{"id":2288,"date":"2015-12-11T05:13:40","date_gmt":"2015-12-11T05:13:40","guid":{"rendered":"https:\/\/courses.candelalearning.com\/waymakerintromarketing1xmaster\/?post_type=chapter&p=2288"},"modified":"2016-02-18T17:22:51","modified_gmt":"2016-02-18T17:22:51","slug":"reading-common-ethical-issues","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-marketing\/chapter\/reading-common-ethical-issues\/","title":{"raw":"Reading: Common Ethical Issues in Marketing","rendered":"Reading: Common Ethical Issues in Marketing"},"content":{"raw":"\"Photo<\/a>\r\n\r\nConsider\u00a0the following business situation: You're a member of the marketing team for a B2B company that sells software to restaurants. Your product is a point-of-sale system that manages orders, menus, and staff scheduling. While it generally works well, there are sometimes glitches that cause it to drop orders, and the system goes down more often than you would like. You are marketing the system to a major restaurant chain, and they've asked for a list of references from\u00a0current customers. The marketing and sales teams sit around a table reviewing the current customer list trying to decide which references to provide. First, the team screens out those who have complained most vocally about the glitches with\u00a0the product. There is one customer who told his account manager, \"These thing happen with all systems,\" so the team thinks he would be a good reference. There's also a new customer who started using the system recently and hasn't yet experienced the system down time that other customers have. The team selects that restaurant, as well, and prepares to send the two names to the sales prospect.\r\n\r\nQuestion: Is that ethical? Is it fair and honest to cherry-pick the customer references, selecting only the ones that are unlikely to share negative experiences about\u00a0your\u00a0product? To be sure, there's a range of customer feedback, and not all of it is positive. Are you expected to give a full picture of customers' experience\u2014warts and all\u2014so the restaurant chain\u00a0will know exactly what it's buying?\r\n\r\nAnswer: In general, when prospective customers request customer references, they expect to receive favorable ones, and doing so is not a violation of their trust. It's a lot like\u00a0a prospective employer's request for a job candidate's\u00a0work references. When you're marketing yourself for a\u00a0new job, you name\u00a0the references who\u00a0are most likely to\u00a0report your talents and strengths\u2014you don't include a\u00a0crabby boss who never had good things to say about anyone.\r\n\r\nThe question becomes more challenging when the\u00a0customer relationship is more complicated. In every case\u2014even the simplest\u2014it's a judgment call. Suppose\u00a0your company compensates customers for providing references. A company might give\u00a0some small thank-you gift to acknowledge that taking reference calls requires time, and that the company appreciates the client's support.\u00a0Is that\u00a0unethical? Possibly. On one hand, it's reasonable and desirable to express\u00a0your appreciation to the customer, since part of maintaining the customer relationship is letting customers know that you value them and their\u00a0time. On the other hand, there's a risk, especially if the gift is large, that the customer might be influenced or even induced to give your company or product a favorable review. There is a point where the compensation begins to distort the customer dialogue and relationship, and then\u00a0it's clearly unethical\u2014and if you're inducing<\/em> a customer to alter their behavior in exchange for a gift, it's bribery.\r\n\r\nMarketing professionals face regularly face questions of this kind. Where the organization appreciates a close partnership with a client, a thank-you gift may well be appropriate. \u00a0The challenge is to choose one of the right size that expresses appreciation but doesn't\u00a0compromise the integrity of the\u00a0client or the\u00a0marketing organization.\r\n\r\nBelow is a table that shows how marketing professionals responded to a survey on the most difficult ethical issues they face.[footnote]Lawrence B. Chonko and Shelby D. Hunt, \u201cEthics and Marketing Management: An Empirical Examination,\u201d Journal<\/em> of Business Research<\/em>, Vol. 13, 1985, pp. 339\u2013359.[\/footnote]\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Most Difficult Issue<\/strong><\/td>\r\nPer<\/strong>cent<\/strong> of Marketing Professionals Responding<\/strong><\/td>\r\n<\/tr>\r\n
Bribery<\/td>\r\nGifts from outside vendors, payment of questionable commissions, \"money under the table\"<\/td>\r\n15%<\/td>\r\n<\/tr>\r\n
Fairness<\/td>\r\nUnfairly placing company interests over family obligations, taking credit for the work of others, inducing customers to use services not needed, manipulation of others<\/td>\r\n14%<\/td>\r\n<\/tr>\r\n
Honesty<\/td>\r\nLying to customers to obtain orders, misrepresenting services and capabilities<\/td>\r\n12%<\/td>\r\n<\/tr>\r\n
Price<\/td>\r\nDifferential pricing, charging higher prices than firms with similar products while claiming superiority<\/td>\r\n12%<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Product<\/td>\r\nProduct safety, product and brand infringement, exaggerated performance claims, products that do not benefit consumers<\/td>\r\n11%<\/td>\r\n<\/tr>\r\n
Personnel<\/td>\r\nFiring, hiring, employee evaluation<\/td>\r\n10%<\/td>\r\n<\/tr>\r\n
Confidentiality<\/td>\r\nTemptations to use or obtain classified, secret, or competitive information<\/td>\r\n5%<\/td>\r\n<\/tr>\r\n
Advertising<\/td>\r\nCrossing the line between exaggeration and misrepresentation, misleading customers<\/td>\r\n4%<\/td>\r\n<\/tr>\r\n
Manipulation of Data<\/td>\r\nFalsifying figures or misusing statistics or information, distortion<\/td>\r\n4%<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nNotice that many of the responses include watchwords like \"questionable,\" \"exaggerated,\" \"distortion,\" and \"crossing the line.\" In marketing, the greatest challenge is to influence the behavior of the target customer (by getting them to buy) without violating the customer's trust or acting unethically. With the rise of social media, customers are in a much better position to share frank evaluations of\u00a0products and services publicly, and this\u00a0gives marketers a new means of capturing unbiased customer feedback. (It also opens the door to the problem of \"fake customer reviews,\" but that's another issue.)","rendered":"

