Page 105 - Foundations of Marketing

72 Part 1 | Strategic Marketing and Its Environment

draft new legislation to regulate the behavior, or they may engage in litigation to force the
organization to “play by the rules.” Deceptive advertising in particular causes consumers to
become defensive toward all promotional messages and become distrustful of all advertising;
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thus, it harms not only consumers but also marketers themselves.

Ethical Dimension
Economic and legal responsibilities are the most basic levels of social responsibility for a
good reason: failure to consider them may mean that a marketer is not around long enough to
engage in ethical or philanthropic activities. Beyond these dimensions is marketing ethics—
principles and standards that define acceptable conduct in marketing as determined by various
stakeholders, including the public, government regulators, private-interest groups, consumers,
industries, and the organization itself. The most basic of these principles have been codified as
laws and regulations to encourage marketers to conform to society’s expectations of conduct.
For instance, an Avon global bribery scandal cost the firm more than $ 250 million in legal fees
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and led to the ouster of Avon CEO Andrea Jung.
However, marketing ethics goes beyond legal issues. Ethical marketing decisions foster
trust, which helps to build long-term marketing relationships. Marketers should be aware of
ethical standards for acceptable conduct from several viewpoints—company, industry, govern-
ment, customers, special-interest groups, and society at large. When marketing activities deviate
from accepted standards, the exchange process can break down, resulting in customer dissatis-
faction, lack of trust, and lawsuits. The 2013 Edelman Trust Barometer revealed that 62 percent
of American respondents trust businesses to do what is right. Figure 3.3 compares American
consumers’ trust of business compared to citizens of other countries. The figure reveals that
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Americans’ trust in business is lower than China, Brazil, the United Arab Emirates, and India.
When managers engage in activities that deviate from accepted principles, continued mar-
keting exchanges become difficult, if not impossible. The best time to deal with such problems
is during the strategic planning process, not after major problems materialize. For example,

Figure 3.3 Trust in Business for Selected Countries

90%

80%

70%

60%
50%

40%

30%

20%
10%

0%
Brazil India Italy China Japan Germany France US UK Russia Spain

Source: Edelman Insights, Global Deck: 2013 Trust Barometer , http://www.slideshare.net/fullscreen/EdelmanInsights/global-deck-2013-edelman-
trust-barometer-16086761/5 (accessed July 24, 2013).

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