The SAGE Handbook Of Marketing Ethics [1st Edition] 1529709296, 9781529709292, 1529736781, 9781529736786, 1529737672, 9781529737677

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The SAGE Handbook of

Marketing Ethics

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SAGE was founded in 1965 by Sara Miller McCune to support the dissemination of usable knowledge by publishing innovative and high-quality research and teaching content. Today, we publish over 900 journals, including those of more than 400 learned societies, more than 800 new books per year, and a growing range of library products including archives, data, case studies, reports, and video. SAGE remains majority-owned by our founder, and after Sara’s lifetime will become owned by a charitable trust that secures our continued independence. Los Angeles | London | New Delhi | Singapore | Washington DC | Melbourne

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The SAGE Handbook of

Marketing Ethics

Edited by

Lynne Eagle Stephan Dahl Patrick De Pelsmacker and Charles R. Taylor

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SAGE Publications Ltd 1 Oliver’s Yard 55 City Road London EC1Y 1SP SAGE Publications Inc. 2455 Teller Road Thousand Oaks, California 91320 SAGE Publications India Pvt Ltd B 1/I 1 Mohan Cooperative Industrial Area Mathura Road New Delhi 110 044 SAGE Publications Asia-Pacific Pte Ltd 3 Church Street #10-04 Samsung Hub Singapore 049483

Editor: Matthew Waters Editorial Assistant: Umeeka Raichura Production Editor: Prachi Arora Copyeditor: Neville Hankins Proofreader: Derek Markham Indexer: Cathryn Pritchard Marketing Manager: Abigail Sparks Cover Design: Naomi Robinson Typeset by Cenveo Publisher Services Printed in the UK

Editorial arrangement © Lynne Eagle, Stephan Dahl, Patrick De Pelsmacker and Charles R. Taylor, 2021 Chapter 1 © Lynne Eagle, Stephan Dahl, Patrick De Pelsmacker and Charles R. Taylor, 2021 Chapter 2 © Leonidas C. Leonidou, Bilge Aykol and Pantelitsa Eteokleous, 2021 Chapter 3 © Charles R. Taylor and Mivena Panteqi, 2021 Chapter 4 © Dominik Mahr, Martina Čaić and Gaby Odekerken-Schröder, 2021 Chapter 5 © Mathieu Alemany Oliver, 2021 Chapter 6 © Caroline Moraes, Solon Magrizos and Lucy Hebberts, 2021 Chapter 7 © Patrick De Pelsmacker, Kristien Daems and Ingrid Moons, 2021 Chapter 8 © Brian Young, 2021 Chapter 9 © Daniel E. Palmer, 2021 Chapter 10 © Martin Eisend and Sofiia Kanevska, 2021 Chapter 11 © Ann-Marie Kennedy and Marian Makkar, 2021 Chapter 12 © Lynne Eagle and Rachel Hay, 2021 Chapter 13 © Stephan Dahl, 2021 Chapter 14 © Mark Peterson, 2021 Chapter 15 © Johan Jansson, 2021 Chapter 16 © Caroline J. Oates, 2021 Chapter 17 © Ross Brennan, 2021 Chapter 18 © Krzysztof Kubacki and Natalia Szablewska, 2021 Chapter 19 © Tazim Jamal and Seunghoon Lee, 2021 Chapter 20 © Natalia Szablewska, Tanja Kamin and Krzysztof Kubacki, 2021

Chapter 21 © Karla K. Gower, 2021 Chapter 22 © Michelle Cull, Suzan Burton and Regan Lam, 2021 Chapter 23 © Srikant Manchiraju and Amrut Sadachar, 2021 Chapter 24 © Christian Lolk and Charles R. Taylor, 2021 Chapter 25 © Karmen Lužar, Steven Greenland and David Low, 2021 Chapter 26 © Morven G. McEachern, 2021 Chapter 27 © Isabell Koinig, Sandra Diehl and Ralf Terlutter, 2021 Chapter 28 © Béatrice Parguel and Elisa Monnot, 2021 Chapter 29 © Juan Manuel Elegido, 2021 Chapter 30 © Roseline van Gogh, Michel Walrave and Karolien Poels, 2021 Chapter 31 © Annmarie Hanlon, 2021 Chapter 32 © Nicolas Chanavat and Guillaume Bodet, 2021 Chapter 33 © Greg W. Marshall, O. C. Ferrell, Victoria Bush, Mark W. Johnston and Linda Ferrell, 2021 Chapter 34 © Peter Neijens, 2021 Chapter 35 © Brendan James Keegan and Lee Smorthit, 2021 Chapter 36 © Lynne Eagle, Stephan Dahl, Patrick De Pelsmacker and Charles R. Taylor, 2021 Chapter 37 © Patrick De Pelsmacker, Lynne Eagle, Stephan Dahl and Charles R. Taylor, 2021

Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act, 1988, this publication may be reproduced, stored or transmitted in any form, or by any means, only with the prior permission in writing of the publishers, or in the case of reprographic reproduction, in accordance with the terms of licences issued by the Copyright Licensing Agency. Enquiries concerning reproduction outside those terms should be sent to the publishers. At SAGE we take sustainability seriously. Most of our products are printed in the UK using responsibly sourced papers and boards. When we print overseas we ensure sustainable papers are used as measured by the PREPS grading system. We undertake an annual audit to monitor our sustainability.

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Library of Congress Control Number: 2020945069 British Library Cataloguing in Publication data A catalogue record for this book is available from the British Library 978-1-5297-0929-2

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Contents List of Figures and Tables Notes on the Editors and Contributors PART I

viii x

FOUNDATIONS OF MARKETING ETHICS

1

Introduction to Marketing Ethics Lynne Eagle, Stephan Dahl, Patrick De Pelsmacker and Charles R. Taylor

2

Internal and External Drivers of an Ethical International Marketing Strategy: Implications on Reputational Advantage and Performance Leonidas C. Leonidou, Bilge Aykol and Pantelitsa Eteokleous

3

20

PART II THEORETICAL AND RESEARCH APPROACHES TO MARKETING ETHICS 3

Cross-cultural and Religious Perspectives on Marketing Ethics Charles R. Taylor and Mivena Panteqi

43

4

An Interdisciplinary View of Marketing Ethics Dominik Mahr, Martina Čaić and Gaby Odekerken-Schröder

58

5

Conducting Ethical Research in Marketing Mathieu Alemany Oliver

74

6

Female Sexualisation and Objectification in Advertising: Research Insights and Future Research Agenda for Advertising Ethics Caroline Moraes, Solon Magrizos and Lucy Hebberts

7

Parental Mediation of Children’s Exposure to Online Media and Advertising Patrick De Pelsmacker, Kristien Daems and Ingrid Moons

PART III

91

107

MARKETING ETHICS AND SOCIAL ISSUES

8

Marketing to Vulnerable Consumers Brian Young

125

9

Cross-Cultural and Sub-Cultural Issues in Marketing Ethics Daniel E. Palmer

136

10

Stereotyping in Marketing Martin Eisend and Sofiia Kanevska

146

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11

Cultural Appropriation Ann-Marie Kennedy and Marian Makkar

12

Appearances Matter: The Impact of Unattainable Idealizations of an Individual’s Physical Self Lynne Eagle and Rachel Hay

169

Ethical Issues in Marketing to the LGBT Community: Of Becoming Visible and Being Targeted Stephan Dahl

184

13

14

Ethical Perspectives on Sustainability in Marketing Mark Peterson

155

196

PART IV ISSUES IN CONSUMER ETHICS 15

Circular Economy and Sustainable Consumption: Suggestions for Ethical Marketing Johan Jansson

215

16

Sustainability Marketing: Products, Fairtrade, and Greenwashing Caroline J. Oates

226

17

Business-to-Business (Industrial) Marketing Ethics Ross Brennan

238

18

The Ethics of Social Marketing and Non-Profit/Charity Marketing Krzysztof Kubacki and Natalia Szablewska

248

19

Ethical Issues in Tourism Tazim Jamal and Seunghoon Lee

259

20

Social Causes, Consumer Activism and Human Rights Natalia Szablewska, Tanja Kamin and Krzysztof Kubacki

275

PART V ETHICAL ISSUES IN SPECIFIC SECTORS 21

Ethics and Corporate Social Responsibility Karla K. Gower

289

22

Ethics in Financial Products Marketing Michelle Cull, Suzan Burton and Regan Lam

301

23

Consumer and Marketing Ethics: A Case of the Fashion Industry Srikant Manchiraju and Amrut Sadachar

315

24

Ethical Considerations for Pharmaceutical Marketing Christian Lolk and Charles R. Taylor

326

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Contents

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25

Ethical Marketing of Harmful Products: Sugar, Alcohol and Tobacco Karmen Lužar, Steven Greenland and David Low

339

26

Food Marketing Ethics Morven G. McEachern

354

27

Ethical Aspects of Digital (eHealth and mHealth) Marketing Isabell Koinig, Sandra Diehl and Ralf Terlutter

367

PART VI ETHICAL ISSUES IN THE MARKETING MIX 28

Product and Branding Ethics Béatrice Parguel and Elisa Monnot

385

29

The Ethics of Pricing Juan Manuel Elegido

399

30

Personalization in Digital Marketing: Implementation Strategies and the Corresponding Ethical Issues Roseline van Gogh, Michel Walrave and Karolien Poels

411

31

Ethics in Digital Marketing and Social Media Annmarie Hanlon

424

32

Ethics Within Sponsorship Nicolas Chanavat and Guillaume Bodet

444

33

The Sales Ethics Subculture Greg W. Marshall, O. C. Ferrell, Victoria Bush, Mark W. Johnston and Linda Ferrell

457

34

Ethics in Public Relations Peter Neijens

474

PART VII CONCLUDING COMMENTS AND REFLECTIONS 35

36

37

Ethics and New Media, A Double-Edged Sword: A Case Study of Digital Marketing Transformation in the Charity Sector Brendan James Keegan and Lee Smorthit

483

Marketing Ethics and Regulation of Marketing Activity: The Role of Government and Industry Lynne Eagle, Stephan Dahl, Patrick De Pelsmacker and Charles R. Taylor

498

Concluding Comments Regarding the Challenges of Marketing Ethics Patrick De Pelsmacker, Lynne Eagle, Stephan Dahl and Charles R. Taylor

Index

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List of Figures and Tables FIGURES 2.1 4.1 4.2 5.1 5.2 7.1 7.2 12.1 14.1 14.2 14.3 14.4 19.1 19.2a 19.2b 19.3a 19.3b 19.3c 22.1 22.2 25.1 25.2 32.1 35.1

Conceptual model Integrative framework of interdisciplinary marketing ethics Overview of theoretical and managerial implications of interdisciplinary marketing ethics The researcher and the ethics triad Cressey’s (1953) fraud triangle in light of the (marketing) research landscape Number of parental mediation strategies used per media device for children and teenagers Number of media devices on which each parental mediation strategy is used for both children and teenagers Social cognitive theory factors with addition of fourth factor Primary stakeholders and secondary stakeholders Costco logo Costco’s stock performance compared with S&P 500 The five points of Costco’s code of ethics Evolution of research on ethics in tourism Town hall on St George Island Gombey folk dance An increasing popular mountain destination: Main Street, Canmore, Alberta Anti-idle sign at railway crossing Anti-idle garbage truck sign The Market Research Society code of conduct principles Pyramid model of CSR Confectionery and soft drink placements in one of the leading Australian supermarkets Percentage of Australians aged 18+ years who smoke daily and tobacco regulations since 2000 Systematization of the manifestations of ambush marketing Charity measurement framework

24 66 70 75 86 115 116 173 200 201 202 203 263 267 267 270 271 271 303 304 342 345 453 495

TABLES 1.1 1.2 1.3 2.1 4.1 4.2 4.3 5.1 6.1 6.2 6.3 12.1

Marketing ethics academic articles over time Overview of common ethical frameworks Comparison of 4Ps of traditional marketing and alternative terminology Indicative forms of unethical international marketing mix practices Phases of marketing ethics formation and interdisciplinary influences Illustrative review of mid-range theories on ethics within the S-D logic Overview of value destruction potential of social robots and marketing remedies Basic guidelines for conducting ethical research in marketing throughout the research process A sample of articles on gendered consumer responses to Ad FOAS Article highlights for Ad FOAS effects specific to female consumers A sample of articles on Ad FOAS effects specific to male consumers Historical and contemporary beauty trends

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4 8 14 23 61 63 68 75 94 96 98 170

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List of figures and tabLes

12.2 14.1 19.1 24.1 25.1 25.2 26.1 32.1 36.1 36.2 36.3 36.4 36.5 36.6 36.7

Relevant concepts and theories that may explain the impact of repeated exposure to unrealistic images Comparison of the two- and five-capital views of capitalism Scopus search results of research related to sustainable/responsible/ethical tourism Overview of Pharmaceutical Market Interests and Relationships from Producer to Consumer Winfield brand variants sold in Australia in 2018 Common unethical marketing practises used by harmful product manufacturers – confectionery and soft drinks, alcohol and tobacco Main UK assurance schemes Key milestones and informative anecdotes from the history of partnership in the modern Olympic Games (International Olympic Committee, 2019; Chanavat and Desbordes, 2014) Examples of consumer protection legislation Industry organisations with specific lobbying focus Examples of ethics codes and principles Overview of arguments for and against self-regulation: traditional media Industry organisations involved in developing/implementing self-regulatory provisions Examples of self-regulatory organisations and their codes Unintended effects of health communication campaigns

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172 199 262 327 346 348 356 446 499 503 505 507 508 510 515

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Notes on the Editors and Contributors THE EDITORS Lynne Eagle is Professor of Marketing, College of Business, Law and Governance at James Cook University, Australia, and Adjunct Professor of Marketing at both the University of Canterbury, New Zealand and Charles Darwin University, Australia. Her research interests centre on: trans-disciplinary approaches to sustained behaviour change in social marketing/health promotion/environmental protection interventions, including the ethical dimensions of this activity. Within this broad area, she is active in research relating to marketing communication effects and effectiveness, including the impact of persuasive communication via traditional and digital channels, and the challenges of communicating effectively with population sectors that face literacy and numeracy challenges. She has published widely and is on the editorial board of several journals. Stephan Dahl is Adjunct Associate Professor at James Cook University, Australia and Charles Darwin University, Australia. His research interests include social media, marketing ethics and social marketing, and he has published in national and international journals, including the Journal of Advertising Research and the Journal of Marketing Management. He is an editorial board member of the International Journal of Advertising and the Journal of Consumer Affairs. He wrote the textbook Social Media Marketing: Theories of Digital Communications and co-edited Marketing Ethics & Society (both Sage) and is also the co-author of Social Marketing (Pearson) and Integrated Marketing Communications (Taylor and Francis). Patrick De Pelsmacker is Professor of Marketing at the University of Antwerp and part-time professor at Ghent University, Belgium. His research focuses on advertising to children and teenagers, advertising effectiveness, online behaviour, sustainable consumer behaviour and cross-cultural consumer behaviour. His research has been published in journals such as the Journal of Advertising, the International Journal of Advertising, the Journal of Business Research, Young Consumers, the Journal of Environmental Psychology, Ecological Economics and International Marketing Review. Charles R. Taylor is John A. Murphy Professor of Marketing, Villanova University School of Business, USA, Editor-in-Chief of the International Journal of Advertising and a regular contributor to Forbes.com. His research interests include advertising effectiveness, global marketing and advertising, Super Bowl advertising, and marketing and public policy issues, as well as advertising ethics. He has published in numerous journals and has won the Ivan Preston Award for Outstanding Contribution to Research from the American Academy of Advertising and the Flemming Hansen Award for Outstanding Contribution to the Advertising Field from the European Academy of Advertising.

THE CONTRIBUTORS Mathieu Alemany Oliver is an Assistant Professor of Marketing at TBS Business School, France, where he mainly teaches marketing research and cultural perspectives on marketing and consumption. His core research interests focus on consumption-mediated interpretations and constructions of reality, with published and ongoing work on consumer childlikeness and adulthood, business-related conspiracy theories, new materialism, or eco-anxiety. He also serves on the editorial board of the Journal of Management, Spirituality & Religion.

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Bilge Aykol is an Associate Professor of Marketing at the Faculty of Business of Dokuz Eylül University, Turkey. Her research interests centre on international marketing and purchasing, relationship marketing and experiential consumption. Her articles have appeared in the Journal of World Business, the Journal of International Marketing, International Business Review, Management International Review, Industrial Marketing Management, Psychology & Marketing, the Journal of Small Business Management and Tourism Management. Guillaume Bodet is Professor of Sport Marketing and Management at the University of Lyon 1 (France) and a member of the Laboratory of Vulnerabilities and Innovation in Sport (L-VIS EA7428). He is also the programme leader or the Masters’ in Sport Management at UFR STAPS (Lyon 1). His research interests deal with sport marketing and consumption, with a particular focus on sport services and brands. He is a board member of the European Association for Sport Management (EASM) and associate editor of European Sport Management Quarterly. Ross Brennan is Professor of Industrial Marketing at the University of Hertfordshire, UK. His research interests include business-to-business marketing, industrial networks, social marketing and marketing education. His published work includes several textbooks, notably Marketing: An Introduction (with Gary Armstrong, Philip Kotler and Michael Harker) and Business to Business Marketing (with Louise Canning and Ray McDowell), and research articles in such journals as Industrial Marketing Management, the European Journal of Marketing, Marketing Theory, Business Ethics: A European Review and the Journal of Marketing Education. Suzan Burton is a Professor of Marketing at Western Sydney University, Australia. Her research is focused on consumer choice, and in particular on how marketing strategies often influence consumers to make dysfunctional choices. Her research has been recognised by funding from the Australian Research Council and various external bodies, and she has been named as ANZMAC Distinguished Marketing Educator of the Year. She has supervised nine doctoral students to completion, has an H-index of 23, and over 2,300 citations. Victoria D. Bush is Professor of Marketing and Donna Ruth Roberts Scholar in the School of Business at the University of Mississippi, USA. Her work has been published in such journals as the Journal of the Academy of Marketing Science, the Journal of Business Ethics and the Journal of Business Research. Her research interests are in sales ethics, media and organisational culture. Prior to her doctoral work, she worked in advertising and for media agencies. Martina Čaić is a post-doctoral researcher at Aalto University, School of Arts, Design and Architecture in Finland and CTF – the Service Research Centre at Karlstad University in Sweden. She received her PhD from Maastricht University in the Netherlands, where she was a Marie Curie Fellow funded by the Service Design for Innovation Network (SDIN). Her research addresses customer experiences in value networks, with a particular focus on robotic and ambient-assisted living technologies. Specifically, she conducts research in healthy-aging contexts, employing a service design mindset, tools and methods to understand users’ perceptions of disruptive technologies. Her research has been published in the Journal of Service Management, the Journal of Services Marketing, the International Journal of Social Robotics and the International Journal of Design. Nicolas Chanavat is a Full Professor of Sport Marketing and co-head of the Sport Management Research Team (CETAPS, EA3832) at the University of Rouen-Normandie (France). He is also Vice-President of the French National Olympic Academy, co-founder and in charge of the French Centre for Olympic Studies, and a member of the Management Board of the French Society of Sport Management. He is a specialist in sport marketing and mega sporting events and has published several books and scientific articles in these areas. He has worked also for professional sport clubs and organised mega sporting events (FIFA, IOC, UEFA). Michelle Cull is a Senior Lecturer (Accounting and Financial Planning) and Associate Dean, Engagement in the School of Business at Western Sydney University, Australia. Her research focuses on trust and ethics in financial planning as well as financial literacy. She has received a number of industry grants to support her research and an ‘Early Career Researcher Award’ for her contribution to financial planning. She currently supervises eight PhD students. Prior to her academic career, she worked in various

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accounting, finance and management positions in some of Australia’s largest companies by market capitalisation, and also as a consultant. Kristien Daems is a post-doctoral researcher at the University of Antwerp, Belgium. Her research focuses on advertising literacy in children and teenagers and co-creation in innovation. Her research has been published in the Journal of Marketing Communications, Computers in Human Behavior and Young Consumers. Sandra Diehl is Associate Professor and Head of the Department of Media and Communications at the University of Klagenfurt, Austria. Her research interests include CSR and health communication, international and intercultural advertising, as well as media and convergence management. She has published in such journals as the International Journal of Advertising, the Journal of Business Research, Media and Psychology, Advances in International Marketing, Advances in Consumer Research, International Marketing Review and European Advances in Consumer Research. She has authored and edited several books, among them Advances in Advertising Research and The Handbook of CSR Communication. She is a board member of the European Advertising Academy and currently Conference Manager. Martin Eisend is a professor of marketing at European University Viadrina in Frankfurt (Oder), Germany. His research activities centre on marketing communication and methods of empirical generalisation. He has published over 70 articles in peer-reviewed journals, such as the Journal of Marketing, Information Systems Research, Journal of the Academy of Marketing Science, International Journal of Research in Marketing, Journal of Retailing, or Journal of Product Innovation Management. Martin serves on the editorial review boards of all major marketing communication journals and is an Associate Editor of the International Journal of Advertising. He currently is the president of the European Advertising Academy. Juan Manuel Elegido is the Vice-Chancellor of Pan-Atlantic University, Nigeria, and a professor of business ethics at the Lagos Business School, the graduate business school of the university. He was born in Madrid (Spain) in 1952. He has a licentiate degree in law from the Universidad Complutense de Madrid (Spain) and a doctorate in law from the Universidad de Navarra (Spain). He is the author of five books: Jurisprudence (1994), Fundamentals of Business Ethics (1996), Una Comunidad de Servicio – Ensayos en Etica de la Empresa (A Community of Service - Essays on Business Ethics) (2000), Business Ethics in the Christian Tradition (2003) and The Nature of Human Beings (2018). He has also published numerous articles on law and on business ethics in academic and professional journals. Pantelitsa Eteokleous is a post-doctoral researcher at the University of Cyprus. Her research interests are concentrated on the fields of social responsibility, ethics, entrepreneurship and international marketing. Her work has appeared in the journal International Marketing Review, chapters in books, and in various conference proceedings. Linda Ferrell is Professor and Chair of the Marketing Department at the Harbert College of Business at Auburn University, USA. She has published in the Journal of the Academy of Marketing Science, AMS Review, the Journal of Business Ethics, the Journal of Public Policy & Marketing, the Journal of Business Research, as well as others. She is Past-President of the Academy of Marketing Science and presently serves on its Board of Governors. O. C. Ferrell is the James T. Pursell, Sr. Eminent Scholar in Ethics and Director of the Center for Ethical Organizational Cultures at Auburn University, USA. He is President of the Academy of Marketing Science and co-conference chair for the 2020 American Marketing Association Winter Academic Conference. He received the AMS Cutco/Vector Distinguished Educator Award, was the first recipient of the Marketing Education Innovation Award for the Marketing Management Association, and holds the Lifetime Achievement Award from the Macromarketing Society. Karla K. Gower is the Behringer Distinguished Lecturer of Public Relations and the Director of the Plank Center for Leadership in Public Relations at the University of Alabama, USA. She is the author of Legal and Ethical Considerations for Public Relations and Public Relations and the Press: The Troubled Embrace, and co-author of The Opinions of Mankind: Racial Issues, Press, and Propaganda in the Cold War. Her research areas are public relations history and ethics and legal issues impacting public relations. She has published in journals such as the Journal of Public Relations Research, Public Relations Review and Communication Law and Policy.

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Steven Greenland is a professor in marketing and the Chair of Business at the Asia Pacific College of Business and Law, Charles Darwin University, Australia. He researches and publishes in the areas of social responsibility and marketing strategy, including articles in Tobacco Control and Addiction. Annmarie Hanlon teaches Digital and Social Media Marketing at the Cranfield School of Management, UK, and is a practitioner working on digital marketing strategy and social media projects with charities, household names and organisations across Europe. As an early adopter, working in ‘online marketing’ since 1990, she is a senior examiner in digital strategy and a winner of the Worshipful Company of Marketors’ Mais Scholarship. Her research interests include the strategic application of social media in organisations, differences in practice between generations and ethical issues in practice. Rachel Hay is a lecturer in marketing for the College of Business, Law and Governance at James Cook University, Australia. Her recent PhD focused on ‘The engagement of women and technology in agriculture’. She is a social scientist working in behaviour change. Her recent research includes two National Environmental Science Program (NESP) projects focused on the measurement and evaluation of water quality programmes and land manager practices in sugar cane and grazing. Her work on technology adoption has been published in reputable journals and in a 2016 Parliamentary Inquiry into Innovation in Agriculture. Her research interests extend to projects focused on trans-disciplinary approaches to sustained behaviour change in social marketing, health promotion and environmental protection interventions. Lucy Hebberts graduated with a First-Class BSc Business Management degree from the University of Birmingham, UK, in 2019. During her time at university, she founded Minding My Own Business, an organisation that designs products to raise awareness of issues surrounding sexual violence, while donating profits to sexual violence charities. She now works as a Business Lead for GINA, a social enterprise providing support for sexual violence and abuse survivors, and sister organisation of The Rape & Sexual Violence Project (Birmingham, UK). Tazim Jamal is a professor in the Department of Recreation, Park and Tourism Sciences at Texas A&M University, USA. Her primary research areas are sustainable tourism, collaborative tourism planning and heritage tourism, plus issues in critical and interpretive tourism research. She is the author of Justice and Ethics in Tourism (2019), co-editor of The SAGE Handbook of Tourism Studies (2009) and an Associate Editor of the second edition of the Encyclopedia of Tourism (2016). She is on the editorial board of nine peer-reviewed journals. Johan Jansson is an associate professor at Lund University School of Economics and Management and Umeå School of Business, Economics and Statistics at Umeå University, Sweden. He mainly does research on sustainable consumption, consumer attitudes, norms and behaviours, as well as on marketing of sustainability in for example the mobility domain. His research has appeared in journals such as the Journal of Consumer Marketing, Journal of Consumer Behaviour and he serves on the editorial boards of Business Strategy and the Environment, and Sustainable Development. He has been named an excellent teacher at Umeå University and teaches at the Masters and PhD level in marketing ethics, sustainability and consumption. Mark W. Johnston is the Alan and Sandra Gerry Professor of Marketing and Ethics in the Crummer Graduate School of Business at Rollins College, USA. His research covers a wide range of topics including sales performance and motivation, as well as a number of issues related to business ethics in sales and strategic decision making. He has consulted with companies around the world and enjoys working with students at a number of different universities in the USA and Europe. Tanja Kamin is an associate professor in the Department of Media and Communication Studies and Head of the Social Psychology Research Centre at the University of Ljubljana, Slovenia. Her research is oriented towards critical studies of everyday life, which is seen as an intersection and confrontation of macro and micro politics. Her writings survey cultural capital, empowerment in relation to health, food and the role of (social) marketing in shaping behaviours.

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Sofiia Kanevska is a PhD student and research assistant for the Chair of Marketing at European University Viadrina in Frankfurt (Oder), Germany. She is researching gender roles in advertising, perceptions of stereotyped advertising, and the resulting influence on consumers. Brendan James Keegan is a Senior Lecturer in digital marketing at Manchester Metropolitan University Business School, UK. His research interests include social media analytics, agency–client relationships and digital place management. He has published work in various journals including the European Journal of Marketing, Management Decision and the Journal of Information Science. Ann-Marie Kennedy is a Senior Lecturer in marketing at the University of Canterbury, New Zealand. She specialises in marketing ethics, marketing for behaviour change and macromarketing. Her research has been published in the European Journal of Marketing, Industrial Marketing Management, the Journal of Macromarketing, the Journal of Social Marketing and the Journal of Consumer Affairs among others. Isabell Koinig is a post-doctoral researcher in the Department of Media and Communications at the University of Klagenfurt, Austria. In her dissertation, she investigated how different pharmaceutical advertising appeals are received in a cross-cultural context as well as the degree to which these appeals facilitate consumer self-empowerment. Her research interests predominantly concern the areas of health communication (advertising, social media, eletronic and mobile health, health for sustainable development, and wearables), intercultural advertising, organisational health as well as media and convergence management. Krzysztof Kubacki is Professor of Marketing and Society at Auckland University of Technology, New Zealand. After working for several years as a musician for the Helena Modrzejewska Theatre and Wrocław Opera House in Poland, he became a full-time academic in 2003. His research focuses on the identification, trial, evaluation and critique of behaviour change programmes. Recently, he spent five years (2013–2018) working as VicHealth’s Social Marketing Research Practice Fellow. The findings and frameworks emanating from his VicHealth fellowship have directly informed state and nationwide behaviour change programmes. His research has been published in over 100 books, book chapters, journal articles, and industry and government reports. Regan Lam is currently a consulting researcher and educator. He earned his PhD from Macquarie University, Australia. He has nearly 20 years’ working experience in tertiary education. He has previously worked at the City University of Hong Kong and The Hong Kong Polytechnic University (PolyU). At PolyU, he was the Programme Director and Senior Lecturer at the School of Professional Education and Executive Development. Apart from lecturing at both undergraduate and postgraduate levels, he oversaw the entire branding and promotion of the school. Before becoming an academic, he worked in junior and managerial marketing positions at DBS and Hang Seng Bank in Hong Kong. His research is focused on customer loyalty behaviour in financial services and digital marketing. His work has been published in leading marketing journals. Seunghoon Lee is a PhD student in the Department of Recreation, Park and Tourism Sciences at Texas A&M University, USA. His research interests are sustainable tourism, heritage tourism and community development. Prior to coming to Texas A&M, he worked at the Korean government research institute for promoting and planning tourism. His expertise includes GIS, urban geography and spatial analysis. Leonidas C. Leonidou is a professor of marketing at the School of Economics and Management of the University of Cyprus. His current research interests are in the areas of international marketing/purchasing, relationship marketing, strategic marketing, socially responsible marketing, and marketing in emerging economies. He has published extensively in these fields and his articles have appeared in various journals, such as the Journal of Marketing, the Journal of International Business Studies, the Journal of the Academy of Marketing Science, the Journal of World Business, Tourism Management, the Journal of International Marketing, Management International Review, International Business Review, Journal of Business Research, Long Range Planning, Industrial Marketing Management, the Journal of Business Ethics, Psychology & Marketing, International Marketing Review, the European Journal of Marketing and the Journal of Small Business Management. Christian Lolk is a marketing and market research professional with experience in the pharmaceutical and digital technologies, and non-profit industries, including work with clients such as LinkedIn, Gilead

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Sciences and Merck. During his MBA with Villanova University’s School of Business, USA, he received a research fellowship supporting publications in the areas of marketing sustainable consumer packaged goods and human–computer interactions related to analytics decision making. His research interests include consumer behaviour and marketing ethics. David Low is Dean of the Asia Pacific College of Business and Law, Charles Darwin University, Australia. His research interests include social marketing and sustainability and his papers have appeared in leading journals such as the Journal of Cleaner Production. Karmen Lužar has a journalism and public relations background and lectures in a range of marketing subjects, including communications, at the Asia Pacific College of Business and Law, Charles Darwin University, Australia. She is also undertaking a PhD on environmental science communication as an innovative destination marketing strategy to contribute to regional sustainable development. Solon Magrizos is a Lecturer in Marketing at the University of Birmingham, UK. His main research interests include issues related to ethical companies and ethical consumers, corporate social responsibility (CSR), with a focus on small to medium and social enterprises, and the perceptions and reactions of consumers to CSR initiatives. He has published his work in the Journal of Sustainable Tourism, the International Journal of Technology Management, Journal of Travel Research, Human Resource Management, Information Technology and People, and in the proceedings of several academic conferences. Dominik Mahr is Professor of Digital Innovation & Marketing, Head of the Department of Marketing & Supply Chain Management, and the Scientific Director of the Service Science Factory at Maastricht University, the Netherlands. He is also Senior Research Fellow at the Centre for Relationship Marketing and Service Management, Department of Marketing, Hanken School of Economics, Helsinki, Finland. His research focuses on the human side of digitalisation, including the implications of digital data, devices and technologies for customers, organisations and society at large; it has been published in leading scientific journals including the Journal of Marketing, the Journal of Consumer Research, the Journal of Service Research, the Journal of Business Research, Research Policy, MIS Quarterly, the Journal of Service Management and the Journal of Product Innovation Management. Prior to his academic career, he worked for several years as a consultant in the automotive and high-tech industries. Marian Makkar is a lecturer of marketing at the College of Business, RMIT University, Australia. Her research interests cover consumer culture, the sharing economy, market evolution and communities. She has published papers in international journals such as the Journal of Retailing and Consumer Services, Marketing Intelligence & Planning and the Journal of Fashion Marketing & Management. Srikant Manchiraju is an assistant professor at Florida State University’s Jim Moran College of Entrepreneurship, USA. He is also a faculty affiliate of Florida State University’s Family Institute. Broadly speaking, his research and teaching interests are related to marketing and psychology. He has authored several book chapters and articles for conference proceedings and research journals. He volunteers for various professional organisations on a regular basis. Greg W. Marshall is the Charles Harwood Professor of Marketing and Strategy in the Crummer Graduate School of Business at Rollins College, USA, and also holds an appointment as Professor of Marketing and Sales in the Aston Business School, Birmingham, UK. He serves as Editor-in-Chief of the European Journal of Marketing. His areas of research centre on performance issues in sales organisations. Prior to his doctoral work he held managerial positions in the consumer packaged goods and retailing industries. Morven G. McEachern is Professor of Sustainability & Ethics at the University of Huddersfield, UK. Her research interests focus on business and consumer behaviour within a variety of sustainable production and ethical consumption contexts. In addition to various peer-reviewed international conference contributions, she has published in various journals (much of which focus on food marketing ethics) such as the Journal of Marketing Management, Consumption, Markets & Culture, the Journal of Business Ethics and Sociology, and contributed to edited books (e.g. Case Studies in Food Retailing and Distribution, a volume in the Consumer Science and Strategic Marketing Series, Elsevier, 2018) and is co-author of Contemporary Issues in Green and Ethical Marketing (Routledge, 2014).

