EXAMINING MARKETING MIX FROM AN ETHICAL VIEW: A FIELD RESEARCH ON MARKETING EXECUTIVES

EXAMINING MARKETING MIX FROM AN ETHICAL VIEW:
A FIELD RESEARCH ON MARKETING EXECUTIVES
Dr. Erkan Özdemir
Prof. Dr. Tuncer Tokol
Uluda Üniversitesi
Uluda Üniversitesi
ktisadi ve dari Bilimler Fakültesi
ktisadi ve dari Bilimler Fakültesi
Ara rma Görevlisi

Pazarlama Karmas
n Etik Aç dan ncelenmesi: Pazarlama Yöneticileri
Üzerinde Bir Alan Ara
rmas
Özet
letmelerin d a aç lan en önemli i levi olan pazarlama, etik olmayan uygulamalar n da en çok
ya and
i letme i levlerinden biridir. Pazarlama yöneticilerinin pazarlama karmas
n ürün, fiyat, da
m ve
tutundurma ö eleri ile ilgili alaca kararlar ve yerine getirece i faaliyetler pazarlama bölümünün ve
dolay
yla i letmenin etik aç dan de erlendirilmesini etkileyecektir. Bu çal man n amac pazarlama
yöneticilerinin pazarlama karmas karar ve faaliyetleriyle ilgili etik bak aç lar
ara
rmak ve sektör
kar la
rmas yapmakt r. Çal mada ilk olarak pazarlama eti i ile ilgili literatür incelenmi tir. Daha sonra
pazarlama yöneticilerinin pazarlamayla ilgili etik bak aç lar
n ve sektörel bir kar la
rman n ortaya
konmas için farkl i letmelerde çal an pazarlama yöneticileri üzerinde bir anket çal mas tasarlanm ve
pazarlama karmas
n ö elerine göre pazarlama yöneticileri üzerinde bir alan ara
rmas yap lm
r.
Anahtar Kelimeler: Pazarlama karmas , etik, pazarlama eti i, pazarlama yöneticileri, alan
ara
rmas .
Abstract
Marketing is the most significant function of enterprises in which unethical practices are
experienced. Marketing executives’ decisions relating to product, price, place and promotion items of
marketing mix and actions that they will perform for it affect the department of marketing and consequently
marketing will affect the evaluation of the enterprise from an ethical point of view. The aim of the study is to
investigate the ethical perspective of marketing executives regarding the marketing mix decisions and
practices, and make a sector comparison. First, the literature on the marketing ethics are reviewed. Then a
questionnaire on marketing executives who serve in different enterprises is designed to display marketing
executives’ ethics view points about marketing and make a sector comparison, and a field study is done on
marketing executives according to elements of the marketing mix.
Keywords: Marketing mix, ethics, marketing ethics, marketing executives, field research.

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164 Ankara Üniversitesi SBF Dergisi 64-2
Examining Marketing Mix from an Ethical View:
A Field Research on Marketing Executives
I- INTRODUCTION
Ethics is defined as an ‘‘inquiry into the nature and grounds of morality
where morality means moral judgments, standards, and rules of conduct’’
(Tsalikis/Fritzsche, 1989: 696). In other words, ethics which is a discipline that
deals with what true and false is or ethical duty and engagement is a system of
determined theory or moral values (Shea, 1988: 17). On the other hand,
business ethics is the total of rules of conduct and principles of conduct that is
based on ideas relating to which business attitude is correct and which one is
false (Scholl/Dessler/ Reinecke, 1993: 46), This might be moral code or system
of a person, a group or business. However, ethical behavior is related to fair or
correct standards of the interaction between sides in a situation (Coppett/
Staples, 1994: 423).
However, ethics in marketing transpire from marketing executives'
relationships with organizational members, consumers, rivals, and the sides,
which include public opinion, in exchange process. Disagreement in performing
responsibilities and obligations which each sides have cause ethical problems
(Lund, 2000: 331). In other words, ethical conflict occurs when people percieve
that their duties toward one group are inconsistent with their duties and
responsibilitis toward some other group including one’s self (Chonko/Hunt,
1985: 340). On the other hand, ethics are also tied closely to social
responsibility. The concept as called social responsibility relating to ethics
includes social relationships between society, in which enterprises work, and
enterprises (Goolsby/Hunt, 1992: 58).
