and Beverage Industry is one that has identified that it is important and vital for them to follow transparent and honest means of interacting with consumers. This is borne out of the fact that over 91% of British consumers are moving towards local products because they believe British food and beverage manufacturers are more honest and transparent in disclosing information about their products in adverts and other marketing drives (The Cooperative Group, 2014). This implies that the demand for honesty and transparency in marketing is steeped in the needs to satisfy and meet customer needs and expectations. One of the main areas of challenge is in relation to the health-value of every product that is made available to consumers in the UK. The challenge is related to the contemporary issue of obesity which is mainly connected to misleading adverts and adverts that do not appropriately warn consumers of products with fattening contents (Stones, 2015). Obesity is one of the most contested issues in the industry today. Many individuals and entities in the UK seem to have demands about how obesity must be controlled and regulated throughout the country. However, the food and beverage industry is given the greatest percentage of the share because it is said that most of these entities do not do much to disclose the content of their products (PR Newswire, 2014). Hence, there are greater obligations and requirements for entities around the UK to label their products appropriately and this includes the increasing of the bar on the basic minimum content that have to be made available to consumers. Health concerns like the systems of processing foods and the means through which they are made available to consumers form an important part of labelling requirements. The European Union made recent demands on the food and beverage industry to label the country of origin and procedures of production on certain food and beverage products (Harrson-Dunn, 2015). There are also specialised requirements for disclosure when the customers of a given product includes children (Clarke & Svanaes, 2014). The fact that the food and beverage industry is extremely diverse implies that there are different requirements for different product lines and this is also complemented by the fact that different products have different regulatory requirements and frameworks (Astley, 2012). Thus, there are different honesty and transparency requirements and standards that are applicable to the various sectors of the UK food and beverage industry. This segmentation is growing further, as more products are being brought on board and the dietary requirements and expectations of the members of the society keep changing over the years. Honesty and transparency standards in marketing and product disclosure in the UK food and beverage industry are improved and enhanced each year by the initiatives of companies. For instance, the recent Honest Tea initiative of Coca Cola significantly changed the disclosure requirements of the UK food and beverage industry and its corresponding requirements for better and more honest marketing (Bouckley, 2013). Therefore, the current trends of marketing in the UK food and beverage requirement can be summed up as proper disclosure, health consciousness, current rules and meeting industry competition requirements which include anti-obese and healthy products and services. These come together to define the way and means through which the UK’s food and beverage industry’s stakeholders are expected to carry out their activities in order to maintain high transparency standards and expectations. Theory of Ethics and Misleading the Public Honest and transparent marketing is an ethic that enables a firm to achieve all of its corporate social responsibility goals. This applies appropriately in all the four contexts of Garriga and Mele’s categories of corporate social responsibility. The model classifies corporate social responsibility under one or more of the following headings: instrumental, political, integrative and ethical theories (Garriga & Mele, 2004). The instrumental theory implies that a firm uses elements of CSR to achieve its end of making wealth. Truthful and honest advertising prevents reputational risk that could lead to major lawsuits and other negative views that will affect the chances of success of an entity’s products on the market. Politically, honest marketing shows that the people at the top of an organisation are acting in good faith and this reflects conspicuously to the entire society through adverts that are appropriate and adequate. The integrative theory asserts that a firm is able to link its profit orientation with the social needs of people through CSR. Honest marketing is vital because it helps to inform consumers truly and accurately before they choose a firms product. Finally, the ethical theory asserts that the firm uses CSR elements to promote good and morally upright activities. It is universally accepted that misleading the public is a wrong act. Hence, honest marketing is an ethically responsible act and process that firms and organisations need to engage in. Organisations have various criminal obligations imposed upon them because of the new laws and trends relating to lying about the content of a product. This has evolved to include obligations like honesty, responsibility, fairness, respect, transparency and citizenship which guides the conduct of business and trade (Schlegelmilch & Oberseder, 2009). These are generally accepted rules and regulations that must be taken