Buyer Beware: Are Marketing And Advertising Always Ethical?

Marketing is fundamentally an ethically sound activity insofar as it aims to find and present ways of satisfying people's needs and wishes and thus of expanding their freedom and contributing to their personal and social fulfilment.

This centrality of the consumer, however, which gives a positive ethical tone to marketing as a function of business, also alerts us to his or her vulnerability in a relationship that is asymmetrical and unbalanced in favour of the supplier's information and other resources.

It was such considerations that led John F Kennedy in 1962 to propose the four consumer rights: to safety (security, including non-observable defects); to information (involving relevant knowledge and disclosure); to choose (amid the diversity available through competition); and to redress (or to be heard or compensated).

 

Production and pricing

The fundamental concern to respect individuals and their interests generates ethical conclusions regarding the various aspects of marketing. Thus, market research should not only exemplify respect for honesty, accuracy and objectivity in dealing with people but should also have regard for their unique individuality, neither imposing on them nor invading their physical and psychic privacy.

Again, the process of acquiring corporate intelligence should desirably not have recourse to deceitful approaches or false interviews or to hiring away employees of other companies in order to gain access to their corporate secrets.

Product management should routinely take account of safety factors, including health warnings and tamper-proof and child-proof packaging. It should be careful to provide information about important product qualities, including their contents and ingredients, and to give due and timely notice of any replacements or improved products that are being planned.

Ethical respect for the recipients of business's attentions also affects product differentiation and innovation and will include not only the honesty and genuineness of differences being developed but also the deception involved in reducing the size of a product while keeping its price fixed and various features of packaging, including slack and wasteful packaging.

Environmental sensitivity from the cradle to the grave, involving raw materials, production processes and disposal and recycling of products, should mean more from the ethical point of view than sales gimmickry and should honestly reflect the increasing environmental sensitivities and expectations of customers and society at large. Companies wishing to present an ethical profile in their marketing will also take care to provide channels of customer reaction and redress, including prompt product alerts and recalls when necessary.

Many of these ethical conclusions are straightforward enough. But probably one of the most difficult ethical issues in marketing affects the pricing of products and in settling on what should count as a fair price or as a reasonable return on costs.

If the word profiteering has any meaning, it implies that there are ethical limits to what price one can set for a product. The ways in which various sales practices are described clearly presupposes the possibility of overcharging and thus of taking unethical advantage of customers and others.

Predatory pricing to ruin a competitor, collusion in price fixing by members of an industry, objections to price maintenance in such commodities as books and non-prescription medicines, price discrimination in different parts of the market, and price gouging (i.e. exploiting people's needs) all imply by contrast that there is such a thing as a fair price. On the other hand, prestige pricing may be a matter of ethical indifference, when luxuries or an elite segment of the market are concerned and individuals may be thought quite capable of looking after themselves in their pursuit of non-necessities.

Perhaps this indicates that a crucial factor in considering the ethics of pricing non-luxuries lies in competition and the possibility of customer choice that it offers. In other words, to suggest that an ethical price for necessities is simply constituted by what people are prepared to pay must depend on what choice is available to them. This may be answered in terms of how great their need is for the product and of whether they have the opportunity to shop around and purchase it at a competitive price.

Making informed choices

Possibly the area of marketing that is most ethically sensitive in ordinary business activities, at least in the eyes of the public, is that of advertising. As we have already noted, this is fundamentally an ethically sound activity. It is a valuable feature of society and of business in drawing attention to goods and services that are available to satisfy people's needs, desires and wishes. It expands human freedom by increasing choices; it can inform, stimulate and entertain; and mostly it is legal, decent, honest and truthful, as the International Chamber of Commerce observes.

It also contains an ethical tension which is the basis of most of the moral issues that can arise in advertising. On the one hand the potential customer seeks information in order to make an informed choice. On the other the potential seller seeks to persuade in order to make a sale. The ethical trick may be how to combine sales influence with respect for the individual's freedom of choice and exercise of personal responsibility.

If respect and support for the individual in their freedom of choice is at the heart of ethical advertising, this involves two major conditions about his or her power to exercise choice: that it be adequately informed and that it be unforced and freely exercised.

First, to be informed takes us into the area of knowledge and communication about various goods and services that are on offer. Here there can be no substitute for customer awareness of the true state of affairs about products and the options available. Obviously unethical behaviour is found in inducing ignorance or error through lying, deliberate misrepresentation and serious omission.

However, there are also less obvious problem areas in the matter of providing appropriate information. What counts as appropriate? Total disclosure about a product can raise costs and can also result in information overload that defeats its purpose. Yet concealment, omissions or the withholding of relevant information would materially affect the customer's purchasing decision. Presumably the acid test is whether the aim of an advert is to provide the most useful information to help the consumer make a reasoned choice.