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Erkan Özdemir - Tuncer Tokol Examining Marketing Mix from an Ethical View:
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The pressure between the difficulties of economic life in competitive
market of the today and ethics is one of the inevitable facts for many executives
and enterprises (Camenisch, 1991: 245). For this reason, when executives' point
of views to affairs plan on reasonable profitability instead of maximizing profit
of enterprises, executives' point of views to affairs ease taking ethical decision
(Chonko, 1995: 10). Irrespective of the cost to environment, society or
consumer, enterprises' activities to maximize their profit are not ethical decision
(Ergeneli, 1996: 103). One of the subjects which causes problems in an ethical
decision making is short timed reasoning (Chonko, 1995: 10). The dilemmas
presented by unethical behaviors of managers are particularly problematic
for employees because of the nature of hierarchy in organizations (Uhk-
Bien/Carsten, 2007: 188). For this reason, development of the enterprise culture
to prompt ethical behaviour and prevent unethical behaviour must be an
important mission of marketing management (Hunt/Vasquez-Parraga, 1993:
78). Because unethical actions of enterprises not only cause negative public
opinion, but also cause disapproval of other interest groups (Ingram/Skinner/
Taylor, 2005: 249).
The aim of the study is to investigate the ethical perspective of marketing
executives regarding the marketing mix decisions and practices, and make a
sector comparison. The remainder of the article is structured as follows: First,
the literature on the marketing ethics are reviewed. This is followed by a
description of the research methods and procedures used in the study. The
findings of the study are then presented. The article concludes with a summury
of the study’s research contributions and directions for future research.
II- CONCEPTUAL FRAMEWORK
Marketing Ethics
Marketing ethics concerns the application of ethical considerations to
marketing decision making (Smith, 1993: 10). Marketing ethics can be
considered as moral judgement and behaviour standards in marketing practice
or moral code or system in marketing area (Gaski, 1999: 316). In other words,
marketing ethics is the research of the base and structure of rules of conduct,
standards, and moral decisions relating to marketing decisions and practices
(Lu/Rose/Blodgett, 1999: 91). Marketing executives who take strategic
decisions often face with ethical conditions and their decisions is related to all
sides of marketing mix as product, price, place and promotion (Rallapalli/
Vitell/Szeinbach, 2000: 65). Marketing executives' ethical decision making
process related to these decisions is affected by miscellaneous ways as
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166 Ankara Üniversitesi SBF Dergisi 64-2
philosophical, economical, sociological, psychological, religious.
Consequently, all of these present valid point of views (Mccabe/Ingram/Dato-
On, 2006: 102 ). In this study, marketing ethics is studied according to elements
of marketing mix as product, price, place and promotion.
Ethics and Product Decisions
Marketing executives face with a lot of ethical problems related to
planning and application of product strategies. For example, in new product
development process, since ethics and legal subjects are discussed less than it is
needed, faulty products are put on the market and so these products damage
consumers (Morgan, 1993: 350-351). This grows out of seeing product security
as engineering problem in most cases (Meel/Saat, 2002: 21). Similarly, some
product areas such as especially toys for children are sensitive to the ethical
problems (Chonko, 1995: 188-189). For this reason, ethical way of thinking
should come into all levels of marketing from engineering to customer support
(Rotfeld, 1999: 313). Other ethical issues related to product decisions,
information on labels can sometimes be used as deceptive although it is
technically true (Chonko, 1995:192), rubbish problem which packing cause
after its usage (Menezes, 1993: 289), decline of recalling of product although it
is problematic, failing in terms of guarantee related to product (Chonko, 1995:
195-197) and performing planned product obselence (Kaya, 1991: 3) to shorten
product life cycle (M gl ore, 2000: 1). The ethical problems which exist in
international areas grow out of different laws of countries (Schlegelmilch,
1998: 81-82).
Ethics and Pricing Decisions
Pricing is probably one of the most difficult areas of marketing when it is
analyzed from the ethical point of view. Ethically, price should be equal or
proportional to benefit which is taken by the consumers (Kehoe, 1985: 71-72).