into account in order to get the marketing unit of organisations to operate within the right framework and approach for the achievement of the best results possible. Ethical Responsibility of Marketing Managers There are some obligations that are impending upon marketing managers directly. These are enshrined in various laws that are imperative to all marketing managers, including those in the food and beverage industry. The UK law requires that an advertiser provides accurate information about their products and in cases where they are misleading the firm will be liable to damages. This is included in the Sale of Goods Act, 1979 and its subsequent amendments that give rise to tort actions for breach of contract. Therefore, the UK government requires that product descriptions are accurate and they contain all relevant information that describes the product in absolute terms (UK Government, 2014). This includes the presentation of accurate content and prices in order to prevent liability for misleading consumers. There are two entities that are tasked with the regulation of advertising and marketing in the UK and these are the Advertising Standards Authority (ASA) and the Committee of Advertising Practice (CAP). These two entities work to set standards on marketing practice and marketing activities in different parts of the UK. Honesty on the part of marketers is stressed in three main areas in the codes of these entities. The first is in the area of advertising to children. This requires due care and diligence in order to prevent issues and matters that could cause negative results for this vulnerable class of consumers. The second area has to do with causing an offence through a given advert or advertising process. This is about a situation where it will be offensive to put together certain words or cause some act or result that is forbidden by law. Finally, there is the situation where political matters and sensitive issues of social blending are concerned. These are areas where people ought to be treated in a very responsible manner to avoid being seen in the negative light of circumstances and things to create large scale upheaval and negativity. Therefore, there areas are directly regulated and affected by rules relating to marketing and advertising: 1. False and deceptive messages; 2. Excluding important information; 3. Utilisation of aggressive sales techniques (UK Government, 2014) Therefore, a marketing manager will have to ensure that there is due care and diligence in situation where products are being presented to the markets. This includes the thorough scrutiny of information and the proper evaluation of facts in order to ensure that contents are appropriate and information given to consumers do not violate any major elements and aspects of proper marketing and good faith practices. Proposal on How Unilever Marketing Managers can Promote Honesty in Marketing Unilever is one of the UK’s leading foods and beverage manufacturers. They have a long-standing history of their production for the UK and other colonies for many decades. They have a reputation to protect and a positive standard to live up to. Therefore, Unilever has very high standards and expectations to meet by presenting good and appropriate marketing activities. In order to pay particular attention to marketing and prevent any issues relating to lawsuits and negative reputation in the area of honesty and transparency, Unilever will have to look at things from a strategic, competitive and marketing perspective. This will help the company to get a positive image and achieve proper results. Strategic Concerns of Honest Marketing The current strategy of Unilever is defined as “Sustainable Living” and this is to improve the health and wellbeing of their consumers, espouse environmentally friendly activities and enhance the livelihoods of all their stakeholders (Unilever, 2015). Obviously, these are very high standards that the company needs to work towards. This includes major processes and activities that they are to conduct to present a very positive image and achieve the best of results. The achievement of the health and wellbeing of Unilever requires that they provide healthy and appropriate products to the consumers. Hence, there is an obligation to conduct research and improve the content of products they offer to consumers. There must be proper care to disclose the benefits and the positive elements of these products in order to maintain a good and positive reputation. The strategy and image of Unilever will be hurt greatly if there are dishonest and non-transparent forms of marketing in the company at any point in time. Therefore, there is the need for Unilever’s management to set up an appropriate system of evaluating risks in marketing and ensuring that the content of each marketing campaign is properly audited and evaluated. This is the only means through which the company can achieve its strategic goals without major issues and problems. Competitive Aspects of Honest Marketing UK consumers have shown that they prefer UK producers because they have a liability to disclose things truthfully. Therefore, all entities in the food and beverage industry is expected to provide true information that is not misleading. On the same grounds, it is important for Unilever and its staff members to present information that is true because it helps them in terms of competitiveness. Secondly, there are requirements for details relating to obesity and other health matters to be disclosed in marketing. This means that Unilever