Business Ethics in Marketing - Case Study Example

Business Ethics Table of Contents Table of Contents Executive Summary 3 Introduction 3 Business Ethics 4 Relationship with consumers and society 5 Advertising to consumers 6 Ethics of sales and marketing 7 Niche marketing 8 Packaging 8 Certification and labelling 8 Branding 9 Marketing strategies 9 Conclusion and recommendations 10 Recommendations 11 References 12 Executive Summary Despite the many required documentations of consumers purchases on food products, the motivation of the purchases are under-researched. The individual choice of the product is linked to the business ethics of the company, and the ethics vary from one company to the other and from individual to individual. Consequently, the essay investigates the degree to which business ethics influence the choice of the product by the consumer. In this case, the focus is on the purchasing decision of the consumer on dairy products of the company using the consumer perception, attitudes and beliefs. Therefore, for the company to meet future market development, it must aim at modifying the consumer’s attitudes and perceptions by implementing educational marketing campaigns that reinforce the ethical, societal and environmental benefits. The research will adopt a semi-qualitative approach to identify consumer attitudes, perceptions, knowledge and purchasing behaviour. This method allows an exploration of consumer relationships amongst variables. Consequently, the method enables a descriptive method that assists in giving reasons for purchasing decisions of buyers and the causal for such decision. Introduction In the case study, a manager works in a large dairy products company. The company had launched a new yogurt product with various ingredients that promotes health digestion. However, the company had a plan to offer 10 cents for every sale to the American Heart Association. The company brings a wide range of sustainable food ingredients to improve the quality of food products, while improving their health profile and shelf life. The company products help in reducing fat, sugar and salt content without sacrificing taste and texture, while actively promoting digestive, immune and bone health. The yoghurt ingredients offer a sustainable and health source of proteins. Thus, the company has loyal customers who have the experience of using the company’s products. The food ingredients add value to both manufacturers and consumers. The company carried a market research and concluded that many consumers look for yogurts that are good for digestive health (Farahani, Taghadosi, & Behboudi, 2011). The company defines sustainable development as the increasing access to higher quality products, while contributing to economic and social development, and conserving the environment for future generations. The company has fundamental approach to business and has been concerned in the creation of long-term sustainable value for the customers, employees, shareholders and society as a whole. Therefore, the company should ensure that it meets the business ethics that are stipulated in the company policy to give the company a competitive edge against their competitors. However, from the case study, the company has invested millions of dollars to support the advertisings on radios, televisions, web and print outs, and also packaging. Business Ethics Business ethics refers to a system of moral principles that are applied in the commercial world. Therefore, ethics is a flexible term with different aspects and thus, the company should be aware of the social and environmental aspects of the communities they are doing business with. However, business ethics provide guidelines for the acceptable behaviour in the commercial world in both day-to-day operations and strategy formulation. In order for the company to succeed, an ethical approach is required to give the company a positive corporate image to the public. The company should maintain the highest standards of conduct as they do business. To manage high standards, the company should ensure that it has direct positive influence on the societies, economies and environments. This can be done through engaging in honest advertising about the products. The company employees should be responsible to the commitment to maintain business ethics. The company is committed in listening to the views of consumers and stakeholders as it implements its strategy of sustainable development. The company’s basic business ethics principles include: The company is committed to favour long-term development over the short-term profit. Therefore, the company will focus on future market developments hence ensuring that the company engages the required business ethics. Long-term commitments and relationships. The company should have ways of developing and maintaining long-term relationships with consumers and stakeholders. This can be achieved by respecting both the needs of the consumers and stakeholders. Respect for integration with diverse culture. In this case, the company should respect the diverse cultures in the society. This can be done through accepting and listening to external parties in the country on issues regarding morality and ethics. Proper conduct and ethical values as basic requirements for both management and employees. All the employees should conduct themselves in a manner that enables long-term sustainability of the company product. Recognition that consumers need information about the products that they purchase and the company behind the brand. This is an important principle since the company uses advertising agencies and marketing staffs to give information to consumers. Therefore, the company should ensure that those giving information to consumers are truthful and honest. Thus, ensuring long-term sustainability development. Relationship with consumers and society The company business is concerned with fulfilling the customers’ needs and requirements. Many people who buy the company products are free to choose from other products, and thus choose the company’s product due to quality. Therefore, the basic