However, when monopolistic power is had, it is seen that unreasonable price
increase is set (Ortmeyer, 1993: 401). Other ethical issues related to pricing
include non-price price increases, misleading price reduction, price
advertisements which can be misleading or considered as deceitful and their
limits are not explained well, the practices of price fixing that affect the
structure of competition, predatory pricing which aims to have monopolistic
position, discriminatory pricing, pricing applications of products according to
the products’ unit or quantity basis and practicing of misleading pricing
methods (Chonko, 1995: 210-217).
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Erkan Özdemir - Tuncer Tokol Examining Marketing Mix from an Ethical View:
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Ethics and Distribution Decisions
Ethical issues related to place grow out of enterprises, which form
channel of distribution, have different needs and goals. At power relationship in
the channel, if channel members to put their power which they have into bad
use, this may cause an ethical problem (Laczniak/Murphy, 1993: 111). For
example, a powerful manufacturer may force retailer to conduct in different
ways in subjects such as choice of retailer locations, minimum order size,
product mix selection, restriction on alternative supply resources and
arrangement of physical condition in retailer’s location (Chonko, 1995: 273),
pricing of intermediary enterprise, advertisement number, procurement credits
to the consumers, and with their sales policy in subjects as regional and
customer restrictions (Cespedes, 1993: 486).
Other ethical issues result in subjects as retailing decisions, direct
marketing, supply and channel management. Ethical issues related to retailing
decisions eventuate in areas such as buying, product assortment, pricing,
selling, forward buying and slotting allowances. Ethical issues in direct
marketing are the subjects which are privacy, confidentiality and intrusion
(Chonko, 1995: 271-280). Ethical problems which are faced while using of
internet for marketing are reliability of operations, illegal activities, privacy,
accuracy, pornographic, product guarantees, burglary, aiming at children,
spams, deceptive advertisements (Bush/Venable/J.Bush, 2000: 242).
Ethics and Promotion Decisions
Ethical issues related to promotion can be analysed under two headings
as advertising and personal selling. Advertisements are one of the ways of
marketing which is criticised most from an ethical point of view. Unilateral
advertising message, preconceived advertising messages, advertisements'
breaking programmes are criticized (Chonko, 1995: 225-226). Whether
advertisements are ethics or not is determined according to the extent of loss of
advertisements to consumers. Loss can be defined in three ways: breach of the
autonomy with control or manipulation, aggression to privacy, and breach of
right to know (Nebenzahl/Jaffe, 1998: 806-807). Ethical problems in
advertising can be analysed under two main headings: the content of advertising
message and agent/customer relationships (Dunn/Barban/Krugman/Reid, 1990:
78). The relationship between advertising and ethics can be analysed from the
point of view of persuasive trait of advertising, deception, puffery and making
promises that cannot be kept. Other ethical issues related to advertising include
advertising to children, demonstrations, mock-ups, endorsements and
testimonials (Drumwright, 1993: 610).
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168 Ankara Üniversitesi SBF Dergisi 64-2
One of the marketing fields in which there are faulty behaviour from the
ethical point of view is selling. For example, in one study, it is found that
unethical behaviour is positively related to the performance of salesperson. In
other study, % 39 of participants feel that salesperson deceive them. This grows
out of ethical conflict peculiar to selling (Dubinsky/Nataraajan/ Huang, 2004:
298). Selling ethics presents a morality framework which guides salespeople in
daily routine relation with their customers. Salespeople face with ethical
problems because they work in the area (Dalrymple/Cron, 1995: 278). For
example, salespeople and advertisers take place in bottom lines on the scale of
honesty and ethical standards in Gallup's study in which ethical condition of
various occupations were analyzed in 1983 (Laczniak/Murphy, 1991: 261).
