Ethical issues for marketing in a global context

Crane and Matten(2016) identi?ed Three key ethical issues of globalization in relation to consumers, to which may be added a fourth:

Differing standards of consumer protection

The exporting of consumerism and increase in cultural homogenization

The targeting of marketing at lower-income consumers in developing countries

Geographical segregation of business operations.

1

Differing standards of consumer protection

Some companies take advantage of differences in the legal regulations to market their offerings where there are fewer constraints on their activities. For example, pharmaceutical companies have been censured for marketing their products in countries in which they are subject to lower levels of control.

It is not just developing countries in which consumers may be less protected. Less regulation of pharmaceutical marketing in the USA enables companies to market their medicines directly to consumers through mass advertising aimed at encouraging consumers to ask their doctors to prescribe particular brands of medicines, while they are promoted indirectly via pharmacies in developing countries.

2

Differing standards of consumer protection

Crane and Matten (2016) note that there is seldom such coordinated international action and that large differences in the standards of consumer protection still exist for many products, including automobiles, medicines, food and drink.

3

Exporting consumerism and increasing cultural homogenization

Another ethical issue associated with global marketing is the criticism that it involves exporting not only goods and services to other parts of the world, but the transmission of the values embedded in them and therefore encourages the spread of consumerism.

Doubts have been raised about the impact of consumerism on wellbeing. For example, the psychologist and writer Oliver James(2007) argued that an obsessive spiral of consumerism made people more likely to succumb to depression, anxiety and addictions – a phenomenon he has dubbed as ‘af?uenza’–and that this was spreading to the rest of the world.

4

Exporting consumerism and increasing cultural homogenization

Globalization has led to cultural homogenization at the expense of local cultures. Crane and Matten (2016) highlight the similarity of shops and products offered on high streets in cities around the world and the dominance of global brands in entertainment and sport, with concern focusing on the aggressive tactics of some multinational corporations (MNCs) that have squeezed out local providers and the role of international marketing activities in exporting consumerism

5

Targeting lower-income consumerism developing countries

Cultural homogenization is evident in research comparing the preferences between local and foreign brands among predominantly middle-class consumers in India. This revealed that consumers who admired the life styles in economically developed countries preferred foreign brands of products for status-enhancing reasons

Ethical issues are raised when lower-income consumers in developing countries are targeted by marketing. There are two key concerns:

Marketing products beyond the reach of low-income consumers perpetuates dissatisfaction.

Low-income consumers might be exploited.

6

Targeting lower-income consumerism developing countries

The targeting products at low-income consumers, whether they desire them or not, can be detrimental (Harmful)

It should be recognized that exclusion from targeting can also increase the gap between the af?uent and the poor with respect to vital issues such as health.

Diseases and conditions that affect primarily the poor may be neglected by the pharmaceuticals industry in favor of researching and developing treatments that are easier

However, targeting vulnerable populations in which levels of consumer protection may be lacking raises important ethical issues

7

Targeting lower-income consumerism developing countries

Low-income consumers may be considered potentially vulnerable (under-risk) because of:

1- Their economically restricted circumstances, which mean they do not have the same choices open to them as more af?uent consumers.

2- They may also not have the level of education or information to make informed decisions about consumption and use of certain products.

For example, they may be unaware of safety issues or health risks. Consumer vulnerability has been conceptualized as powerlessness in the marketplace that negatively affects consumers’ personal and social self-perceptions.

These economic, educational and informational restrictions may leave vulnerable consumers exposed to exploitation and at a disadvantage in terms of bargaining power when it comes to the exchange process. However, it should be noted that while some groups (such as the poor)may be more prone to experience vulnerability, that does not mean that everyone in those groups will always experience vulnerability.

8

Geographical segregation of business operations

One of the effects of global business is that it separates geographically some of the causes and effects of the scope of business’ operations.

For example, demand for a product in developed country might be satis?ed by a corporation that sources raw materials for and manufacture of that product from one or more developing countries, with the result that consumers in the developed country are shielded from any negative consequences emanating from the depletion of raw materials or manufacture under dangerous or harmful conditions. Consumers might be impacted indirectly, however, whether or not they are aware of it, by the loss of manufacturing jobs in their home country

9

Geographical segregation of business operations

Another effect of the geographical separation of business operations is that some large MNCs have taken advantage of national boundaries on government control to reduce the tax they pay without violating the laws in different countries. Well-publicised examples include Starbucks, Google and Amazon (BBC, 2013). Such behavior has fueled calls for greater corporate accountability (Crane and Matten,2016).