and its allied firms will have to set out these forms of information as this is important and will make the products more accepted. This can also help them in product design because any product that cannot be fully labelled will have to be reviewed and improved. Finally, Unilever is a leader in the food and beverage industry. Therefore, there is the need for Unilever to set high standards in reporting and marketing and this will keep them at the forefront of the competition. Technical Components of Honesty and the Marketing Unit Finally, it must be noted that although Unilever’s marketing unit is acting as a fundamental unit of the firm, the marketers could be held individually accountable for their actions. Therefore, there is the need for marketers to use the highest principles of honesty and transparency to provide appropriate information when they are marketing their products to consumers in the UK and beyond. Conclusion Honesty in marketing is an important element of corporate affairs and corporate success. Every company has an obligation to remain truthful in marketing because that is what consumers want and it is highly regulated. In the food and beverage industry, there are ethics that relate to truthfulness and disclosure of relevant information. This is because the industry has direct implications on the health of consumers and users of the products. Therefore, it is imperative for a food and beverage entity to achieve the highest levels of standards. The achievement of honesty and transparency in marketing has legal as well as corporate governance significance. In terms of corporate governance, a firm is able to make sustained and long-term profits only if it carries out its activities including marketing honestly and transparently. Failure to do so will lead to a loss of reputation that will have significant implications for a company. Secondly, there are regulations that require proper disclosure in areas relating to criminal or offensive product marketing, aggressive marketing and deception. These are major matters that are regulated by law and must be taken seriously by firms. Unilever is required to remain truthful and honest in its marketing because that is the only way the firm’s reputation will be safeguarded and keep the investors’ confidence in the directors going. Remaining honest will keep Unilever ahead of the competition and make them appear as responsible and also sensitive to the needs of consumers. This can help Unilever to improve their products and also attain higher levels of reputational recognition. Finally, remaining honest in marketing is important because the marketing staff could be held individually liable for failures in disclosing true information. Bibliography Astley, M. (2012, August 29). Wisemilk Initiative will boost milk pricing Transparency. Retrieved from Daily Reporter: http://www.dairyreporter.com/Manufacturers/Initiative-will-boost-milk-pricing-transparency-Robert-Wiseman-Dairies Bouckley, B. (2013, June 12). Coke Owned Brand Honest Tea Predicts $100+ sales in 2013 as it "democratizes organics". Retrieved from Beverage Daily: http://www.beveragedaily.com/Manufacturers/Coke-owned-brand-Honest-Tea-predicts-100m-sales-in-2013-as-it-democratizes-organics Clarke, B., & Svanaes, S. (2014). Lierature Review of Online Food and Beverage Marketing to Children. Retrieved from Committe of Advertising Practice: http://www.cap.org.uk/News-reports/~/media/Files/CAP/Reports%20and%20surveys/Family%20Kids%20and%20Youth%20Literature%20Review%20of%20Research%20on%20Online%20Food%20and%20Beverage%20Marketing%20to%20Children.ashx Ferrell, O. C., & Fraedrich, J. (2014). Business Ethics: Ethical Decision Making and Cases (4th ed.). Mason, OH: Cengage. Garriga, E., & Mele, D. (2004). Corporate Social Responsibility Theories: Mapping the Territory. Journal of Business Ethics 53, 51-71. Harrson-Dunn, A. R. (2015, February 11). Majority MEP vote sends meat origin labelling to the Commission. Retrieved from Food Navicator: http://www.foodnavigator.com/Policy/Majority-MEP-vote-sends-meat-origin-labelling-to-the-Commission PR Newswire. (2014, April 14). Eating Out in the UK 2013 - A Comprehensive Analysis of the UK Informal Eating Out Market. Retrieved from PR Newswire: http://www.prnewswire.com/news-releases/eating-out-in-the-uk-2013---a-comprehensive-analysis-of-the-uk-informal-eating-out-market-255188071.html Quatro, S. A., & Sims, R. R. (2012). Executive Ethics: Ethical Dilemmas and Challenges for the C-suite. New York: IAP Press. Schlegelmilch, B. B., & Oberseder, M. (2009). Half a Century of Marketing Ethics: Shifting Perspecitives and Emerging Trends. Journal of Business Ethics, 1-19. Stones, M. (2015, January 12). Premier Foods Joins Food Industry New Year Resolution. Retrieved from Food Manufacture: http://www.foodmanufacture.co.uk/Manufacturing/Food-industry-New-Year-resolutions The Cooperative Group. (2014, December 4). Cooperative Foods Commits 1.5 Billion Pounds to UK Farmers. Retrieved from The Cooperative Group: http://www.co-operative.coop/corporate/press/press-releases/Food/co-operative-food-commits-15billion-to-uk-farmer/ Todnem, R., & Burnes, B. (2012). Organizational Change, Leadership and Ethics. London: Routledge. UK Government. (2014, November 12). Marketing and Advertising: The Law. Retrieved from Gov.Uk: https://www.gov.uk/marketing-advertising-law/describing-your-product Unilever. (2015, March 4). Our Strategy. Retrieved from Unilever: http://www.unilever.com/sustainable-living-2014/our-approach-to-sustainability/our-strategy/ Read More