Some features which grows out of position of salespeople may cause repression
on salesperson from the ethical point of view in enterprises. For example, the
purchasing representatives of enterprises supplicate from entertainment to gifts
which are obviously gravy. These kind of ethical problems cause stress, nerve
defect and anxiety (Robertson/Anderson, 1993: 593). Salespeople are similar to
an independent enterprising because they clear off from supervision and
enterprise culture and they have power to take decision. However, this creates
chance for salespeople for unethical practices. Similarly, salespeople feel
pressure on arriving at a determined totality and closing sales in competitive
markets (Kopp, 1993: 539-540). This pressure make them close sales in a
pressurized way. However, when individual chracteristics and chracteristics
related to organization overlap, performance and satisfaction head up and stress
related to sales fall off. On the other hand, deficiency of balance results in low
performance, dissatisfaction and increasing incompatibility. Ethical conflict
may increase when ethical judgements of a salesperson is different from the
ethical judgements of executives. For this reason, organizational climate of an
enterprise or organizational culture can be an additional factor for ethical
conflict (Schwepker/Ferrell/Ingram, 1997: 99).
Salespeople can have problems with customers. These problems are
high-pressure persuasion, customer discrimination, misrepresentation, giving
and receiving gifts (Chonko, 1995: 251-255). Bribery is the ethical problem
which is seen most frequently in international area. The aim of bribery is doing
the work, which is aimed to do, faster and having a work, which can not be
done, done (Dunfee/Smith/Ross, 1999: 22). Gifts and other benefits are often
provided in a businessto business context as one way to develop the
relationship between suppliers and their business customers yet, at the same
time, giving and receiving gifts and benefits is cited as one of the most ethically
problematic issues in purchasing and sales (Fisher, 2007: 99). According to the
research on Australian managers, giving and receiving gifts, and favour are the
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Erkan Özdemir - Tuncer Tokol Examining Marketing Mix from an Ethical View:
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ethical problems which are seen most frequently. Actually, these problems are
related to the culture of the place in which international enterprises are
governed (Armstrong, 1992: 170). Consequently, different cultures reveal
different expectations and these different expectations may reveal different
attitudes and ethical standards against bribery (Armstrong, 1996: 1200). For
example, it is predicted that the enterprises in USA spend 100-150 million $ for
bribery although bribery is forbidden in USA (Chan/Armstrong, 1999: 3).
However, in some countries, bribery is tolerated more. For example, it is
withheld a tax from bribery in Germany (Pitta/Fung/Isberg, 1999: 242). For this
reason, when international enterprises are chiefly emphasized in the current
marketing conception, understanding ethical decision making process of
executives who are from different cultures rather well is basic for effective
marketing management (Singhapakdi/Salyach
n/Virakul/Veerayangkur, 2000:
272).
Salespeople may be face with ethical problems as excluding rivals related
to rival enterprises, interfering with rival presentations, criticizing rivalry, using
unethical spying tactics about rivals (Chonko, 1995:258). Additionally, when a
sales manager changes business quarter, desiring of taking important customers
or giving important information to new employer is other ethical problem
(Stanton/Buskirk/Spiro, 1991: 625). Ethical problems related to salesperson's
own organizations are related to the subjects which are engagement, promotion
and evaluation, control, distribution of sales region, usage of enterprise assets
(Chonko, 1995: 261). It is seen that whether unethical practices affect
consumers or not, ethical standards must be basic factor in all measurement and
analysis stages which are in evaluation process (Wotruba/Simpson, 1989: 602).
For this reason, the ethical way of decisions that will be taken must be
considered.
According to the study, moral philosophy of sales managers is not too
different from other sales managers (Bass/Barnett/Brown, 1998: 11). However,
according to a different research, sales managers who work in the field give
importance to evaluation according to the result or activity in their moral
evaluation more than sales managers, who work in the enterprise, do. They
think that true decision is situational based, it is not rule or obligation based. On
the contrary, sales managers who work in enterprises are inclined to focus on
rules during taking ethical decisions (Cherry/Fraedrich, 2000: 180-181).
According to the study on Turkish sales managers, when sales managers assess
whether a salesperson's behaviour is ethical or unethical, they firstly assess the
intention of the salesperson. However, it is seen that sales managers assess
according to result or activity (Mengüç, 1998: 346).
