Ethical marketing involves practices that follow ethical standards and focus on how businesses can fulfill their social responsibilities and handle different ethical issues. It is basically about combining social and commercial objectives in a way that benefits both the business and society.
Organizations that follow ethical marketing intentionally apply moral standards to their marketing strategies and try to align their business aims with the aspirations of their clients and society.
Why is ethical marketing important?
Today, the awareness of different ethical issues is rising and people are becoming more and more conscious of whether a company respects its social and moral engagements or not.
These results from a 2014 Nielsen Study confirm what we’ve just said:
- 55% of respondents reported being willing to pay more for products/services from companies committed to “positive social and environmental impact”.
- 52% of respondents reported purchasing at least one product/service in the past 6 months from a socially responsible company.
- 2/3 of all consumers choose sustainable products over conventional products.
- 52% of respondents say their purchase decision was at least partially affected by social and environmental impact labels/notifications on the packaging.
If there is anything that we can take away from this study it is that the days when consumers made a purchase decision based strictly on product quality and price are long gone, today’s consumers’ needs go way beyond and look for things like environmental sustainability and social engagement.
- Customer loyalty: brands whose marketing strategy follows an ethical approach have more chances to win customers’ trust and confidence and therefore have them become loyal to the brand because these brands are more likely to leave a positive impression.
- Brand credibility: when a brand works o fulfilling its engagements towards the society and adopts moral and ethical values in its deals it’s increasing its credibility in the market and customers’ minds, and builds a good reputation to end up gaining the respect of investors, peers, stakeholders, and even competitors.
- Long-term profits: gaining customer loyalty and brand credibility leads to acquiring a significant market share, increased brand value, better sales, and better revenue. All of this means ensuring a considerable increase in the long-term profits.
- competitive advantage: the ethical behavior of an organization can also result in developing a competitive advantage over time, especially when this organization is a pioneer in adopting this approach in its industry/market.
Some principales of ethical marketing:
- Transparency: Shel Holtz defines transparency as “the degree to which a company shares its leaders, employees, values, culture, strategy, business processes, and the results of those processes with its publics. It’s the opposite of opacity, in which companies operate behind closed doors and shuttered windows.” The more people know about you the more they are willing to trust you! We all have that “need-to-know” culture, and we all appreciate things like honesty, transparency, clarity, and good communication. So if the company I choose to support and buy from makes an effort in communicating clear and transparent information about their products/services, who they’re, and how they do business, that would make me trust them and be willing to engage in more transactions with them. Transparency also involves not exaggerating about the benefits of your products/services or making false claims. Promising your customer a level of quality that cannot be delivered will get you in trouble.
- Protect consumer data and privacy: people nowadays are becoming increasingly concerned about entrusting their personal data with companies, so these are called to be more committed to preserving their customers’ data. Otherwise, they will lose their clients’ trust, and peoples’ interest to do business with them will decrease.
- Environmental sustainability: the human industry is a big part of the environmental problems our planet is facing. Climate change, loss of natural resources, air and water pollution, and extinction of species, are some negative environmental impacts the industrial processes can result in. In the light of this worrying situation, sustainable practices are becoming imperatives for businesses.
- Human rights: Companies are increasingly held accountable for human rights performance in their daily operations, supply chains, and business relationships. In 2011 the UN’s Guiding Principles for Business and Human Rights, known as the Ruggie Principles, were endorsed, a global initiative identifying the obligations of countries and companies towards human rights. The Ruggie Principales propose that companies take measures such as: make a public commitment to respect human rights, identify, prevent, mitigate, and account for, damage or damage caused to human rights, and dispose of procedures for remedying the negative consequences on human rights they cause or contribute to causing.
- Avoid stereotyping: one thing you really want to stay away from, in your “ethical marketing strategy”, is stereotyping. Some portrayals are harmful to people (e.g. portraying women as sex objects or associating certain qualities, activities, happiness, and success with physical data or showing how gender limits a person’s capabilities.).
No one can deny that every business’s main goal is to make more and more profits, but even when striving for such a material goal we can still rely on ethics, simply because ethics are certainly one of the most important requirements of humanity, and after all, we shouldn’t forget that behind those shiny brands there are humans! and every business transaction is just human dealing with human!
Oeconomia 