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Elisa Monnot is an assistant professor at THEMA (CY Cergy Paris Université, France). She coordinates the Center for Marketing & Public Policy Research (http://marketingandpublicpolicy.com/), a research tank dedicated to the exploration of the societal implications of consumption. Her areas of expertise include sustainable consumption and marketing (e.g. waste management, overpackaging, sustainable communication) as well as consumer learning and product usage. Ingrid Moons is Associate Professor of Marketing and Consumer Research at the University of Antwerp, Belgium. Her research focuses on advertising to children and teenagers, innovation adoption, sustainable consumer behaviour, co-creation, and cross-cultural consumer behaviour. Her research has been published in journals such as Young Consumers, the Journal of Marketing Communications, Sustainability, the Journal of Environmental Psychology, Ecological Economics, Food Quality and Preference and International Marketing Review. Caroline Moraes is Reader in Marketing and Consumer Research at Birmingham Business School, University of Birmingham, UK. Her research interests converge at the intersection of consumption, ethics and sustainability, recognising that neoliberal markets generate complex ethical and responsibility challenges for consumers, marketers, NGOs and policy makers. She has published her work in various journals including Psychology & Marketing, the Journal of Business Ethics, the Journal of Marketing Management, Consumption Markets & Culture, the Journal of Travel Research and Sociology. Peter Neijens is Honorary Fellow and Emeritus Professor and Chair of Media and Persuasion at The Amsterdam School of Communication Research (ASCoR), University of Amsterdam, the Netherlands. He has published widely, specifically on (new) media and persuasion in public opinion and advertising. He is a Fellow of the International Communication Association, has received the Netherlands–Flanders Communication Association Career Award for a lifetime of scholarly achievement in communication science, as well as the European Advertising Academy’s Flemming Hansen Award for long-term impact in advertising research (http://pneijens.socsci.uva.nl). Caroline J. Oates is Reader in Marketing at the University of Sheffield Management School, UK. Her research centres on aspects of marketing which raise ethical issues for marketers, namely sustainability marketing and marketing to children. She has published widely in both fields in journals such as the European Journal of Marketing, the International Journal of Advertising, the Journal of Marketing Management, Psychology & Marketing and the Journal of Consumer Policy. She is also the co-author of two books: Advertising to Children on TV: Content, Impact, and Regulation, with Barrie Gunter and Mark Blades; and a Mastering Business Research Methods book for Sage on Conducting Focus Groups, with Panayiota Alevizou. She is co-editor of Advertising to Children: New Directions, New Media, with Mark Blades, Fran Blumberg and Barrie Gunter. She founded and until recently chaired the Special Interest Group on Sustainability for the global Academy of Marketing network. Gaby Odekerken-Schröder holds a chair in customer-centric service science at Maastricht University and is the Co-founder of Maastricht University’s Service Science Factory, the Netherlands. Her main research interests are innovations in (healthcare) services and customer loyalty. Her research has been published in journals such as the Journal of Marketing, MIS Quarterly, the Journal of Retailing, Journal of Service Research, Journal of Service Management, Journal of Consumer Marketing, Journal of Relationship Marketing and Journal of the Association for Consumer Research. Daniel E. Palmer is currently the Interim Dean of Kent State University at Trumbull, USA. He is also an associate professor in the Department of Philosophy at Kent State University. His research interests are primarily in ethical theory and applied ethics and he has published widely on issues in business ethics and corporate responsibility. Mivena Panteqi is a research assistant at the Villanova School of Business, USA. She graduated with honours with a BSBA in Marketing from Drexel University and is currently pursuing her MBA at Villanova. Equipped with an international background, her research interests include international business and marketing as well as consumer behaviour. She plans on pursuing a PhD in Marketing upon completing her MBA studies. Her past industry experiences located in the USA and abroad include marketing roles in the hospitality and financial industries as well as academic administration. She speaks five languages, three of which she is fluent in.

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Béatrice Parguel is a CNRS researcher in applied psychology within Paris-Dauphine University, France. She coordinates the Center for Marketing & Public Policy Research (http://marketingandpublicpolicy. com/), a research tank dedicated to the exploration of the societal implications of consumption. Her research, based on psychological theories and experimental methodologies, particularly investigates consumers’ information and education. Recently, her research has contributed to the exploration of subjects like greenwashing and ‘executional greenwashing’, overpackaging withdrawal and the implications of the sharing economy in terms of sustainable development. Mark Peterson is Professor of Marketing and Sustainable Business Practices in the College of Business of the University of Wyoming, USA. He served as editor of the Journal of Macromarketing from 2016 through 2019. He is the author of Sustainable Marketing, a SAGE Publications book. Karolien Poels is a professor of strategic communication and persuasive technologies at the Department of Communication Studies, University of Antwerp, Belgium. Currently she is the Chair of the Department of Communication Studies (2018–2021) and President of NeFCA (Netherlands–Flanders Communication Association). Starting in the field of advertising research and emotions, her research has developed in other, mainly ICT areas with a focus on online advertising and social media. She studies how individuals use and experience ICT and how these insights can be applied for persuasive communication (advertising, health promotion, crisis communication, consumer/user protection and empowerment). Amrut Sadachar is an assistant professor in the Consumer and Design Sciences Department at Auburn University, USA. His research focuses on the area of retailing, small-business management, consumer behaviour and experiential marketing, apparel sustainability, ethical consumption, and retail technologies. He has co-authored numerous peer-reviewed high-impact research articles and refereed conference presentations and proceedings at national and international conferences. Lee Smorthit is a digital marketing Masters graduate from Manchester Metropolitan University Business School, UK, who works as a digital marketing strategist. His research examines sustainable and ethical approaches to digital marketing in the not-for-profit sector. Natalia Szablewska is Senior Lecturer in Law at Auckland University of Technology (New Zealand) and Adjunct Professor at the Royal University of Law and Economics (Cambodia). She has over 15 years of experience spanning the public sector, governmental and non-governmental organisations, and academia in six countries. She is a social scientist and lawyer specialising in human rights (law) and transformative justice processes. Her research centres on themes at the intersection of law, public policy and ethics, and she employs gender- and human-rights-based approaches to examine issues relating to vulnerable populations and socio-legal (in)equalities. She has published widely for academic and non-academic audiences, and her academic work has appeared in leading law and social science journals. Ralf Terlutter is Professor of Marketing and International Management and Head of the Department of Business Management at the Faculty of Management and Economics of University of Klagenfurt, Austria. His research interests include health marketing and communication, corporate social responsibility, intercultural communication, as well as new media and communication. He has published in such journals as Journal of Advertising, International Journal of Advertising, Media and Psychology, International Marketing Review, European Management Journal, Journal of Business Research, Sports Medicine, Journal of Medical Internet Research, International Journal of Hospitality Management, among others. Roseline van Gogh is a teaching assistant and PhD researcher in the Department of Communication Studies at the University of Antwerp, Belgium. She first received a bachelor’s degree in communication management from the AP College (Antwerp). Subsequently, she obtained a Masters degree in Communication Sciences, with specialisation in strategic communication, at the University of Antwerp. Her current research interests are cause-related marketing, charitable crowdfunding, corporate social responsibility, and both offline and online persuasive communication. Michel Walrave is a professor in the Department of Communication Studies at the University of Antwerp, Belgium. His research is centred around online self-disclosure and privacy. He investigates individuals’ self-disclosure and privacy in interpersonal online communication on social network sites.

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More particularly, his research focuses on self-disclosure’s motives, opportunities (e.g. sharenting) as well as risks (e.g. cyberbullying). He also investigates sensitive online disclosures (e.g. sexting). Next to interpersonal self-disclosures, he studies internet users’ entrusting of personal data to businesses and how consumers deal with interactive and personalised marketing. Brian Young is an honorary research fellow at the University of Exeter, UK. He obtained his PhD from Hong Kong University in Chinese–English bilingualism and developed interests in cross-cultural psychology and how different value systems and languages can frame and influence thoughts, feelings and behaviour. At the University of Salford he worked in the Department of Sociology, Anthropology and Psychology teaching and researching in media psychology, including advertising, and wrote Television Advertising and Children published by Oxford University Press in 1990. For the last 30 years he has taught at the University of Exeter, firstly in the Department of Psychology where he taught and participated in the activities of the Economic Psychology Research Group in that department and from 2009 in the business school where he taught advertising, consumer psychology, and children and youth markets. He was Editor of Young Consumers, a quarterly journal published by Emerald, from 2006 to 2019. His most recent book was published by Palgrave Macmillan in 2018 as Consumer Psychology: A Lifespan Developmental Approach.

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PART I

Foundations of Marketing Ethics

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1 Introduction to Marketing Ethics Lynne Eagle, Stephan Dahl, Patrick De Pelsmacker a n d C h a r l e s R . Ta y l o r

INTRODUCTION

I. FOUNDATIONS OF MARKETING ETHICS

This Handbook is a compendium of current theory and practice across all aspects of marketing ethics. The contributing authors have provided critical reviews of the state of knowledge regarding marketing ethics in specific sectors. The Handbook is organised into seven sections:

As a field of enquiry, marketing ethics is relatively recent, with an early 2020 Google Scholar search illustrating a significant increase in focus over the last two decades as Table 1.1 shows. This rapid expansion has not come without drawbacks – fragmentation of effort and a tendency to compartmentalise ethical issues have been noted for at least the last decade (Abela & Murphy, 2008).

• Part I Foundations of Marketing Ethics • Part II Theoretical and Research Approaches to Marketing Ethics • Part III Marketing Ethics and Social Issues • Part IV Issues in Consumer Ethics • Part V Ethical Issues in Specific Sectors • Part VI Ethical Issues in the Marketing Mix • Part VII Concluding Comments and Reflections In this first chapter, we examine the ethical challenges that are common across all sectors, highlighting areas where knowledge is incomplete and where further debate and a collaborative research agenda would benefit the marketing industry overall, together with stakeholders such as customers, regulators and society as a whole.

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What Does Marketing Ethics Mean in the Twenty-first Century? The focus of research into marketing ethics has changed over time. Until the mid-2000s, definitions focused on defining its scope such as the following from a leading marketing textbook: Marketing ethics is ‘the systematic study of how moral standards are applied to marketing decisions, behaviours and institutions’. (Murphy, Laczniak, Bowie, & Klein, 2005, p. xvii, citing definitions originating in the 1990s)

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Table 1.1 Marketing ethics academic articles over time Time

Number of marketing ethics articles

Pre-1970 1970–1979 1980–1989 1990–1999 2000–end 2019

29 39 277 1,100 11,300

Source: Google Scholar

More recently the focus has moved to an examination of what distinguishes ethical marketing: Ethical marketing refers to practices that emphasize transparent, trustworthy, and responsible personal and/or organizational marketing policies and actions that exhibit integrity as well as fairness to consumers and other stakeholders. (Murphy, 2017, p. 85)

Of all marketing activity, advertising/marketing communication is the most heavily criticised. It has been suggested by some that that advertising ethics is an oxymoron (Beltramini, 2003). Beltramini also said that ‘Advertising ethics has sustained itself as a towering lightning rod for controversy, at times singularly and fully credited with the demise of professional business practices, and the rise of underhanded and unprofessional commercialism’ (p. 215). While academics and many members of the public do recognise that advertising can perform positive societal functions including information provision, many simultaneously view advertising as serving primarily the interests of business with minimal consideration of other stakeholders. Calfee and Ringold (1994) found that, throughout history, people have a mix of contradictory beliefs about advertising. As a result of these paradoxical beliefs, it is very important to the advertising field that ethics be top of mind among both academicians and practitioners. According to annual Gallup polls (e.g. Gallup, 2018), advertisers rank below only politicians, lawyers and certain types of salespeople (e.g. of used cars) on the list of the most admired professions in the world. While there is a strong case to be made that advertising makes a positive contribution to society, there is simultaneously concern, among many, that bad advertising practice has negative consequences such as misleading people and attempting to dupe people into desiring and buying things they do not need. For a detailed overview of criticisms of advertising and its effects, see De Pelsmacker, Geuens and

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Van den Bergh (2020). Given public perceptions, it is critically important for the industry to engage in and promote ethical practices. Early research focused on the scope of ethics in marketing (Ferrell & Gresham, 1985; Laczniak, 1983) and in mapping out tentative models and key issues (Hunt & Vitell, 1986). The field has not remained static. The main ethical issues identified in early research were bribery, issues relating to fairness and honesty, coupled with both product and pricing decisions (Chonko & Hunt, 2000). These authors also noted the major ethical conflict facing marketers related to balancing the demands of a company with the needs of consumers. While accusations of deception and manipulation continue to be made, additional issues have arisen relating to resource depletion, wastage and other sustainability concerns (Eagle & Dahl, 2015). The growth in digital marketing platforms has led to heightened concerns regarding data privacy, data security and security concerns including impact on children (Daems, De Pelsmacker, & Moons, 2019). Additionally, big data misuse has led to concerns regarding what has been termed ‘surveillance capitalism’ (Zuboff, 2015) and covert marketing (Rotfeld, 2008). While big data has received considerable recent focus, other forms of covert marketing have also been criticised, such as ‘native advertising’ where advertising is presented in a format resembling editorial content, and also the myriad forms of product placement within both traditional media such as television and digital media (Eagle & Dahl, 2018). Moreover, various forms of ‘native advertising’ through which the advertising is made to blend in with content in a way that gives many consumers the impression that the advertising is content are of concern (Taylor, 2017). In 2018, a major scandal was revealed where a political consulting firm, Cambridge Analytica, was revealed to have breached data privacy in its use of data mining of Facebook personal, identifiable, data profiles in order to provide marketing communication advice to politicians (Common, 2018). This has led to a lessening of trust not just in social media, but also in corporations holding significant personal data (Dennis et al., 2019). Greater concern over privacy has also led to the passage of the General Data Protection Regulation (GDPR) in the EU and, more recently, the California Consumer Privacy Protection Act, both of which focus on requiring consent for data collection and its anonymisation. Concerns about traditional data management platforms involving the collecting and merging of data without explicit consumer consent are driving a trend towards this type of regulation.

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Changing Norms The expanded range of ethical concerns has occurred at a time of changing societal norms, including a recognition of diversity in targeting, with the need to move from a focus on traditional roles to acceptance of a wider range of ‘modern’ roles (Alam, Aliyu, & Shahriar, 2019). Particularly when targeting diverse groups, companies can face scrutiny of how ‘authentic’ the company is. For example, when sponsoring LGBT–Pride events, companies’ donations to politicians and internal policies have been examined and been criticised in the media in cases where these were contradictory to the events sponsored (Champlin, 2019). Thus, merely paying lip service to behaving ethically in marketing, or tokenistic use of ethical practices, is increasingly found out and criticised. The use of eroticism and stereotyping, particularly in relation to the portrayal of women in advertising appears to be becoming less effective, due at least in part to the impact of movements such as the #MeToo movement and changing social norms (Eliasson & Rakocevic, 2018). Significant demographic shifts occurring across the USA, much of the EU and other regions such as Asia-Pacific have instigated greater emphasis on diversity. Younger age groups appear to be more aware of and to value diversity more than older age groups. Moreover, increased diversity presents a range of challenges for marketers regarding the implications of cultural complexities both within and between countries. Marketers have been accused of a lack of more than superficial understanding of ‘other’ cultures (e.g. Latin American/Muslim/Asian: Pires & Stanton, 2015; Zarrad & Debabi, 2015). For example, there are 1.6 billion Muslims worldwide, of which twothirds are Millennials (Janmohamed, 2016). Islamic marketing requires an understanding of the heterogeneity of Muslims (Wilson & Grant, 2013). Marketing practices that are acceptable in Western contexts may be perceived as unethical within Muslim communities. Asian advertising often features Western characters, and brands try to appear Western (e.g. Chinese manufacturer ‘German Pool’, whose brand features a German flag in addition to the name). This depiction is not without reason, as consumers in China have been found to prefer Western characters, particularly where the consumers are male and a utilitarian product is advertised (Nguyen & Rowley, 2015; Xu & Chen, 2016). Similarly, ‘code switching’, by changing between languages, such as from Spanish to English, has been found to be effective in some Latin American countries but does not produce positive results in all countries (Alvares, Uribe, & León De La Torre, 2015).

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Improvements in education and changing social norms have led to growing scepticism regarding any marketing tactics that are insincere, such as greenwashing and fauxminist (fake female empowerment) including fake femvertising (feminist advertising) (Sobande, 2019). This intolerance extends to any corporate social responsibility activity that is perceived as being inauthentic or self-serving (Alhouti, Johnson, & Holloway, 2016). From an ethical perspective, in assessing CSR programmes, it is wise to consider at least the degree to which the programme is truly focused on the greater good as opposed to simply being a calculation aimed at profit maximisation. Especially at the present time, sceptics argue that at least some CSR efforts are primarily in the interest of companies and their profits. To the extent that this is true, it creates an ethical issue in and of itself. Growing awareness of the above factors is coupled with recognition of the rise in importance of the ‘Global South’ (i.e. countries and cultures outside of Europe and North America that are rising in both economic and political influence terms). Many of these countries are resisting attempts to impose ‘Northern’-oriented business practices and are challenging the paternalistic imposition of colonial structures and also business and infrastructure legacies imposed during the colonisation era (Dados & Connell, 2012).

Corporate Influence on Individual Ethics One of the many challenges to those seeking to improve ethics within marketing is that individual decisions are subject to corporate culture and, ultimately, managerial influences (Procópio, 2019). Of concern is that corporate leadership may not foster ethical behaviour among employees at all levels, with the worst cases being described as ‘toxic’, suggesting that toxic leaders display the traits of corporate psychopaths (Boddy & Croft, 2016). The corporate behaviour of some large multinational organisations has been repeatedly called into question. For example, Nestlé was criticised in the 1970s for marketing tactics in developing countries that included sales representatives dressed in nurses’ uniforms to promote bottle feeding of infants rather than breast feeding. This strategy ignored issues of affordability and, in some situations, access only to unsafe water sources (AnttilaHughes, Fernald, Gertler, Krause, & Wydick, 2018; Muller, 2013). More recently, in 2010, Nestlé, along with other major multinationals such as Unilever, were criticised for purchasing palm

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oil from unsustainable sources (Kadarusman & Herabadi, 2018; Louche & Roome, 2017). A highprofile campaign, primarily on social media by organisations such as Greenpeace, led to these organisations changing to sustainable sources (Steel, 2010). In 2018, accusations were again levelled at Nestlé that its marketing strategies in developing Asian countries such as the Philippines were similar to those discredited in the 1970s, something strongly denied by the company (EllisPetersen, 2018). Nestlé has repeatedly been criticised for the way it responds to controversies. For example, in 2015, Maggi noodles in India were found to contain monosodium glutamate (MSG). Products containing MSG were required to carry a warning. However, the noodles carried only the wording ‘No added MSG’. The company argued that this was factually correct as the product contained MSG only from natural sources and seemed surprised by a temporary ban on product sales. Considerable controversy ensued, with conflicting claims, lawsuits and conflicting product test results. The company’s stance was widely criticised, for example: ‘It is evident that Nestlé’s crisis response was governed more by its traditional corporate culture than by an ability to keep pace with the changing demands of its environment, leading to the amplification of an issue into a crisis’ (Dhanesh & Sriramesh, 2018, p. 204). This is by no means an isolated example – in recent years there have been severe criticisms of the handling of oil spills by petroleum companies, and the VW emissions scandal (Rhodes, 2016). More general criticisms focusing on industry sectors rather than individual companies include growing concerns raised over ‘plastic pollution’ such as single-use plastic bags and their impact on wildlife and the environment as a whole (Eagle, Hamann & Low, 2016: Nielsen, Holmberg, & Stripple, 2019). Many countries now ban these bags and are moving to restrict other forms of plastic packaging. Other sectors to face criticism include tourism and fashion, both discussed in more detail in later chapters. Examples of the concerns relating to these two sectors include the eco-footprint of the tourism industry in relation to both airlines and cruise ships, and growing pressure on the fashion industry to remedy ‘sweatshop practices’. In general, today’s companies must be aware that their actions pertaining to consumer protection and disclosure of information are under increased scrutiny and should react accordingly in terms of both policies and public relations. Responding to cultural and religious differences represents another cultural challenge for marketers. At the heart of this issue is that attitudes to various ethical practices frequently vary based

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on cultural factors (Hofstede, 1984; Husted & Allen, 2008). Indeed, research has found that culture plays a major role in perceptions of what is ethical decision making (Cohen et al., 2006; Hofstede, 1984; Vitell, Nwachukwu, & Barnes, 1993). Similarly, different religious perspectives can lead to significant or nuanced differences in how the ethics of marketing practices is perceived (Alam et  al., 2019). While there are many commonalities in values expressed by major world religions, there are also differences. Moreover, the level of spirituality has been found to have an impact on ethics (e.g. Arli, 2017; Saleem, Eagle, Yaseen, & Low, 2018).

II. THEORETICAL AND RESEARCH APPROACHES TO MARKETING ETHICS Unfortunately, the legacy of a founder of modern psychology, Kurt Lewin, who is widely quoted as having claimed that there is nothing so practical as a good theory (Bargal, Gold, & Lewin, 1992), appears to have weakened over time, yet his claim is valid today. A challenge for those engaged with marketing ethics is the relatively underdeveloped state of theories in this sector. While several concepts are claimed to be theories, they lack four basic criteria: that is, conceptual definitions of terms, domain limitations within which the theory applies, sets of relationships between variables, and specific predictions (Wacker, 1998). Further, it has been noted that the theories that do exist were developed prior to the digital age and, in common with the wider field of marketing, may no longer offer effective analytical or predictive power. Concerns are evident regarding this weakness, firstly, in terms of the need for relevant theories with real-world application: Theory-driven research is necessary for research on marketing ethics to progress, and theory-driven research requires theories that merit testing. (Chonko & Hunt, 2018, p. 92)

Secondly, in terms of the ability of the overall marketing sector adequately to apply and test theories, particularly those relating to behaviour change: Theory is rarely applied or tested with sufficient precision to allow theoretical conclusions to be drawn to inform future intervention development, even in well-designed interventions. (Michie et al., 2008, p. 26)

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Criticism is particularly severe in the communication sector, which, like marketing overall, has drawn concepts and theories from a range of disciplines with no consistent meaningful integration, resulting in theory being claimed to be ‘reduced to an “ad hoc” toolbox, from which theories are randomly picked to provide studies with a fitting framework’ (Ballantyne, 2016, p. 329).

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Common Ethical Frameworks There are a number of ethical frameworks discussed in the academic literature, each having both strengths and weaknesses in predicting and resolving ethical challenges, as Table 1.2 illustrates.

Value of Codes of Ethics A General Theory of Marketing Ethics? The need for a ‘theory to guide thoughtful, systematic analyses of ethical issues’ was initially acknowledged in the 1970s and revisited several times over the following decades (Hunt & Vitell, 1986; 2006). The Hunt–Vitell theory (HVT) that was developed and refined by these authors over this time moved from a normative (‘how should decisions be made?’) to a more positive perspective (‘how are decisions actually made?’). HVT draws on the frameworks detailed in Table 1.2, noting that while both deontological and teleological principles are important, consumers tend to rely more heavily on deontological principles in decision making (Hunt & Vitell, 2006). It is a process model, documenting the steps in decision making where ethical implications arise and a range of individual, professional, organisational and industry factors that may impact on the decision process and outcomes. The theory was not without criticism, particularly focused on its descriptive rather than predictive nature (Ferrell, Crittenden, Ferrell, & Crittenden, 2013; Laczniak & Murphy, 1993). This criticism is also relevant to other theories that have been developed, such as the Contingency Model (Ferrell & Gresham, 1985) among others. We note that these theories and models have been tested primarily in the American context and would benefit from cross-cultural studies, given the sector’s growing awareness of diversity and different cultural perspectives (see our earlier comments regarding the rise in influence of the Global South). This would determine how effective they are and whether they are useful for industry practitioners. An additional criticism is that the various models, frameworks and theories are often in conflict with each other regarding key factors influencing or moderating ethical decisions. While there have been calls for, and attempts to, integrate concepts into a single model (see e.g. Schwartz, 2016), we have been unable to locate any studies that provide empirical testing across different contexts in a form that enables both descriptive and predicative analysis.

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The marketing sector and many of its specialist sectors have a range of codes of ethics. Others such as the social marketing sector are in the process of developing codes that attempt to address the major issues within their sector. While resources such as codes of ethics provide guidelines for practitioners, especially inexperienced staff, codes are ineffective by themselves unless supported by management (Chonko & Hunt, 2000). It is also helpful if such codes are promulgated, monitored and enforced by an industry-controlled ‘watchdog’ such as the selfregulatory organisations that operate in many countries, such as the EU-wide European Advertising Standards Alliance, the USA’s BBB National Programs which incorporates the former Advertising Self-Regulatory Council, the UK’s Advertising Standards Authority and the Ad Standards Authority in Australia.