consumers can trust the quality of the company’s product. Therefore, the consumer can trust the quality and safety when they open and taste the yogurt. The company products go through a series of steps before being packed and thus, meet the standardised and detailed requirements. This enhances the relationship of the company with the consumers and society in that the end-products portray high quality features. Yogurt helps in the digestion processes and thus, it is recommended by the America Heart Association. The company also employs interaction campaigns with the society and consumers to enhance strong relationships. Research and innovation for food safety, quality and enhanced wellbeing The company operates a food and nutrition research organization that deals with the researches on company products to ensure that the safety and quality of products are maintained. The company invests more than $10000 every year on research and innovation for food safety to enhance wellbeing and quality. It has laboratories that operate at the highest international standards and specialised scientists who have developed specific tests for a great number of products and processes. Thus the company procedures are recognised by the government and experts in the toxicological and microbiological food safety. This gives the company a competitive advantage on areas of business ethics as their products are recommended by the government as being of quality and of high standards. Advertising to consumers The company is determined to advertise in a responsible way, ensuring that they are not misleading consumers regarding the benefit of a product; the company does not encourage dangerous or irresponsible consumption. The company ensures that it monitors the advertising so that it does not contain objectionable content and does not have discriminating or offensive content on political, religious, ethnic, cultural and social groups. Therefore, the company avoids programmes that include offensive and dishonest information regarding its products. The guidelines of the company have been distributed to advertising agencies and marketing staffs to ensure that all campaigns are reviewed and comply with company principles. However, adhering to these internal standards results to high costs, which the company should incur to implement long-term sustainable developments. Ethics of sales and marketing Marketing provides information about the access of the product and may seek to manipulate the behaviour and values of the consumers. The society may regard this as acceptable if the aim of the company is to engage in corporate social responsibility. However, marketing ethics overlaps strongly with media ethics, since marketing of the product makes use of media. Moreover, media ethics is much broader and extends outside the business ethics. The marketing ethics is a subset of business ethics. Therefore, this means that business ethics is a broad term and includes external parties also such as shareholders, creditors, the government and financial institutions. However, marketing ethics deals with values, principles and ideals that companies need to use in marketing their product to consumers. Therefore, we will focus on marketing ethics in two major concerns: the political philosophy and the transaction focused business practice. In arguing for marketing ethics, first, the aim is to maximize profit for the shareholders. Consequently, the company should be transparent to declare the ingredients used in the products. The company should also declare the risks in using the product to consumers such as financial risks, health risks and security risks (Farahani, Taghadosi, & Behboudi, 2011). The company should also be truthful and honest in advertising. In addition, the company should include fairness in pricing and distribution and forthrightness in selling. In engaging in above ethics, the company achieves business ethics and enhances its corporate public image. In a transaction-focused business practice, it is dangerous since it will use short-term methods of increasing sales that are against the future market developments. On political philosophy, the company has been involved in using media agencies to mislead the public about the company product thus increasing sales through misleading information. Niche marketing Products with added value are more competitive in the market when compared to those that do not hold any specific added value. Therefore, the company products distinguish it from the other products in the same category in its aim to serve specific needs and wants of the consumers. Therefore, the company should focus on the specific needs of small individuals and therefore, develops a product in the specialty of the small individuals. The company must first identify the niche marketing in order to develop its marketing strategy and tactics. Therefore, the company can be able to concentrate in a specialised and targeted market of such products. In this case, business ethics become clear to the consumers since there is interaction with the company staff as they promote the product (Ettenson, Smith, Klein, & John, 2012). Thus, the company should only customize the product in accordance with market requirements. However, the company will incur extra costs in dealing with the niche consumers, but it will enhance long-term relationships. Packaging For the company to be successful in marketing the products with the added value, it requires differentiation on the product. Packaging should include the information about the product and labels of certification from external institutions that regulate food production. Therefore, the company needs to use advertisement strategies, product design and packaging to differentiate its product from that of its competitors. Packaging is important since it enhances the brand of the company. Certification and labelling The company needs to use product packaging that communicates the added value of the product, and it should be clearly visible and recognisable. The product should also be credible. The credibility is achieved through certification