Marketing ethics is concerned with how businesses present themselves and communicate with their customers. The ethical issues in this field range from the misrepresentation of products in advertising materials to the use of branding that could enable consumers to mistake one product for another.
Honesty is one of the most important issues in marketing ethics, as reflected in the Chartered Institute of Marketing's code of practice. Companies are under an ethical obligation to be honest in the way they represent themselves, their products and their pricing to consumers, and in their relationships with clients or other businesses. Content choices can also be problematic in other ways. The use of violence, sex or other potentially controversial tactics to market a product, or the decision to pursue negative advertising against competitors, raise ethical concerns as well as potential legal difficulties. For example, advertising that distorts perceptions of body size could be potentially harmful, according to the Royal College of Psychiatrists.
Another important issue for marketing ethics is the manner in which the target audience is defined and approached. One of the most obvious ethical issues is the use of advertising to target vulnerable audiences, such as children under 12, who may find it difficult to recognise the commercial intent of advertising. The exclusion of segments of the population from marketing materials and target audiences can also be ethically problematic. For example, marketing and market research that stereotypes or refuses to acknowledge people of a certain race, age, gender or sexuality, or which attempts to distance a brand or product from them, could encourage discrimination.
Once the target audience has been defined, the manner in which it is approached must also be handled ethically. The use of strategies like native advertising, advertising which poses as genuine content, that might conceal the intent of the material or of direct marketing techniques that use surreptitiously collected information could become unethical when the audience is unaware of how they are being used. The protection of people's privacy and the transparency with which their personal data is handled are an important part of ethical marketing, and 84% of consumers state that they are happier to share information with companies that are open about data collection and use, and 60% saying they would be happy to receive targeted marketing from a company that provided such transparency, according to the leading marketing magazine Campaign.
Considering the ethics of marketing is important because it can protect consumers against unscrupulous companies and prevent competitors from gaining an unfair advantage. It can also be important for the companies being marketed. Avoiding unethical marketing can prevent scandals that could damage consumer trust and loyalty. It can also avoid the risk of prosecution, since many unethical tactics are also prohibited by advertising regulations or consumer protection laws. However, some suggest that ethical behaviour should go beyond obeying the law and acting in one's own self-interest. Sometimes ethical reasons will outweigh self-interest, even without the threat of law.
Ultimately customers are increasingly sophisticated and aware of the issues at stake. It boils down to trust and that is something that can be lost in an instant, particularly if something hits social media. Just ask Findus.
There is a point of view that all marketing is essentially a lie. While there is a point at which this may be the case but there is an area of expression of brand values where truth and authenticity does exist. The hard fact of the matter is that your brand principles are not what you say they are but what your customers believe they are. In many cases there is a large gap between these two.
I believe that it is those brands which have the best understanding of this and manage to match their own message with their customers' beliefs that are the leading brands of today.