Ethics is a complex concept to define, and there is an attempt made by contemporary theorists to highlight ethical behavior in a marketing context. Issues surrounding marketing ethics and social responsibility are inherently controversial. An area that causes particular dispute is the question of the effect of ethical and unethical marketing activity in regards to the purchasing behavior of consumers.

1. Business and
Marketing
Ethics on
Consumer
Behavior
Seta A. Wicaksana
Founder and CEO
www.humanikaconsulting.com

2. Seta A. Wicaksana
0811 19 53 43
wicaksana@humanikaconsulting.com
• Managing Director of Humanika Amanah Indonesia – Humanika Consulting
• Managing Director of Humanika Bisnis Digital – hipotest.com
• Wakil Ketua Asosiasi Psikologi Forensik Indonesia wilayah DKI
• Business Psychologist
• Certified of Assessor Talent Management
• Certified of Human Resources as a Business Partner
• Certified of Risk Professional
• Certified of HR Audit
• Certified of I/O Psychologist
• Dosen Tetap Fakultas Psikologi Universitas Pancasila
• Pembina Yayasan Humanika Edukasi Indonesia
• Penulis Buku : “SOBAT WAY: Mengubah Potensi menjadi kompetensi” Elexmedia
Gramedia 2016, Industri dan Organisasi: Pendekatan Integratif menghadapi perubahan,
DD Publishing, 2020. Human Factor Engineering: Manusia dan Lingkungan Kerja. DD
Publishing, 2021, Psikologi Industri dan Organisasi, DD Publishing, 2021
• Organizational Development Expertise
• Sedang mengikuti tugas belajar Doktoral (S3) di Fakultas Ilmu Ekonomi dan Bisnis
Universitas Pancasila Bidang MSDM Disertasi Peran Utama Budaya Organisasi dalam
Agilitas Organisasi di Lembaga Pemerintah Non Kementrian XYZ
• Fakultas Psikologi S1 dan S2 Universitas Indonesia
• Mathematics: Cryptology sekolah ikatan dinas Akademi Sandi Negara

3. Business and Marketing Ethics

4. Is Marketing the
Purpose of Business?
• In his description of business’ purpose, marketing scholar
Theodore Levitt suggests that (see full quote in notes):
• The purpose of a business is to create and keep a
customer. To do that you have to produce and deliver
goods and services that people want and value at a
prices and under conditions that are reasonably
attractive relative to those offered by others . . . .
• Similarly, the American Marketing Association defines
marketing in a way that suggests marketing is at the heart of
business activity.
• They define marketing as “an organizational function
and a set of processes for creating, communicating,
and delivering value to customers and for managing
customer relationships in ways that benefit the
organization and its stakeholders.”

5. What is
“Marketing?”
• The concept of an exchange between a
seller and a buyer is central to the
“market” and is the core idea behind
marketing.
• Marketing involves all aspects of creating a
product or service and bringing it to market
where an exchange can take place.
• Marketing ethics therefore examines the
responsibilities associated with bringing a
product to the market, promoting it to, and
exchanging it with, buyers.

6. The Four P’s
• All of the factors considered, and each decision made
throughout this process is an element of marketing.
• What, how, why, and under what conditions is
something produced?
• What price is acceptable, reasonable, fair?
• How can the product be promoted to support,
enhance, and maintain sales?
• Where, when, and under what conditions should
the product be placed in the marketplace?
• These four general categories—product, price,
promotion, placement—are sometimes referred to as
the “4 P’s” of marketing.

7. The Ethical Questions
raised by The Four P’s
• What responsibilities do producers have for the quality
and safety of their products? Who is responsible for
harms caused by a product? Are there some products
that should not be produced, or does consumer demand
decide all production questions?
• Is the consumer’s willingness to pay the only ethical
constraint on fair pricing? Should the ability to pay be a
factor is setting price? Do all customers deserve the
same price, or can producers discriminate in favor of, or
against, some consumers? What effects will price have
on competitors? On retailers?
• (continued)

8. The Ethical Questions
raised by The Four P’s
• Are deceptive or misleading ads ethical? What
ethical constraints should be placed on sales
promotions? Is the information gathered in
market research the property of the business that
conducts the research? What privacy protections
should be offered for marketing data?
• Is it ethical to target vulnerable populations such
as children or the elderly? What responsibilities
does a producer have when marketing in foreign
countries? What responsibilities do producers
have to retailers? To competitors? To suppliers?
8-8

9. Marketing
ethics
• Marketing ethics addresses principles
and standards that define acceptable
conduct in the market place.
Marketing usually occurs in the
context of an organization, and
unethical activities usually develop
from the pressure to meet
performance objectives.
• Some obvious ethical issues in
marketing involves clear cut attempts
to deceive or take advantage of a
situation

10. Marketing
Ethics &
Consumer
Rights
The law and regulations are
generally designed to protect the
consumers from unethical practices
by businesses
These laws and regulations
recognize that consumers have
certain basic rights in the
marketplace
Each marketer must relay on
his/her own value system to
determine what is and is not ethical

11. ETHICAL ISSUES IN
MARKETING
• • Marketing ethics Marketers’
standards of conduct and moral values.
• • Many companies create ethics
programs to train employees to act
ethically.
• • Employees’ personal values
sometimes conflict with employers’
ethical standards.

12. ETHICS IN MARKETING
RESEARCH
• Invalid or unreliable research studies
• Invasion of consumer privacy, not respecting
confidentiality
• Disguising sales as research
• Failure to secure voluntary and informed
participation
• Competitive intelligence gathering
• Consumers are concerned about privacy, and
Internet has increased privacy concerns.