Enforcement of Professional Behaviour Professions such as accountancy and medicine have mechanisms by which adherence to professional codes of ethics can be enforced (Hunt & Vitell, 2006; Sha, 2011), with consequences for individuals who transgress – in the most severe cases, this may include losing the right to practise in the profession. Marketers are not subject to the same level of peer control; there is no requirement that they be licensed and membership of sector organisations is voluntary. Marketers therefore lack the ability to enforce such codes in the way that professional groups are able to do. Many marketing organisations have codes of ethics for their members. See Chapter 36 for an extensive but not exhaustive list of relevant codes. For example, the American Marketing Association (AMA) provides the following: 1 Marketers must do no harm 2 Marketers must foster trust in the marketing system (not mislead), good faith and fair dealing 3 Marketers must embrace, communicate and practice fundamental ethical values that will improve

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Table 1.2

Overview of common ethical frameworks

Key provisions

Comments

Deontology (based on the work of eighteenth-century Accepts that actions intended to do good may have philosopher Immanuel Kant) unintended negative consequences The term derives from the Greek term for obligation or Related to this is the concept of virtue ethics, which stresses both duty and is based on the concept that there are ethical the ‘correctness’ of an action and being ethical in terms of ‘absolutes’ that are universally applicable, with the selecting ‘good’ strategies in order to achieve a goal (Carter, focus on means or intentions Mayes, Eagle, & Dahl, 2017). As we have already noted, corporate culture may impede individual actions Teleology/consequentialism While this framework explicitly considers potential impacts Teleology derives from the Greek words for goal or of actions, difficulties arise when comparing alternative result and reason. The framework is based on the courses of action with different levels of potential impact, identification of potential or actual outcomes or effects for example a programme that provides minor benefits to of actions. The framework is usually divided into: all, versus one that provides major benefits to many but no, (a) Utilitarianism in which behaviour is ethical if it or negative, impact on others. Utilitarianism also implies results in the greatest good for the greatest number that harm to some may be justified if many more derive (b) Egoism, in which the benefits to the individual benefit, without those who may be potentially harmed undertaking action, such as a marketer or a being able to influence any decisions made that affect them marketing organisation, are stressed and the impact It could be argued that the examples presented earlier in this on other people is de-emphasised or ignored entirely chapter represent a form of corporate egoism, particularly those relating to Nestlé Relativism Ignores the possibility that: There is no universal set of ethical principles; individual (a) a group’s principles are based on incorrect information cultures, societies or social groups may have their own and ethical frameworks; no set of principles is superior (b) the implications of a group’s principles being repugnant to others; and no group should judge the ethical to other groups (e.g. sexism or racism) standards of other groups Social contract theory Given that the contract is implied rather than stated explicitly, Implicit contract exists between the state and/or there is no shared understanding of what rights and organisations and individuals or groups regarding responsibilities apply to the various parties. It has been argued rights and responsibilities as a member of society that buyer–seller relationships constitute a form of implicit social contract, but this is only workable if all parties have full access to all relevant information (Eckerd & Hill, 2012) Distributive justice Both these frameworks relate to an earlier concept of a basic This framework is related to social contract theory. level of rights (Ferrell & Gresham, 1985), something now Proponents of this framework hold that there should be more formally encapsulated within a range of consumer assignments of benefits and burdens from all activity protection legislation in many countries according to some standard of fairness (Klein, 2016). It remains aspirational in that no clear enforceable mechanism for achieving its aims has yet emerged Source: Adapted from Ferrell and Fraedrich (1994, p. 54) and Eagle et al. (2013, p. 96)

consumer confidence in the integrity of the marketing exchange system. These basic values are intentionally aspirational and include honesty, responsibility, fairness, respect, openness and citizenship. (American Marketing Association, 2020) If a marketer is found guilty of transgressing the implicit or explicit standard of behaviour for any sector organisation to which they may belong, they may be ejected from that organisation, but this does not, per se, prevent them from continuing in employment in the sector. There are,

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however, other direct sanctions available to organisations, and indeed to the industry overall, in many countries. For example, in the UK, The British Code of Advertising, Sales Promotion and Direct Marketing issued by the industry’s selfregulatory body (Committee of Advertising Practice, 2005) and administered by the independent UK Advertising Standards Authority (2020) specifies provision for marketing communications in breach of the codes to be withdrawn or amended. Adjudications are published on the ASA website (www.asa.org.uk) and often in the media. Further, the industry regulators may request the

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media to deny advertising space or time to noncompliant marketers. The lack of personal, as opposed to organisational, accountability has led to debates spanning at least the last two decades regarding whether codes of ethics can ever be more than statements of desired best practice, given the potential lack of direct consequences for individuals, and given that sanctions are directed at organisations rather than the individuals within them for ethical lapses (Lere & Gaumnitz, 2007). Some industries, such as distilled spirits, deal with this by including an enforcement mechanism in the self-regulatory code of DISCUS, the industry’s self-regulatory body. There can be little doubt that these codes sometimes are designed to head off stricter government regulation (Rotfeld & Taylor, 2009) as they often have the ability to head off blatant ethical violations by industry members. Yet, an argument can be made that these codes, when followed, lead to a balance between industry interests and industry critics that makes the overall regulatory environment more effective. While marketers use the term ‘profession’, marketing does not meet the characteristics of a true profession as initially outlined in the 1990s: that is, a clearly defined body of knowledge and skills, control over who can be admitted to practise, or continue to practise, including formal educational qualifications required, all of which contain an ethics component. For a more detailed discussion of professions’ characteristics, see Cruess and Cruess (1997). Some existing codes appear to be little more than statements of good intent, such as the code for the European Association of Communication Agencies (2016) which includes the following: 1. Society and citizens We recognise our obligation to create advertising which is consistent with the social, economic and environmental principles of sustainable development. We further recognise that this obligation applies equally across the different societies that receive advertising that might not have been developed for them. 2. Consumers We recognise that consumers are entitled to rely on our profession to operate not only within the law and within the letter and spirit of global, national and sectoral codes of practice but also within accepted ethical norms. We accept that our understanding of the ‘average consumer’ might not always be the standard, acknowledging that there are groups who are vulnerable, for example, and that we should adopt a sensitive approach to judging how advertising will be understood and acted upon by society in general.

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III. MARKETING ETHICS AND SOCIAL ISSUES As the chapters within this Handbook will show, there has been an increased focus on providing service to customers for products and services in ethical ways, with both service dominant logic and CSR being themes that reoccur through many of the chapters (Williams & Aitken, 2011). There is also heightened awareness of the need to develop ethics resources for use in both formal education and professional development. This is discussed in more detail in the final chapter. Another key change to marketing has been the move away from a primary focus on consumer marketing to incorporate the marketing of behaviour change, often as the result of policy failures over time. This is primarily the domain of government agencies and associated public policy implementation organisations and other not-for-profit organisations, although some commercial entities are becoming active in this area as part of CSR activity. Thus marketing’s remit has broadened beyond conventional products and services to incorporate policy development and implementation. These new areas focus on addressing a range of social issues, ranging from health and lifestylerelated issues through to a rapidly growing number of environmental and sustainability-related topics. What sets this activity apart from more conventional forms of marketing is that the issues are often those for which past policies and reliance on information provision as a key to driving behaviour change have proven ineffective. They tend to be complex, have multiple causes and are frequently referred to as ‘wicked problems’ and include issues such as sustainability, equitable access to health care, obesity, poverty, terrorism and other behavioural issues (Kennedy, Kapitan, Bajaj, Bakonyi, & Sands, 2017).

The Nature of Wicked Problems The nature of wicked problems was first detailed in the 1970s in the context of urban planning with 10 characteristics identified: 1 There is no definitive formulation of a ‘wicked problem.’ 2 Wicked problems have no ‘stopping rule’ (i.e. no definitive solution). 3 Solutions to wicked problems are not true or false, but good or bad. 4 There is no immediate and no ultimate test of a solution to a wicked problem.

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5 Every (attempted) solution to a wicked problem is a ‘one-shot operation’; the results cannot be readily undone, and there is no opportunity to learn by trial and error. 6 Wicked problems do not have an enumerable (or an exhaustively describable) set of potential solutions, nor is there a well-described set of permissible operations that may be incorporated into the plan. 7 Every wicked problem is essentially unique. 8 Every wicked problem can be considered to be a symptom of another problem. 9 The existence of a discrepancy representing a wicked problem can be explained in numerous ways. 10 The planner has no ‘right to be wrong’ (i.e. there is no public tolerance of experiments that fail). (Rittel & Webber, 1973, p. 160) More recently, the significance of wicked problems has been debated in the wider public policy context (Head & Alford, 2015). So serious are the impacts of these types of problems on policy development and implementation that some government departments have invested significant resources in defining their impact. For example, the following extracts from a policy guidance document examine each of the individual characteristics of wicked problems listed above (Australian Public Service Commission, 2012, Section 2). We have added additional comments on some aspects of the discussion. The original focus of the wicked problem literature was on systems design at a more ‘micro’ level, but the concept has gradually been applied to broader social and economic policy problems. Wicked problems are difficult to clearly define. The nature and extent of the problem depend on who has been asked, that is different stakeholders have different versions of what the problem is. Often, each version of the policy problem has an element of truth – no one version is complete or verifiably right or wrong. The debate concerning the causes, the extent and the solutions to climate change is a good example. Wicked problems have many interdependencies and are often multi-causal. There are also often internally conflicting goals or objectives within the broader wicked problem. In dealing with the use and effects of illicit drugs, for example, there is tension between the goal of minimising harm to existing drug users via measures such as the provision of safe injecting rooms and clean needles, and the goal of sending a clear message that illicit drug use is illegal. It is the interdependencies, multiple causes and internally conflicting goals of

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wicked problems that make them hard to clearly define. The disagreement among stakeholders often reflects the different emphasis they place on the various causal factors. Successfully addressing wicked policy problems usually involves a range of coordinated and interrelated responses, given their multi-causal nature; it also often involves tradeoffs between conflicting goals. Attempts to address wicked problems often lead to unforeseen consequences. Because wicked policy problems are multi-causal with many interconnections to other issues, it is often the case that measures introduced to address the problem lead to unforeseen consequences elsewhere. Some of these consequences may well be deleterious. It has been asserted, for example, that the success of policies designed to reduce atmospheric pollution in the USA and Western Europe may be partly responsible for an apparent increase in global warming due to the impact of a reduction in sulphur particles in the atmosphere on the formation of clouds that trap heat in the atmosphere. Wicked problems are often not stable. Frequently, a wicked problem and the constraints or evidence involved in understanding the problem (e.g. legislation, scientific evidence, resources, political alliances) are evolving at the same time that policy makers are trying to address the policy problem. Actions to tackle climate change are good examples of this, as a constant flow of research pushes for ongoing adjustments of previously agreed targets. Policy makers have to focus on a moving target. Wicked problems usually have no clear solution. Since there is no definitive, stable problem there is often no definitive solution to wicked problems. Problem solving often ends when deadlines are met, or as dictated by other resource constraints rather than when the ‘correct’ solution is identified. Solutions to wicked problems are not verifiably right or wrong but rather better or worse or good enough. In some cases, such as the challenge of illicit drug use, the problem may never be completely solved. To pursue approaches based on ‘solving’ or ‘fixing’ may cause policy makers to act on unwarranted and unsafe assumptions and create unrealistic expectations. In such cases, it may be more useful to consider how such problems can be managed best. Wicked problems are socially complex. It is a key conclusion of the literature around wicked problems that the social complexity of wicked problems, rather than their technical complexity, overwhelms most current problem-solving and project management approaches. We note that these are often linear-focused. Solutions to wicked problems usually involve coordinated action by a range of stakeholders,

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including organisations (government agencies at the federal, state and local levels), nonprofit organisations, private businesses and individuals. For example, improving the sustainability of the fashion industry requires extensive and complex interaction between fashion brands, producers and the society in which they operate, governments and consumers. Wicked problems hardly ever sit conveniently within the responsibility of any one organisation. Even if the solution to achieving safer communities is opaque, it is clear that it involves many organisations beyond the police. It is also clear, for example, that environmental issues cannot be dealt with at any one level of government. They require action at every level – from the international to the local – as well as action by the private and community sectors and individuals. Wicked problems involve changing behaviour. The solutions to many wicked problems involve changing the behaviour and/or gaining the commitment of individual citizens. The range of traditional levers used to influence citizen behaviour – legislation, fines, taxes, other sanctions – is often part of the solution but these may not be sufficient. For instance, raising taxes on petrol and lowering public transport costs only has a limited effect on traffic volumes in the absence of social change and improved transport options. More innovative, personalised approaches are likely to be necessary to motivate individuals to actively cooperate in achieving sustained behavioural change. Some wicked problems are characterised by chronic policy failure. Some longstanding wicked problems seem intractable. Indigenous disadvantage is a clear example – ‘Its persistence has not been for want of policy action. Yet it has to be admitted that decades of policy action have failed.’ Recently the term ‘super wicked problems’ has emerged to describe issues that, in addition to having the same characteristics as other wicked problems, also have the following additional characteristics: 1 Time is running out; 2 There is no central authority, or only a weak central authority, to manage the problem; 3 The same actors causing the problem seem to solve it; and 4 The future is discounted radically so that contemporary solutions become less valuable. (Peters, 2017, p. 388)

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Climate change and many sustainability issues are included in super wicked problems (Waddock, Meszoely, Waddell, & Dentoni, 2015). The ethical issues that arise with these problems include the impacts of competing goals and the very real possibility of unintended harm being caused for some population groups. For the development of ethical resources and skills, there is an important role for (tertiary) business education and on-the-job training for marketing professionals. Indeed, the educational sector is increasingly seen as a change agent to develop appropriate skills for (future) practitioners tasked with dealing with wicked problems (Dentoni & Bitzer, 2015), with implications for both research and teaching as well as wider stakeholder engagement. This is discussed in more detail in the last chapter.

IV. ISSUES IN CONSUMER ETHICS Perspectives on the Role of the Corporation and Social Responsibility Recent years have seen increased emphasis on the view that companies should focus on more than simply maximising shareholder value. In contrast to Milton Friedman’s view in 1970 that corporations are, in essence, behaving responsibly by producing a quality product and offering it at an affordable price, there has been a trend towards companies emphasising environmental, social and governance (ESG) issues, with many appointing a top executive as Chief ESG Officers or VicePresidents of ESG (Taylor, 2018). The increased focus on ESG recently (2019) culminated in a statement by the US Business Roundtable, a group of influential CEOs, ending with the sentence: ‘Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.’ The main idea of the full statement is that the purpose of the corporation, and hence the CEO’s responsibility, is to maximise stakeholder wealth as opposed to just shareholder wealth as had been taught in business schools for many years. The statement has drawn global attention with some in Europe and Asia suggesting it is representative of a fairer form of capitalism (e.g. Gifford, 2019; Japan Times, 2019). Not surprisingly, the Business Roundtable’s statement has generated lively debate, with some praising it and others expressing cynicism

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(e.g. Bahnsen, 2019) and arguing that it will lead to attempts to appear to the public to be socially responsible while in reality the profit motive will remain at the heart of the corporation. There is little doubt, however, that a large part of the impetus for the Business Roundtable statement stems from younger generations (Millennials and Generation Z in particular) expecting companies to be attentive to ESG and indicating that they are more likely to work for or buy products and services from companies they perceive to be socially responsible (Neilsen, 2017). Thus, the issue of what types of ESG initiatives are truly socially responsible is a valid point of concern as are discussions about how maximisation of shareholder wealth and stakeholder wealth can be balanced.

Rising Awareness of Social and Environmental Impacts There is increasing awareness of the negative impacts that consumption has on the environment, including, but not restricted to, issues relating to pollution and resource depletion. This has led to two areas of focus that are now discussed in turn: increased focus on ethical consumption, and a drive for environmentally-friendly products and overall ‘green marketing’ (Cronin, Smith, Gleim, Ramirez, & Martinez, 2011).

Ethical consumption

An increasingly popular phenomenon is ethical consumption behaviour, where consumers shape their consumption on the basis of ethical principles (Adams & Raisborough, 2010; Dahl & Waehning-Orga, 2015). Thus, consumers forgo the ‘best deal’ in order to achieve social, environmental, moral or political outcomes. Peattie (2012) distinguishes between seven major reasons for consumers. These are pious, patriotic, green, socially conscious, responsible (combining socially conscious and green consumption), citizenship-based and mindful consumption. The most recent of these motivations to emerge is mindful consumption, which combines a holistic consumption behaviour based on the mindset of caring for oneself, the community and nature, and which is usually displayed as consumption temperance, for example by flight, meat and car avoidance. Particularly following the financial crisis of 2007–2008, anti-consumption behaviours and movements have played a significant role in pushing for a more ethical and sustainable consumption behaviour. Campaigns such as ‘Buy Nothing Day’ (in response to Black Friday) or

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‘Veganuary’ (as a form of non-meat consumption) have attracted mainstream following and attention. Contemporary anti-consumption behaviours often actually advocate targeted consumption of goods and services that support a particular ethical stance, frequently using social media to encourage fellow consumers to buy specific products. For instance, ‘carrotmobbers’ (www.carrotmob. org) organise online to reward pro-social behaviour by creating a type of flashmob purchasing from individual businesses (Hutter, Hoffmann, & Mai, 2016). While marketing and consumer activism can create positive change in the direction of a desired behaviour, it must be noted that there are conflicting reports over subsequent changes in behaviour, while some reports find that pro-ethical behaviour change in one area (e.g. in recycling) may have a positive spillover effect into other areas (such as energy and water conservation) (Berger, 1997). However, more recently, reports have highlighted that consumers who are environmentally conscious in everyday life often also use the most environmentally damaging modes of transport when going on holidays (Barr, Shaw, Coles, & Prillwitz, 2020). Other paradoxical behaviours with a negative spillover effect include consumers who reduced water consumption subsequently used more energy (Tiefenbeck, 2013), and consumers who switched to energy made sustainably who subsequently used more energy (Jacobsen, Kotchen, & Vandenbergh, 2012). Thus, unintended consequences are potentially a likely outcome of pro-ethical behaviour change.

Eco-friendly products/green marketing

Sustainable development is one of the goals of post-modern society. The key element to strive for a sustainable society is sustainable well-being. The big challenge is to convince consumers to move towards more sustainable consumption behaviour. Although consumers generally express the desirability of, and even the need for, a more eco-friendly lifestyle, they often do not put their money where their mouth is. A sustainable future is not reached by diminishing ‘unsustainability’, but by radically changing consumer behaviour. However, it is difficult to change daily routines and consumers’ perceptions of sometimes unattractive yet environmentally-friendly products. Generally speaking, consumers want attractive, convenient products, thereby often disregarding higher consumption levels of energy and materials, and most of the time they find it hard to change habits. Past behaviour affects future behaviour. For instance, a study of the

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motivational determinants to adopt electric cars (Moons & De Pelsmacker, 2012) found the strength of habits to be one of the most important factors that reduced the willingness to adopt electric mobility. In general, studies report only a low to moderate association between consumers’ concern about the environment and the adoption of eco-friendly consumption behaviour. One of the reasons consumers choose not to adopt environmentallyfriendly products, even if they want to help the environment, is lack of efficacy. Essentially, this is the idea that one person is not going to make enough of a difference, so why bother? Moreover, a lot of ‘green’ products are purchased for other reasons than the fact they are eco-friendly. In a study about the adoption of eco-friendly vegetarian food (Moons, Barbarossa, & De Pelsmacker, 2018), it was found that eco-friendliness was not at all a motivational driver for the adoption of such food, but rather taste and health concerns. Indeed, people are fundamentally egocentric. The more a consumption item is congruent with their perceived actual, ideal or social self-identity, the greater the chance people will buy or use it. If they feel that being, wanting to be, or wanting to be seen to be green is an important part of this self-identity, they will consume accordingly. This was demonstrated in studies about electric car adoption (Barbarossa, De Pelsmacker, & Moons, 2017) and ecotourism (Moons, De Pelsmacker, & Barbarossa, 2019). These self-identity considerations trigger a feeling of moral obligation ‘to do the right thing’, rather than ‘being eco-concerned’. Self-identity considerations are strongly related to the values people hold in life. Personal values, conceptions of desirable end-states that form an integrated system of evaluation, determine our actions such that they are consistent with our values. People holding social altruistic, biospheric, transcendent and openness to experience values behave more eco-friendly. Individuals who adhere to egoistic, self-enhancement and conservative values behave less eco-friendly. Finally, decision theory and models are often detached from the emotional and visceral richness of life. The single cognitive viewpoint of most consumer decision-making models may be traced to the traditional economic perspective of products as objects. However, Moons and De Pelsmacker (2012) found that the emotional reaction towards electric vehicles (‘how would you feel about having such a car?’) is the most important determinant of the willingness to adopt it. Indeed, studies show that the role of emotions is particularly eminent in the context of new products that represent radical innovations. Similarly, studies about the drivers of ecotourism found that ecotourists are not

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particularly ‘green’. They do feel a general responsibility for the impact of their travels, but not necessarily with respect to their ecological footprint, but also because they feel responsible for the preservation of local culture, people and economy. A second important motivator is, again, the emotional factor: ‘how do I feel about being an ecotourist?’ (Moons, De Pelsmacker, & Barbarossa, 2019). The good news is that, for whatever reason people start to act in an environmentally-friendly way in one area, this behaviour tends to spill over into other areas (Moons & De Pelsmacker, 2012).

V. ETHICAL ISSUES IN SPECIFIC SECTORS Industry-specific ethical questions exist in a variety of industries, including those such as health care and those for ‘sin products’. This is especially true when industry structure revolves around large brand conglomerates, such as in the pharmaceutical industry (Salvioni, Gennari, & Astori, 2015). For ‘sin product’ questions arise pertaining to the degree to which marketing and advertising should be limited (e.g. alcohol and tobacco products) even when the products are legal. For health care and pharmaceuticals, the issue is complex as people may have a pressing or even dire need to consume the products or services that potentially opens the door to charging artificially high prices (Sillup & Porth, 2008). Moreover, there are sensitivities and disagreements pertaining to the degree to which such products should be advertised, with some believing the public can be relatively easily fooled by ads for pharmaceuticals or other health care treatments, while others argue that properly regulated ads better inform the consumer. Issues in pharmaceutical marketing also arise in terms of sales practices and the question of whether there are unethical incentives for selling or prescribing drugs. Because of the complex nature of marketing ethics in these industries, academic research is of very high importance to provide insight to consumers, companies and regulators in the interest of developing sensible regulation in such a critically important arena.

Specific Challenges of Social Marketing/Behaviour Change What sets this sector apart from commercial marketing? There are a number of potential ethical issues within social marketing, including, but not restricted to, the following (for a more detailed discussion, see Eagle, Dahl, & Low, 2017):

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• Trying to do good but inadvertently doing harm. • Who decides on what behaviours to target/who has the right to speak on behalf of others. • Targeting. • The ethics of literacy challenges. • Potential for stigmatising/victim blaming/generating fear, guilt and shame (e.g. obesity). • Perceived coercion and nudging people to change behaviours. • Limiting personal freedoms by restricting some behaviours in the interests of others (e.g. smoking). • Personal financial incentives (‘buying’ behaviour change).

VI. ETHICAL ISSUES IN THE MARKETING MIX 4Ps and Beyond A key component of the marketing concepts that have formed the foundation for commercial marketing activity has been the use of the 4Ps, a concept originating in the 1960s (McCarthy, 1964), namely: • • • •

services, as opposed to product marketing, leading to an expansion to 7Ps for the services sector (Akroush, 2011; Booms & Bitner, 1981) through the addition of the following: • People (Some variants suggest ‘participants’, capturing a wider range of potential stakeholders than just customers and also that the ‘people’ dimension should be part of the standard 4Ps and not just part of the services mix; see e.g. Akroush, 2011.) • Process • Physical evidence Other variants have been proposed since the 1980s, often in conceptual or theoretical terms rather than being empirically tested (Harvey, Lusch, & Cavarkapa, 1996; Lovelock, 1996), with additional ‘Ps’ proposed, such as Personalisation (Goldsmith, 1999). Critics note that while such standard frameworks as the various 4+Ps are ‘easily digestible formulas’ they do not encourage critical analysis of proposed activity (Gordon & Gurrieri, 2014, p. 262): More than most other fields of scientific inquiry, marketing is context dependent; when one or more of the numerous contextual elements surrounding it (such as the economy, societal norms, demographic characteristics, public policy, globalization, or new communication technologies such as the Internet) change, it can have a significant impact on the nature and scope of the discipline. (Sheth & Sisodia, 1999, p. 72)

Product Price Promotion Place

This was in fact a simplified version of an earlier 12-point list that included branding, packaging, display, servicing, physical handling and fact finding and analysis, as well as breaking promotion down into individual components of advertising, personal selling and promotions (Borden, 1964). The 4Ps evolved in an era when production was the primary business focus, leading to numerous criticisms including the lack of implementation guidelines (see e.g. Brownlie & Saren, 1992; O’Malley & Patterson, 1998), and specific criticism of its lack of customer focus (Dominici, 2009). It was also accused of being inadequate for

While recognised as an enduring framework for commercial marketing planning in spite of its weaknesses, more recent criticism focused on its utility in digital era commercial marketing (Jackson & Ahuja, 2016; Kucuk, 2011). However, accepting the weaknesses of the 4Ps and its more recent expansions/variants (see Table 1.3), we note that there are ethical dimensions to each of the components and indeed the original 12 points noted earlier. These are explored in more detail in the following chapters (see e.g. the chapter discussing the ethics of pricing strategies).

Table 1.3 Comparison of 4Ps of traditional marketing and alternative terminology Standard 4Ps (McCarthy, 1964)

Customer-centric framework 4As (Lauterborn, 1990) (Sheth & Sisodia, 2011)

Social marketing terminology (Peattie & Peattie, 2003)

Product Price Place Promotion

Customer wants/needs Cost to customers Convenience Communication

Social propositions Cost of involvement Accessibility Social communication

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Acceptability Affordability Availability Awareness

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Key Influence: Growth of Non-traditional and Digital Communications Platforms A reoccurring theme throughout the Handbook is the importance of digital media forms. Social media and other new technologies have increased the possibilities of targeting and reaching consumers with more sophistication than ever before. Ethical concerns specific to new media fall into broadly three categories. Firstly, brands can use social media platforms to interact directly with consumers in a human-like way, for example by responding and talking directly with consumers. These ways are likely to be highly persuasive, particularly when the brand appears to be human like (Dahl & Desrochers, 2013), although there is still a dearth of research in the area. A second concern regards the tracking of users, including across multiple websites, and the detailed profiling. This in turn enables marketers to use highly sophisticated targeting and segmentation strategies and tailor messages to specific audiences. While this can deliver highly relevant messages to users, it can also be used to deliver fake news and unethical messages, for instance by playing on fears of voters (Allcott & Gentzkow, 2017). Thirdly, companies increasingly engage in covert marketing. This is a firm’s marketing actions whereby consumers believe that the activities are not those of the firm. The oldest form is product or brand placements (Eagle & Dahl, 2018). Apart from brand placements in movies, television programmes, books and music, the practice has also expanded to placing brands in computer games and on social media. For example, eCigarettes appear frequently on social media platforms, such as on Instagram, and have raised concerns over the impact such product depictions may have (Chu, Allem, Cruz, & Unger, 2017). Covert marketing exists in many other forms, such as native advertising and influencer marketing. Covert marketing is considered by many to be at least to a certain extent unethical. For instance, according to Bhatnagar, Aksoy and Malkoc (2004), brand placement is the ultimate example of unethical, inherently deceptive advertising, since it is both disguised and obtrusive. Brand placement or native advertising disclosure – that is, communicating to the viewers or readers that brands are placed in media content – may serve to increase the accessibility of the persuasive or commercial intent behind placed brands. Currently, there are no strict rules on how sponsorship in native advertising should be disclosed. The Interactive Advertising Bureau (IAB) (undated) states that native advertising and influencer marketing should be disclosed in the clearest

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and most conspicuous possible terms that allow the message to be understood as advertising. The US Federal Trade Commission posits the same rules, and only allows FTC-conform hashtags: ‘#ad’ and ‘#sponsored’. Instagram also proposes ‘#brand partner’, and in 2017 also introduced a new function, ‘#paid partnership with …’.

VII. CONCLUDING COMMENTS AND REFLECTIONS We have shown that there are numerous areas within marketing in which there is potential for substantial ethical issues. There is a need for an integrated trans-disciplinary research agenda to address these issues. In addition, theories both for marketing as a whole and for its various sectors and subsets could be strengthened and empirically tested. Ideally, this should be achieved via a collaborative research agenda involving both industry and academia. We note that calls for this have been made over many years (see e.g. Cowton, 2008; Javalgi & La Toya, 2018). Hopefully the insights provided in the following chapters may act as a catalyst for this process to begin.

REFERENCES Abela, A. V., & Murphy, P. E. (2008). Marketing with integrity: ethics and the service-dominant logic for marketing. Journal of the Academy of Marketing Science, 36(1), 39–53. Adams, M., & Raisborough, J. (2010). Making a difference: ethical consumption and the everyday. British Journal of Sociology, 61(2), 256–274. Advertising Standards Authority (2020). Advertising Codes. Retrieved from https://www.asa.org.uk/ codes-and-rulings/advertising-codes.html Akroush, M. N. (2011). The 7Ps classification of the services marketing mix revisited: an empirical assessment of their generalisability, applicability and effect on performance-evidence from Jordan’s services organisations. Jordan Journal of Business Administration, 7(1), 116–147. Alam, M. M., Aliyu, A., & Shahriar, S. M. (2019). Presenting women as sexual objects in marketing communications: perspective of morality, ethics and religion. Journal of Islamic Marketing, online edition (ahead of print DOI: https://doi. org/10.1108/JIMA-03-2017-0032). Alhouti, S., Johnson, C. M., & Holloway, B. B. (2016). Corporate social responsibility authenticity:

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O’Malley, L., & Patterson, M. (1998). Vanishing point: the mix management paradigm re-viewed. Journal of Marketing Management, 14(8), 829–851. Peattie, K. (2012). Researching the unselfish consumer. Chapter Seven in V. K. Wells & G. R. Foxall (eds), Handbook of Developments in Consumer Behaviour. Cheltenham: Edward Elgar, pp. 202–245. Peattie, K., & Peattie, S. (2003). Ready to fly solo? Reducing social marketing’s dependence on commercial marketing theory. Marketing Theory, 3(3), 365–385. Peters, B. G. (2017). What is so wicked about wicked problems? A conceptual analysis and a research program. Policy and Society, 36(3), 385–396. Pires, G. D., & Stanton, J. (2015). Revisiting ethnic marketing ethics. In A. Jamal, L. Penaloza, & M. Laroche (eds), The Routledge Companion to Ethnic Marketing. Abingdon: Routledge, pp. 327–336. Procópio, M. L. (2019). Moral standards in managerial decisions: in search of a comprehensive theoretical framework. Business Ethics: A European Review, online edition (ahead of print DOI: https:// doi.org/10.1111/beer.12216|). Rhodes, C. (2016). Democratic business ethics: Volkswagen’s emissions scandal and the disruption of corporate sovereignty. Organization Studies, 37(10), 1501–1518. Rittel, H. W., & Webber, M. M. (1973). Dilemmas in a general theory of planning. Policy Sciences, 4(2), 155–169. Rotfeld, H. J. (2008). The stealth influence of covert marketing and much ado about what may be nothing. Journal of Public Policy & Marketing, 27(1), 63–68. Rotfeld, H. J. & Taylor, C. R. (2009). The advertising regulation and self-regulation issues ripped from the headlines with (sometimes missed) opportunities for disciplined multidisciplinary research, Journal of Advertising, 38(4), 5–14. Saleem, M. A., Eagle, L., Yaseen, A., & Low, D. (2018). The power of spirituality: Exploring the effects of environmental values on eco-socially conscious consumer behaviour. Asia Pacific Journal of Marketing and Logistics, 30(4), 867–888. Salvioni, D., Gennari, F., & Astori, R. (2015). Corporate responsibility and ethical culture in pharmaceutical industry. Journal of Business & Economic Policy, 2(2), 62–84. Schwartz, M. S. (2016). Ethical decision-making theory: an integrated approach. Journal of Business Ethics, 139(4), 755–776. Sha, B.-L. (2011). Accredited vs. non-accredited: the polarization of practitioners in the public relations profession. Public Relations Review, 37(2), 121–128.

