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| Tuesday, 10 August 2004 |
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Marketing 'ethics' to enhance corporate image by Prasanna Perera, Marketing and Management consultant, Chartered Marketer CIM, UK.
We hear this term "ethics" been referred to across many fora. The meaning of ethics is morally acceptable or correct. From a marketing perspective, this takes on a relevant and important meaning. Through the discipline of marketing we are dealing with people (customers) and ethically appropriate practices are absolutely mandatory. As marketers, we should never take a customer for a ride. What are the specific areas, where marketing ethics should be practised? Basically, ethics should cover the entire gamut of marketing, operations, of a company. However, we could highlight certain specific areas of importance. False and misleading advertising Advertising claims should be truthful and factual. There should be no hidden agendas. A clear, factual and appealing message should be given to the customer, at all times. Sales Promotions Consumer promotions should clearly add value to the customer. In doing so, clarity in terms of what is offered is important. There is simply no purpose in conducting a promotion, if it adds to the level of confusion prevailing in the consumer's mind. Keep sales promotions simple. Easy redemption methods, no elaborate entry coupons and form filling. An important ethical aspect of sales promotions is that all gifts, prizes and free offers promised, should be honoured. Nothing frustrates and disappoints a consumer, than if he or she feels cheated. In such situation, the promotion does more harm that good, for your organisation and brands. Pricing strategies Pricing is an important element of the marketing mix, specially in markets such as Sri Lanka. Product quality standards Do not promise a Rolls Royce and deliver a popular model. It is better to under promise and over-deliver in the case of product quality issues. When edible products are considered, many moral issues come into play such as quality of ingredients, production systems and processes. There are legal requirements that regulate product quality, but self regulation is the ethically appropriate practice. Distribution related aspects In marketing, intermediaries are an important link in order to carry out effective distribution. In a true spirit of partnership, the organisation and the intermediaries, should be satisfied. This satisfaction can be achieved, by treating intermediaries in a fair and just manner. Examples would include profit margins, credit facilities and other allowances Practise marketing ethics, when dealing with distributors and wholesalers. After all they are your partners in business. Make sure that they are able to derive a satisfactory return on their investment. In return make it clear to intermediaries, that they must provide the required services, in a consistent and ethical manner. From a legal perspective, an organisation would have entered into a distributor agreement. But from a practical standpoint it is better to deal in an ethically accepted manner, so that legal issues do not surface. Suppliers of marketing inputs Advertising and public relations agencies, suppliers of different products and services are an integral part of the marketing discipline. Take for example an advertising agency that handles your product or service. In order to get the best for your product or service, a mutually beneficial relationships must exist. This relationships building exercise, should revolve around sound business ethics. (Both from the agency and the client organisation). Agencies should be objective and fair in dealing with clients. All clients should be given the best attention. On the part of clients treat your advertising agency as a "true partner". Use marketing ethics, as your guide in building this partnership. Internal customers (employees) When ethics are considered, internal customers are often forgotten. It is important from a business perspective, to treat all employees fairly and provide them equal opportunities for advancement. There should be no favouritism and unethical pressure groups. What are the benefits to an organisation that practises marketing ethics? It enhances the image of the organisation in the eyes of its "stakeholders". Corporate image and branding are vital requisites for business success, in competitive markets. Customer satisfaction is enhanced and consolidated in terms of external and internal customers. Customers would be most willing to deal and remain loyal, to an organisation that is ethical in its practices. Accessibility to markets internationally and locally is facilitated. It is easier for an organisation that is ethical to establish new business opportunities and consolidate existing business. Investor confidence is enhanced by ethical marketing practices. Investors would have serious reservations in dealing with a company, whose ethics are questionable. Employees of high calibre could be attracted and the possibility of retaining them would be high if an organisation is considered to be ethical in its business and marketing activities. In fact the "right" type of employee, can enhance the ethical practices of an organisation. Relationships with distributors and advertising agencies can be consolidated if both parties are ethical in their dealings. It is acknowledged that relationship building is a key element in marketing effectiveness. External customers are more receptive to advertising and promotions carried out by organisations who they consider are ethical in their marketing practices. Customers are also willing to try and adopt new product/service offerings of such organisations. This mainly results from customer confidence arising out of the beliefs that "ethics" govern business activities at all times. Conclusion Business ethics have been a topic of discussion at many fora. Although interpretations can differ the principles remain the same. From a marketing standpoint ethics are paramount, from two perspectives. i.e. the external customer and internal customer (employee). Marketers simply cannot afford to take undue advantage of their "partners in progress". This goes against the very principles of marketing, which is to identify and satisfy needs in a profitable but also an ethical manner. Do not exploit your customers in an unfair manner. This will not pay dividends in the longer term. Further, you are also damaging the image and reputation of your organisation, products and brands. "Perhaps the biggest responsibility of any corporation, is to own up when it makes a mistake". (Lee Iacocca) "The behaviour of the community is largely dominated by the business mind. As great society, is a society, in which its men of business think greatly of their functions". (A. N. Whitehead) |
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