Unethical marketing of services

Several writers have highlighted the fact that there is greater potential for unethical behaviour in the marketing of services due to the intangible nature of services, and also the deregulation of many service sectors.

The intangible nature of services and the high level of competition among service providers means it can be very difficult for consumers to evaluate service offerings, which leaves them highly vulnerable to influence by sales people and marketing promotions.

It is arguable that ethical behaviour is more crucial to services marketing in order to combat skepticism and gain the trust and confidence of consumers.

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Kotler’s classification of products

Kotler (1972) identified four classes of product along two dimensions: immediate satisfaction and long-term consumer welfare.

There is diagram on page 60 of the B324 Block 2 course book.

Deficient products are those that offer no immediate satisfaction and have no long-term benefit to consumer welfare. Pleasing products have no long-term benefit to consumer welfare but are immediately satisfying (e.g. cigarettes). Salutary products are those which are beneficial to consumers in the long-term, but offer no immediate satisfaction. Desirable products are those which are both immediately satisfying and beneficial to consumer welfare in the long-run.

Fair trade marketing

Fair trade marketing is about making sure small producers are paid enough to cover their costs and have enough to live on.

The argument against fair trade is that it distorts the market and encourages oversupply, resulting in further price falls. The advantageous price paid to producers could result in dependency.

There are two basic components:

  • Providing a working model of international trade that makes a difference to producers and consumers.
  • Challenging business practice by modifying the dominant economic model.

The labelling/certification scheme is important in brand differentiation.

Fair trade works well with the idea of an ‘alternative high street’ – towns like Garstang and Hebden Bridge.

Mainstreaming can result in growth in what still remains a niche. However, mainstreaming could also result in dilution of the message.

Firms could attempt to enter the market and redefine it to better suit the marketing strategies.

Sustainability and green marketing

… is about:

  • Ensuring actions do not impact on the biosphere or threaten its long-term viability.
  • Balancing economic, environmental and social goals and consequences.

The diagram on page 21 of the B324 Block 3 course book is a good reminder of the main goals of sustainability, according to Schaltegger, et al., 2003.

Sustainable marketing is arguably an oxymoron because marketing is traditionally about driving consumption.

Some factors driving growth of green marketing:

  • Firms seeing it as an opportunity to differentiate.
  • Firms recognising their obligations to be more environmentally responsible.
  • Government bodies forcing firms to be more so.
  • Competitors adding pressure by being more green.
  • The increased high cost of waste disposal.

A key concept to remember is that of holism in green marketing.

Another interesting concept to remember is the dominant social paradigm and some of its key dimensions:

  • Economic dimension
  • Technological dimension
  • Political dimension

Some challenges for green marketing to be effective:

  • Must be led from the top.
  • Must be integrated.
  • Must be marketing led.
  • Must be backed by actions.

Firms must try to avoid “hitting the green wall”.

We are still very much stuck in the second age of green marketing!

Responsible marketing and CSR

CSR is about firms voluntarily taking responsibility for the wider consequences of their actions. These consequences are not necessarily intended by the firm, or paid for by its customers, but manifest as side effects.

Responsible marketing is CSR applied to marketing practice: that is, firms taking on responsibility for the wider social and environmental impacts of their marketing strategies.

Ideally, companies should engage in CSR because it is the right thing to do – accepting they have moral obligations to wider stakeholders and society, and not just their shareholders. However, there are also strategic reasons why companies might wish to engage in CSR:

  • Social responsibility is becoming more important to customers
  • Embracing CSR can enhance reputation and brand image.

There are three main attitudes companies may display towards CSR:

  • Doing the legal minimum in terms of compliance
  • Realising CSR is important in terms of reputation, but not really committed
  • Being genuinely committed to CSR and factoring it into all business decisions.

Carroll’s (1991) four-part model of CSR is an interesting one. Carroll argues that true social responsibility involves meeting all four layers of the model.

There is a diagram of the model on page 83 of the B324 Block 3 course book.