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2 Internal and External Drivers of an Ethical International Marketing Strategy: Implications on Reputational Advantage and Performance Leonidas C. Leonidou, Bilge Aykol and Pantelitsa Eteokleous

INTRODUCTION Recent decades have witnessed a dramatic change in the way firms conduct their business, which is the result of three major trends: (a) mounting public attention concerning corporate ethical scandals and unethical behavior, due to higher connectivity among people caused by advances in information, communication, and transportation technologies;1 (b) a trend toward accepting some universal values (particularly in developed countries), such as those pertaining to the protection of the environment, helping vulnerable members of society, and enhancing health and safety standards, which are further promoted by increasing globalization; and (c) the great ethical vacuum prevailing in many countries (particularly in developing and emerging economies) which increases the temptation to take advantage of loose regulatory systems, inefficient institutional frameworks, and bureaucratic infrastructures (Demirtas, 2015; Javalgi & Russell, 2018). Hence, in this new ‘ethical era’ marketers need to strive hard to fight against and close any ‘ethical gaps’ if they want to survive and prosper (Martin et al., 2011).

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The challenge to operate in an ethical manner is more evident in the case of international firms, due to great differences among countries with regard to regulations, norms, and concerns about social responsibility issues (Leonidou et al., 2013). This is because perceptions of ethics are highly context-specific and managers need to assess the normative concerns of the focal country and show respect for their underlying societal values if they want to achieve long-lasting business success (Ilies et al., 2007). In fact, what is considered ethical in one country can be perceived as a highly unethical act in another, which raises an important question for international marketers as to whether their actions and practices are morally appropriate according to the context in which they operate (Javalgi & Russell, 2018). It also stimulates an interest in finding out whether the international firm’s ethical behavior reflects positively on its business performance (Martin et al., 2011). Firms usually try to exhibit highly ethical behavior when they operate in their home country, but when crossing national boundaries some may tend to be indifferent toward exhibiting such

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behavior, and instead choose to operate at the minimum acceptable level in the host market (Lee et al., 2005). This may lead companies into situations where they adopt unethical practices abroad, which are socially unacceptable and/or illegal at home, with all the negative implications that this may entail for their reputation and business performance (Donaldson, 1996). While there is consensus among researchers that ethical managerial decision making varies depending on contextual, situational, and cultural elements, and that dealing with focal ethical pressures in each country is strategically important, there is little understanding of the drivers and outcomes of an ethical international marketing strategy (Laczniac & Murphy, 2019). The purpose of this chapter is to propose a conceptual model focusing on the drivers of an ethical international marketing strategy and its impact on competitive advantage and performance. Specifically, we have four major objectives to accomplish: (a) to examine the role of internal company factors on designing an ethical international marketing strategy; (b) to explore the impact of external environmental factors on developing an ethical international marketing strategy; (c) to investigate the effect of an ethical international marketing strategy on building a reputational competitive advantage; and (d) to explore the impact of this reputational advantage on both market and financial performance. Shedding light on the drivers and implications of ethical international marketing strategy can contribute to the marketing ethics literature in three different ways. Firstly, we bring together internal and external company factors in an integrative model to provide international firms with guidance on how to evaluate ethics in their foreign marketing operations. Despite growing interest in the subject, the thrust of extant research has been primarily on cross-country ethical evaluations, the focus being mainly on differences in ethical managerial decision making (e.g., Singh et  al., 2007), the effect of culture on managerial perceptions concerning ethicality (e.g., Armstrong & Sweeney, 1994), and ethical judgments made by international managers (Singhapakdi et al., 1994). However, much less emphasis is placed on issues beyond cross-country differences in order to understand the role of drivers (both internally and externally) in the formulation of an ethical international marketing strategy by firms located in a single country. Secondly, the various elements of an ethical international marketing strategy have often been examined in a fragmented, isolated, and sometimes peripheral way, without being seen as an

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integrated set of factors, the interplay of which can seriously affect the firm’s success in foreign markets. Even though considerable knowledge may have been accumulated with regard to international marketing strategy, critical issues relating to the ethical dilemmas and decisions confronted by international marketing managers have, surprisingly, remained relatively untapped in the extant literature. This amounts to a serious gap in knowledge for both corporate and public policy makers, who want to penetrate international markets in light of growing globalization, intensified competition, and increasing digitalization. Our analysis aims to narrow this gap by offering useful insights concerning the nature of ethical international marketing strategy and its potential implications. Thirdly, recent reviews on international marketing ethics (e.g., Javalgi & Russell, 2018; Schlegelmilch & Öberseder, 2010) call for advancing this field of research by highlighting the importance of ethically conducting international marketing strategy as a means of providing additional value to foreign customers. Thus, it is crucial for international marketers to acquire fresh knowledge and guidance on how best to address ethical concerns, avoid misconduct, and act as good citizens in host markets. Most importantly, we want to demonstrate that acting ethically in the international marketplace is vital for gaining competitive advantage derived from a positive reputation, which is expected subsequently to have a favorable impact on the international firm’s market and financial performance. Although critical for the firm’s advancement along the internationalization path, these issues have missed the attention of scholars in the field. The remainder of this chapter is organized as follows. In the next section, we review prior research on the ethical aspects of international marketing. This is followed by an explanation of our conceptual model and the development of research propositions. We then draw conclusions and offer implications for both theory and practice. The chapter ends with directions for future research.

BACKGROUND RESEARCH As a scholarly inquiry within the marketing field, ethics has attracted attention for more than five decades, with marketing ethics being defined as ‘the systematic study of how moral standards are applied to marketing decisions, behaviors, and

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institutions’ (Murphy et al., 2005, p. 17). However, despite voluminous research within a domestic business context, prior research on ethical aspects of international marketing is limited in both quantity and scope, shedding little light on the antecedents and outcomes of ethical international marketing strategy (see Appendix 2.1 for a summary of indicative empirical research).

Drivers of Ethical International Marketing Strategy The various antecedents of international marketing strategy can be broadly divided into those internal to the firm and those referring to the external foreign environment within which the firm operates. In the case of internal influences, Aurifeille and Quester (2003) conclude that firm size, dependence on overseas markets, and international experience are influential in tolerating unethical acts. Leonidou et  al. (2013) also find that the more similar the corporate values of the exporter and the import buyer, the less the likelihood of the exporter adopting unethical marketing practices, with this effect becoming stronger when the firm possesses strong network ties. Regarding personal/managerial factors, Al-Khatib et  al. (2016) report that ethical ideologies, as well as the level of Machiavellianism and opportunism, determine the degree of ethicality of negotiation strategies of international salespeople. Leonidou et al. (2013) also note that personal-value similarity between exporters and importers acts as a barrier to the adoption of unethical international marketing strategies. As regards external influences, Armstrong (1996) focuses on cultural dimensions and shows that individualism and uncertainty avoidance are positively correlated with the importance attached to ethical perceptions. Leonidou et al. (2013) also demonstrate that the similarity of national values between foreign business partners reduces the likelihood of adoption of unethical marketing strategies by the exporter. Singhapakdi et  al. (2001) also confirm that economic development, legal/political conditions, and cultural factors influence the importance that marketing managers place on ethics as a driver of organizational effectiveness.

Dimensions of Ethical International Marketing Strategy Ethical international marketing strategy refers to the ethical way in which each of the elements of the marketing mix (i.e., product, price, distribution,

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and promotion) are conducted in foreign markets. As shown in Table 2.1, there are various unethical marketing practices in which international firms can be engaged. With regard to products and services, such practices include offering to foreign markets products or technologies that are forbidden to be used in the home country, the supply of faulty or hazardous products, and offering products of sub-standard quality (Armstrong et  al., 1990; Armstrong & Sweeney, 1994). Concerning pricing, examples of unethical practices are identified as misleading invoices, dumping, and price-fixing agreements (Schlegelmilch & Öberseder, 2010). Unethical distribution practices can be stealing goods during the logistics process, paying questionable commissions to dealers, and exercising coercive power on members of the distribution channel (Schlegelmilch & Öberseder, 2010). With regard to promotion, unethicality mainly refers to inappropriate advertising content, deception of product features and qualities, and misrepresentation of the information provided (e.g., Armstrong, 1996; McNeil & Pedigo, 2001; Zarkada-Fraser & Fraser, 2001). Other more general unethical practices engaged in by international marketing practitioners include bribery, corruption, and illegal/ immoral activities (e.g., purposively damaging the environment) (Armstrong, 1996; McNeil & Pedigo, 2001).

Outcomes of Ethical International Marketing Strategy Firms having an ethical stance in their international marketing activities reduce the possibility of incurring costs (e.g., financial penalties) resulting from unethical practices, such as engaging in bribery or a corruption scandal. Current marketing ethical scandals (e.g., BP and Volkswagen AG) indicate how reputation and sales suffer as a result of negative media and activists’ attention, while millions of dollars are paid to resolve cases in court (Balmer et  al., 2011; Murphy et  al., 2017; Sims, 2009).2 On the other hand, companies highlighting the ethical way in which their marketing activities are conducted in foreign markets are also shown to be in a differentiating position associated with reputational advantages (Martin et al., 2011). Leonidou et  al. (2013) also showed that engaging in unethical international marketing activities has detrimental effects on the working relationship with foreign partners and its performance. Moreover, Auger et al.’s (2010) cross-cultural study reveal that consumers tend to positively evaluate firms acting in an ethical manner, and are willing to pay extra money to buy ethical

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Price Price fixing: Agreeing with other firms to set prices at a higher level, thus leading to price collusion that harms consumers due to elevated prices Resale price maintenance: Refraining from selling products to dealers because of not following suggested prices Price discrimination: Discriminating prices to traders although offering the same product quality and having the same cost Minimum pricing: Destroying competition by selling at a price lower than the cost Dumping and predatory pricing: Selling a product to a foreign market at a lower price than its domestic one or below production cost to harm competitors and avoid entrance of new ones Deceptive pricing: Misleading customers into thinking that they are buying a good product at a low price Phony list pricing: Announcing reductions in prices when no real savings from the retail price takes place

Product

Shoddy goods: Selling defective products that are of inferior quality and stability and can harm users’ health and safety Dangerous products: Selling dangerous products that can put the life of the buyer in danger Inferior product quality: Selling products of inferior quality than originally stated and/or using spare parts of inferior quality without informing the consumer Misleading product information: Providing misleading information or avoiding important information on the packaging about the product Ambiguous product warranties: Offering warranties with unfair terms, covering unreasonable period of time, and using language which is not clear to the average consumer Product packaging: Exaggerations in design to mislead consumers on the quantity of the product or creating confusion about the product brand Patent violation: Copying competitors’ products and pretending that the patent belongs to the firm

Exclusive dealing: Choosing specific outlets to sell the company’s products and requiring them not to sell those of competitors Tying agreements: Obliging distributors to buy all their product lines (full-line forcing) Dealers’ rights: Ceasing cooperation with dealers as a ‘punishment’ because of refusing to engage in illegal or unethical acts Unfair agreements: Taking advantage of weak distributors to set higher than normal prices Bribery and commissions: Paying money or giving gifts and making special favors to politicians, governmental officials, or businesspeople to close a distribution deal

Distribution

Table 2.1 Indicative forms of unethical international marketing mix practices

False advertising: Exaggerating in advertising claims for product features or qualities that are false Deceptive advertising: Providing ambiguous statements and words in advertisements that intend to deceive and promote claims on products that cannot be proven Bait-and-switch advertising: Seducing or motivating the customer through advertising to buy something more expensive Advertising to vulnerable communities: Targeting with advertisements children, poor people, and people with low educational levels in order to exploit them Inappropriate language: Using inappropriate language in ads that would offend certain groups of consumers because of gender, color, religion, occupation, etc. Stealth marketing: Promotion to consumers in a disguised way without their being aware they are exposed to the advertisement of a specific product

Promotion

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products. Finally, the effect of acquiring an ethical identity or brand ethicality within a foreign market is found to be more influential than any other promotional activity, and increases customer willingness to buy the company’s products (Fan, 2005; Van Quaquebeke et al., 2019).

heightened market and financial performance. Altogether, we propose 12 associations between constructs of the model, which are explained in the following.

Internal Factors and Ethical International Marketing Strategy CONCEPTUAL MODEL AND RESEARCH PROPOSITIONS Figure 2.1 shows the conceptual model of this study, which contains five sets of variables, with their operational definitions provided in Appendix 2.2. The central construct is ethical international marketing strategy (comprising product, price, distribution, and promotion), the degree of which is proposed to be determined by both internal (i.e., reputational resources, social entrepreneurship capability, ethical company leadership, ethical organizational culture, organizational control) and external factors (i.e., institutional setting, regulatory intensity, economic conditions, social public concern, cultural context). We also propose that the adoption of an ethical international marketing strategy will yield a reputational competitive advantage for the firm, which will subsequently translate into

Figure 2.1

Reputational resources are important intangible resources accruing from the firm’s positive actions and behaviors over long periods of time, which are difficult for competitors to imitate (Fernández-Olmos & Díez-Vial, 2013; Spyropoulou et  al., 2010; Villena Manzanares, 2019). Companies owe their reputational resources to their credibility, trustworthiness, and reliability accumulated by acting professionally and responsibly in the market, with part of this accrued from their social involvement (e.g., being eco-friendly) (Fombrun, 1996; Fombrun et  al., 2000). We therefore contend that reputational resources will increase the potential to adopt an ethical international marketing strategy because: (a) international firms usually deal with many stakeholders in multiple foreign markets (which are interconnected through information and communication technologies) and therefore the firm’s international reputation may serve as a

Conceptual model

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mechanism to enforce ethical responsibilities (Zyglidopoulos, 2002); (b) the reputation of an international firm as an ethical organization can mitigate the liability of foreignness by increasing its legitimacy in the eyes of the various publics in different foreign markets (Campbell et al., 2012); and (c) the international firm’s reputation generates foreign customer expectations for more solid ethical marketing practices, while any failure to meet these expectations would result in deep disappointments and negative customer measures (e.g., product boycotting) (Campbell et al., 2012). Notably, to preserve their good image, some international firms with enviable reputations deliberately avoid entering foreign markets which, due to their corrupted and poorly regulated nature, may expose them to unethical practices (Musteen et  al., 2013). We can therefore propose the following: P1 : The greater the possession of reputational resources, the greater the extent to which the firm will adopt an ethical international marketing strategy. Social entrepreneurship capability refers to the firm’s ability to establish a hybrid organization that creates social value through market-based mechanisms (Miller et  al., 2012). Social entrepreneurs strive to meet financial and social objectives concurrently, with social value creation prioritizing financial value creation. It is a combination of the resourcefulness of entrepreneurship with a mission to positively change society (Seelos & Mair, 2005). Social entrepreneurship may involve activities such as: providing goods and services to people in need, either free or at a reduced cost; employing disadvantaged groups of people (e.g., disabled) in the value-creation process; and engaging in an economic activity that delivers social value (Saebi et  al., 2019). Social entrepreneurship directs attention to the well-being needs of all stakeholders in a society (particularly social beneficiaries) (Glavas & Mish, 2015; Lortie & Cox, 2018) and considers social problems as market opportunities (Tasavori et al., 2016). By striking a balance between social and financial issues, the firm tries to preserve the ethicality of its marketing strategy. This is more evident in international marketing, where firms entering bottom-of-the-pyramid or economically poor markets attempt to be socially innovative by offering affordable products, collaborating with fundraising organizations for philanthropic purposes, and helping local people to improve their

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living standards (Ghauri et  al., 2014; Tate & Bals, 2018). Firms possessing a social entrepreneurship capability also work with the broader supply chain to offer socially responsible products to the market (Glavas & Mish, 2015). Accordingly, we propose that: P2 : The higher the level of social entrepreneurship capability, the greater the extent to which the firm will adopt an ethical international marketing strategy. Ethical leadership is defined as ‘the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision making’ (Brown et  al., 2005, p. 120). Leaders are expected to behave in an honest, credible, trustworthy, legitimate, and ethical way, as well as influence, diffuse, and implement these values within their organizations (Demirtas, 2015). Ethical leaders have a long-term vision, not only for their company’s prosperity, but also for the well-being of society at large. They strive to promote the greater good and take responsibility for their actions and their company’s conduct, act in ways to respect and elevate the needs and interests of people within and beyond the organization, and discourage unethical behavior by employing punishment mechanisms holding subordinates or others accountable for their actions (Low & Davenport, 2009; Maak & Pless, 2006; Mayer et al., 2012). In an international context, ethical leadership is vital in endorsing an ethical international marketing strategy, because ethical values internalized by higher levels of management are usually translated into strategic actions preserving ethicality, such as setting departmental/functional ethical standards (e.g., maintaining the same level of high quality for products and services across markets) (Li et  al., 2019; Pasricha et  al., 2018). This is because company employees set their own goals, centering on ethics, and are motivated by the behavior of the ethical leader (Steinbauer et  al., 2014). In addition, the legitimacy that is acquired by the firm through its ethical leadership behavior creates customer expectations concerning ethical marketing practices (Eisenbeiss, 2012). Hence, we can propose that: P3 : The higher the level of ethical leadership, the greater the extent to which the firm will adopt an ethical international marketing strategy.

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Ethical organizational culture refers to the prevalence of specific values, norms, beliefs, and conditions within an organization that promote ethical behavior among its employees (Kaptein, 2008; Treviño et al., 1998). Such organizations incorporate ethical issues into their vision and mission statements and have an explicit code of ethics (Verbos et  al., 2007). They also encourage: (a) cultivation of clear normative expectations with regard to the ethical conduct of employees; (b) employees to raise and discuss ethical issues and moral dilemmas; (c) provision of rewards to employees acting in an ethical manner and imposition of punishments for those behaving unethically; and (d) visibility of employees’ unethical conduct and its consequences to their peers, supervisors, and subordinates (Kaptein, 2008). This organizational culture ensures ethicality and fairness in the international marketplace when these values do not emerge naturally (Santos et  al., 2015). Treviño et  al. (1999) report that an ethical organizational culture is an important driver of the effective design and implementation of ethical marketing programs; this is particularly true in an international context, where firms are confronted by many ethical dilemmas, such as adhering to home versus local regulations for product composition, consumer rights, or promotional content (e.g., Armstrong, 1996; McNeil & Pedigo, 2001). Such a culture facilitates employees’ identification with their social roles, which subsequently motivates them to develop innovative technologies that will raise the quality of life for the people of a foreign country, as well as respond to customer problems in a socially responsible manner (Pučėtaitė et al., 2016). It also allows international marketers to adopt a longterm and cooperative perspective in their relationships with foreign customers, making it free of unethical practices and opportunistic actions (Santos et  al., 2015). The following proposition can therefore be made: P4 : The more ethical the organizational culture, the greater the extent to which the firm will adopt an ethical international marketing strategy. Organizational control is ‘the systematic process through which managers regulate organizational activities to make them consistent with expectations established in plans, targets, and standards of performance’ (Daft, 1997, p. 628). To be able to meet plans, targets, and standards of ethical performance, the international firm relies on the dependable behavior of organizational members, which is ensured by formal controls (e.g., explicit code of ethical conduct), instrumental

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satisfactions (e.g., rewards for contributing to positive ethical performance), and internalization of core values (e.g., training focusing on international marketing ethics) (Morris, 1997). Effective organizational control exercises normative influence on managers and employees by codifying legal, social, and behavioral norms and prohibitions, sets a barrier to organizational acts of deviance, and represents binding instruments established by high-level executives that can ensure compliance (Laufer & Robertson, 1997). Controls foster the ethical working climate by building awareness of ethical issues, while also helping managers and employees understand the connection between ethical performance and business performance (Goebel & Weißenberger, 2017; Morris, 1997). Such organizational control is even more imperative when operating internationally, because: (a) the distance between the company and its foreign distributors, agents, and other partners leads to information asymmetries and possible deviant behavior; (b) high environmental uncertainty leaves room for the appearance of unethical practices in order to ensure survival; and (c) the existence of cultural differences with foreign partners can result in different interpretations of what is considered ethical or unethical, thus creating confusion about the appropriate action to take (Armstrong, 1996). This argumentation leads to the following proposition: P5 : The higher the organizational control, the greater the extent to which the firm will adopt an ethical international marketing strategy.

External Factors and Ethical International Marketing Strategy A country’s institutional setting comprises both formal (e.g., legislative norms) and informal (e.g., religious groups) institutions that are characterized by regulative, normative, and cultural–cognitive elements influencing the way organizations and economic activity take place (Hodgson, 2006). In an international business context, firms are influenced by institutions at three different levels: (a) local (e.g., local communities), which have their own distinctive norms and hierarchies (especially in transitional and emerging countries), as well as have close and frequent interactions with the company; (b) national (e.g., governments), which are unpredictable actors likely to promote their own interests and enact regulations only if these suit them best; and (c) global (e.g., ethical trading initiative), which play an important role in shaping universal ethical standards and address issues that cannot be dealt

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with by individual governments (Parmigiani & Rivera-Santos, 2015). These institutions usually set acceptable levels of ethical standards, but when in practice formal institutions fail to regulate, control, or punish unethical behavior, greater power is expected to be given to informal institutions (Ngo et  al., 2016; Peng & Lin, 2009). Institutional settings have four defining characteristics, namely specificity (i.e., regulating certain issues), stability (i.e., rate and frequency of making changes over time), predictability (i.e., the ability to predict the degree of change), and enforceability (i.e., the existence of regulations or mechanisms in place to sanction misconduct) (Acemoglu & Johnson, 2005; Ngo et al., 2016). When managers choose to operate in countries where institutions score highly on these characteristics, their international marketing strategies are expected to adhere more to high ethical standards. Taking the above into consideration, we can posit that: P6 : The stronger the host country’s institutional setting, the greater the extent to which the firm will adopt an ethical international marketing strategy. Regulatory intensity refers to all those governmental initiatives and practices that regulate business conduct (e.g., dangerous products, price fixing, bribing to close a distribution deal, deceptive advertising), and the degree to which they tolerate unethical conduct and punish unethical practice (Schlegelmilch & Öberseder, 2010). Laws and regulations are perceived to be the society’s ‘codified ethics’, responding partially to the requirements of the social contract (Carroll & Shabana, 2010). On entering foreign markets, managers are faced with regulatory regimes that reside somewhere in the continuum of absent or loose regulations to more advanced ones (Merz et  al., 2010). For example, with regard to consumer health and safety, product labeling, and product environmental impact, the USA has well-established regulations and oversight institutions (Laczniac et al., 2016). Notably, in their attempt to avoid the potential costs of ethical investments, some powerful international firms choose to move their operations to loose regulatory environments in order to avoid legal punishments due to unethical practices (Surroca et al., 2013). However, these firms make themselves potential targets for boycotts by consumers and protests hindering their operating legitimacy and reputation (Campbell et al., 2012; Surroca et al., 2013). In addition, the most challenging ethical concerns that managers face operating internationally is the possibility of encountering corrupt

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governments and politicians. In such instances, gaining access to specific resources and getting the support of governmental services may only be possible by bribing key officials. Such practices, although banned by law and/or deemed unethical in the home country, may be considered normal practice in the host country (Armstrong et  al., 1990; Javalgi & Russell, 2018). Hence, the following proposition can be made: P7 : The higher the host country’s regulatory intensity, the greater the extent to which the firm will adopt an ethical international marketing strategy. Economic conditions refer to the way the wealth of a country is distributed among its people and the available purchasing power of its potential customers (Ghemawat, 2003; Jain, 1989). There are indications that differences in economic conditions across countries are responsible for explaining variations in ethical marketing practices, with firms operating in countries characterized by poor economic conditions having a tendency to be involved in more unethical strategies (Carrigan et al., 2005). Thus, the existence of underdeveloped economic conditions is a good predictor of the absence of established ethical norms, as well as the prevalence of corruption, bribery, and loose moral standards (Franke & Nadler, 2008; Marta & Signapakdi, 2005; Volkema, 2004). In such environments, international marketing managers seem not to prioritize ethics as important for achieving organizational effectiveness, but instead direct their efforts toward combating everyday poverty and starvation (Franke & Nadler, 2008; Singhapakdi et al., 2001). As a result, international firms may not be tempted to engage in ethically upgrading their marketing strategy where economic conditions in the foreign country are poor (Javalgi & Russell, 2018). This contrasts with what is happening in economically advanced nations where, due to established regulatory systems and stringent controls, there is a tendency to operate in a more ethical manner (Campbell et al., 2012). In fact, some international marketers evaluate similarities in economic conditions among countries and form clusters according to their level of sensitivity to ethical issues (Marta & Singhapakdi, 2005). We can therefore propose the following: P8 : The better the economic conditions in the host country, the greater the extent to which the firm will adopt an ethical international marketing strategy.

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Social publics refer to consumers, activists, NGOs, and other members of society that want to promote their ethical standards, values, and concerns (Banerjee et  al., 2003; Gruber & Schlegelmilch, 2015). In today’s world, these publics have become more educated, informed, and concerned about ethical issues, as well as have better access to information and resources so as to monitor the operations of international firms (Leonidou et al., 2013a). Social publics is considered the most important stakeholder group, having the greatest salience (i.e., power, urgency, legitimacy) over the firm’s operations. In fact, the role of these publics can at times drive regulatory actions or bring devastating sanctions to corporations (Carroll & Shabana, 2010; Surrocca et  al., 2013). Social public concern forms an ‘informal regulation,’ which is expressed through actions that monitor and sometimes ‘punish’ unethical firm behavior in international markets (Banerjee et  al., 2003). Some of the most important social publics are: (a) customers themselves, who are sensitive about buying products/services from companies acting ethically; (b) local communities, which are directly affected by the firm’s practices and impose their norms and expectations on the firm’s ethical behavior; and (c) activists, who act as ‘watchdogs’ in ensuring that firms adhere to high ethical standards worldwide and promote respect for human life and society at large (Banerjee et  al., 2003). There are cases where international firms are required by publics in host countries to take a more responsible role and even offer various public services through their international marketing activities (Gruber & Schlegelmilch, 2015). When these publics spot any kind of unethical behavior, they use several ‘powerful’ mechanisms to exert pressure (e.g., consumer boycotting), aiming to harm the firm’s reputation and/or force it to operate at higher ethical levels. Based on the above, we may posit the following: P9 : The stronger the social public concern in the host country, the greater the extent to which the firm will adopt an ethical international marketing strategy. National culture refers to the programing of the mind, common values, and beliefs shared by groups of people within a society (Hofstede et al., 2010). It resembles a shared understanding and the common coding of norms toward ethical values that guide individuals’ attitudes and behavior (Paul et al., 2006). Culture varies across countries, creating different perceptions among

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people regarding what is ‘right’ or ‘wrong’ in terms of the firm’s international marketing practices. One of the few studies to examine the effect of culture on marketing was that of Paul et  al. (2006), which confirmed the differential effect on values of various ethical marketing dimensions. For instance, ‘masculinity’ was negatively related to ‘general honesty and integrity’ in both the USA and India, whereas long-term orientation was important for these countries in terms of product and promotion ethicality (Paul et  al., 2006). This is because, in countries with higher levels of masculinity, people prefer challenge, earnings, and advancement over quality of life, while long-term-oriented societies denote perseverance and sustained efforts to reach slow results, with the focus on frugal usage of resources (Hofstede et al., 2010). Empirical evidence also indicates that cultures scoring high on power distance are characterized by lower levels of ethical attitudes (Franke & Nadler, 2008; Scholtens & Dam, 2007; Vittell et  al., 2003). Also in countries characterized by low uncertainty avoidance, managers seem to acknowledge that unethical conduct can quickly bring negative economic consequences for the firm, and thus adopt higher levels of ethical attitudes (Marta & Singhapakdi, 2005; Vittell et al., 2003). Although in collectivistic cultures people care for and act in favor of their in-group expectations, they tend to belong to a number of outer-groups and experience diverse stakeholder expectations and thus have great access and capacity toward respecting higher ethical standards (Lu et  al., 1999; Paul et  al., 2006). We can therefore propose the following: P10 : The lower the power distance and masculinity, and the higher the uncertainty avoidance, collectivism, and long-term orientation in the host country, the greater the extent to which the firm will adopt an ethical international marketing strategy.

Ethical Strategy, Competitive Advantage, and Performance The firm’s ethical international marketing strategy comprises sensitivities to avoid unethical practices, such as shoddy goods, price fixing, unfair distribution agreements, and deceptive advertising. Building an ethics-based reputation is a challenging task for an international firm, because as its number of foreign markets gradually increases, it will be confronted with a

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variety of situation-specific ethical issues, thus demanding consistency in its ethical marketing strategies across countries (Zyglidopoulos, 2002), Firms that adopt such an ethical perspective are more likely to develop reputational advantages over their competitors in foreign markets (Arevalo & Aravind, 2017; Javalgi & Russell, 2018; Neville et  al., 2005).3 By acting in an ethical manner, these firms fulfil the expectations of and deliver promises to foreign customers (as well as to other stakeholders, such as government agencies, suppliers, and distributors), building in this way an image of a trustworthy, reliable, and dependable organization (Dupont & Karpoff, 2019; Miles & Covin, 2000). In fact, there are cases in which firms (e.g., The Body Shop) exceed their stakeholders’ ethical expectations by engaging in discretionary activities and setting new industry standards of marketing ethics. It is worth noting that a reputational advantage has a long-lasting nature, because it is inherently inimitable by other competitors, due to its multidimensional composition (Roberts & Dowling, 2002). Hence, the following proposal can be made: P11 : The firm’s adoption of an ethical international marketing strategy will help to achieve a reputational competitive advantage. The reputational advantage derived from the adoption of an ethical international marketing strategy will have favorable effects on both the market and the financial performance of the firm. Concerning market performance, because reputation derived from ethical marketing practices is a valuable asset, customers tend to place high value on their transactions with those firms that possess it. This will not only facilitate the firm’s entry and expansion into foreign markets, but will also help to build its market share (Roberts & Dowling, 2002). Reputable firms also find it easier to make their products more acceptable to international markets, because reputation helps to enhance foreign customer trust and reduce risks associated with his/her purchases (Kwon & Lee, 2019). On the other hand, with regard to financial performance, a reputation derived from an international firm’s ethical conduct will help to increase sales and profits, because foreign customers will be more willing to buy its products and accept higher prices (Eberl & Schwaiger, 2005; Roberts & Dowling, 2002). Reputational advantage will also reduce contracting costs, thus facilitating the firm’s collaboration with promising overseas distributors/agents (Roberts & Dowling, 2002).

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Based on the above, we can propose the following: P12 : The firm’s possession of a reputational competitive advantage (derived from ethical marketing conduct) will enhance the firm’s (a) international market and (b) international financial performance.

