Marketing Ethics: Proctor and Gamble - Case Study Example

Ethics Marketing Ethics: Proctor and Gamble Submitted by: Submitted 30th March 2009 Discuss the impact of an ethical issue on the business process of marketing its products and services. You are expected to discuss relevant theory and the potential challenges this factor will make on the organization’s current and future marketing strategies. Introduction In today’s world, when globalization has taken the entire world by storm, one can witness numerous corporations having global presence in a number of regions and countries. As a result of this widespread access, these companies have been able to create products and services which have been created exclusively for these regions keeping in mind the different external factors in mind such as the cultural, economic etc. Each nation is bound by its own social conventions, norms and economic practices which results in the diversity of practices adopted by the multinational corporations. These differences have had made the difference between the success and failure of establishing set-up in the different regional centers. Seglin, (2003). Nestle, PepsiCo, Coca-Cola, McDonald’s are some of the international chains which are some of the biggest stories of such global corporations which have a profound understanding of the lifestyles gained through experience and continuous learning. Only through a joint utilization of the global resources can these corporations hope to transcend national boundaries and develop a global society. This paper would seek to establish a sound basis for the companies creating an ethical policy which is according to global standards and in line with the different marketing and cultural factors. The company that this paper would seek to analyze and measure would be “Proctor & Gamble” an internationally recognized company for its products and services. In today’s conscious world, when ethical practices are considered to be an important part and parcel of all company activities, Proctor and Gamble has to ensure that before conducting any marketing activities it has to ensure that the code of marketing ethics is followed. Marketing ethics are defined as those policies and principles which are at the background of any marketing activity. Solomon,(1983). Proctor and Gamble being a global corporation has had to research on the different ethical standards of the different countries in which it has presence. There are different frameworks which are available to such global corporations to monitor their marketing ethics. Bowie, (1999). Ethics This paper would seek to analyze the different ethical practices that are currently in place and which could have an effect on the way Proctor and Gamble markets its goods and services. The different frameworks include the value-oriented framework, stakeholder-oriented framework and process oriented framework. All these frameworks deal with the notion of ensuring that the different marketing practices are aligned to the processes, consumers, values which they infringe upon and affect. For an organization such as Proctor and Gamble ethical issues are a huge concern as a result of the different external environments in which they operate. Not only are there different external issues to be considered but the marketing policy has to be created such so that the ethical values are no compromised. Ethical values when are evaluated in terms of business operations are defined as the moral principles and problems that can arise as a result of the different business areas. Rothman,(2004). Business ethics have become increasingly significant as a result of the far reaching impact of corporations such as Proctor and Gamble. Marketing is no longer the mere advertisement of goods and services but it has become a valuable tool to disseminate information and hence, can be used to manipulate and influence the consumers. Hence, an important line has to be drawn as to where do business practices are allowed and when do they become objectionable. This paper would outline certain marketing ethic issues while concentrating on one significant ethical issue; pricing, anti-competitive practices, specific marketing practices, content of advertisements, black markets and lastly the effect of marketing on children. All these above outlined ethical issues are pertinent in their right but this paper would concentrate on the content of advertisements which is a highly controversial issue. In order to operate in any country or region, certain cultural, political, social and economic factors have to be considered and taken into account. Proctor and Gamble if examined closely is a company which can be taken as a responsible organization as a result of the ethical practices that it engages it. However, still the issue of the content of advertisement can become controversial especially when taking into account the different external factors. Examples In countries such as Pakistan, UAE where the society operates on the basis of religious fundamentals, the content of the advertisements becomes highly controversial. In these countries where Proctor and Gamble has presence, it has to ensure that the advertisements do not portray women as mere “objects” as can be the case for many other nations where women are used to attract customers and clients. The way women are even portrayed has to be done in a quite sensitive manner. In the recent past, billboards of Proctor and Gamble were taken down or destroyed in Pakistan due to the “obscene” use of women models. Hence, cultural and social values can become a major concern for global corporations such as Proctor and Gamble as any “immoral” advertisement can result it in the company creating a bad reputation for it amongst the competitors, customers and even the public officials. According to the Hunt-Vitel marketing theory in the Journal of Macro marketing, the deontological and the teleological perspectives allow for an understanding of the values which come into play as a result of the ethical considerations. Hartman,(2004) In the case of Proctor and Gamble, the organization would have to look at the issues which arise as a result of the gap which could be created by a potential problem of a misconstrued advertisement which would further entail alternative decision making practices. Theories According to Jeremy Bentham pleasure is the standard of value and hence, the theory of ethical hedonism. According to the greatest happiness" principle of utilitarianism, which is the case for many marketers today they believe that by giving happiness to the consumer they would be fulfilling their end of the bargain. Harwood, (1996). Hence, in