13. ETHICS IN PRODUCT/PACKAGE STRATEGY
• Example: Package strategy.
• Larger packages are more noticeable on the shelf.
• Oddly sized packages make price comparison
difficult
• Actual versus apparent size
• Example: Product strategy.
• Misleading or inadequate information
• Excessive or environmentally-unfriendly packaging
• Product testing: on animals or insufficient testing to
reveal safety concerns
• Marketing socially controversial products
• Marketing unsafe products

14. • ETHICS IN DISTRIBUTION
• • What is the appropriate degree
of control over the
distribution channel?
• • Should a company distribute its
products in marginally
profitable outlets that have no
alternative source of supply?
• ETHICS IN PROMOTION
• • Truth in advertising is the
bedrock of ethics in promotion.
• • Marketing to children has come
under increased scrutiny.
• • Marketing beer to college
students, including through
providing promotional items such
as shirts and hats, raises ethical
questions.
• ETHICS IN PRICING
• • Most regulated aspect of a firm’s
marketing activities.

15. FOUR AREAS OF PRICING ARE
CONSIDERED UNETHICAL
AND ILLEGAL:
• Deceptive Pricing: Where a salesperson
tries to influence lure customers into a
store. Thereafter, a salesperson tries to
influence to buy a higher-priced item.
• Unfair Pricing: When competitors are
driven out by low prices the company
raises price back to their former level.

16. FOUR AREAS OF PRICING ARE
CONSIDERED UNETHICAL AND
ILLEGAL:
• Price Discrimination: It can be
unethical if similar buyers are
charged different prices for the
same based on their ability to pay.
• Price fixing: It is an agreement
among firms in an industry to set up
prices at certain levels. Two types of
price fixing:
• Horizontal price fixing
• vertical price fixing

17. Consumer
Behavior

18. Framework
for Deviant
Consumer
Behavior

19. Addictive/Compulsive Consumption
• Deviant Acquisition Behavior
• Addiction Chemical
dependence
• Compulsive—Irresistible urge to perform
irrational act, e.g., gambling stages
• Pleasure of “big win”
• Becomes central force of individual’s
life
• Engage in crime to finance
• Realization of hitting rock bottom
• Causes
• Inherited tendencies
• Family-related factors

20. Addictive
Behavior
• Usually brought on by chemical
dependency
• Dependence on product or activity
• Repeated use of product, even if
dangerous
• Can be harmful to addicts and those
around them
• Examples: cigarettes, drugs, alcohol,
Internet use and video games

21. Compulsive
Behavior
• Compulsive consumption
• Eating
• Buying
• Gambling

22. Compulsive
Buying
• The Experience
• Low Self-Esteem
• Fantasy Orientation
• Alienation
• Family History
• Consequences
• Financial
• Emotional
• Interpersonal

23. Impulsive
Behavior

24. Marketing
Implications

25. Consumer
Theft
• Prevalence
• Retail: $41.6 billion
• Nonretail
• Psychological Factors Affecting
• Temptation to steal
• Ability to rationalize behavior

26. Motivations
for
Consumer
Theft

27. Consumer Theft and
Marketers’ Problems
• Increased usage of theft-reducing
devices
• Coverings costs of theft
• Reducing ability to serve customers

28. Black
Markets
• “…situations in which
consumers pay (often
exorbitant amounts) for
items not readily
available…sellers are
unauthorized.”
• Legal Items in Short Supply
• Brands
• Illegal Items

29. Underage Drinking and Smoking
• Prevalence
• Consequences
• Marketing Implications
• Product availability
• Exposure to advertising
• Targeting youth
• Inappropriate message in media/ads
• Warning labels/ads

30. Cases

31. Advertising to
Children—Issues
• Undeveloped cognitive abilities
• Unable to store/retrieve information in
long-term
memory
• Prey on needs
• Teach children materialism, act on impulse,
immediate gratification
• Do not understand cost
• Host selling
• Types of products

32. Advertising to Children—
Possible Solutions
• Program/Advertising Separator
• Limits to amount of advertising per hour
• Public Service Announcements (PSAs)
• Children’s Advertising Review Unit—Better
Business Bureau
• Educational Initiatives

33. Do Marketing
Efforts Promote
Obesity?
• Link between junk food
advertising and childhood
obesity
• Less guilt in eating low-fat
snacks
• Underestimate of calorie
content of meals
• Unhealthy food perceived
as tastier

34. Advertising and
Self-Image
• Idealized Body Images
• Obsessions with thinness
• Thinness, advertising, and
self- perceptions = Social
Comparisons Theory
• Materialism
• Consumers less satisfied
• Family influences
• “Good life”

35. Do Marketing Practices
Invade Consumers’
Privacy?
• Sources of Marketing Information
• Tracking purchases
• Applications
• Marketing research
• Public domain
• Consumers’ Responses
• Uncomfortable
• Complaints
• Lack of trust
• Data has errors

36. Marketing
Implications
• Horror stories hurt all marketers
• Communicating how information
gathered helps consumers
• Laws and self-imposed regulation
• Markets for privacy protection

37. Social
Responsibility
Issues
• Environmentally conscious
behavior
• Conservation behavior
• When do consumers’ like to
conserve?
• Can consumers be
motivated to conserve?

38. Resisting Marketing
Practices
• Individual Resistance—Word-of-mouth
• Advocacy Groups—Inform public about
business practices
• Boycotts
• Avoid purchasing
• Companies held accountable
• Gain publicity
• Hurt company financially

39. Learning and Giving for Better Indonesia
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