Before going into some of the common ethical issues businesses face, first we need to understand what ethical issues in the business context means. It is your responsibility as the owner of the company to deal with ethical issues and set clear guidelines about which behaviors are acceptable or unacceptable in the workplace. No matter your companys size or what industry it is in, it is ultimately up to you, the business owner, to ensure that the health and safety of employees at your workplace is maintained. A businesss operations can impact a number of people — positive and negative — including employees, customers, suppliers and their employees, and the communities where a company operates.
Unethical behaviour, such as price-warring, selective advertising, and deceptive marketing, may adversely affect the relationship that the company has with its customers. Ethical or conscious marketing done wrongly can lead to a major backlash from consumers, as well as having serious impacts on a businesss results, such as reduced sales. These decisions are never easy, and not every ethical marketing decision will improve customer and business value. Brands must take action and listen to consumers values-driven calls to adopt ethical marketing practices.
Brands must incorporate their core values into all their marketing practices. Brands must make tough business decisions when their values clash with regulatory requirements, and they must contextualize their ethical marketing practices while respecting consumers aesthetics and cultural preferences. Strategy, operations, and engagement are crucial if brands want to make sure their ethical marketing approaches cut the mustard with consumers, said Xiaofeng Wang, a Forrester Principal Analyst. Speaking at Forresters CX APAC summit this week in Sydney, the Forrester principal analyst shared what works — and what does not — in building an ethical marketing approach, including actionable examples of brands around the world who have tried, succeeded, or failed in this challenge.
Forresters principal analyst noted just how impactful a business-friendly approach to marketing can be. Wang also warned marketers to watch out for “greenwashing” — not just their communications, but the way that sustainable initiatives are perceived by consumers. Another tricky element of the ethical marketing equation is localisation, with Forresters lead analysts noting that consumers across markets can have similar values, yet they will have differing perceptions of the same issues. She pointed to Unilevers efforts to dispel stereotyping through structural changes in its marketing and advertising ecosystem, and product development and manufacturing, as a powerful example.
There is a positive correlation between ethical marketing, consumer/brand relationship quality, and consumer perceptions of product quality; collectively, these promote brand loyalty. An increasing number of consumers prefer to invest in brands that they feel are making ethical, socially responsible decisions, not leaving anyone hurt, and unaware about what they are buying. Marketers were quick to sense this shift in consumer preferences toward ethical companies, and they have generally moved more quickly to capitalise on this shift in consumers preferences toward ethical companies.
Heres how your brand can integrate ethical marketing so that you are reaching out to the right customers. Incorporating ethical marketing in your overall business strategy will not only attract the right customers, but retain them.
Ethical marketing strategies are all about defining what is ethical for your business and your brand. A business should have an ethical marketing policy that guides its pricing, advertising, research, and competitive strategies. Companies should make sure that their marketing efforts are respectful and ethical.
When companies look to market their products internationally, they need to prepare for potential marketing ethics issues that arise from that terrain. International businesses are faced with a dilemma: conforming with labour standards of the country they are from, against a host countrys lack of those rights. Doing business in foreign countries presents Australian companies with ethical issues that must be addressed prior to opening a foreign operations.
Following best environmental practices is another ethical challenge for companies that have overseas operations. Environmental impacts are another ethical challenge faced by Australian businesses on the international stage. When activities within the corporate setting are at odds with ethical human principles and impact individuals involved with work in an organisation, this becomes an ethical concern.
Cultural considerations may also make or break the companys ability to do business worldwide. Understanding the differences between cultures can mean the difference between success and failure in the global marketplace.
Social and cultural influences on advertisements may influence business relationships with prospective customers. For each item, there are best practices to be followed, as well as pitfalls to avoid, as brands leverage four ethical marketing principles to win consumers hearts and wallets.
When done well, ethical marketing practices can increase customers trust and loyalty, as well as provide brands with lasting value – but factors of success are complicated. Marketing ethics, no matter what the product is offered or market objective, provide guidelines by which to conduct good marketing. Honoring cultural values is not always just a matter of sound business practices and ethics.
Acting on cultural ethical values is essential to the success of multinational companies to gain customer support and business, as well as achieving a competitive edge in specific markets. Not only this, ethical and social accountability in marketing definitely requires cultural sensitivity and respect. Being ethically conscious and accountable as a brand builds a positive relationship with your target markets — particularly in the younger age range — and fosters relationships built on trust.
The world marketplace
Companies entering the world marketplace with a code of ethics established stand a better chance at developing a positive international image, which leads to stronger market shares and higher profits. Another ethical challenge is related to the vulnerable audiences of emerging markets/developing countries, since audiences there might be under-informed about sophisticated marketing strategies. Some ethical issues with marketing research are privacy intrusions and stereotypes.
It makes sense to align your strategies with consumers priorities, which will keep your company – and customer base – alive long-term. To ethically and effectively market, it is good to remember that all marketing decisions and efforts must meet and serve the needs of customers, suppliers, and business partners. First, know about all ethical issues your company is likely to encounter, determine ways of discovering them in advance, and, above all, learn how to handle those issues in an equitable manner, not by dismissing or denying the existence of problems.
A guide for developing human rights policies is available at www.unglobalcompact.org/docs/issues_doc/human_rights/Resources/HR_Policy_Guide.pdf. Assess the human rights impacts that the operations of your company will have, directly or indirectly, on all people connected with the companys business activities (e.g., workers, business partners, suppliers, contractors, unions, the local community, and customers. With each of these steps, it is important to consider potential partnerships with other companies, nongovernmental organizations, community groups, labour organisations, trade unions, Indigenous peoples, and other local communities and governments, in order to ensure compliance with those human rights impacts arising from your companys business operations.