CONCLUSIONS One summary conclusion that can be derived from the previous analysis is that certain internal company factors and external environmental forces play a crucial role in developing an ethical international marketing strategy, the implementation of which will help to yield a reputational competitive advantage and ultimately improve market and financial performance. Throughout our analysis, we have amply demonstrated that marketing ethics is indeed highly context-specific and, therefore, in order to succeed in foreign markets, firms need to develop international marketing strategies that respect host countries’ ethical norms, while at the same time maintaining their home country’s ethical standards. Most importantly, we have shown that, despite multiple company cases of ethical or unethical behavior in international marketing history, surprisingly, there is relatively little research on the subject. Our analysis revealed that while the internal drivers of ethical international marketing strategy emphasize a different organizational potential and mindset beyond the pure economic focus on international marketing programs, the external determinants highlight the host-country contextual factors that may differentiate the way the company should design and implement an ethical international marketing strategy. However, it is the interplay between all these internal and external factors that will ultimately be responsible for shaping the firm’s ethical marketing strategy in international markets. Our analysis has also elevated the role of reputation as a new form of competitive advantage, which is heavily derived from the firm’s degree of ethicality in pursuing ethical marketing activities. In fact, we have demonstrated that the firm’s superior performance in foreign markets is achieved by capitalizing not only on the generic competitive advantages of low cost and/or product differentiation, but also on its reputational advantage.

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IMPLICATIONS Theoretical Implications Our analysis has stressed the interplay between multiple micro and macro factors in shaping the ethical marketing content of the firm’s marketing strategy across foreign countries. This, coupled with the multiplicity of markets where international firms operate, underscores the complexity of handling and coordinating ethical marketing issues in an international context to achieve superior competitive advantage and heightened performance. All these imply that international marketing ethics should be given more attention by extant business theories (e.g., resource-based view), as well as new theories that could be developed having marketing ethics as a central focus. These theories could be embodied with ideas and variables gained from established consumer ethics theories, such as justice theory, cognitive dissonance theory, and social learning theory. The analysis undertaken has also featured an ethical international marketing strategy that is not clearly defined and conceptualized as a construct, which may cause problems in its proper understanding, formulation, and implementation. There is a need therefore to proceed with accurate definitions and robust operationalizations of each of the four components of this strategy. It is also important to identify which of these strategy elements has the greatest weight, as well as clarify possible synergistic relationships among them. Another key construct in our model that also warrants scale development and validation is that of reputational competitive advantage, which is highly relevant in today’s rapidly digitalized trends, where news about companies travels fast on a global scale.

Managerial Implications In operating successfully in foreign markets, international marketing managers should first enhance those dimensions in their organization that will be conducive to their ethical conduct. For example, there is a need to make frequent reputation audits in the markets where their firms operate, and correct any image-distorting acts. It is also important to promote and reward social entrepreneurship through the development of creative socially innovative offerings to foreign customers. It would also be useful to encourage

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ethical leadership among international marketing people and ensure that they set role models for their subordinates. Building and maintaining an organizational culture geared toward preserving strong marketing ethics are also of paramount importance in operating successfully internationally. It is also vital to establish both formal (e.g., social reporting) and informal (e.g., marketing audit) mechanisms to safeguard embedding ethical concerns in international marketing activities. International marketing managers should also evaluate at regular intervals various external environmental factors prevailing in foreign markets, namely institutional settings, regulatory intensity, economic conditions, social public concern, and national culture. Of these, while some are relatively stable in nature (e.g., national culture), others are fast-changing (e.g., regulatory intensity). Most importantly, it should be understood that there is a great diversity of these environmental factors across countries, implying that firms should sensitively and carefully handle ethical marketing issues in each of the foreign markets in which they operate. This does not mean that their ethical marketing strategies should be discounted in vulnerable, negligible, and poor societies, but, on the contrary, that they should use these countries as a testing ground to indicate the genuine nature of their ethical conduct. It is also crucial to realize that marketing actions considered ethical at home may be unethical in foreign countries.

DIRECTIONS FOR FUTURE RESEARCH Our previous analysis has given rise to some interesting questions that could be the object of future research. Firstly, previous studies have so far paid little attention to addressing ethical international marketing strategy issues, and input is limited regarding the unethical use of product, price, distribution, and promotion in foreign markets. Hence, it is vital to empirically test our proposed conceptual model and gain concrete evidence as to the magnitude and direction of the proposed associations between constructs. This would require borrowing measurement scales for some of the constructs (e.g., ethical leadership) from other disciplines, but also developing entirely new operationalizations for others (e.g., ethical international marketing strategy).

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Secondly, it would also be useful to identify suitable constructs that could be used as moderators in the conceptual model, as in the case of competitive intensity, which changes the firm’s contextual conditions by decreasing predictability and increasing uncertainty (Auh & Menguc, 2005). In markets characterized by high competitive intensity, the outcomes of a firm’s actions will largely depend on the movements of its rivals (Wilden et  al., 2013). Thus, anticipating competitive actions and responding proactively will increase the firm’s chances of survival (Wilden et  al., 2013). Hence, one would expect the relationship between ethical international marketing strategy and reputational competitive advantage to be stronger in a situation of high competitive intensity (Leonidou et al., 2013a). Thirdly, it would also be illuminating to explore the control role of certain variables in the model. For example, the adoption of an ethical international marketing strategy is expected to be controlled by the firm’s foreign market entry mode (Albaum, 2012). This is because the firm’s ethical marketing strategy in international markets is usually affected by the amount of control exercised on it. For example, while the use of a wholly owned subsidiary can enable the firm to adopt its own ethical style in its marketing activities in the host market, in the case of entry modes involving shared ownership (e.g., joint venture) its ethical conduct will be largely limited by the cultural traits, ethical norms, and profit interests of the foreign partner. Fourthly, since our analysis has shown that there are differences in the ethical environments among countries, due to variations in institutional, regulatory, economic, and other conditions, it would be interesting to see the extent to which firms adapt their ethical international marketing strategy in each of the foreign markets they operate in. Most importantly, it would be useful to explore whether this strategy is designed proactively (i.e., as a result of the firm’s own deliberate initiatives) or reactively (i.e., as a result of pressures exerted by forces of a compulsory nature, as in the case of regulations). It would also be illuminating to find out whether this customization of the firm’s ethical international marketing strategy is used to benefit the foreign country or to take advantage of its weaknesses. Fifthly, pertinent literature has viewed ethical international marketing practices from the perspective of firms located in North America, while only recently we have seen the examination of these practices from the standpoint

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of firms from other countries (particularly in Europe). Even though this is a noteworthy trend to be followed by future research, it is also crucial to expand the analysis to cover international firms based in emerging and transitional economies (Javalgi & Russell, 2018). It would be useful to test our conceptual model in such different country settings and even proceed with comparisons between them. This would be helpful in spotting differences in the way firms from different countries perceive ethicality and how this is incorporated into their international marketing strategies. Sixthly, although our conceptual model can be applicable to international firms operating in any type of foreign market, particular attention should be paid to emerging and developing countries (especially ‘bottom of the pyramid’). This is because customers from these countries provide a ‘new’ market, due to the stagnancy observed recently in the markets of many developed countries (Cavusgil et al., 2018). These countries face a growing middle class that might be a great challenge for success or failure for international marketers. This challenge also derives from the fact that we know very little about their consumers’ attitudes toward business ethics, expected ethical standards in marketing operations, and ethical infrastructures and associated organizations (Varadarajan, 2014). Hence, evaluating and acknowledging the ethical specificities of these countries would provide useful insights into crafting appropriate international marketing strategies. Finally, by its own nature, ethics is a complex field of business inquiry that is difficult to conceptualize and understand. Hence, to better grasp its nuances, there is a need to employ more advanced research techniques and designs. For example, qualitative research, in the form of in-depth personal interviews and focus group discussions, would significantly help to extract valuable input from both sellers and buyers regarding ethical issues involved in international marketing. Moreover, with regard to quantitative analysis, a recent review by McLeod et  al. (2016) suggested certain advanced statistical techniques (e.g., two-stage least squares models) to be adopted by future research, in order to have a better understanding of organizational ethics inquiry. Furthermore, since the firm’s involvement in international markets is a very dynamic phenomenon, longitudinal research designs can address to some degree issues of causality in this field (McLeod et al., 2016).

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APPENDICES Appendix 2.1 Summary of research on ethical aspects of international marketing Study

Objectives

Methodology

Main findings

Armstrong et al. (1990), EJM

To discover the ethical Survey among 38 Major ethical problems in international problems involved in the Australian and 207 marketing faced by the two samples of international marketing US exporters firms are bribery, cultural differences, and activities of Australian unethical pricing practices. Australian and versus US firms American samples have similar attitude toward a manager’s ethical conduct Armstrong (1992), To identify and categorize Survey among The ethical problems in international marketing JBE ethical problems in 60 Australian most frequently faced by Australian international marketing exporters managers include gift/favor/entertainment, regarding their cultural differences, and traditional/small frequency of occurrence bribery, while the most important ones are and importance large-scale bribery, cultural differences, and involvement in political affairs. Overall, the general management for unethical conduct is low Armstrong and To examine the differences Survey among 165 The frequency of exposure to and the Sweeney (1994), in ethical perceptions Australian and importance attached to international JBE of Australian and Hong 76 Hong Kong ethical problems do not change with type Kong international international of industry. Regarding culture, respondents managers in different managers from Hong Kong perceive lower frequency industries, cultures, and and lower importance concerning modes of entry international ethical problems. In terms of entry mode, higher frequency of ethical problems is reported to be perceived for entries through joint venture and wholly owned subsidiaries Chan and To investigate the Survey among 60 Gifts/favors/entertainment, cultural differences, Armstrong perceptions of Australian and 58 traditional/small-scale bribery, questionable (1999), JBE Australian and Canadian Canadian exporters commissions to channel members, and managers with regard pricing practices are the most frequently to the frequency faced unethical practices in international and importance of marketing by Australian and Canadian international marketing exporters. Large-scale bribery is perceived ethical problems as the most important unethical international marketing practice by both samples. Significant differences are found between the two samples in terms of frequency and importance ratings of other unethical problems and practices McNeil and Pedigo To discover the nature and Survey among Respondents identified nine ethical problems (2001), APJML type of ethical dilemmas managing directors in international marketing, listed as product confronted by Western of 299 exporting/ quality issues, altering invoices, bribery and Australian managers importing firms in corruption, power networks of high-ranking engaged in import/ Australia based on government officials, information and export operations the critical incident product rights, theft and striking, cognitive technique dissonance between specific business practices and company policy, violation of human rights, and racism. To cure these problems, they suggest market intelligence, integrity, cultural sensitivity, and a formal corporate policy regarding ethics as solutions (Continued )

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Appendix 2.1 (Continued) Study

Objectives

Methodology

Zarkada-Fraser and Fraser (2001), JBIM

To investigate perceptions of ethicality of international sales negotiation tactics and connect them to the decision-making frameworks in different countries

Structured interviews There are significant perceptual differences with marketing or with regard to acts associated with sales managers of misrepresentations of objectives, exporting firms in information, etc., as well as with usage of Japan, the USA, promises and threats. All respondents stated Greece, Russia, the that adapting to the partner’s unethical UK, and Australia behavior is unethical. Intuition and previous experiences with similar situations are influential in moral decision making for all respondents. For most of the decisionmaking criteria, respondent perceptions differ by country

Aurifeille and Quester (2003), IBR

To examine the impact of certain organizational variables on the ethical tolerance of international firms

Leonidou et al. (2013), IBR

Survey among 166 marketing managers from firms in Australia, New Zealand, and Singapore operating in foreign markets Survey among 189 Cypriot importers

(a) To examine the effect of value drivers on the unethical export marketing strategy; (b) to examine the impact of these drivers on relationship quality; (c) to test the role of relationship quality on relationship performance; and (d) to understand the moderating role of network ties on the link between value similarity and relationship quality (a) To categorize global Survey among Two types of marketing negotiators are negotiators based 995 marketing identified: (a) principled and (b) corrupt on their ethical executives in Saudi negotiators. The corrupt negotiators score ideologies, opportunism Arabia, Egypt, higher in Machiavellianism, relativism, and Machiavellian Russia, Japan, opportunism, and lower in idealism tendencies; (b) to Belgium, and the compared to the principled negotiators. develop an ethical USA Principled negotiators are more likely to profile of each group; perceive unethical negotiation tactics and (c) to investigate (i.e., making false promises, inappropriate the degree to which the information gathering about the partner, emerging groups differ attempting to attack a negotiation partner’s by their perceptions of network, and misrepresentation of own unethical negotiation position) less favorably than corrupt tactics negotiators

Al-Khatib et al. (2016), BE

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Main findings

Firm size, dependence on overseas market, and overseas experience are predictors of the extent of ethical tolerance by international marketers. However, the nature of their effects depends on the years in business, years in international business, number of employees devoted to overseas operations, and sales level The higher the national-, corporate- and personal-value similarity between the exporter and the importer, the lower the likelihood for the exporter to follow unethical marketing strategies. An unethical export marketing strategy, on the other hand, decreases the quality of the working relationship, which is a critical determinant of heightened relationship performance. In cases of stronger network ties, the negative influence of corporate- and personal-value similarities on the quality of the foreign partner relationship becomes stronger

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Appendix 2.2 Operational definitions of model constructs Construct

Operational definition

Reputational resources

Excess market value of a company’s intangible assets beyond its stock of patents and knowhow, attributed to the company’s image as a responsible corporate citizen (e.g., brand awareness, strength of brand image, appeal of brand personality, brand image distinctiveness) (Fombrun et al., 2000; Morgan et al., 2006; Petrick et al., 1999) The firm’s capability to explore, assimilate, and take advantage of business opportunities with a social impact, which is expressed by the firm’s sensitivity to ethical, social, and economic issues, management responsiveness to social problems, consideration of social benefits in problem solving and budget allocation, as well as social proactiveness, innovativeness, and risk-taking (Kraus et al., 2017; Kuratko et al., 2017; Palacios-Marqués et al., 2018) The extent to which the leader of the firm makes ethical decisions, listens to and cares for ethical matters related to his/her employees, takes actions to condemn unethical behavior, and becomes the role model of ethical conduct within the organization (Brown et al., 2005)

Social entrepreneurship capability

Ethical company leadership Ethical organizational culture

The extent to which organizational conditions enable ethical conduct, characterized by: clarity (i.e., being clear about the normative expectations with regard to the conduct of employees), congruency (i.e., managers acting in accordance with normative expectations), feasibility (i.e., creating the conditions enabling employees to conform to normative expectations), supportability (i.e., supporting the ethical conduct of employees), transparency (i.e., making employees’ unethical conduct and its consequences visible to their peers, supervisors, and subordinates), discussability (i.e., giving employees the opportunity to raise and discuss ethical issues and moral dilemmas), and sanctionability (i.e., punishing employees for unethical behavior and rewarding them for ethical behavior) (Kaptein, 2008) Organizational The extent to which the firm specifies and communicates objectives related to ethics (e.g., code of control ethics, ethics training, ethics-centered corporate governance), monitors ethics performance and sets feedback mechanisms (e.g., whistleblowing channels, ethics committee), and motivates employees by connecting rewards to performance (e.g., ethics-based reward system) (Lindsay et al., 1996) Institutional setting The extent to which the host-country institutional environment is: specific (i.e., providing clear guidelines on how to regulate ownership, contractual arrangements, and other forms and activities related to business conduct), stable (i.e., remaining relatively unchanged over time), predictable (i.e., allowing to foresee possible changes in the institutional environment), and enforceable (i.e., providing formal means to protect the contractual arrangements, rights, and responsibilities of businesses) (Acemoglu & Johnson, 2005; Ngo et al., 2016) Regulatory intensity The extent to which strict regulations, laws, and rules in the operating foreign environment are in place to oversee the wide range of ethical issues related to business conduct (e.g., bribery, customer’s deception, misleading advertisements) (Banerjee et al., 2003) Economic conditions The level of economic development of the foreign country, measured in terms of GDP, degree of industrial development, the purchasing power of people, the distribution of income, and the level of its economic, commercial, and transportation/communication infrastructure (Katsikeas et al., 2006; Zeriti et al., 2014) Social public concern The extent to which various forces, such as customers, activist groups, and the local and global community, in the foreign country influence, exert pressure on, and worry about firms’ ethicality in business conduct, processes, or products offered (Banerjee et al., 2003) National culture The host country’s position on each of the following dimensions: • Power distance: The extent to which the less powerful individuals in the country’s institutions and organizations anticipate and accept an unequal distribution of power • Masculinity: The extent to which emotional gender roles are clearly different in the society • Collectivism: The extent to which people in the society are integrated into strong, tight in-groups, which protect them in reciprocity for unquestioning loyalty • Uncertainty avoidance: The extent to which individuals in the society feel threatened by ambiguous or unknown situations • Long-term orientation: The extent to which individuals in the society promote virtues oriented toward future rewards (Hofstede et al., 2010) (Continued )

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Appendix 2.2

(Continued )

Construct

Operational definition

Ethical international marketing strategy

The extent of avoiding unethicality in decisions taken by the firm to meet its international marketing objectives on the following dimensions: • Ethical product, such as avoiding selling dangerous/harmful products, selling defective/shoddy products, providing misleading information on packaging/labeling, promising ambiguous product warranties, etc. • Ethical pricing, such as avoiding setting artificially high prices and then reducing them, being involved in price fixing with other competitors, misleading customers with deceptive prices, engaging in price discrimination among customers, etc. • Ethical distribution, such as avoiding being involved in unfair distributor agreements, delivering unwanted products, using bribery and commissions to close a distribution deal, violating dealers’ rights, etc. • Ethical promotion, such as avoiding being involved in deceptive or false advertising, promoting to vulnerable communities, adopting deceptive selling techniques, making undelivered promises in communication messages, etc. (Leonidou et al., 2002; Leonidou et al., 2013) Reputational benefits (e.g., the ability to enjoy a good image for the firm’s product/service, the ability to attract talented employees, the ability to have a positive image with stakeholders) derived by the company from its ethical marketing conduct in relation to competing firms in its industry in the host market (Arevalo & Aravind, 2017) Market-related outcomes (e.g., market share, customer satisfaction, customer loyalty) attained in the host county in which the firm operates (Leonidou et al., 2013b) Financial-related outcomes (e.g., sales, profits, ROI) attained in the host county in which the firm operates (Leonidou et al., 2013b)

Reputational competitive advantage International market performance International financial performance

Notes 1

2

3

The twenty-first century has witnessed from its very beginning the Enron scandal, continued with the collapse of Lehman Brothers in 2008 affecting the global economy, Volkswagen’s cheating on its diesel emissions in 2014, and Facebook’s violation of users’ privacy in the last few years (Laczniac & Murphy, 2019). While firms can be tempted to engage in unethical behavior in the short term in order to reduce costs or increase profits, evidence so far indicates that in the long run the revelation of unethical practices can have disastrous outcomes on their performance (Coleman, 2011; Jo & Kim, 2008; Watkins et al., 2019; Xu et al., 2019). Examples include the pharmaceutical company TEVA that engaged in inflating goods’ prices and experienced a fall in its stock prices and Wells Fargo that created fraudulent customers’ savings and checking accounts (Laczniac & Murphy, 2019, p. 401). Notably, some companies that see their reputation deteriorating and their performance falling end up developing ethical and socially responsible strategies in order to be able to recover (Torres et  al., 2012). However, building a reputation as an ethical company and a good corporate citizen

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is not an easy task, but one that takes time to develop and yield favorable results (Gazert, 2015).

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Santos, N. J. C., Laczniak, G. R., & Facca-Miess, T. M. (2015). The ‘integrative justice model’ as transformative justice for base-of-the-pyramid marketing. Journal of Business Ethics, 126(4), 697–707. Schlegelmilch, B. B., & Öberseder, M. (2010). Half a century of marketing ethics: Shifting perspectives and emerging trends. Journal of Business Ethics, 93(1), 1–19. Schlegelmilch, B. B., & Robertson, D. C. (1995). The influence of country and industry on ethical perceptions of senior executives in the US and Europe. Journal of International Business Studies, 26(4), 859–881. Scholtens, B., & Dam, L. (2007). Cultural values and international differences in business ethics. Journal of Business Ethics, 75(3), 273–284. Seelos, C., & Mair, J. (2005). Social entrepreneurship: Creating new business models to serve the poor. Business Horizons, 48(May–June), 241–246. Sims, R. (2009). Toward a better understanding of organizational efforts to rebuild reputation following an ethical scandal. Journal of Business Ethics, 90(4), 453–472. Singh, J., Vitell, S., Al-Khatib, J., & Clark, I. (2007). The role of moral intensity and personal moral philosophies in the ethical decision making of marketers: A cross-cultural comparison of China and the United States. Journal of International Marketing, 15(2), 86–112. Singhapakdi, A., Karande, K., Rao, C. P., & Vitell, S. J. (2001). How important are ethics and social responsibility? A multinational study of marketing professionals. European Journal of Marketing, 35(1/2), 133–152. Singhapakdi, A., Vitell, S. J., & Leelakulthanit, O. (1994). A cross-cultural study of moral philosophies, ethical perceptions and judgments. International Marketing Review, 11(6), 65–78. Spyropoulou, S., Skarmeas, D., & Katsikeas, C. S. (2010). The role of corporate image in business-tobusiness export ventures: A resource-based approach. Industrial Marketing Management, 39(5), 752–760. Steinbauer, R., Renn, R. W., Taylor, R. R., & Njoroge, P. K. (2014). Ethical leadership and followers’ moral judgment: The role of followers’ perceived accountability and self-leadership. Journal of Business Ethics, 120(3), 381–392. Surroca, J., Tribo, J. A., & Zakhra, S. A. (2013). Stakeholder pressure on MNEs and the transfer of socially irresponsible practices to subsidiaries. Academy of Management Journal, 56(2), 549–572. Tasavori, M., Ghauri, P. N., & Zaefarian, R. (2016). Entering the base of the pyramid market in India: A corporate social entrepreneurship perspective.

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Part II

Theoretical and Research Approaches to Marketing Ethics

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3 Cross-Cultural and Religious Perspectives on Marketing Ethics C h a r l e s R . Ta y l o r a n d M i v e n a P a n t e q i

INTRODUCTION One of the major challenges for global marketers pertains to differences in ethical standards and perspectives in various parts of the world (Khera, 2001). For example, what may be perceived as a ‘bribe’ to a customs official in an economically developed country may be part of a way of life in a poor country where the official might need to engage in such behavior in order to make a decent living (Khera, 2001). The focus of this chapter is on delineating the major religious and cultural perspectives that have an influence on global business ethics. A primary goal of the chapter is to identify areas where ethical perspectives largely overlap. An additional goal is to identify areas that are problematic because of more profound differences in ethical perspectives based on religion and/or culture. The chapter begins with an overview of major religious perspectives on business ethics. This is followed by a similar review of cultural perspectives and their relationships to business ethics. Next, we talk about specific studies that have been done on the impact of religion on ethical issues related to controllable marketing variables (i.e., the 4Ps of marketing). This is followed by a similar review of culture and its impact on the ethics pertaining to the controllable marketing variables.

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After these reviews, the discussion makes some generalizations about findings on the impact of religious and cultural perspectives on marketing ethics before providing conclusions and suggestions for future research.

MAJOR RELIGION PERSPECTIVES AND IMPACT ON BUSINESS ETHICS The four most practiced religions in the world, according to Pew Research, are Christianity, Islam, Hinduism, and Buddhism, respectively. As this study is based on current available literature (the analysis is in no way intended to slight other religions; however, the marketing literature is dominated by studies of a small number of widely practiced religions), our analysis will be mainly on the Christian/Judeo-Christian, Islamic, and Buddhist religions and how they factor into international marketing ethics. Religion often impacts people’s moral compasses, even though during modernism, a movement that emerged in the nineteenth century in Western society, when it was being stripped away from organizational cultures (Kim et al., 2009). The modernist worldview, also

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known as modernism, bases principles such as morality, reality, and knowledge in human reasoning, science, and objective evidence and excludes religious beliefs from this mix (Pearcey, 2004). Post-modernism, a viewpoint that came to life more recently in the West, unlike modernism, claims that these principles should be defined by each individual according to their personal worldview (Daniels et al., 2000). This is where religious viewpoints as well as cultural viewpoints come in. When conducting business internationally, one might not understand the extent that religion may have on that country’s culture, ethics, and worldview. This may not only translate into making problematic decisions as a marketer (decisions perceived as unethical from a domestic viewpoint), but also create difficulties in resonating with the target market. Even if one understands differences in ethics, it is nonetheless difficult to navigate balancing different perspectives and identifying clear boundaries that should not be crossed. Therefore, it is important to understand religions’ perspectives and the way each of them impacts culture, values, and business decision making in various parts of the world.

by assessing the impact they had on the society as a whole (Veith, 1994). It is argued that this type of resolution that excludes ‘God teachings’ from evaluating ethical problems often results in moral relativism, where ethical conducts become relative to an individual’s culture, viewpoint, or time in history (Kim et al., 2009). Moral relativism, in fact, has been acknowledged as the main theory of moral thought in business ethics literature (Singhapakdi et al., 2000; Tsalikis et al., 2001). Another way that Christian ethics clashes with ideas that evolved in the eighteenth century is that, in Christianity, self-interest is considered as a vice that needs to be put aside to work for the common good, while in Adam Smith’s theory of capitalism, work was defined as ‘a means of fulfilling one’s self-interest.’ Smith’s theory revolves around the idea of ‘the invisible hand’ – the assumption that if all markets and businesses act in line with their self-interest and are left alone, supply and demand will balance, and the economy will flourish (Kim et al., 2009). In Christianity, ideologies such as a regard for the common good, altruism, self-sacrifice, and charity are always to be chosen instead of self-interest, personal ambition, and self-advancement (Colson and Pearcey, 1999).

Christian Perspective on Business Ethics

Islamic Viewpoints on Business Ethics

Christianity is the world’s largest religion, practiced by 2.3 billion people, making up for nearly one-third of the world’s population (Hackett and McClendon, 2017). As Christian values have derived at least in large part from Judaism, they consider work as ‘fulfillment of spiritual life.’ Christian ethics has been founded on scripture, also known as the holy writings, found in the Bible. Scripture sets moral standards as guidelines that help its believers distinguish right from wrong (Kim et al., 2009). The ten commandments are a good example of how Christianity dictates which actions the religion condemns – and this applies in business where activities such as lying, stealing, etc., are regarded as unethical. The Bible’s teachings on love and service to others have also been interpreted as primary goals of corporate social responsibility, from a Christian ethics viewpoint (Calkins, 2000). Even though Judeo-Christian teachings were used as a moral compass throughout most of Western history, with the rapid evolution of modernism, ethical issues started to get addressed through frameworks such as utilitarianism. While believers of Christianity would analyze ethical issues by referring to the ten commandments found in the scripture, utilitarians analyzed them

Some estimates suggest that the Islamic religion is practiced by 25% of all consumers worldwide (Saeed, et  al., 2001; Ishak and Abdullah, 2012). Therefore, it is becoming increasingly important to understand the implications this religion has on culture and values, especially in predominantly Muslim countries. Islamic countries are also known to be rich in natural resources (Luqmani, et  al., 1980) and subsequently hold significant investing potential and buying power. Furthermore, many Islamic countries such as Egypt, Algeria, Pakistan, Afghanistan, etc., have become increasingly religious and applying Islamic law, also known as Shari’ah, to all aspects of life and thought (Saeed, Ahmed and Mukhtar, 2001; Abuznaid, 2009). A common misconception about Islamic countries is that they are anti-capitalistic and antiprogressive. While the Islamic religion embraces value maximization instead of profit maximization in business, Islamic teachings from prophet Muhammad still highlight the importance of trade, business, and property ownership (Luqmani, 1980). In the center of value maximization is the concept of justice and business exchanges that guard the interests of all parties involved (Saeed, Ahmed and Mukhtar, 2001; Abuznaid, 2009).

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Additionally, Islamic law prohibits excessive profits and considers them to be exploitative of consumers (Luqmani, 1981). Islamic teachings, similar to Christian, highlight the importance of benefiting the society, contributing to the common good. An example of this in Islam is the enforcement of zakaat, a 2.5% annual tax upon individuals that is used for the collective benefit in an attempt to ‘share wealth with the less fortunate.’ Islamic law also prohibits practices like usury (lending money at a high interest), and making banks collect equity on financing ventures instead of interest (Luqmani, 1980). Other practices that the Islamic religion and subsequently Shari’ah prohibits and condemns are alcohol sale and consumption (Ishak and Abdullah, 2012), manipulation of human psychology to generate sales, false promotional claims, bribery, corruption (Abuznaid, 2009), etc. All things considered, Islamic law underlines the importance of corporate responsibility and accountability (Saeed, Ahmed and Muhktar, 2001). When it comes to business ethics, Islam only embraces the divine command theory among all other ethical theories. Divine command theory equates ethical values with God’s commands by condemning any action that does not rely on religious teachings to categorize what is ethically wrong (Al-Aidaros, 2013). Theories such as utilitarianism, deontology or virtue ethics are rejected by Islam, mainly because of their lack of representation of ‘spiritual objects of life’ (Saeed, et  al., 2001; Al-Aidaros, 2013). Likewise, theories like idealism and relativism are also rejected by Islam, as they are considered too vague as they are not based on specific rules (such as Qur’anic commandments) and leave significant room for interpretation (Saeed, Ahmed and Muhktar, 2001).

Buddhist Perspective on Ethics Buddhism, as one of the most largely practiced religions worldwide, is practiced by 10% of the worlds’ population, according to the World Population Review (2019). The Buddhist perspective on business ethics focuses on the individual and their thoughts, feelings, and behaviors towards others (Fam et  al., 2004). Buddhism, just like many other religions, withholds diverse religious movements within. One of the movements discussed in terms of ethics is Mahayana Buddhism, practiced by Tibetans and many Westerners (Gould, 1995). Mahayana Buddhism holds in its center compassion for all sentient beings, not limited to humans, considering all beings to having

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been our mothers and fathers at some point in time. By urging followers to consider everyone as mothers and fathers, Buddhism instills feelings of gratitude, kindness, love, and compassion in every follower towards other beings. In Buddhism, compassion has been interpreted as the notion that if one cannot be helpful to others, they can minimally inflict no harm upon them. Therefore, Buddhism urges followers to behave ethically toward other beings even if that positive behavior has not been reciprocated (Gould, 1995). Additionally, Buddhism judges immoral acts by evaluating them in terms of five factors: (1) the object, (2) the intention, (3) the effort, (4) the presence of a mental stain (i.e., negative emotion), and (5) the accomplishment of the act (Gould, 1995). For example, if the act of stealing is being evaluated in terms of these five factors it would be processed as follows in assessing morality: (1) the object belongs to another person, (2) the motive behind the theft, (3) the effort put to commit the theft, (4) the greed felt on the thief’s part, and (5) the satisfaction brought on after the theft (Gould, 1995). The Buddhist perspective shifts the moral responsibility on the individual and their experiences (Choudhury, 2014). In fact, Buddhist teachings, similar to Hindu, encourage individuals to take on exercises such as visualizing, thought watching, exploring, and meditating to help build and expand ethical understanding and practice in business. These exercises are conducted with the purpose of understanding oneself – thoughts, feelings, emotion, and behavior as well as one’s surroundings – developing empathy and respect toward others and recognizing their contributions (Gould, 1995). From a marketing ethics perspective, Buddhism prompts followers to visualize the people who most benefit or get harmed from the products that they make, market, promote, and sell, before even starting each process. Buddhism also puts an emphasis on self-responsibility versus others. This ideology is fundamental to Buddhist ethical behavior as, by evaluating a problem starting from oneself, one can reduce the bias that is usually involved in evaluating a problem that concerns multiple parties. In Buddhism, followers are also encouraged to use their personal growth as a means for empowering others. This way, if others look up to you, you can inject feelings of responsibility and promote ethical behaviors upon others as well (Gould, 1995; Choudhury, 2014). Clearly, the religious perspectives reviewed above have significant differences, while also having some underlying commonalities. These issues will be further elaborated on in the discussion section of the chapter.