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170 Ankara Üniversitesi SBF Dergisi 64-2
III- METHODOLOGY
Sampling
The target population for this study consisted of enterprises, which are in
the report of The Chamber of Commerce and Industry of Bursa “250 major
firms research in Bursa” (the report of The Chamber of Commerce and Industry
of Bursa, 2000: 4), in machine-metal, food agriculture and livestock,
automotive industry and automotive supply industry and textile sectors. The
criterion which is used to select four sectors in 16 sectors, is that the number of
enterprises is 25 or more in each of these four sectors. Because it is thought that
the characteristics of sectors can be displayed as a result of large number of
enterprises. The number of enterprises, which are not the participants of the
study, in other sectors is considerably low. 183 enterprises are included in the
study.
In this study, stratified sampling is used because the participants of the
study include the groups which have important differences among them,
another reason of using stratified sampling in this study is to compare the
characteristics of each sector. The enterprises from each group which are
included in the sample were chosen randomly.
Method and Questionnaire
Questionnaire method was used to collect data in this study. In order to
examine the ethical perspective of marketing executives regarding the
marketing mix decisions and practices, a survey instrument was developed from
literature review. Reliability assessment was conducted for the purpose of this
study. The Cronbach’s alpha value for the scale was 0.72. Likert scale with 5
options, grading and marking questions were used in the questionnaire.
Questionnaire forms were filled with marketing executives by face to face
interview. One marketing manager from each enterprise filled the questionnaire
form. 183 enterprises are included in the study. 54 usable questionnaires were
returned which represents a 30% response rate.
IV- FINDINGS
The data that is collected according to the objective of the study is
analysed under headings in the below part.
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Erkan Özdemir - Tuncer Tokol Examining Marketing Mix from an Ethical View:
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Socio-Demographic Profile of the Respondents
Table 1 provides a socio-demographic profile of the respondents who
participated in the study. The sample was dominated by male respondents
(83%) and majority of the respondents fell in the 20–40 (84%) age group. 82%
of the respondents had graduates education, with 6% having earned a post
graduate degree. 61% of the executives have business experience of 8 years and
over.
Table 1: Socio-demographic profile of the respondents
n
%
Gender
Male
45
83%
Female
9
17%
Age
20-30 years
17
32 %
31-40 years
28
52 %
41-50 years
7
13%
51 years or older
2
3%
Education
Post Graduate
3
6%
Graduate
41
76%
Vocational/Technical
5
9%
High School
5
9%
Experience
0 - 1 year
2
4%
2 – 3 years
2
4%
4 – 5 years
7
13%
6 – 7 years
10
18%
8 Years and over
33
61%
Total
54
100%
Unethical Decision Areas in Marketing
In the questionnaire, the executives are asked to range the six decision
areas, in which the unethical practices are seen, according to rank of
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172 Ankara Üniversitesi SBF Dergisi 64-2
significance by taking their enterprises into consideration. The data is collected
is shown in table 2.
Table 2: Importance of Unethical Marketing Mix Decisions in Marketing.
Importance
Product
Price
Distribution
Advertisement
Selling
Sales
rank
promotions
Total
%
1
13%
48%
2%
19%
9%
9%
2
22%
15%
11%
13%
17%
17%
3
13%
5%
20%
20%
24%
24%
54
4
11%
11%
26%
11%
18%
18%
5
9%
17%
22%
28%
15%
15%
6
32%
4%
19%
9%
17%
17%
In table 2, it is seen that decision area-price, in which unethical practices
are seen as the most significant ones, are 48% in marketing. Decisions related
to product are on the second and sixth rank and this can be commented as some
enterprises have quality policies and the customers of products that they sold
are professional customers. In table 2, it is also seen that unethical decisions
related to the distribution have significance which is in middle rank. Similarly,
the executives considered advertisement as significant in nearly all importance
ranks. Selling and sales promotions have usually the third significance rank.
Responsible Positions in Unethical Marketing
Practices
According to the executives, the percentage of answers for offices which
will be responsible if unethical marketing practices exist is shown in table 3.
Table 3: Responsible Positions in Unethical Marketing Practices
Responsible
Marketing
Marketing
Salesperson
Purchaser
General
All
Boss
position
Manager
Dep. Chief
Manager
people
n
45
21
20
10
5
4
1
%
83%
39%
37%
19%
9%
7%
2%
Total
54
According to 83% of the executives who work in all sectors, marketing
manager should be responsible from unethical marketing practices. According
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