\"Photo<\/a><\/p>\n

Consider\u00a0the following business situation: You’re a member of the marketing team for a B2B company that sells software to restaurants. Your product is a point-of-sale system that manages orders, menus, and staff scheduling. While it generally works well, there are sometimes glitches that cause it to drop orders, and the system goes down more often than you would like. You are marketing the system to a major restaurant chain, and they’ve asked for a list of references from\u00a0current customers. The marketing and sales teams sit around a table reviewing the current customer list trying to decide which references to provide. First, the team screens out those who have complained most vocally about the glitches with\u00a0the product. There is one customer who told his account manager, “These thing happen with all systems,” so the team thinks he would be a good reference. There’s also a new customer who started using the system recently and hasn’t yet experienced the system down time that other customers have. The team selects that restaurant, as well, and prepares to send the two names to the sales prospect.<\/p>\n

Question: Is that ethical? Is it fair and honest to cherry-pick the customer references, selecting only the ones that are unlikely to share negative experiences about\u00a0your\u00a0product? To be sure, there’s a range of customer feedback, and not all of it is positive. Are you expected to give a full picture of customers’ experience\u2014warts and all\u2014so the restaurant chain\u00a0will know exactly what it’s buying?<\/p>\n

Answer: In general, when prospective customers request customer references, they expect to receive favorable ones, and doing so is not a violation of their trust. It’s a lot like\u00a0a prospective employer’s request for a job candidate’s\u00a0work references. When you’re marketing yourself for a\u00a0new job, you name\u00a0the references who\u00a0are most likely to\u00a0report your talents and strengths\u2014you don’t include a\u00a0crabby boss who never had good things to say about anyone.<\/p>\n

The question becomes more challenging when the\u00a0customer relationship is more complicated. In every case\u2014even the simplest\u2014it’s a judgment call. Suppose\u00a0your company compensates customers for providing references. A company might give\u00a0some small thank-you gift to acknowledge that taking reference calls requires time, and that the company appreciates the client’s support.\u00a0Is that\u00a0unethical? Possibly. On one hand, it’s reasonable and desirable to express\u00a0your appreciation to the customer, since part of maintaining the customer relationship is letting customers know that you value them and their\u00a0time. On the other hand, there’s a risk, especially if the gift is large, that the customer might be influenced or even induced to give your company or product a favorable review. There is a point where the compensation begins to distort the customer dialogue and relationship, and then\u00a0it’s clearly unethical\u2014and if you’re inducing<\/em> a customer to alter their behavior in exchange for a gift, it’s bribery.<\/p>\n

Marketing professionals face regularly face questions of this kind. Where the organization appreciates a close partnership with a client, a thank-you gift may well be appropriate. \u00a0The challenge is to choose one of the right size that expresses appreciation but doesn’t\u00a0compromise the integrity of the\u00a0client or the\u00a0marketing organization.<\/p>\n

Below is a table that shows how marketing professionals responded to a survey on the most difficult ethical issues they face.[1]<\/sup><\/a><\/p>\n\n\n\n\n\n\n\n
Most Difficult Issue<\/strong><\/td>\nPer<\/strong>cent<\/strong> of Marketing Professionals Responding<\/strong><\/td>\n<\/tr>\n
Bribery<\/td>\nGifts from outside vendors, payment of questionable commissions, “money under the table”<\/td>\n15%<\/td>\n<\/tr>\n
Fairness<\/td>\nUnfairly placing company interests over family obligations, taking credit for the work of others, inducing customers to use services not needed, manipulation of others<\/td>\n14%<\/td>\n<\/tr>\n
Honesty<\/td>\nLying to customers to obtain orders, misrepresenting services and capabilities<\/td>\n12%<\/td>\n<\/tr>\n
Price<\/td>\nDifferential pricing, charging higher prices than firms with similar products while claiming superiority<\/td>\n12%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n\n\n\n\n
Product<\/td>\nProduct safety, product and brand infringement, exaggerated performance claims, products that do not benefit consumers<\/td>\n11%<\/td>\n<\/tr>\n
Personnel<\/td>\nFiring, hiring, employee evaluation<\/td>\n10%<\/td>\n<\/tr>\n
Confidentiality<\/td>\nTemptations to use or obtain classified, secret, or competitive information<\/td>\n5%<\/td>\n<\/tr>\n
Advertising<\/td>\nCrossing the line between exaggeration and misrepresentation, misleading customers<\/td>\n4%<\/td>\n<\/tr>\n
Manipulation of Data<\/td>\nFalsifying figures or misusing statistics or information, distortion<\/td>\n4%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Notice that many of the responses include watchwords like “questionable,” “exaggerated,” “distortion,” and “crossing the line.” In marketing, the greatest challenge is to influence the behavior of the target customer (by getting them to buy) without violating the customer’s trust or acting unethically. With the rise of social media, customers are in a much better position to share frank evaluations of\u00a0products and services publicly, and this\u00a0gives marketers a new means of capturing unbiased customer feedback. (It also opens the door to the problem of “fake customer reviews,” but that’s another issue.)<\/p>\n\n\t\t\t

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CC licensed content, Original<\/div>