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MAJOR CULTURAL FRAMEWORKS AND CULTURAL DIFFERENCES BETWEEN EAST AND WEST The extant literature has discussed three different elements of ethical decision making: (1) perception of a moral problem, (2) processes of moral reasoning, and (3) actual behavior (Rest, 1986; Trevino, 1986; Jones, 1991). Societal culture has been classified as a situational variable in the ethical decision-making process (Husted and Allen, 2008). More specifically, scholars have classified culture as one of the main drivers in the perception phase of ethical decision-making processes (Hofstede, 1984; Vitell et al., 1993; Cohen et al., 1996).

Geert Hofstede’s Framework – Cultural Dimensions Analyzed by Region Clearly, the most influential framework for analyzing dimensions of culture is Geert Hofstede’s study (1980). While the study has been criticized for the data being collected from a single global company and its exclusive focus on work-related values, its definition of culture is ‘an interactive aggregate of common characteristics that influence a group’s response to its environment,’ and its findings have been highly influential. Hofstede initially identified four dimensions of culture: (1) individualism versus collectivism, (2) high versus low power distance, (3) high versus low uncertainty avoidance, and (4) masculinity versus femininity. He later added two more dimensions in updating the study: long-term vs. short-term orientation and indulgence vs. restraint. Individualism and collectivism have been the most discussed cultural dimensions as they appear to have a strong impact on ethical decision-making (Husted and Allen, 2008). Individualistic cultures prioritize individual interests while collectivist cultures give more priority to group interests (Hofstede 1980; Triandis, 1995; Oyserman et al., 2002). Hofstede, as one of the most recognized scholars that studied the cultural factors, attributed loose ties among individuals to an individualistic culture and strong ties to a more collectivist one. The individualism and collectivism dimensions have been influential in forming patterns of beliefs, attitudes, norms, roles, and values in specific geographical regions during particular historic periods (Hofstede, 1980; Triandis, 1995). Patterns such as group norms and duties as well as an emphasis on relationships are more characteristic of collectivist

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cultures, while the persuasion of personal beliefs and rights as well as a focus in achieving tasks versus maintaining relationships are mostly practiced in individualistic ones (Triandis, 1995; Oyserman et al., 2002; Husted and Allen, 2008). Individualism and collectivism have been related to morality by scholars in multiple ways. Firstly, it was argued that collectivist cultures have a much smaller tolerance for individual deviations from group norms than individualistic cultures (Triandis and Bhawuck, 1997). Secondly, collectivist cultures, unlike individualistic ones, define positive morality in terms of in-group solidarity (Cohen et  al., 2006). Thirdly, preferences of equity versus equality are relevant, because, even though equity is both a preference of individualistic cultures and collectivist cultures, in collectivist cultures it is only preferred when dealing with out-groups, while in in-group situations, equality is their first choice (Triandis, 1994; Oyserman et  al., 2002). Equity and equality differ in terms of the way that rewards are allocated within a specific group. In an equity system, each individual is compensated according to their level of contribution, whereas in an equality system all individuals receive the same compensation, regardless of how much or how little they contributed (Fadil et al., 2005). Some societies have different viewpoints than others in terms of which practices they consider ethical in business based on individualistic vs. collectivistic perspectives. For example, Western societies are known to tolerate actions that do not result in negative consequences for the parties involved, even though those same actions may be regarded as unethical in Eastern societies. This viewpoint matches the ethics of autonomy, in which the main focus is to protect the individual from harm (Husted and Allen, 2008). Societies that are characterized by a collective culture are more prone to act in accordance with duty, hierarchy, and interdependency, while in individualistic cultures people are more concerned with prioritizing individual rights (Husted and Allen, 2008). Hofstede (1985) defined power distance as the extent to which individuals of a society accept unequal distribution of power in institutions and organizations. Cultures with high power distance are characterized by individuals that are accepting of disparities in power, such as the privilege their superiors have over them (Hofstede, 1984). In contrast, individuals from low-power-distance cultures are less likely to tolerate inequalities between classes and are more likely to disagree with their superiors (Lu et al., 1999). Along these lines, Vitell et al. (1993) made the inference that individuals in countries that are relatively low in power distance are influenced more by their peers than their supervisors when it comes to behaving

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ethically, while in countries with high power distance, ethical behavior expectations are viewed more as a responsibility held by superiors rather than employees of an organization. Uncertainty avoidance is the extent to which individuals feel intimidated by situations that are unstructured or ambiguous (Hofstede, 1985). While individuals with high uncertainty avoidance prefer structure, guidelines, and security, individuals with low uncertainty avoidance are more accepting of risky and unpredictable situations (Vitell et  al., 1993; Lu et  al., 1999). In terms of ethical behavior, business practitioners in countries with high uncertainty avoidance such as Japan, tend to follow group norms more than those in countries such as the USA that are low in uncertainty avoidance (Vitell et al., 1993). Ferrell and Skinner (1988) found that in the absence of formal codes of conduct, business and marketing practitioners in the USA (where uncertainty avoidance is low) may be more susceptible to unethical behavior than their Japanese counterparts. This finding is reinforced by the study conducted by Armstrong (1996) as well as Leonidou et  al. (2013) that concluded that societies with high uncertainty avoidance ‘perceive higher levels of the importance of ethical problems,’ unlike their low-uncertainty-avoidance societies’ counterparts. The masculinity dimension is the extent to which individuals of a society expect men to be ambitious, assertive, and striving for material success, and women to be more caring, nurturing, and responsible (Hofstede, 1984; 1985). On the other hand, in a feminine society, social roles for both sexes overlap, and interpersonal relationships are valued more than ambition or competitiveness (Vitell et al., 1993). An example where this culture dimension impacts perceptions of ethical behaviors in different societies is in practices such as ‘high-pressure selling’ that is considered unethical in countries high in femininity such as Sweden, but not in countries high in masculinity such as the USA and Japan.

The GLOBE Study (Robert House) – Additional Cultural Dimensions and Ethical Implications The GLOBE study is one of the most detailed and comprehensive research efforts concerning national as well as organizational cultures (House et  al., 2004; Alas, 2006). Building on Hofstede’s approach, House et al. (2004) studied 62 societies and identified nine cultural dimensions of culture: (1) uncertainty avoidance, (2) power distance, (3) institutional collectivism, (4) in-group collectivism, (5) gender

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egalitarianism, (6) assertiveness, (7) future orientation, (8) performance orientation, and (9) humane orientation. As uncertainty avoidance and power distance were already discussed as Hofstede’s dimensions, we will explain the other dimensions identified by GLOBE and identify how they relate to ethical behavior in business. As for collectivism, House et  al. (2004), split this dimension into two groups: institutional collectivism, referring to the degree to which collective action and distribution of resources are encouraged by organizations; and in-group collectivism, referring to the degree to which individuals are loyal to their families or organizations (House et  al., 2004). In terms of ethics, both of these classifications of the collectivism dimension have been related to group harmony and loyalty and individuals belonging to this dimension have a low tolerance for deviation from group norms (Triandis and Bhawuk, 1997; Parboteeah et  al., 2005). House et al.’s gender egalitarianism and assertiveness have been related to the femininity and masculinity dimensions, respectively (Parboteeah et  al., 2005; Seleim and Bontis, 2009). Like the femininity dimension, gender egalitarianism promotes gender equality in a society by minimizing gender role differences. Additionally, similar to masculinity, assertiveness refers to the degree to which individuals in a society are aggressive, confrontational, and assertive (House et al., 2004). According to House et  al. (2004), individuals in assertive societies tend to be competitive while having a thirst for success and thinking of others as opportunistic. These characteristics have led researchers to relate assertiveness to ‘individuals’ willingness to justify ethically suspect behaviors’ (Parboteeah et al., 2005). Future orientation, similar to Hofstede’s longterm orientation dimension, has been defined by House et  al. (2004) as the degree to which individuals take future-oriented steps such as planning and investing in the future and delaying gratification. Individuals from societies high in future orientation are concerned with the future consequences that current actions may bring, and therefore have less tendency to engage in unethical behaviors than those from societies that are low in future orientation (Ashkanasy et  al., 2004). A study by Karaibrahimoglou and Cangarli (2016) reinforced this conclusion by finding a positive relationship between ethical behaviors of managers and societies high in future orientation. House et al. (2004) define performance orientation as the degree to which members of a society are encouraged and recognized for excelling and improving. Scholars have classified societies that score high on this dimension as having a

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‘willingness to justify ethically suspect behaviors’ (Parboteeah et al., 2005). This notion has derived from the theory that if a society values achievement more than anything else, then individuals will be mainly judged on the result of their behavior, rather than the way they achieved that result (Parboteeah, Bronson and Cullen et al., 2004). Humane orientation is defined as the degree to which individuals’ fairness, altruism, friendliness, generosity, caring, and kindness are encouraged and rewarded in a society (House et  al., 2004). Societies high in humane orientation, such as Denmark or Sweden, are found to be less likely to justify unethical behaviors, as the individuals of these societies value affiliation and belongingness more than the desire for material possessions and power (Parboteeah et al., 2005).

THE IMPACT OF RELIGION AND CULTURE ON THE MARKETING MIX Impact of Religious Viewpoints on the 4Ps of Marketing In this section, we focus on specific ethical issues studied by previous scholars as viewed through the lens of different religions and their impact on the controllable marketing variables: product, price, promotion, and distribution (place). Here, we draw only on prior research findings and do not speculate on issues that have not been addressed in the marketing literature to date. In terms of product, we have identified three major ethical issues that have been the subject of academic study from religion-based ethical viewpoints: quality issues, value issues, and perspective on sustainability. Christian ethics condemns practices designated to prioritize personal gain over ‘the common good’ (Colson and Pearcey, 1999). Along those lines, a marketer influenced by Christian ethics viewpoints should aim to offer high-quality products to consumers and not prioritize lowering production costs over consumer safety and satisfaction issues (Rossouw, 1994). In this contact, providing real value is a noble pursuit, but ‘cutting corners’ at the expense of the consumer can be deemed questionable. Additionally, Christian religiosity has been related to environmental consciousness as a religion that aims to protect and cultivate nature (Rossouw, 1994). From a marketing perspective, this means that business decision makers should put environmental concerns above profitability or cost minimization during the production process.

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The Islamic perspective also puts a great emphasis on delivering high-quality products to consumers that are pure and made in a permissible way also known as ‘halal’ in Arabic, in order to avoid any harmful consequences to the end-user. In Islamic cultures, the focus on delivering value versus maximizing business profits is often manifested in product exchanges/sales, where marketers are expected to be truthful and mindful of the impact their products have on the entire society (Saeed, et al., 2001). Buddhism takes a similar stance in regards to product quality, urging followers to visualize the receiver/consumer of their products/services and imagine as if they are part of their immediate family – assuming one would not want to cause any harm to immediate family members (Gould, 1995). Additionally, the Buddhist approach to delivering value is through producing functional and durable products that are essential to life, while avoiding the production of goods whose demand is driven by ‘greed and indulgence’ (Durning, 1998; Lamberton, 2005). One of the reasons that the Buddhist perspective gravitates toward simplicity and low consumption of goods is its fundamental support of sustainability. Excessive consumption of goods, mostly accredited to Western economies, has been related to environmental issues (Costanza and Daly, 1992). Therefore, Buddhist followers contribute to nature conservation and sustainable production of goods through lowering their consumption (Lamberton, 2005). When it comes to pricing practices, there are three prevalent ethical issues discussed by the prior literature: price discrimination, predatory pricing, and bribery. Price discrimination has been defined as the ‘practice of charging different customers different prices for the same product’ (Elegido, 2011). Consistent with Judeo-Christian values, which are critical of treating people differentially (‘do unto others’), price discrimination is largely prohibited in the USA by the Robinson Patman Act. Meanwhile predatory pricing is regarded as highly unethical by Christianity as it is unfair from a competitive viewpoint, and also drives up consumer prices. According to the US Federal Trade Commission, predatory pricing refers to purposely lowering prices below competitors’ costs as part of a strategy to drive competitors out of business and creating a monopoly. In the USA it is generally banned by the Sherman Act and the Clayton Act. Bribery in an international business context means offering financial or non-financial rewards to government officials in exchange for a commercial benefit (Sanyal, 2005). Christian teachings based on the foundation of the Jewish Old Testament consider bribery as a major sin (Quddus et  al., 2009). The Christian New Testament also

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categorizes the practice of bribery as highly unethical, on the giving as well as the receiving end, including cases in which the bribe would not be used to achieve competitive advantage (Quddus et  al., 2009). As a result, it is not a surprise that the US Foreign Corrupt Practices Act bans significant forms of bribery and has received praise from many ethicists around the world. This especially makes sense in the context of Islam and Buddhist tenets frowning on bribery (see below). Interestingly, research has found that in contrast to the Western view, from an Asian Christian perspective the lines between a gift and a bribe are blurry. Hwa (1998), argues that while the Bible condemns bribery as a means to obstruct justice or hurt and oppress ‘the poor’, it does not condemn bribery practices that result from weakness or coercion. Wong’s (2008) study findings from a sample of Malaysian Christians is consistent with Hwa’s argument, by revealing that Christians consider asking for a bribe less ethical than offering one in order to do business or secure a contract. In Islamic cultures, price discrimination is forbidden because it is viewed as a practice that gives consumers a false impression that they are getting a bargain on their purchase. In fact, Islamic law bans changing the price of a product for one buyer vs. another without altering its quality or quantity (Saeed, et  al., 2001). In line with this, predatory pricing is also prohibited in Islam since it enforces the ideology of excessive focusing on profit maximization while harming competitors (Ishak and Abdullah, 2012). However, Islam does not interfere with price fluctuations that emerge as a result of market conditions such as supply scarcity or surplus (Saeed, Ahmed and Muhktar et al., 2001). Bribery is one of the practices that Islam considers as ‘haram’ or unethical and therefore forbids. Unethical payouts given to influence decisions or outcomes such as gaining market share or entering specific target markets are condemned by Islam (Abuznaid, 2009; Saeed, et al., 2001). From a Buddhist perspective, bribery is also condemned as it is considered to be ‘deceptive’ and subsequently leading to ‘moral disintegration’ (Nichols, 2012). The practice of bribery violates two of the precepts of Buddha’s teachings – not to lie and not to steal. Additionally, it is considered to be generated from personal negative motivations that encourage individuals to act out of greed and personal interests among other negative sentiments (Nichols, 2015). In terms of promotion, there are also many similarities among religious viewpoints, even though those viewpoints are not necessarily manifested the same way in every region of the world. The most commonly discussed promotion topics viewed through a religious lens are product

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misrepresentation, disclosures, and the use of sexual and emotional appeals. Product misrepresentation is one of the main practices that is forbidden by Islam in terms of promotion. In Islam, it is highly unethical to conceal existing product defects or advertise products for attributes or properties that they do not actually possess (Saeed, et al., 2001). In fact, exaggeration or obfuscation is not tolerable, and marketers are obligated to disclose any defects associated with their products before purchase takes place (Niazi, 1996). Other promotional requirements in Islam include clear restrictions on using emotional or sexual appeal to encourage product sales, as they are considered to be manipulative practices that take advantage of basic human instincts (Erffmeyer et al., 1993). Additionally, selling ‘addictive products’ or activities such as alcohol and gambling are forbidden in strict Islamic cultures and their promotion is regarded as offensive by followers of the religion (Fam et al., 2004). Sexual appeal in promotion from a Buddhist perspective has historically been regarded quite negatively as well (Fam et  al., 2004). Buddhist teachings emphasize the power of positive deeds as well as positive thought and, therefore, condemn language that expresses sexuality, anger, or exploitation. Additionally, Buddhism pushes for self-control and personal discipline to eliminate desires or base instincts (Dillon, 1998). Consistent with these teachings, Buddhist followers have been found to be offended by advertisements featuring gender/sex-related products as well as addictive products, similar to Islam followers (Fam et al., 2004). Christian cultures tend to be more tolerant of emotional appeals than other major religions, and sexual appeals are commonly seen. While fundamentalist Christian teaching, similar to Buddhist, encourage self-control and evaluating objects of pleasure in terms of morality to achieve fulfilment (Fam et  al., 2004; Gibbs et  al., 2007), the idea that it is acceptable to acquire material possessions is well accepted. As a result of admiration for the Judeo-Christian work ethic, ads focusing on indulgence, such as by taking a cruise, are widely accepted. Nonetheless, there appear to be some limits, as at least one study has shown that some Christian believers are offended by sexual appeals that are too overt as well as ads for addictive products, similar to their Islamic and Buddhist counterparts (Fam et al., 2004). In terms of ethics in distribution, the following issues have been addressed by prior research from a religious perspective: product delivery, transportation, local production, and environmental conservation. Islamic teachings encourage marketers to shield their customers from any potential burden

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during product delivery and condemn distribution practices that risk harming the natural and human environment for a higher return on profit (Saeed et al., 2001). Starting from putting an emphasis on timely deliveries to providing safe transportation methods, Islam places a heavy emphasis on the consumer and meeting consumers’ expectations (Saeed et al., 2001). Buddhism places considerable emphasis on local production of goods as opposed to importation (Lamberton, 2005). Buddhist economic principles consider the importation of goods unnecessary, unless it is required to supply products that fulfill essential consumer needs. One of the reasons for this is to reduce the pressure that global transport systems place on ecology (Lamberton, 2005). In fact, conserving the natural environment is one of the main concerns of Buddhism. Buddhism identifies a connection between humankind and the ecological environment and claims that deterioration in human health is caused by deterioration in ecological health (Steingraber, 2000). Additionally, Buddhist economics pushes for lower consumption of nonrenewable energy sources and their usage only to satisfy essential needs (Schumacher, 1973). While little has been written on Christian perspectives on distribution, it is likely due to a recognition that trade is a necessity (Helble, 2007), and efficiencies in getting products to consumers who want and need them are part of doing a good job and treating others well. Moreover, as part of the Judeo-Christian work ethic, it is likely that developing efficient distribution systems that increase efficiency and allow for lower prices for consumers but increased profits at the same time is viewed positively by most Christians (Helble, 2007).

Impact of Cultural Differences on the Controllable Marketing Variables Like religion, culture can have a great impact on perceptions of what is ethical and what is not (Ferrell et al., 1989). In this section we will discuss the specific ethical issues from different cultural perspectives as related to the marketing mix. In terms of product, the main ethics topics that have been discussed as dependent on cultural dimensions have been product information disclosures, intellectual property infringements, and green buying intention. Three main studies have identified, grouped, and analyzed specific marketing norms in relationship to cultural dimensions (Vitell et al., 1993; Yoo and Donthu, 2002; Pallab et al., 2006). These studies utilize measures of marketing ethical norms

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such as information and contract norms that factor into marketing decisions and relate to information disclosures (Yoo and Donthu, 2002; Pallab et al., 2006). The information and contract norms include items such as disclosing all substantial risks associated with the product or service usage, as well as any product component substitution that might change the product itself or impact the consumer’s purchase decision (Yoo and Donthu, 2002; Pallab et al., 2006). When information and contract norms have been studied in relation to cultural dimensions, it has been found that highly collectivistic cultures as well as those high in uncertainty avoidance have stronger information and contract norms (Yoo and Donthu, 2002; Pallab et al., 2006). However, cultures high in masculinity and power distance are negatively related to these variables. These findings imply that cultures high in collectivism and uncertainty avoidance are likely to disclose product information with consumers, while cultures high in masculinity and power distance are not (Yoo and Donthu, 2002). Intellectual property rights are considered to be essential to promote innovation as well as economic growth, even though in some cultures they may be regarded as a barrier to access existing knowledge (Marron and Steel, 2000). These authors observed that the ratio of illegally copied software in some cultures was substantially higher than in others and studied perceptions of intellectual property protection. They found that people in individualist cultures (Western countries) relate to the concept of individual ownership more naturally than those in collectivist cultures (non-Western countries), where people are used to sharing. Therefore, the authors concluded that collectivist countries, such as Indonesia and Korea, have higher piracy rates and therefore higher tolerance for intellectual property rights violations than individualist ones such as the USA and Australia (Marron and Steel, 2000). Green buying intention represents the willingness of consumers to purchase ecologicallyfriendly products whose production methods are kind to the environment (Lu et  al., 2015). Consumers with high ethical awareness have been found to be more prone to buying green products (D’Souza et  al., 2007). Liobikienė et  al. (2016) studied different countries within the European Union and found significant correlations between two of Hofstede’s cultural dimensions with green buying behavior: specifically that individualistic cultures and long-term orientation are negatively correlated with green purchases. The following topics have emerged as the most discussed pertaining to price: price fixing, price skimming (discrimination), and bribery. The US

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Federal Trade Commission defines price fixing as an agreement between competitors to raise, lower, or stabilize prices or competitive terms without allowing market conditions such as supply or demand to freely determine them. The studies that have analyzed specific marketing norms as they relate to cultural dimensions have also measured price and distribution norms (Vitell et  al., 1993; Yoo and Donthu, 2002; Pallab et  al., 2006). In their study, Pallab et  al. found that uncertainty avoidance had the most positive effect on price norms, implying that price fixing is less likely in high-uncertainty-avoidance cultures. Additionally, Yoo and Donthu found a marginal relationship between the masculinity dimension and price and distribution norms, which implies that cultures high in masculinity are less likely to engage in price fixing. Price skimming, similar to price discrimination (discussed in the previous section), has been identified as the practice of setting a high product price initially with the intention of skimming the highest amount possible of revenues from consumer segments that are willing to pay the high set price without engaging in bargaining (Armstrong and Kotler, 2003). Ndubisi (2004) argues that skimming practices are more acceptable in cultures high in power distance, as they help boost the ego of the powerful members of the society. In contrast, in cultures that are low in power distance, products with initially reasonable prices are predicted to be more viable and therefore consumers in those cultures are likely to be unwilling to pay prices that are not the same for all (Ndubisi, 2004). International firms have known to resort to paying bribes in order to conduct business in countries where this practice is common, justifying their actions through the need to comply with the ‘norms’ of the country they are doing business in (Carmichael, 1995). Bribe taking and perceived level of corruption have been measured through the Corruption Perception Index (CPI) as the most reliable determinant of bribery internationally (Sanyal, 2005). Using the CPI, Sanyal found a significant relationship between two of Hofstede’s dimensions and bribe taking/corruption. His study found that in countries high in power distance and masculinity, the level of bribe taking is also high. This happens due to corruption being more acceptable in countries high in power distance, and pursuits of success and achievement being more acceptable in countries high in masculinity (Sanyal, 2005). Seleim and Bontis (2009) studied corruption through the CPI in relation to the GLOBE cultural dimensions and confirmed a positive relationship between cultures high in power distance and corruption levels in addition to cultures practicing in-group collectivism. Most

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other cultural dimensions, including uncertainty avoidance, institutional collectivism, humane orientation, future orientation, and performance orientation, were negatively related to corruption/ bribe taking (Seleim and Bontis, 2009). With regard to promotion practices, the following topics have surfaced as related to unethical behavior and cultural dimensions: consumer privacy, deceptive communications, sales practices (high-pressure, manipulative tactics), sexual appeals, and gender stereotyping. Consumers across cultures have demonstrated different levels of concern when it comes to information privacy, arguably because of differences in regulation (e.g., the European Union’s GDPR vs. the industry self-regulation approach in the USA: Bellman et  al., 2004; European Commission, 2018). Differences in cultural values have been proven to account for differences in perceptions of data privacy (Milberg et al., 2000, Bellman et al., 2004). After testing four of Hofstede’s dimensions in relation to information privacy concerns, Bellman et al. (2004) found that individuals from countries high in individualism, power distance, and masculinity are less concerned with information privacy and therefore more comfortable with disclosing private information than those in cultures low in individualism, power distance, and masculinity. Several studies have explored deceptive communications, particularly relating to individualistic and collectivistic cultures (Kim and Levine, 2008; Min-Sun et  al., 2008; Triandis, 2005). Collectivist cultures have been found to be more prone to using deception during communications in order to protect the benefit of their in-group (Triandis, 2005). Contrary to that, in individualistic cultures deception is viewed as lying (Hopper and Bell, 1984). A study by Nishiyama (2000), found that US consumers considered common collectivistic Japanese business strategies to be deceitful. Additionally, a study by Merkin et  al. (2014) also suggested that individualistic cultures are negatively related to a propensity in deception. One of the main categories involved in the studies about marketing norms in relation to cultural dimensions has been product and promotion norms (Vitell et al., 1993; Yoo and Donthu, 2002; Pallab et al., 2006). One of the items consistently used for measuring product and promotion norms is the extent to which high-pressure tactics or potential manipulations are avoided as a practice to generate sales. Out of the five Hofstede dimensions that Pallab et al. (2006) studied in relation to product and promotion norms, they found positive correlations between cultures high in collectivism and long-term orientation and promotion norms. In terms of sales, findings suggest that cultures

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high in collectivism and long-term orientation are more likely to apply high-pressure during the sales process (Yoo and Donthu, 2002; Pallab et al., 2006). Another topic that has been discussed in terms of differences in perceptions of the ethics of promotion practices has been the use of sexual appeals in advertisements (Liu et al., 2009). Research has identified differences of perceptions of sexual appeals based upon cultural dimensions in individualism/collectivism as well as uncertainty avoidance (Liu et  al., 2009). Individualistic cultures have been found to pursue a variety of experiences as well as stimulation and therefore are assumed to be more attracted to sexual appeal than their collectivistic counterparts (Herrmann and Heitmann, 2006; Liu et  al., 2009). Additionally, individuals that are part of cultures low in uncertainty avoidance appear not to react much different when exposed to mild versus strong sexual appeal in advertisements. However, individuals in cultures such as Mexico that are high in uncertainty avoidance have shown significant changes in reactions to mild versus strong sex appeals (Garcia and Yang, 2006). Gender stereotyping has also been criticized as a commonly used practice in advertising globally, mainly for the consequences it causes in women’s self-esteem (Dens et al., 2009). Responses to gender stereotyping have been shown to vary depending on cultural values, especially on the power distance and assertiveness dimensions of culture (De Meulenaer et al., 2017). De Meulenaer et al. found that individuals’ responses to male stereotyping in cultures high in assertiveness were especially favorable, whereas their responses to female stereotyping were negative. Additionally, they found that cultures high in power distance also had a favorable reaction to male stereotyping. When it comes to comparing the differences in cultures to ethical perceptions in terms of distribution practices, the following topics have been discussed: trust in the channel and electronic retailing ethics from the consumers’ perspective. Distribution channels often play an instrumental role in penetration of a new foreign market through many different mechanisms, including: establishing a brand/product that matches the profile of foreign customer base; developing strategies to minimize logistical costs and maximize profits; and acting as an intermediary between regulatory institutions and manufacturing company etc. (Nevins and Money, 2007). Several studies show that one of the most important factors in maintaining healthy relationships and improving commitment between manufacturers and distributors is mutual trust (Geyskens et al., 1998; Grewal et  al., 1999; Kiessling and Harvey, 2004). Trust

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has also been established as a mediator between buyers and sellers in a marketing channel (Morgan and Hunt, 1994). Hofstede’s cultural dimensions have been studied in this regard and results show an impact of individualism on distribution channel relationships (Nevins and Money, 2007). A study by McFayden and Cannella (2004) reveals that distributors that are part of an individualistic culture are more likely to interrupt supplier relationships suddenly, unless they have established a trustworthy relationship with their partners. In instances in which trustworthy relationships are missing, collectivistic distributors are more likely to maintain channel relationships than distributors in individualistic countries (Nevins and Money, 2007). The internet has recently become an increasingly popular distribution channel for online retailing (also known as e-commerce), fueled by the increasing usage of internet resources by populations around the world (Elbeltagi and Agag, 2016). Elbeltagi and Agag studied consumers’ perceptions of e-commerce ethics in relationship to consumer satisfaction using Hofstede’s cultural dimensions as moderators. After establishing that consumer perceptions of online retailing ethics (CPORE) included security, privacy, fulfillment/ reliability, non-deception as well as service recovery, the researchers found that one of the most significant cultural dimensions that had a positive effect on the relationship between CPORE and consumer satisfaction was individualism (Elbeltagi and Agag, 2016). These findings imply that if the consumer that engages in e-commerce is part of a culture low in individualism (high in collectivism), their perceptions of online retailing ethics would not necessarily lead to satisfaction and subsequently to repurchase intention (Elbeltagi and Agag, 2016).

DISCUSSION It is notable that in spite of being linked to different documents/perspectives, major religious perspectives on marketing ethics do show many commonalities. Judeo-Christian ethics are rooted in scripture and the ten commandments (Kim et al., 2009), while Islamic ethics applies Shari’ah law to all aspects of life and thought, including ethical matters (Saeed et  al., 2001). Buddhist ethics is largely rooted in the notion that it is essential to instill love, compassion, empathy, and respect toward all beings, with an emphasis on the surrounding ideology of treating everyone as mothers and fathers.