of the relevant added value and acknowledged by external institutions; this should be disclosed on the product through a label. This credibility of certification can be assured through independently working certification systems and increased through the participation of relevant stakeholders in the certification process. Branding In the marketing of products, product differentiation is crucial. However, besides the certification and labelling, branding conveys the invisible qualities to the consumers. Therefore, successful marketing should have an interaction between consumer and product, and can lead to attached emotional feelings to the brands and thus, make it special for consumers (Ghorsad, 2014). The brand represents attributes the consumer ascribes to the product. Marketing strategies Marketing products with added value to the public comprise marketing strategies such as direct marketing. In accordance with the strategies to enter into niche marketing, the company needs to adopt a pull strategy. It is reasonable to market the products and therefore, it aims at serving consumers’ needs. The company should provide full facts about the product to consumers to enable them to make informed choices. Business ethic practices are important in the company, since consumers become loyal hence enhancing the public image of the company. Consumers are very sensitive to taste, food safety and health, and these are the primary motives for the buying decision of the consumers. Business ethics enable the company to have a future growth of the business and therefore, the company benefits in the long run (Agnihotri, 2013). Corporate social responsibility The concept of corporate social responsibility has been one of the strategies to engage the market for several companies and organizations. However, companies are getting engaged in social activities so as to comply with certain legal obligations. Consequently, other companies go beyond their legal obligations in order to be good for society. Some critics argue that social responsibility diverts the company from its primary purpose of existing which is making profits, and operating the business in the best interest of their stakeholders. Second, they argue that when the company decides to spend its resources in social responsibility activities, the cost involved will be passed on to customers through a higher price or reducing the profits. The company defines social responsibility beyond making profits and their legal obligations. The company believes that it has a duty to contribute toward the community and the world we live in; moreover, they consider participating in social issues will improve the quality of life, increase the awareness of human rights, public safety, and general health issues. Social responsibility is not only important for people and the planet, but also is vital for business success by enhancing the brand image and increase the market share. The society may regard this as acceptable if the aim of the company is to engage in corporate social responsibility. Therefore, the company will enhance the brand image and increase the market share Conclusion and recommendations Business ethic practices are important in the company; since consumers become loyal hence enhancing the public image of the company. In the society, business ethics refers to three things: Avoid breaking the law in work-related activities Avoid action that may result in civil law suits against the company Avoid actions that are bad for the company image Therefore, businesses must be concerned with the above three things since they may lead to loss of money and the company reputation. However, it is not likely that ethics can be taught. The ethics rest on early social environment where each individual grows. Although being perfect in business ethics may save a company from legal and public relations costs, morality in business is also costly (Kong, 2012). The company is required to pay attention to product safety, truthful advertising, environmental impacts and human working conditions; therefore, this may lead to a tight-budgeted business. Recommendations Developing measures of social sustainability The company is in early stages in ensuring social sustainability to suit in the company. Implementing the business principle at all levels The company should communicate the business principles at all levels of management so that they can understand how to implement them in a way that is specific to the job or function. Internal monitoring to adherence of business principle The company should have internal processes put in place to monitor adherence to the corporate business principle. Consultation with external parties The company should consult external parties on issues regarding business ethics so that they can be able to know the areas that need improvements. When they consult American Heart Association, the company will be able to put measures on the safety of the products that need to be produced and sold to consumers. The company should exercise fairness in pricing and distribution and forthrightness in selling their products. Packaging should be implemented by the company to include the information about the product and labels of certification from external institutions that regulate food production. This will help to the company to enhance the public image. References Agnihotri, A. (2013). Doing good and doing business at the bottom of the pyramid. Business Horizons, 56(5), 591-599. Ettenson, R., Smith, N. C., Klein, J., & John, A. (2012). Rethinking consumer boycotts. Image. Farahani, M., Taghadosi, M., & Behboudi,SS M. (2011). An exploration of the relationship between transformational leadership and organizational commitment: The moderating effect of emotional intelligence: Case study in Iran. International Business Research, 4(4), p211. Ghorsad, T. (2014).Adventures and Ethics in MF Authentication.International Journal of Research, 1(6), 329-338. Kong, D. (2012). Does corporate social responsibility matter in the food industry? Evidence from a nature experiment in China.Food Policy, 37(3), 323-334. Read More