The development of proper ethical standards is important for a business organisation to achieve sustainability and growth. The implementation and adoption of proper ethical principles in the marketing strategy is important for businesses to promote fairness and responsibility in providing information about its products and services to the customers. Business ethics holds high importance and significance in marketing for strengthening their brand image by developing long term relationships with customers (Tittle, 2000). In this regard, the present essay aims to demonstrate an explanation of ethical issues in marketing field and provides examples of Australian corporation’s facing some marketing ethical issues in pursuing their businesses.
Ethical Issues in Marketing Field
Ethical marketing can be regarded as an effective marketing strategy of a business organisation to gain competitive advantage by achieving customer satisfaction. The development of fair and responsible marketing practices enables an organisation to develop trust among its consumers and promotes its goodwill (Tittle, 2000). Ethical issues in marketing refers to the conflicts and problems that an organisation faces in development of their various marketing concepts such as advertising, promotion, delivery channels, pricing, segmenting, targeting and positioning of its products and services. Unethical marketing practices in segmenting, targeting and positioning refers to use of selective marketing practices to discourage the demand of its products and services from undesirable market segments such as ethnic minority groups. Ethical issues faced in advertising and promotion activities refer to use of unethical advertising and promotional content to seek the attention of its target audiences (Tittle, 2000).
Business organisations are largely implementing the use of social networking sites such as Twitter and Facebook and this is also leading to the widespread occurrence of ethical issues in their advertising and promotional strategies. Business organisations can display attractive features and qualities of a product in its online advertisement in social networking sites to capture customer’s attraction that may not be present in the actual product (Barker et al., 2012). The use of controversial methods by an organisation in its delivery channels such as publishing false reviews on its products delivered through e-commerce channels such as Amazon and Flipkart. Post-purchase dissonance is also one of the major ethical issues related to the use of e-commerce online delivery channels by an organisation. It refers to purchase of a specific product by a customer that is marketed online on a specific website and finds that its quality is inferior as displayed in the e-commerce delivery channels (Hauptman, 2015). Thus, ethical issues in all these marketing concepts refer to the use and adoption of and deceptive marketing practices by a business organisation for the sake of profit maximisation.
Unethical Business Practices in Australia Corporations
The government of Australia has established a legislative framework that the business organisations need to adopt and implement for conducting their business operations in a fair manner. The government has developed an Australian Ethical Business code of practise to govern and monitor their business operations so that businesses are conducted in an ethical way. However, Australian corporations have faced several issues regarding marketing ethics that negatively impacted their sustainable growth and development (Roberts, 2010). The prominent example in this regard is of local unit of Volkswagen in Australia adopting the use of fraudulent marketing practices for enhancing its profitability. The company enjoyed a good brand reputation in the country before its involvement in the unethical practice of marketing its diesel cars as low-emission vehicles. The case was investigated by the Australian Competition and Consumer Commission (ACCC) and it was inferred from the interrogation that the company has implemented the use of defeat devices in its vehicles for generation of deceptive readings (Thompson, 2015). The main intention of the company behind the adoption of such devices is to cheat the emission tests in its diesel vehicles. ACCC has concluded that Volkswagen has breached Australian Consumer Law by providing misleading information to the public and also was found to be violating mandatory standards through the use of defect devices (Brown, 2015).
The decision of purchasing cars is very important for a customer and as such receiving misleading information relating to fuel efficiency can have large impact the buying decision. The use of fraudulent practices to seek customer attraction and influencing them to purchase its low-emission diesel vehicles is highly unethical and morally wrong on the part of the company (Klan, 2015). The deceptive representation of its vehicles in the public is refereed as intentionally non-compliance with ethical standards developed by the ACCC that Australian corporations need to comply with. The company as a result suffered huge loss of sales due to loss in its brand reputation worldwide. In addition to this, a huge penalty of about $1.1 million per breach was imposed on the company by Australian Consumer Law (Brown, 2015).
The another major example that exist in this regard of business organisation facing ethical issues in its marketing practice refers to the offensive ads displayed in Australia of on online dating website known as Ashley Madison. The online website facilitates cheating having a tagline of ‘Life is short. Have an affair’ and as such inculcates the use of unethical advertising content for seeking people attention (Lallo, 2015). The website as such is found to be involved in promoting dishonesty in relations that is regarded as unethical and morally wrong. The website attracted large number of complaints and it was reported by the Advertising Standards Bureau that the advertisements has breached the code of conduct of marketing ethics. The complaints were mainly about raising concerns over displaying active involvement with multiple partners on the website. The promotion of such relationships in open is unethical and dishonest and thus its advertising content is regarded as offensive. The Bureau reported that such offensive ads of Ashley Madison have received about 481 complaints by the public. The advertisements of Ashley Madison were also promoted among the public through TV commercials that caused large number of people raising concerns over broadcasting of such offensive and adultery promoting ads (Lallo, 2015).
The occurrence of such ethical problems in marketing in Australia corporations highlighted the importance of adopting fair and honest marketing practices by businesses. The companies should inculcate responsible and ethical practices in their business operations. It is also evident from the above two examples that business organisations generally undermine ethical behaviour in the presence of external environment that encourages aggressive and risk-taking behaviour (The Sydney Morning Herald code of ethics, 2006). The companies such as Volkswagen operating in global environment enhance the ethical problems faced by an organisation. Volkswagen, having good brand reputation has ignored the adoption of ethical practices in all parts of the world where it operates its business. The occurrence of such issues in marketing also emphasises on the negative impact that an organisation can have on its sustainability by the adoption of unethical business activities (Klan, 2015). The business organisations, as such, need to develop and implement adequately its ethical codes that determine its standards and values that direct their organisational behaviour. The ethical codes of conduct should be specific and implement in an organisation through effective leadership style of the senior managers. In this context, deontological ethical theory states that ethical behaviour of an individual is directed through adhering to the specific moral values and standards (Thompson, 2015).
It is also very important for organisations to provide ethical training to its employees to provide them proper knowledge of the significance of ethics in their businesses and consequences of non-complying with organisational code of conduct. The occurrence of ethical problems related to marketing practices in firms such as Volkswagen and Ashley Madison highlighted the significance of providing ethical training to the employees. Ethical training is essential for employees so that they can act in accordance with the business ethics in case of facing any ethical dilemmas in their working environments. In addition to this, organisations also need to abide by the governmental regulation that governs and monitors their business operations to prevent the adoption of any unethical marketing practice (Thompson, 2015). The marketing problems related to business ethics identified in Volkswagen and Ashley Madison is related to the advertising and promotion marketing strategies of an organisation. As such, the role of Australian Association of Advertising Agencies is highly important in this regard in Australia for governing and monitoring the advertising and promotional practices used by organisations. It is the responsibility of the agency to identify and prohibit the occurrence of any fraudulent marketing practice by Australian corporation’s and takes remedial actions (Rudder, 2009).
Thus, from the overall discussion held in the essay it can be stated that ethics in marketing field is very important for a business organisation to achieve long-term growth and development. The adoption of any deceptive marketing practice such as that occurred in the case of Volkswagen and Ashley Madison negatively impacts the brand image by losing customer faith.
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