the case of Proctor and Gamble as long as the content of advertisements is entailing the different external factors and not resulting in “pain” there practices would be considered to be ethically sound. Another important theory which entails the concept of ethical practices with marketing is the theory proposed by Immanuel Kant, standard morality is the duty of all companies conducting marketing practices. In this sense, the organization has to stick to what is right and hence; there is no room for what is pleasurable. Therefore, in order to operate and accordingly Proctor and Game would have to review the polices and rules for each nation in great detail in order to remove the chances of any “wrong” marketing practice to be conducted by them. This theory of ethical practice leaves no room for doubt as to what can fall within the brackets of right and wrong. According to the aforementioned theory, Proctor and Gamble would have had to strictly monitor the sort of marketing activities that would be undertaken by it in order to remove the chances of offending potential customers and clients. According to Ayn Rand, ethics are the purpose of the existence of each individual or the end. Therefore, according to this theory, the conditions of human survival are based upon the standard of value and from thereon we derive the universal principles of ethics. Behrman,(1988) This theory is defined as “objectivism” and it results in the pursuit of one’s own pleasure and selfish interests. This principle creates the understanding that human relationships are created under the context of each for him. Under the practice of such an ethical outline, the marketing ideals become aligned with the corporation’s own objectives limiting the scope of the marketing strategy which is no longer bound by the confines of the national ethical practices. Hence, it would result in having a capitalistic point of view which in certain circumstances has been carried out due to the laxity of the regulatory practices in developing nations. Hence, Proctor and Gamble would have to identify the strength of these practices in order to create a marketing strategy which is aligned to the ethical considerations. Knight, (1980). The above theories and ethical considerations were outlined in order to highlight the theoretical perspectives but what has to examined is the effect that they can have on the consumers and clients. Each country has its own businesses’ code of conduct and the socio-political factors which in turn regulate these business practices. Hence, for a global corporation like Proctor and Gamble what should be considered would be the sort of environment in which it is operating. In the case of developed nations, the marketing strategy would be more well-defined as a result of greater information and awareness about ethical issues rather than in developing nations. However, at the same time the sensitivity analysis would allow the company to verify the sort of environment that they operate in as the cultural values of certain developing regions are a strong basis for any activity undertaken. Hence, the content of advertisements would be reviewed according to the social norms and practices by Proctor and Gamble as for example it would be unethical for them to sell alcohol in Muslim nations. After taking into consideration the above concerns and the subsequent lasting impact that a global corporation like Proctor and Gamble could have on the market it could be targeting, it would have to identify the target market appropriately. Gender, age and social set-up would all be important points of consideration in order to create such a marketing strategy where segmentation would be as precise as possible. In certain segments, ethical considerations such as selling immoral products, promoting indecent activities would be considered highly inappropriate. The marketing strategy has to be created by keeping in mind any such events and to cater to them accordingly. In the case of more conservative societies such as that of the Asian market, the company would have to be quite careful in undertaking any marketing decisions in order to eliminate the chances of any offensive marketing. Pro-active marketing strategies are those strategies which are created in order to forestall any incidence of the aforementioned nation taking place and which anticipate competitive action. Proctor and Gamble would have to face stiff competition from the local companies who being aware of the local practices would be more well-informed to tackle ethical issues. However, what could go in the favor of Proctor and Gamble would be access to a larger resource pool in order to research about the local conditions. Albertson, (2007). This Research would go a long way in resolving any ethical differences as otherwise it could come under attack for being a capitalistic set-up with only its own interests at heart. Conclusion Proctor and Gamble would have to identify its target pool as in the case of developing nations, the clientele would be those in the higher income bracket as the lower income classes would not be in a position to afford the goods and services. Thus, the ethical values would play a huge role for this market being a more aware section of the market. Selden (1997). Proctor and Gamble would have to incorporate the local market information in order to sell the products and services. The current practices which are in place is the creation of research centers, customer feedback centers and also a department for the social welfare which has allowed Proctor and Gamble to have a competitive edge over its competitors. The provision of these social services has created an image of a socially aware company for Proctor and Gamble and hence, this image has greatly benefitted the organization in terms of insulting it from customer complaints to a certain extent. Levitt,T (1983) Reactive marketing strategies which are defined as defensive strategies would be put into place whenever the practices of Proctor and Gamble would come into question. In the case of having offended its customers, Proctor and Gamble would have to make sure that these strategies are in place such as those which are enforced by competitors. The above paper outlined certain significant ethical theories and their subsequent effect on the global clients of Proctor and Gamble and what would be the response of the company in the case of such occurrences. References Marketing definition approved in October 2007 by the American Marketing Association.. Selden , P (1997). Sales Process Engineering: A Personal Workshop. 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