Ethics in marketing

The other day, a sponsored tweet appeared in my twitter feed for an out fit called King Casino.  The tweet urged me to visit the company site stressing that there was an error in the way the site operated which could lead to profitable winnings.

This tweet was a fairly obvious scam.  The website in question was very similar to a major online gaming firm and I suspect the tweet was nothing more than an attempt to dupe gamblers of their cash.  The tweet breached both the ASA and OFCOM codes that “marketing material must not materially mislead or be likely to do so”.

It was hardly an ethical attempt at marketing a product and brand.  in fact it was likely in breach of the Consumer Protection Regulations 2007 or be classed as a fraudulent activity.

But it not only con merchants and fly-by-night operators who are concerned about business ethics.  Marketing academics and economic theorists have struggled with the concept of ethical business practices for decades. Some large corporations have suffered significant reputation damage because of poor ethics.

Take General Motors who, in the 1960’s, were at the centre of a massive scandal over their use of cost-benefit analysis over the recall and repair of the ‘sporty’ Corvair.  The subject of Ralph Nader’s book, Unsafe at Any Speed, the unsafe design and GM’s response to fatal accidents involving the Corvair resulted in a major political scandal and significant amendments to America’s consumer safety laws.

GM had designed the Corvair with no anti-roll bars.  This meant that when cornering at even relatively low speeds the car would flip over.  The result was several fatalities on America’s roads.  it was clear that the car needed to be recalled and anti-roll bars fitted.  Instead GM used cost-benefit analysis to compare the cost of compensating the families of those killed in accidents involving the Corvair with the cost of recalling the cars and making them safe.  The compensation cost was a lot less than the cost of repair and therefore GM decided to allow dangerous vehicles to be used on the road knowing the likelihood was further fatalities.

Nader, at the time a prominent journalist, was given leaked copies of GM’s internal documentation on the Corvair and made them public.  In the 1990’s he stood as an independent candidate for the presidency.

Karl Marx, as part of his Communist Manifesto espoused the belief that resources should be allocated on the principle of “From each according to his ability, to each according to his needs”.  Milton Friedman was a proponent of a more laissez-faire approach to the market; one which was all but free of regulation; arguing that the only ethical duty on business was to increase profits.

However, even Friedman suggested that there were some ethical boundaries on ‘let it rip’ capitalism in relation to deception and fraud.

Increasingly marketers look to corporate social responsibility to drive a brand.  The Chartered Institute of Marketing recently surveyed ‘Millennials’ and found that CSR was a major factor in their purchasing behaviour.   The concept of CSR operated on the concept of good business ethics producing good business results in the long-term.  Lindsay Owen Jones, a former CEO of L’Oréal stated, “Business ethics are not a restraint that companies impose on themselves for simply moral reasons.  It is also the most efficient way of doing business in the long-term”.

One of the main aims of marketing is customer retention.  Acting unethically will likely harm the ability to retain customers.  If you scam your target market, it is unlikely that they will come back and repurchase.

Philmus Consulting is a full member of the Chartered Trading Standards Institute, the professional body for consumer protection law enforcers in the UK.  As such guidance and marketing plans produced by the firm are duty bound to comply with the law.

Philmus Consulting is also an associate member of the Chartered Institute of Marketing and abides by the CIM professional marketing competencies including recognition of the importance of compliance within corporate reputation maintenance processes (e.g. knowledge of relevant legislation and regulation).  Responsible behaviour includes working in such a way in that it considers the impact on stakeholders, organisational goals and the wider environment.  As a result Philmus Consulting’s activities Should comply with the principles of good corporate governance, risk management and relevant legislation.