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Some of the philosophical underpinnings of these religions lead to commonalities in terms of marketing ethics. It is notable that all three of these religions put an emphasis on protecting the common good and setting personal ambition and selfinterest aside (Luqmani et al., 1980; Gould, 1995; Colson and Pearcey, 1999). Each also holds principles that relate to corporate social responsibility. In Christian ethics, love and service to others drive the belief that social responsibility is important. In Islam, protecting human beings’ safety and wellbeing is central and leads to the need for social responsibility, while in Buddhism, holding oneself accountable first for actions toward others drives the need for corporations to behave responsibly (Gould, 1995; Calkins, 2000; Saeed et al., 2001; Choudhury, 2014). Other commonalities between these three religious perspectives on marketing ethics include the need for delivering high-quality and safe products avoiding harm to consumers. It is also the case that bribery is forbidden from all three religious perspective, though there is some evidence that in Christianity the lines of the ethicality between giving and receiving bribes is more blurry (Wong, 2008; Abuznaid, 2009; Quddus et  al., 2009; Nichols, 2012). Interestingly, Christian and Islamic ethics both reject direct application of ethical frameworks such as utilitarianism and relativism, instead relying on the fundamentals of their own ethical standards (Al-Aidaros, 2013). A fascinating output of an analysis of religious perspective on marketing ethics is how the substantial commonalities suggest that, globally, ethical breaches in marketing are more frequently related to breaches that also violate religious ethics. While the commonalities are indeed significant, there are some key differences in religious values as they relate to marketing ethics. In comparison to Christianity, Islam emphasizes value maximization (justice for all parties involved in a business transaction) as holding priority over profit maximization (Saeed et  al., 2001). Buddhism is unique from an ethical perspective in stressing the importance of oneself first, before jumping into evaluating situations and/or other people (Gould, 1995). It also places stronger explicit emphasis on maintaining sustainability and nature conservation through low consumption of goods and simplicity (Lamberton, 2005). It is clear that cultural variables have a profound impact on attitudes pertaining to marketing ethics. In collectivistic cultures there is smaller tolerance for individual deviations from group norms (Triandis and Bhawuck, 1997). Positive morality is defined in terms of in-group solidarity in these cultures and (Cohen et al., 2006) there

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is a preference for equality when dealing with ingroups and equity when dealing with out-groups (Triandis, 1994; Oyserman et  al., 2002). In collectivistic cultures, businesses are more likely to disclose product information with consumers (Yoo and Donthu, 2002) and intellectual property infringements are more likely to be tolerated (Marron and Steel, 2000). It is also the case that certain types of deceptive communications are likely to be tolerated, but high-pressure ‘hard sell’ techniques are less likely to be used (Nishiyama, 2000; Yoo and Donthu, 2002; Pallab et al., 2006; Merkin et al., 2014). In terms of distribution, collectivistic cultures maintain strong relationships with distributors (Nevins and Money, 2007) and consumers have been found to be less vigilant in terms of online retailing ethics. Power distance has also been found to have an impact on attitudes toward several ethical issues in marketing. In high-power-distance cultures, ethical behaviors are viewed as the responsibility of supervisors (Vitell et al., 1993) and businesses are less likely to disclose product information with consumers (Yoo and Donthu, 2002). Highpower-distance societies are also more likely to tolerate price skimming, more tolerant of bribery, and more likely to accept disclosure of private information. Uncertainty avoidance has also been found to have some impacts. When a culture is high in uncertainty avoidance, ethical norms are regarded as being important to follow. High uncertainty avoidance is also associated with more negative attitudes toward corruption and price fixing and more disclosure of product information by businesses (Yoo and Donthu, 2002; Pallab et al., 2006). Masculinity (and the assertiveness dimension from the GLOBE study) has been found to be associated with higher acceptability of high-pressure selling and the justification of ethically questionable behavior (Vitell et al., 1993; Parboteeah et al., 2005). When masculinity is high it has been found that businesses are less likely to disclose product information with consumers and less likely to engage in price fixing (Yoo and Donthu, 2002; Pallab et al., 2006). However, masculine cultures are more likely to tolerate bribery and consumers are more likely to report a willingness to disclose private information (Bellman et  al., 2004; Sanyal, 2005). Long-term orientation has been found to be negatively correlated with tolerance for high-pressure sales (Yoo and Donthu, 2002; Pallab et  al., 2006) and desire for making green purchases (Liobikienė, 2016). The related future orientation from the GLOBE study has been found to lead to a lower tendency to engage in unethical behaviors (Ashkanasy et al., 2004) and to be correlated with

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lower propensity to engage in corruption (Seleim and Bontis, 2009).

SUGGESTIONS FOR FUTURE RESEARCH The literature on the impact of religion on culture has been heavily skewed toward Christian and Islamic perspectives. Clearly, more research is needed on other major religions, including Buddhism and Hinduism among others, and how their values specifically relate to business/marketing ethics. In terms of culture, Hofstede’s dimensions have been dominant in the research, but more research on these and other dimensions on the impact toward specific marketing practices is needed. Dimensions from the GLOBE study should be studied in more depth, as should Hofstede’s longterm vs. short-term orientation as well as indulgence vs. restraint, as they have received less attention than the other four Hofstede dimensions.

CONCLUSION There has now been considerable study of ethical issues in marketing from cultural and religious perspectives. In general, major religious perspectives have more points of underlying commonalities than differences. While there are some significant differences in religious perspectives in terms of their impact on marketing ethics, it is very often the case that ethical breaches run in opposition to all major religious perspectives as they affect marketing ethics. This is not as much the case with culture, where the literature shows substantial differences in attitudes toward multiple ethical practices based on ethical issues. Several cultural variables have been found to have a profound impact on marketing ethics. Clearly, however, more research on the impact of cultural variables on various ethical practices in marketing is needed.

REFERENCES Abuznaid, S. A. (2009). Business ethics in Islam: The glaring gap in practice. International Journal of Islamic and Middle Eastern Finance and Management, 2(4), 278. doi:10.1108/17538390911006340

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Al-Aidaros, A. (2013). Ethics and ethical theories from an Islamic perspective. International Journal of Islamic Thought, 4(1), 1–13. doi:10.24035/ ijit.04.2013.001. Alas, R. (2006). Ethics in countries with different cultural dimensions. Journal of Business Ethics, 69(3), 237–247. doi:10.1007/s10551-0069088-3. Armstrong, G., & Kotler, P. (2003). Marketing: An Introduction. Upper Saddle River, NJ: Prentice Hall. Armstrong, R. W. (1996). The relationship between culture and perception of ethical problems in international marketing. Journal of Business Ethics, 15(11), 1199–1208. doi:10.1007/BF00412818. Ashkanasy, N., Gupta, V., Mayfield, M., & Roberts, E. (2004). Future orientation, in R. House, P. Hanges, M. Javidan, P. Dorfman, & V. Gupta, V. (Eds), Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies. Thousand Oaks, CA: Sage. Bellman, S., Johnson, E. J., Kobrin, S. J., & Lohse, G. L. (2004). International differences in information privacy concerns: A global survey of consumers. The Information Society, 20(5), 313–324. doi:10.1080/01972240490507956 Calkins, M. (2000). Recovering religion’s prophetic voice for business ethics. Journal of Business Ethics, 23, 339–352. doi:10.1023/A: 1005989824688 Carmichael, S. (1995). Business Ethics: The New Bottom Line. London: Demos. Choudhury, K. (2014). Materialism, religion, and implications for marketing – An ethnographic study of Nichiren Buddhism: Materialism, religion, and implications for marketing. Psychology & Marketing, 31(9), 683–697. doi:10.1002/mar.20728 Cohen, J. R., Pant, L. W., & Sharp, D. J. (1996). A methodological note on cross-cultural accounting ethics research. International Journal of Accounting, 31(1), 55–66. Cohen, T. R., Montoya, R. M. & Insko, C. A. (2006). Group morality and intergroup relations: Cross cultural and experimental evidence. Personality and Social Psychology Bulletin, 32(11), 1559–1572. Colson, C. W., & Pearcey, N. R. (1999). How Now Shall We Live? Wheaton, IL: Tyndale House. Costanza, R., & Daly, H. (1992). Natural capital and sustainable development. Conservation Biology, 1, 37–46. Cullen, J. B., Parboteeah, K. P., & Hoegl, M. (2004). Cross-National Differences in Managers’ Willingness to Justify Ethically Suspect Behaviors: A Test of Institutional Anomie Theory. Academy of Management Journal, 47(3), 411–421. doi: 10.5465/20159590 D’Souza, C., Taghian, M., & Khosla, R. (2007). Examination of environmental beliefs and its impact on the influence of price, quality and demographic

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4 An Interdisciplinary View of Marketing Ethics D o m i n i k M a h r, M a r t i n a Č a i ć a n d Gaby Odekerken-Schröder

INTRODUCTION Marketing ethics as a common goal – defined as moral standards applied to marketing practices, behaviour and institutions to define what to do and what the ideal approach is (Laczniak and Murphy 2014) – might be informed by contributions from multiple disciplines (Grigg 1999). In particular, marketing increasingly functions, in both research and practice, as an integrator of multiple perspectives. Marketing managers who prioritize superior customer experiences seek a holistic perspective spanning all customer touchpoints, such that they recognize the need to orchestrate customer interactions across internal firm departments (Lemon and Verhoef 2016). Scholarly marketing principles, such as the service-dominant (S-D) logic, similarly integrate various theories that might describe the functioning of markets. Accordingly, an interdisciplinary view to investigate and manage marketing ethics represents a potentially useful contribution to ongoing societal debates. For example, Facebook’s improper harvesting and distribution of the data records of 87 million users represented ‘a breach of trust between Facebook and the people who share their data with us and expect us to protect it’, in the words of its founder Mark Zuckerberg (Guardian

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2018). The complexity of the breach and resulting impacts on consumers mean that marketing, legal principles (data protection), data science and data analytics must combine to establish an ethical judgement and resolution. Similarly, in Apple’s global supply chain – in which low pay and poor working conditions created societal controversies and reputational damage among customers – understanding the ethical challenges demands integration of expertise in marketing (consumer behaviour), supply chains (global value chain), human resources (work stress) and legal principles (labour rights). To accommodate such needs for an interdisciplinary view, this chapter draws on the contemporary S-D logic to offer an integrative framework of marketing ethics. The S-D logic, arguably the most prominent meta-theory in marketing, describes the functioning of markets and also encompasses several mid-range theories (e.g. core competency theory, consumer culture theory, social network theory, new institutional economics, human ecology) from beyond marketing that help expand its insights (Vargo and Lusch 2017). Therefore, this chapter begins by explaining an interdisciplinary approach to marketing practice and research. It then offers a history of the evolution of marketing ethics, due to the influences of various disciplines,

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and summarizes its current status before applying the S-D logic and its main principles to understand marketing ethics. Next, this chapter dives deeper into the mid-range theories that fall under the umbrella of the S-D logic and outlines some influential factors that define ethical issues. The combined insights produce the integrative framework of interdisciplinary marketing ethics, which this chapter applies to robotics and healthcare settings to establish contemporary insights into the use, challenges and dilemmas of marketing ethics. Finally, this chapter concludes with a synthesis of marketing ethics and its specific managerial implications, reflecting the main principles of the S-D logic.

AN INTERDISCIPLINARY APPROACH TO MARKETING Interdisciplinary Approaches An interdisciplinary approach synthesizes multiple disciplines and makes connections across their ideas and concepts (Jones 2010). Demand for interdisciplinarity is rooted in the rise of complex tasks, together with increased knowledge depth and specialization. Collaborations among actors with different expertise can lead to complex problem solutions and innovations, and coordination constitutes a unique team capability (Bruns 2013). Similarly, academia encourages students to focus on gaining knowledge in a discipline in synthesis with other disciplines, to enrich their overall educational experience and to become T-shaped professionals (Spohrer and Maglio 2010). Researchers also benefit from integrating knowledge across disciplines to advance insights into a common problem for which the solutions are beyond the scope of any one discipline (Grigg 1999). Theoretically, interdisciplinary approaches differ from multidisciplinary or transdisciplinary versions (Gustafsson et  al. 2016). Whereas Multidisciplinarity implies borrowing or lending knowledge developed in one discipline to another, and trans-disciplinarity combines existing knowledge to create a new discipline (Gustafsson et al. 2016), interdisciplinarity involves the interactive, mutual integration and sustained communication of participants from different disciplines on an equal footing to address a common problem. Through this mutual integration of knowledge, interdisciplinary thinking fosters openness to new ideas, critical thinking and creativity, which in turn drive exploration and innovation. However, it is not without challenges. Difficulties often arise because it demands substantial willingness, effort

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and abilities to bring together different people with diverse backgrounds, different jargon, and to find mutual understanding (Jones 2010).

Interdisciplinarity in Marketing Practice and Research Marketing managers seek to create superior customer experiences, and many organizations even cite enhanced customer experiences in their mission statements. Customers can interact with companies through various touchpoints and multiple channels, resulting in complex customer journeys (Lemon and Verhoef 2016). Managing customer experiences also requires a holistic perspective on customers and collaboration across departments (e.g. sales, human resources, IT, logistics). Firms need to accept inputs from empowered customers and orchestrate various departments, within and outside the organization, to achieve great customer experiences (McCollKennedy et al. 2015). Marketing theory has paralleled this shift, particularly with the emergence of the S-D logic (Vargo and Lusch 2006). Rather than distinguishing goods and services according to their (in)tangibility, modern marketing theory focuses on value creation with and for customers (Grönroos 2011). For example, car manufacturers do not deliver cars but instead provide comfortable, fast transportation, supported by a car, but also alternative means such as e-scooters or bike-sharing systems. The S-D logic thus is a meta-theory for how to apply knowledge and provide benefits for all involved actors (stakeholders). As its main principles, it is value centric, cocreative, stakeholder inclusive, experiential and systemic, such that it can guide the development and extension of its underlying mid-range theories (Vargo and Lusch 2016). By integrating theories from marketing and other disciplines, the S-D logic establishes a general logic of the market, related to theories about service exchange, value cocreation, resource integration, value determination and institutions/ecosystems (Vargo and Lusch 2017). In this sense, the emergence of the S-D logic of marketing is a call for greater integration of various disciplines into marketing research.

Interdisciplinary Perspectives on Marketing Ethics Marketing ethics is an aspect of corporate ethics that has evolved through several phases, as both research and practice of specific moral phenomena in the twentieth century. A timeline reveals its

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emergence from its beginnings in the 1960s until the present time. Several societal influences and diverse disciplines have shaped understanding of marketing ethics at different points in time. Initiation phase, 1960s. The rise of marketing ethics began in the USA in the 1960s, in light of its rapid economic development after the Second World War, which brought about a series of business issues involving bribery, monopoly pricing, fraudulent trading and polluting. The public responded strongly and asked government agencies to intervene; US religious figures called on people to pay attention to corporate ethics, require organizations to take responsibility for their social influences, and design preliminary corporate ethical decision-making models. Most marketing research focused on applying and enriching theories of ethics that evaluated marketing conduct, such as ‘The Principle of Proportionality’ (Garret 1966) or the ‘Social Justice Framework’ (Rawls 1971). Foundation phase, 1970s. During this second phase, dominated by prominent movements of environmentalism and consumer protectionism, marketing research offered some original contributions to ethical behaviour theory. Kotler (1972) put forward societal marketing as a concept, suggesting a comprehensive consideration of the interests of firms, consumers and society, as well as the incorporation of marketing ethics and social responsibilities into the formulation and implementation of marketing strategies. Others studied ethical issues and countermeasures in specific marketing activities, such as the relationship between marketing ethics and the customer (Clasen 1967) or a firm’s ethical strategies from a customer complaint perspective (Andreasen and Best 1977). Expansion phase, 1980s. Entering the 1980s, marketing ethics research expanded to evaluate ethical issues involving a wider range of stakeholders, such as the government, citizens or marketing intermediaries. In practice, large firms established moral committees and formulated ethical standards; studies of corporate marketing ethics expanded from a focus on the USA to include other developed countries such as those in Western Europe, Japan, Australia and Singapore (Hunt and Vitell 1986). The research scope also extended to emerging marketing fields, such as services marketing, and to specific industries, including insurance, banking and pharmaceuticals. Scholars proposed a series of evaluation models related to marketing ethics; perhaps the most famous one, the Hunt–Vitell model, is based on utilitarian theory and promotes moral considerations in the process of marketing decision making (Hunt and Vitell 1986).

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Reformation phase, 1990s to the present. In the 1990s, research on the marketing ethics of modern enterprises underwent a comprehensive overhaul, driven by rapid economic, technological and political developments. For example, the economies of rapidly developing countries prompted new unethical marketing behaviours that harmed the interests of both consumers and society, encouraging expanded study of marketing ethics in developing countries. International marketing ethics research in turn revealed some differences in moral concepts and national-level marketing ethics, as well as their integration in global marketing management efforts (e.g. Armstrong 1996; Fritzsche 2005). The rapid development of IT, novel analytical possibilities and data-driven decision making simultaneously introduced additional topics into marketing ethics, such as online advertising practices (Aguirre et  al. 2015). Marketing ethics thus expanded to integrate new methods and theories from disciplines such as sociology, psychology, economics, management, law, and so forth. Table 4.1 contains an overview of these phases and their distinct effects on society, interdisciplinary influences, the focus of market ethics, and some selected references. Status quo. From this review, it is possible to derive a broad definition of marketing ethics, as moral standards for marketing practices, behaviour and institutions that give guidance regarding what to do and what the ideal should look like for both individuals and groups (Laczniak and Murphy 2014). An ethical assessment gauges appropriate marketing conduct and consumption decisions in light of the trade-offs between guiding and ideal end-state values. Firms with an ethical commitment demonstrate such conduct throughout the creation, communication, delivery, and exchange of products and services that their customers, organization, stakeholder and society at large all value (Joplin et al. 2019). Customers, overwhelmed by ethical conflicts and their sense of brand identification often support brands that engage in unethical conduct (Dalman et al. 2019). Within organizations, a sales function focused on short-term results might be likely to engage in behaviours that are morally unacceptable to a larger group, for the benefits of the single organization or persons (Lussier et  al. 2019). For a broader set of stakeholders or society at large, a macro marketing perspective on ethics entails non-market values, collective priorities, social rules of collaboration, and organizational roles in both conventional and non-conventional markets (Laczniak and Murphy 2014). Recent investigations of marketing ethics in digital settings advocate for a new understanding of

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Table 4.1

Phases of marketing ethics formation and interdisciplinary influences

Stage

Societal context

Interdisciplinary perspective Focus of marketing ethics

Selected references and topics

Initiation

Rapid economic development after the war A series of business problems, such as accepting bribes, monopoly prices, fraudulent trading and polluting the environment Major movements of environmentalism and consumer protectionism

Market ethics strongly influenced by practice and religious figures calling people to pay attention to corporate ethics Research borrowed from existing theories of ethics

Ethical evaluation of firm actions

Garret (1966): The Principle of Proportionality; Rawls (1971): The Social Justice Framework

Marketing ethics as part of firm’s social responsibility and the role of morality in economic decision making

Formulation and implementation of marketing ethics strategies Ethical issues for consumers and countermeasures in specific marketing activities Driven by utilitarian theory underlying marketing ethics Focus on subdomains of marketing and specific industries Marketing ethics expands to new domains (e.g. information systems, law, psychology) to address common issues

Kotler (1972): Societal Marketing Concept; Bartels (1967): Moral model; Andreasen and Best (1977): Firm’s ethical strategies

Foundation

Expansion

Reformation

Business and Marketing ethics covering marketing practices wider ranges of expanded across stakeholders, countries, countries. Stronger and regions societal attention to marketing ethics Rapid rise of Marketing ethics confronts developing entirely new research countries subjects, such as ethics Rapid development of in developing countries technology and the data collection Globalization practices of advertisers

customers’ moral responsibilities and the rules of the digital business, though notions such as social contract theory and distributive justice theory remain relevant (Levine 2019). Still, technological developments introduce novel ethical debates. For example, the sharing economy, involving platforms such as Airbnb or Uber, started as a promising pursuit of a sustainable and inclusive economy, yet it also raises novel moral and ethical questions, due to its implications for privacy, regulations and workers’ rights (Etter et al. 2019).

MARKETING ETHICS FROM AN S-D LOGIC PERSPECTIVE Previous research links the S-D logic to marketing ethics in various ways, including using it to

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Hunt and Vitell (1986): Hunt–Vitell model; Blanchard and Peale (1988): ethical verification model Armstrong (1996), Fritzsche (2005): International marketing ethics; Aguirre et al. (2015): online data collection and use

integrate ethical integrity into marketing decisions (Abela and Murphy 2008) or adapting its foundational premises to accommodate ethical considerations (Williams and Aitken 2011). This chapter argues that the premises render S-D logic’s perspective to ethical issues, and in support of those arguments it offers several contemporary examples. Firstly, the definition of value according to an S-D logic includes both value creation and value destruction, which might occur simultaneously (Čaić et al. 2018); the latter often creates ethical concerns. For example, ubiquitous surveillance cameras in cities increase perceptions of security and help fight crime, but they also threaten citizens with the privacy invasions associated with constant monitoring and vast data collection opportunities. Secondly, cocreation demands trust and confidence that other actors will act in a fair,

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non-opportunistic way (Karpen et  al. 2015). Yet the recent bribery scandals surrounding FIFA, regarding allocations of major football tournaments to specific cities and permitting marketing rights to certain companies, show that its practices often are at odds with the collegial, respectful fan culture claimed by FIFA. Thirdly, ethical issues often demand a wider, stakeholder perspective across service ecosystems (Laczniak 2006). Thus the fair trade chocolate sold by Tony’s Chocolonely is backed by a totally transparent supply chain, from cocoa bean production to end consumers, connecting multiple stakeholders via blockchain technology. Fourthly, ethical experiences lead to cognitive and affective assessments, as well as behavioural consequences, so they depend on the context and information at hand (Vargo and Lusch 2016). Compared with other experiences though, perceptions of ethical experiences are particularly subjective, because of the long-term, broad impact they exert and the high social desirability bias associated with ethics. Ensuring ethical conduct in predictive analytics to forecast future events demands, for example, not just algorithms designed to avoid biases that may be likely to evoke undesirable outcomes, but also transparency about the data and algorithms being used. Fifthly, a systemic dimension implies a need to incorporate institutional arrangements to coordinate the actors in society (Vargo and Lusch 2017). A recent example comes from the spread of false information and hate speech via social media, leading to public demands for stronger regulations and accountability of social media platforms such as Facebook or Twitter. Therefore, with the argument that the S-D logic provides an interdisciplinary umbrella or meta-theory that encompasses multiple mid-range theories, this chapter identifies distinct views associated with each mid-range theory by detailing their definitions, main influences (i.e. drivers or contingencies) and insights related to ethics. In each case, one study provides an illustrative example of the application of each mid-range theory, as listed and summarized in Table 4.2.

INTEGRATIVE FRAMEWORK OF INTERDISCIPLINARY MARKETING ETHICS: APPLICATIONS By integrating the influential factors listed in Table 4.2, it is possible to establish an integrative framework of marketing ethics, with drivers and consequences, according to dynamic factors

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related to the environment, society, industry, organization, consumer, offer, employees and market. Figure 4.1 depicts this framework, including the identified drivers, definition, practices and outcomes of interdisciplinary ethics in marketing. The proposed definition of ethics involves marketing practices that ultimately strive towards better market and societal outcomes. For example, The Body Shop asserts that ethical behaviour is part of its DNA, and to support its claimed identity as an ethical beauty brand it works with multiple stakeholders on ethical trading initiatives that establish strong ethics across the supply chain. Other applications of the proposed framework pertain to various contemporary marketing settings; this section details applications in the fields of robotics and healthcare, domains that go beyond traditional consumer settings associated with marketing and that are characterized by advanced technological developments, dynamic customer or user motivations and choices, shifting market logics and a wide range of many stakeholders.

Marketing Ethics in Robotics Ethical considerations of social robotics. Social robots and other forms of artificial intelligence (AI) are pushing the digital frontier (KPMG 2016); ethically sound robotic design and conduct considerations are particularly timely and relevant for robots that enter morally charged contexts (e.g. healthcare, education) and appropriate social roles. Decades ago, robotic assistance was mainly reserved for industrial settings (e.g. factories); today, robots are pervasive in conventional public (e.g. supermarkets, airports, hotels, hospitals) and private (e.g. homes) settings (Tamburrini 2009; Veruggio and Operto 2008, Wirtz et  al. 2018). Robot uses also have shifted, from the automation of repetitive, dangerous or tedious tasks performed in structured industrial environments to more socially and physically dexterous roles in chaotic, highly unstructured customer environments, so (Odekerken-Schröder et al., forthcoming). Such shifts create challenges for engineers and designers, especially because state-of-the-art AI agents still lack the ability to handle contextual and moral ambiguity (Charisi et  al. 2017). As robots increasingly coexist with humans (Veruggio and Operto 2008), institutionalized social structures get disrupted, evoking various economic, social and ethical ramifications. To minimize or prevent negative outcomes resulting from the uses of robotic technologies, robot design teams need an interdisciplinary approach that includes various

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Alshurideh ‘four dimensions of marketing ethics, namely, honesty, et al. (2016) autonomy, privacy and transparency’ (p. 80)

Sacconi (1999)

Relationship marketing

Theory of the firm

Resourceadvantage theory

Hunt (2012)

Core competency Hayes and theory Walker (2005)

‘normative standards and justifications of morality, or guidelines for how individuals “ought” to behave … contextual considerations, in which the contexts of ethical and unethical behaviour are crucial for exploring ethical conduct in and of organizations’ (p. 786)

Kennedy and Lawton (1993)

Services marketing Industry: • Development of science and technology • Increase in social productivity Organization: • Strategic vulnerability, power, dependence and uncertainty • Market image of products and companies • Close relationships with customers • Feedback from customers • Authority/ownership • Incomplete contracts.

Influential factors

‘consensus is developing that societal-level moral codes Environment: that promote social trust promote wealth creation’ (p. 5) • Cultural • Professional • Industry • Organizational • Personal • Environment

‘a well-structured code of ethics clearly reflects the idea of corporate responsibility towards all the firm’s stakeholders, and is divided into different chapters defining the corporate duties towards customers, employees, suppliers, government agencies, competitors, local communities, political representatives etc.’ (p. 193) ‘“business ethics” perhaps suggested internal practice, • Community while CSR appears more externally oriented’ (p. 406) • Investors

Perspective on ethics

Mid-range theory Selected or literature stream reference

Table 4.2 Illustrative review of mid-range theories on ethics within the S-D logic

(Continued)

Companies should be judged on how ethically they conduct their core business, so their reason to exist, rather than how they conduct ethically oriented activities such as community development Combining the Hunt–Vitell theory of ethics and resource advantage theory provides insights in the process by which trust-promoting, societal-level moral codes drive productivity, economic growth and wealth creation

Abuse of authority might be mitigated through a contract-based view of corporate codes of ethics

The dimensions of marketing ethics affect an organization’s ability to maintain long-term relationships with customers and have strong influences on feedback, transparency and privacy

Strategic vulnerability relates directly to the perceived uncertainty and resource dependence of the organization and inversely to the expert power of the organization

Insights

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Melé (2009)

Perspective on ethics

New institutional Argandoña economics (2004)

‘guide for judging institutions on the basis of their contribution to the flourishing of people and society – that is, for judging whether institutional change takes place in a way that is favorable to human beings or hostile to them: in a word, for judging whether institutional change meets the conditions to be an optimum, not, in this case, from an economic point of view, but in human life and activity as a whole’ (p. 198)

(1) acting with good faith, sharing honest goals, and participating in licit activities; (2) sharing information, knowledge, and resources with reciprocity and even with gratuity; (3) serving with justice in asymmetrical power relationships; and (4) exercising a positive ethical influence within the network. Specific forms of unethical behaviour in the practice of networking include (1) bad faith or abuse of trust; (2) opportunism, (3) abuse and misuse of power, (4) network cronyism, (5) networking as disguised bribery, and (6) cooperating in the wrongdoing of other actors of the network’ (p. 487) Consumer Ulver-Sneistrup ‘In the socio-culturally informed marketing and consumer culture theory et al. (2011) research tradition of Consumer Culture Theory (CCT) … morality of consumption has predominantly been approached in terms of consumer resistance’ (p. 219) Experience Thomas et al. ‘moral norms as they relate to fair and just exchange marketing (2002) relations and concern marketing-related issues …. It is also important to note that ethics and legality are not necessarily the same. Certain behaviors may be legal (i.e., an advertising campaign that is offensive to certain minority groups), but still be questionable ethically (p. 167) Social network Brass et al. ‘behavior that has a harmful effect upon others and is theory (1998) “either illegal or morally unacceptable to the larger community”’ (p. 15)

Networking theory

Mid-range theory Selected or literature stream reference

Table 4.2 (Continued )

The interaction of work ethics and brand consumption allows consumers to legitimize good and bad brand consumption choices Ethical and unethical cues in the customer environment affect customer assessments of the ethics of a service provider and service satisfaction

• Brand consumption • Work ethics

• Ethics-related cues in the customer environment

• Relationship types Proposition of impact of type and structure, as well as (strength, multiplexity, their combination, on unethical behaviour asymmetry, status) • Relationships structure (structural holes, centrality, density • Values of the society Ethics is not social institutions and norms but rather • Norms and rules of the meta- or a higher- order institutions that coordinate economic behaviour of the interplay of other institutions people • Incentives or motivations of economic actors

Ethical networking does not exclude utilitarian and emotional networking, but the latter needs to be conducted in a reciprocal manner

Insights

• Types of networking • Personal characteristics

Influential factors

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Jones (1995)

Warren (2005)

Askland (2000) ‘a “process” view and an “outcome” view of fairness. The former focuses upon impartial procedures, while the latter focuses upon improved, usually more equal, outcomes. The “outcome” view responds to conditions that are objectionable regardless of causal explanation and promotes more equal prospects for satisfying basic needs’ (p. 287)

Stakeholeder theory

Service science

Market practices and performances

‘Much of the difference revolves around the personal nature of the service and the expectations of customers towards the service worker. Hence the importance of thinking about the ethics of the service relationship in a modern economy, and the need to put this on the right footing in terms of respect and dignity’ (p. 999)

Ethics is the theory of morality, morality being the ‘set of accepted norms, values and informal rules within a social group that guide individual and collective behaviour. By analysing and critically reflecting existing moral rules, ethics aims at justifying right and (morally) good actions’ (p. 261) ‘people who (a) are honest; (b) have personal integrity; (c) don’t lie, cheat, or steal; and (d) honour their commitments are clearly moral in nature’ (p. 417)

Jax et al. (2013)

Business ecosystem

‘the rules to live by that societies might achieve true sustainability’ (p. 384)

Pratarelli (2012)

Human ecology

Instead of viewing economic and ethical understanding of ecosystems as two extremes, their combination is possible but contingent on the specific purpose, human and non-human values, and the trade-offs between them