This still begs a question about usefulness, of course, but it is a good question, and one to be kept continually in mind. For example, it can be used to apply particular ethical scrutiny to small print disclaimers, press advertorials, TV infomercials, exaggeration, puffery and generally inflated claims for goods or services as part of an enquiry about whether they help or hinder informed choice.

There is, of course, the old Latin maxim, caveat emptor, or let the buyer beware, to indicate that customers have their own responsibility to be adequately informed and to take obvious precautions, including seeking expert advice, and so on.

There is clearly much point to this observation, which bases ethical considerations on what is sometimes called the reasonable consumer. Such a person might reasonably be considered able to read adverts with a wary eye, aware of possible conventions and harmless exaggeration. Alongside this, however, one has also to take into account the presence of what can be called market illiterates, particularly when the market in particular expensive commodities is increasingly complex, as it is in the case of computers and financial services.

In addition, there may be particular markets or segments, children, for example, which cannot be expected to be sufficiently intelligent to assess information or to have sufficient presence of mind to make sure they are adequately knowledgeable and therefore in a position to make a truly informed choice. This, of course, is why many people have serious ethical reservations about advertising aimed directly or obliquely at children.

Consumer freedom

Consumer choice that is fully human is the ideal towards which advertising should ethically aim. This means that such choice must be not only informed but also unforced, that is, free from undue pressure. Again, there are areas where what counts as undue pressure is not always obvious.

One may be clear enough about physical coercion or about wearing customers down through sheer exhaustion, as has been alleged of some time-share sales agents. It is also interesting that widespread rejection of subliminal advertising arises from concern that influence is being exercised, literally, below the threshold of people's consciousness, which is thus regarded as an invasion, not now of their physical, but of their psychic privacy.

The same may be said of manipulating people in the sense of getting them to do something without their being aware of it or of why they are doing it. For example, how ethical is it to encourage impulse buying?

Yet there must also be a place for due influence, as in any human interchange. There is thus ethical scope for exercising influence on other people on a rising scale, beginning with straight information and proceeding to suggestion, advocacy and persuasion, before reaching the unethical extreme of manipulation.

Playing on people's feelings and emotions to influence their decisions and choices and to secure their agreement and consent is a normal part of social interaction. After all, we are not computers, to the possible despair of economists, and our choices are not based simply on rational or logical grounds. They are also influenced by our feelings of being attracted or repelled by something on offer, or by a presentation, package or advert highlighting its power to satisfy our various needs.

This is the basis of contending that one is really selling satisfaction and states of mind rather than simply goods or services: well-being, and not just a package holiday or a designer suit; security, and not just insurance or a warranty; even beautiful feet or sexual confidence, and not just shoes or cosmetics.

Problems arise, however, if emotions are being exploited or if impressionable and vulnerable sectors of society are being targeted, such as immature children, despairing sick people and socially insecure ethnic or age groups. In such cases the ethical risk is that what is at work is manipulation rather than persuasion.

Perhaps a clue to this is an absence of the sales resistance and robust scepticism that might normally be expected of consumers. Some critics of advertising methods, however, would go further and fault the whole industry on the grounds that it is in the business of arousing dissatisfaction and of creating unnecessary or undesirable needs in people.

Yet this seems more an observation about culture than about advertising. For there is a place in human living not simply for satisfying inborn animal needs for food and protection but also for satisfying acquired human needs and tastes that are culture-inspired and part of socialisation, including needs for a variety of goods and services of a pleasing kind, standard and promise.

A further defence of modern advertising presents it as an expression of art, operating according to recognised conventions of presentation, enjoyment and appreciation, and sometimes indulging itself and its viewers in harmless fun and entertainment.

The point is well made and yet it is also worth bearing in mind that humour has a powerfully disarming effect. Moreover, whatever else it sets out to do there is no doubt that in laying out its wares advertising ought to respect persons, personal priorities, preferences and ethical values. Possibly, too, individuals need to remind themselves regularly that not all our needs, wants, desires and wishes have to be satisfied. There is always room in life for what one American described as the tragedy of the excluded alternative. And certainly there is much scope in schools for critical consumer education.

On a wider canvas there is little doubt, also, that in the explicit and implicit values and views of life and relationships that are portrayed regularly in the fantasy world of advertising (the perfect kitchen, family, body and so on) there is a danger of sending misleading or highly selective signals to its recipients.

Part of the social responsibility of business, then, must lie in the authenticity and fidelity with which in its advertising it portrays reality, as well as the respect which it and the rest of marketing show for individuals and their responsible autonomy.