Global environmental ethics demands a shift in focus to evolutionary motivations of human to consume; institutions and regulations are limited in developing an environmentally sustainable society

• Relationships using The variety of stakeholders demands bringing together contracts with costs for the stakeholder concept, economic theory, monitoring and bonding behavioural science, and ethics to understand the • Competitive pressure social effects of organizations • Service tasks Management initiatives can be effective to manage • Development of virtues the organizational frontline and steer it towards • A sense of community ethical service relationship management • Purpose in the service organization • Moral aspirations • Contradictory and stressful pressures of service workers • Conditions for functioning There are (in)consistencies between fairness and of markets, e.g. process market concepts to interact on a market, individual ownership, market access, enforceable contracts

• Human vs. non-human values • Transparency in the ecosystem

• Human motivation to consume

The SAGe hAndbook of MArkeTinG eThicS

Figure 4.1

Integrative framework of interdisciplinary marketing ethics

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collaborators, such as roboticists, service designers, marketers, strategists, psychologists, organizational theorists, public servants, and ethicists, at a minimum. Robots are embodied technologies, capable of moving, sensing, information processing and responding (Singer 2009). For example, social robots can engage in conversations, gesticulate, gaze, perceive and respond to emotional cues, and perform other human-like actions (Breazeal 2004). To become well integrated into human society, which thrives on and requires social interactions, robots must act in socially and morally acceptable manners and adopt ethical norms of conduct (IEEE Standards Association 2017). The proliferation of AI technologies makes these ethical requirements especially relevant, and it frames one of the key drivers of consumers’ robotic hesitancy in public and private settings. Machine ethics. Machine ethics (Moor 2006) or machine morality (Sullins 2011) addresses questions about which moral competences a robot should have and how to implement them. Malle (2016) suggests five competences: moral vocabulary, system of norms, moral cognition and affect, moral decision making and action, and moral communication. Humans act on moral prescriptions (right vs wrong) that they learn through social and cultural immersion, but robots require carefully designed algorithms to guide their actions (Charisi et  al. 2017). These algorithms must weight and choose which ethical principles to follow in varied, contextually determined situations. Furthermore, debates about whether robots can act on moral competences remain unresolved (Etzioni and Etzioni 2017). Two commonly cited ethical theories conflict on such questions, namely utilitarianism (or consequentialism) and deontology (or duty-based ethics) (e.g. Charisi et  al. 2017; Kuipers 2016; Veruggio and Operto 2008). The former advocates for the greatest good for the greatest number of people, such that individual rights can be violated for the benefit of overall societal welfare; the latter promotes duties and rules that specify what is right or wrong, prioritizing individual rights relative to overall welfare (Kuipers 2016). Take the example of a self-driving car in a situation in which it must hit either an elderly person on a crossing or a baby in a runaway stroller. The utilitarianism paradigm implies the baby should be saved, because it arguably would contribute more to the perpetuation of society. In the deontology paradigm though, the older person, who is crossing the street legally, should be saved (Awad et  al. 2018). Robot ethics. Along with these developments, robot ethics attempts to answer questions about

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how humans should design, introduce and treat robots (e.g. Lin et al. 2011; Veruggio and Operto 2008). This interdisciplinary approach focuses on what customers and other stakeholders think, feel and dream of when interacting with social robots, rather than what robots can actually do (Coeckelbergh 2009). In line with the media equation offered by Reeves and Nass (1996), which suggests that humans treat non-human actors as social beings (e.g. computers), Čaić et al. (2019a) find that customers perceive robots as social entities with social cognitive mechanisms such as warmth and competence, which implies the applicability of the S-D logic’s propositions regarding the phenomenological and experiential perceptions of the value of social robots. On the one hand, perceiving robots as social entities and developing emotional and social bonds with them might lead to value creation, such as enhanced well-being for lonely elderly people or children with autism (Čaić et al. 2018). On the other hand, it might lead to value destruction and unintended consequences for other service ecosystem stakeholders, as detailed in Table 4.3. Even if, in the future, autonomous robots can deliberate and act as moral agents, their introduction into public and private customer settings inarguably will disrupt economic and social outcomes. In principle, to function and exist in concert with humans, robots need to be designed according to principles of human-centredness. They should not pose any safety hazards (due to malfunction or misuse); must serve the interests of humans and respect human rights (freedom, dignity, autonomy); and should guarantee transparency, sustainability and accountability (IEEE Standards Association 2017). Moreover, robots should be designed to benefit the entire service system, which calls for a value-centric design. Such an approach acknowledges the importance of the usage context, institutionalized arrangements and practices, diverse network actors, and their salient values (Čaić et  al. 2019b; van Wynsberghe 2013). Following these guidelines can help establish trust and confidence between humans and social robots and encourage the successful introduction of robots into diverse service ecosystems (de Graaf 2016).

Marketing Ethics in Healthcare Ethical considerations in long-term care. Long-term care for elderly people, who might be frail, chronically ill and/or physically or cognitively disabled, encompasses all activities undertaken

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Table 4.3

Overview of value destruction potential of social robots and marketing remedies

References

Value destruction potential

Marketing decision practices

Calo (2011)

Privacy issues

Calo (2011)

Use of robotic technologies for nefarious purposes Data security and cybercrimes

Provide tailored privacy options based on customer preferences; ensure transparency Define and strive for higher legal, moral and ethical standards Ensure data protection and transparency

Weintraub and Borenstein (2017) Cadwalladr and Graham-Harrison (2018) Mende et al. (2019)

Wisskirchen et al. (2017)

Sparrow (2016)

Tamburrini (2009) Veruggio and Operto (2008)

AI-enabled customization and manipulative robotic behaviours

Prevent negative behaviour, define the purpose of customization in line with ethical standards and sustainable behaviours Prevent exploitation of humans’ limited attention and willpower

Customers’ compensatory responses (e.g. overeating, purchasing status goods) when interacting with social robots rather than humans in service contexts Impact on the workforce/unemployment Ensure employee training: how to create value with robots at work; how to develop new skills and capabilities for the emerging jobs Effects on psychosocial well-being through Implement customer perspective on ethical delusion and reduced social interaction and unethical robot behaviours; harmonize robotics development with human values Digital divide and fair access to technology Ensure fair access Dependability and technological addiction Prevent use of technology to develop addictive customer behaviours

by others to ensure that older people maintain or improve their functional and health outcomes, consistent with their basic rights, fundamental freedom and human dignity (Sion et  al. 2019). This relationship-centred definition implies a dominant influence of relationships in a valuecocreating network. That is, long-term care relationships among older people, medical staff and family members typically entail perceived justice, autonomy, non-maleficence and beneficence (i.e. common healthcare ethics principles). Justice means that similar cases receive similar treatment; autonomy implies freedom of choice (e.g. when daily bathing takes place is something typically decided by a service facility, which reduces the older person’s autonomy); non-maleficence requires not doing harm, though deciding what harm constitutes in healthcare settings is not a simple matter (e.g. is offering the most appropriate treatment or creating the least discomfort less harmful?); and finally, beneficence demands positive, direct steps to help others (Morrison and Furlong 2014). Ethical dilemmas in experienced care quality. The healthcare literature notes the emerging need to define and assess the quality of longterm care as experienced by the care recipient,

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not just by using assessments offered by medical staff members (Sion et  al. 2019). For example, personal hygiene assistance, including bathing, is a key nursing activity that defines the perceived quality of care (Gozalo et  al. 2014). Bathing affects patients’ well-being and comfort, but it also has physiological functions, such as preserving skin integrity and personal hygiene (Groven et  al. 2017). Taking a relational and customer experience perspective potentially results in an ethical conflict: patients seek freedom of choice (e.g. actively take part in the bathing procedure), but nurses also seek to meet their personal and professional preferences (e.g. taking the lead in bathing, mainly in the interest of time), both of which relate to autonomy (Groven et al. unpublished). In this ethical dilemma, satisfying the autonomy needs of both stakeholders is impossible. Healthcare ethics and cocreation involve multiple stakeholders, and balancing their needs is a widely acknowledged challenge (Verleye et  al. 2017), giving rise to difficult ethical dilemmas. An interdisciplinary perspective that combines healthcare, marketing and ethics instead seeks to cocreate value in accordance with the S-D logic (Vargo and Lusch 2006), which implies activities, practices and processes of

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jointly creating services in a specific context, such as a daily bathing routine (Oertzen et al. 2018). Resolving ethical dilemmas. Everyday ethics is a commonly studied theme in the nursing and healthcare literature (e.g. Bolmsjö et  al. 2006a), which refers to commonly acknowledged ethical dilemmas such as professionals’ right to safety versus patients’ right to care; the power of health providers versus the vulnerability of patients; protection of personal safety versus acceptance of patients’ autonomy; non-discrimination and privacy of patients versus protection of professionals; maintenance of professional attitudes, even towards difficult patients; obedience to the law versus protection of personnel and the patient; and protection of patients’ rights versus obedience to existing orders (Hopia et al. 2016). Taking an S-D logic perspective, value is cocreated by multiple actors, always including the beneficiary (Vargo and Lusch 2016). Therefore, if the solutions to ethical dilemmas are not optimal, perceived value might be destroyed for the patient, service employees (e.g. nurses) and concerned family members. Therefore, to address the dilemmas from an interdisciplinary perspective, conscious ethical reflection needs to be stimulated (Bolmsjö et al. 2006a), such as by educating nurses and other service employees about ethical decision making and assertiveness (Hopia et  al. 2016). Bolmsjö et  al. (2006b) propose a teleological model to help healthcare professionals make ethical decisions, with four main steps: (1) identify and describe the normative situation; (2) identify and describe the different possible alternatives; (3) assess the different alternatives; and (4) decide, implement and evaluate. To define different alternatives, various stakeholders should be integrated into the effort, which will shift the perspective. However, the model cannot be used in situations that require immediate action, and it also demands a fair amount of practice by healthcare professionals open to using it.

CONCLUSION AND MANAGERIAL IMPLICATIONS Marketing’s increasing shift to a holistic responsibility for the customer experience underlines the need for a stronger interdisciplinary approach for marketing ethics. This is emphasized by a recent realization that marketing is not only a corporate function but also a mindset of all employees. In other words, everybody needs to be aware of marketing ethics. The S-D logic embraces an interdisciplinary view to describe application of moral

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standards and responsibilities to marketing decision making and behaviour. In line with the logic’s foundational premises, this chapter proposes five key implications for an interdisciplinary perspective on marketing ethics summarized in Figure 4.2. Firstly, putting ethical value creation at the centre of market activities demands consideration of both value creation and value destruction, with the latter often capturing ethical concerns. Marketing managers are advised to identify systematically the negative sides of offers and manage the tradeoffs between creation and destruction. For example, including privacy concerns through the entire innovation process of data-driven services protects against future harmful use of data and promotes reciprocal value creation. Secondly, ethical cocreation demands trust in fair and non-opportunistic treatment among actors. Firms might develop codes of conduct and protocols for technology and human-driven interaction with vulnerable customers and employees. Thirdly, extending the common customer focus to including many stakeholder is inherent to ethical marketing, which often demands a wider perspective of the market and its actors. Marketing managers may map the ethical concerns and the risks in the relations with the major stakeholders and actively manage their conflicts. Awareness of ethical concerns and transparency around market activities with non-customer stakeholders such as citizens, communities or governmental organizations are hallmarks of good practices of ethical marketing. Fourthly, ethical factors determine the overall customer experience and its cognitive and affective assessment as well as its behavioural consequences. Managers should identify experiences’ ethical factors and their interdependencies across the customer journey and include ethical perceptions in the firm’s daily work (e.g. in its social media activities) and preparation for extraordinary situations (e.g. in its crisis management plans). Compared with other experiences, the perception of ethical experiences appears more subjective in nature, because of the long-term and broader impact of ethical issues and their strong social desirability bias. Fifthly, the systemic dimension of the S-D logic emphasizes incorporating ethical judgement, behaviour and effects as determinants of institutional arrangements which coordinate marketing activities. Firms might engage in industry-wide and societal initiatives to determine ethical, moral and legal standards in marketing technology practices. For example, firms developing AI-based solutions should adhere to ethical principles with transparency in explaining how algorithms are being used, to assure human accountability and oversight even

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Figure 4.2

Overview of theoretical and managerial implications of interdisciplinary marketing ethics

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for automated tasks, to explore worst outcome scenarios for automated AI-assisted decision support systems, to be cultural sensitive and to limit data requirements to the minimum. Participation in the development of industry schemes or legal regulations might be part of tasks for an ethically responsive marketing manager. In sum, taking an interdisciplinary perspective of marketing ethics offers both marketing scholars and practitioners new opportunities and challenges and changes their task profile.

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5 Conducting Ethical Research in Marketing Mathieu Alemany Oliver

INTRODUCTION Ethics in marketing research is often reduced to what a researcher must and must not do when collecting data, analysing data or writing a paper. Institutions, marketing associations, publishers and journals expect authors to publish only original work that they have written, is based on non-manipulated data, and does not infringe on the rights of others. But codes and guidelines do not always prevent researchers from committing more or less serious and deliberate ethical violations. Potential ethical issues are hidden in every decision taken, even when we think we are doing ‘the right thing’. Because ethical challenges can be found in all stages of a research project, this chapter provides qualitative and quantitative researchers with some of the basics of ethical research in marketing, current flaws in our practices, and food for thought to conduct ethical research in marketing, from designing to disseminating it.

THE RESEARCHER AND THE ETHICS TRIAD Before starting any research project, researchers should systematically consider an ethics triad composed of the participants in the study, the research

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community and society at large, which includes – among others – sponsors, consumers and businesses. Because these different stakeholders have different expectations, rights, degrees of freedom, cultures, etc., researchers have different obligations and responsibilities towards the stakeholders, which can lead to ethical conflicts. As a result, and as Figure 5.1 shows, maintaining good practices towards all three different stakeholders (i.e. complete ethics) is very hard to achieve. Table 5.1 provides some guidelines to help researchers in this process.

Research Participants A critical point of social science disciplines is that they are inherently linked to interpersonal relationships and, therefore, often require study participants. This inevitably increases the potential for ethical problems. Indeed, despite all the theories that science has developed, but also because we cannot know all these existing theories, researchers cannot always fully predict human behaviour. In fact, how study participants will react to the researcher’s presence during an experiment or ethnography is barely predictable at all, and it can even be counter-productive to follow the guidelines. With this in mind, marketing researchers sometimes require emotional intelligence, creativity and

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Harder to achieve

Good practices towards all three stakeholders

Participants

Research community

Complete ethics

Good practices towards two out of three stakeholders

Partial ethics

Society

Good practices towards one specific stakeholder

Selective ethics

Easier to achieve

Figure 5.1 The researcher and the ethics triad

Table 5.1 Basic guidelines for conducting ethical research in marketing throughout the research process Research steps

Questions to ask

Step 1. Research idea (being beneficial)

Research aims and objectives: Do they benefit society and minimize social harm? What are the potential ethical issues? Potential managerial implications: Among the members of society, who might be interested in this research? What are the potential ethical issues? If applicable: What is the fit between my sponsor and other stakeholders? Existing studies: Did I explore all existing studies relevant to my research? Do I have good reasons for not keeping a certain number of them? Did I check the methodology used in these studies and, more generally, the quality of these studies (including the level of ethics)? Do I credit all the authors of the papers I use? Literature gap: Now that the gap becomes clearer, have I explored all possible studies related to this gap? Hypotheses (if applicable): Are they supported by existing and relevant theories? Sampling: Why this population rather than another? What is behind exclusion/inclusion choices: convenience or research theory/topic? Do I understand the environment in which this population lives? What are the possible ethical issues/dilemmas related to this environment? Methodology: Have the methodology and questions asked been adapted to the population studied (of course, in addition to the research aims and hypotheses)? Are they respectful of the population studied?

Step 2. Literature review (avoiding t-hacking)

Step 3. Research design (matching the participants’ rights, needs and expectations with the research community’s methodological requirements) Step 4. Data collection (respecting the rights, needs and expectations of the stakeholder triad)

Fieldwork: What is the best way to inform participants about the study? How do I make sure they understand all the information shared with them? Can I keep my promise to participants regarding anonymity, privacy, freedom, debriefing, fair compensation, etc.? Where should I store the collected data? If applicable: Can I keep the promises I made to my sponsors? (Continued )

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(Continued)

Research steps

Questions to ask

Data preparation: Did I keep my promises regarding anonymity1 and privacy? Did I comply with methodological guidelines, for instance regarding missing values or outliers in statistics and interview transcription in qualitative data analysis? Data analysis: How do I keep a record of all the steps of analysis to provide a clear and transparent process to the stakeholders? As a co-author, can I identify any possibly questionable practices of my co-authors who analysed the data? Step 6. Reporting findings Findings: Did I report the whole story? Did I share (or propose to share) my findings with all the (being honest with all stakeholders? stakeholders) Discussion: Which issues tackled during this research could have an impact on these findings? Could the findings be used in unexpected and unethical ways? And how should this issue be dealt with? Implications: Are the implications beneficial, as expected? If not, what other and better implications could be found? Are they respectful of the population studied? What would the study’s population think about these implications?

Step 5. Data analysis (respecting the rights, needs and expectations of the stakeholder triad)

Note: A researcher is never alone and should seek help and advice from colleagues in order to comply with the code of ethical conduct. 1 Researchers can visit https://www.ukdataservice.ac.uk/manage-data/legal-ethical/anonymisation.aspx if they want to find useful information about anonymizing data in both qualitative and quantitative research.

reflection. This means they need to understand the social, legal, cultural and historical contexts of the study and its participants. Participants have rights, and it is up to the researchers to respect these rights. Tybout and Zaltman (1974) identify three basic rights in marketing research: the right to choose; the right to safety; and the right to be informed. More specifically, this means participants will: • be aware of their rights; • receive the right information that allows them to make an informed choice; • feel free to make a choice; • be confident that confidentiality and anonymity are guaranteed; • be confident that the researcher cares about their contribution and that they will not be judged for their answers or absence of answers; • be confident that their short-term relationship with the researcher will be based on honesty, not deception; • have time with the researcher for a debriefing (this also allows participants to measure how much the researcher really cares about them and how honest the researcher was in ensuring their ability to choose and their safety); • have access to the results of the study.

Being aware of rights … and obligations

Participants’ rights are mainly based on free will and propriety. In theory, this means they can accept to take part in a study and even leave it at any

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moment and without providing any reason, just as they can refuse to answer any specific questions. This also means that participants have the right to control the use and dissemination of the information they release. They can, for example, participate in the study and ask the researcher not to use the data collected about them in the analysis or the presentation of findings. They can even ask the researcher to delete all the records, which can cause many troubles for the researcher if he/she has run focus group sessions where many verbatims of other participants depend on the contribution of this particular participant. For researchers, one of the most used solutions is to compensate participants who sign a contract or, at least, accept the conditions to take part in the study. Compensation does not prevent participants from having their rights, but it can imply obligations like accurately completing a questionnaire or accepting to relinquish some of their rights. Note that this is not always possible, especially for researchers spending a lot of time with participants during an ethnography. Finally, participants also have ethical obligations. From the moment they provide full informed consent and agree to participate in the study (compensated or not), they should answer the questions truthfully and, more generally, respect the instructions given by the researcher – instructions they had accepted before the study commenced.

Receiving the right information

What information should be shared with the participants so that they can make an informed decision about participating? For some of us, it is not always

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easy to present ourselves, especially when we tell the participants that we are doing marketing research. To a certain extent – at least, in France, where I live – many people view marketing as a set of unethical practices that use psychological manipulation to make people buy things they do not need. This inevitably triggers suspicion of the benevolence of marketing actors, including researchers. Depending on the topic, this lack of confidence is, at first sight, an important issue that the researcher has to deal with, especially if he/she is not an academic but employed by a company. For example, it can take more time to create an atmosphere of trust with people in anti-consumption movements, those who have many negative sentiments about the marketplace, or to whom we will put personal questions about their fears or taboo practices. Of course, when presenting him/herself, it is generally easier for the academic to mention that he/she is a professor or a PhD student, that the research is not sponsored by privately owned companies, and that the project is conducted in the name of science. When this is not the case, the researcher will have to make more of an effort in the first meeting to create a climate of confidence, for example by talking a little bit about

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him/herself (the participant is potentially about to share personal feelings, opinions and moments of life, so show that you are more than your job; like any other relationship, yours starts with reciprocity). But be careful, as talking about oneself has limits: it can create response bias because the participants will get to know the interviewer and can, in some situations, try to please the interviewer in their answers. In the end, the researcher must strike the right balance between presenting him/herself honestly and not saying too much. Remember that ‘the practice of using masks … compromises both the people who wear them and the people for whom they are worn, and in doing so violates the terms of a contract which the [researcher – originally: sociologist] should be ready to honor in his dealings with others’ (Erikson 1967, pp. 367–368). Regarding information about the study itself, participants need to know what the effort required for this study will be (in terms of time, tasks, location, etc.), whether there is any potential danger (be it physical or psychological), what the benefits for making an effort and taking risks will be (e.g. what is the study’s objective? Is there any compensation?), and who the study’s sponsor is, if it has one.

Box 5.1 Example of a consent form for a questionnaire (as used by the Association for Consumer Research (ACR)) CONSENT FORM

Who is conducting the study? Principal investigator: John Doe, member of the Association for Consumer Research (ACR) and Professor of Marketing at the University of Minnesota ([email protected]), is conducting this survey on behalf of the ACR Board of Directors.

Why are we doing this study? Like many academic organizations, we are taking stock of how well we protect our members from harassment while at ACR events or conferences. We need an accurate assessment of how prevalent harassment is in our ACR environment.

What happens to you in the study? This study involves completing a survey that should take around 10 minutes to complete.

Study results The summarized results will be used by the ACR Board of Directors and shared with the broader membership. No identifying information will ever be collected or shared.

Potential risks of the study We do not think there is anything in this study that could harm you or be bad for you. We will neither collect nor share any identifying information in this survey. Answering questions about social, emotional, or physical harassment you may have

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experienced may be difficult, but you have the option to withdraw at any time. Your participation or non-participation in this study will in no way affect your relationship with ACR, its Board of Directors, or the University of Minnesota.

Potential benefits of the study We do not think taking part in this study will directly help you. However, the organization as a whole, and others in the future, may benefit from what we learn in this study as we make organizational changes based on our results.

Confidentiality The survey is completely anonymous, and your answers will never be linked to your personal identifying information. We will know whether individuals completed the survey or not (simply to avoid sending reminders to those who have completed the survey), but no personal information is stored along with your responses. The individual data set will be kept confidential and only summarized data will be shared. We also will not share summary responses of groups with less than 10 respondents.

Compensation There is no compensation for your participation in this study. Participation in this study is completely voluntary.

Contact for information or complaints If you have any concerns or complaints about your rights as a participant and/or your experiences while participating in this survey, contact John Doe at [email protected] (000-000-0000) or the Research Participant Complaint Line at the University of Minnesota using the form at https://research.umn.edu/units/____, or at +1 000-000-0000 (toll free: 1-000-000-0000).

Participant consent and signature Taking part in this survey is entirely up to you. You have the right to refuse to participate in this survey. If you decide to take part, you may choose to pull out of the survey at any time without giving a reason. Clicking the button below indicates that you consent to participate in this survey. • I agree to participate in this survey • I DO NOT agree to participate in this survey Note: My thanks go to Rajiv Vaidyanathan for agreeing to share this consent form.

Being free to make a choice

Having rights is one thing. Feeling free enough to use these rights is another. In theory, participants, because of the freedom that is given to them, have the ability to counter any asymmetry of power that may arise between them and the researcher. However, in societies ensuring order through governmentality (Foucault 1978/2009), particular asymmetric power relations may persist between researchers – who participate in the governance of individuals by caring, guiding and shaping them toward self-governance – and participants who rely in part on science and related discourses to govern themselves. Simply put, the place given to science in our societies lead researchers to exercise power voluntarily or involuntarily over study

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participants and populations (Mamali 2019). This is the case, for instance, when a participant does not want to disappoint or contradict a researcher because the participant is influenced by the researcher’s status. Not using our rights happens in many different situations for reasons other than power relations. For example, we started to engage in an activity that includes others, so we think it is now too late to give up; we want to help (even at the expense of our privacy) and do not want to disappoint others for fear of being rejected. People have their own personal history and evolve in complex historical and cultural environments that eventually affect their relationships with researchers. It is, therefore, incumbent on the researcher first to understand

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this environment and then make sure that the asymmetry of power is effectively countered by the information shared with the participant.

Confidentiality, privacy and anonymity

In quantitative studies, participants are often told that their data will be anonymized and aggregated with other data for statistical purposes and that, therefore, they will not be identifiable. Qualitative researchers promise similar forms of confidentiality and anonymity and can even ask participants to choose a nickname that should be used later in the research project. In studies that are sponsored by companies, the participant can be asked to provide contact information so that the company can check whether the researcher did his/her job right. This can undermine participants’ faith in promises of anonymity and cause them to provide incomplete answers. In that case, the participant can be given a number with the date of the interview, and only a phone number can be asked. As journals increasingly ask authors to make their dataset available, it is important to double-check that anonymity is maintained. In longitudinal studies in which participants are followed over a long period of time, the researcher must ensure that personal information is kept separate from the data. If, for any reason, responses are tracked, participants should be aware of what this entails and state whether they agree. Privacy is also important. While confidentiality refers more to the non-disclosure of information related to the study itself (e.g. answers to a question), privacy deals with what the researcher sees and hears in the context of the study without being directly related to the study. For instance, during ethnographic work, the chances are quite high that the researcher will obtain a lot of information about the participants’ personal life and environment. The researcher can meet members of the participant’s family, hear everyday discussions between a wife and her husband, or even learn the personal histories of these individuals. While privacy is not often mentioned and guaranteed before participation, it is nonetheless tacitly promised. Finally, confidentiality, privacy and anonymity issues are likely to arise for researchers conducting netnography or other forms of online observation. Indeed, it may be sufficient to copy and paste a verbatim, as well as the names of the internet sources and forums visited by the researcher, to know the identity of the author of the verbatim. Drawing upon Bruckman (2006) and Markham (2012), Kozinets (2015) provides two possible solutions. The first is cloaking. This means that, depending on the level of identification risk,

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researchers can alter the pseudonyms of participants and rephrase verbatim quotations if the risk of being identified is significant. When the risk is very high, Kozinets (2015) suggests not using direct quotations. The second solution is fabrication. Fabrication is ‘a creative and bricolage-style alteration of data into various kinds of composite accounts and/or representational interactions and also uses some techniques that have been associated with remix culture’ (Kozinets 2015, p. 158).

Being confident that the researcher is caring and that participants will not be judged based on their answers or lack of answers

Caring is about making sure the participant will not be harmed by the study (but not to the point of becoming friends with the participant). In our field, the harm that can be caused by a study is generally psychological in nature. For instance, participants hold given attitudes because these attitudes help them minimize risks, structure and provide meaning to their environment, express and/or reinforce their self-image, or protect themselves from undesirable truths or facts about themselves (Katz 1960). During phenomenological interviews, for instance, it happens that participants question themselves and, consequently, are psychologically and emotionally moved. Other types of harm are also possible, such as financial harm, bad reputation and even exclusion from a group because anonymity has not been assured. Finally, researchers should keep in mind that caring too much can lead to too much empathy, which eventually leads to over-interpreting what is unspoken by the participants. Regarding judgement, relationships are generally not as close for quantitative as they are for qualitative research, and this is why there is a greater chance for issues to arise in qualitative research. The researcher must make it very clear that everyone is (and has the right to be) different, with their own life events and interpretations of events. In other words, there is no right or wrong answers as they all ‘mean’ something.

Being confident that the short-term relationship with the researcher will be based on honesty, not deception

The researcher’s relationship with participants must be based on trust. Trust emerges in part through information sharing regarding participants’ right to choose, to safety and to be informed. The clearer the information that the researcher provides and the more he/she answers the participants’ questions, the more he/she will be trusted.

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Depending on the topic, it can be decisive in building trust to find out who the gatekeeper is and who could serve as facilitator. It is also important not to conceal the nature or the purpose of the research technique that is used if this research technique generally leads the participant to reveal more than he or she consciously would, without this technique. For instance, projective techniques aim to find out more about the participants’ private, hidden or unconscious feelings and thoughts. It goes without saying that using projective techniques without informing participants sets up a relationship between the researcher and the participant that is based on deception. While some participants may be familiar with this technique and find it fun, other participants may not realize what is really behind such a technique. Using projective techniques means having the participants say things that they may not have wanted to share. This issue is not easy to deal with, and some researchers may think there is nothing wrong with using projective techniques without informing participants. My feeling is that there is another time when our subconscious is under observation, and that is when we consult a psychologist. When this happens, we know and accept the rules before we start. Why should those who participate in marketing studies be deprived of this decision? Therefore, it is important to tell1 participants more about this technique if they are not aware of it and to do so without compromising the study (it is still possible to elaborate on it during the debriefing).

Although it should not have to be mentioned here, the use of hidden microphones and cameras is highly unethical and does not contribute to an honest relationship.

Time with the researcher for a debriefing

It is not always possible to have a debriefing – it is difficult, for instance, with an online questionnaire. But every time the researcher meets the participants, time dedicated at the end for a short debriefing is important for at least one reason: it enables participants to see that the researcher truly cares about the moment they have just had and that the contract has been respected. This is all the more important when multiple meetings are scheduled. In qualitative research, it also allows researchers to ensure they have correctly interpreted what participants have said or done, which contributes to ethical research in the research community.

Having access to the results of the study

Participants have the right to access the study results. If some findings are confidential because the research was sponsored by a company, the researcher has an obligation to provide a specific report for participants without any of the company’s confidential data. This has to be agreed with the company before the start of the study.

Box 5.2 Examples of ethical dilemmas Dilemma 1: How not to lie to participants while not really telling the truth about the purpose/topic of the study. While participants have the right to be informed, and relationships with researchers should be based on honesty, it is not always possible for researchers to tell participants the real purpose of the study as it could influence the participants’ answers. On the one hand, not being honest with the participants violates common ethical standards between the researcher and the participant. On the other hand, being honest with the participant by revealing the true purpose or topic of the study while the researcher knows that this will create a biased answer violates common ethical standards between the researcher and his/her community. When this situation occurs, it is important to remember that the solution does not involve having to choose between participants’ rights and scientific rigour. If the participants’ side trumps scientific rigour, the research undertaken no longer qualifies as research. If science gains over the participants, then we cheat not only the participants but also the research community, since one of the very fundamental principles of science is the search for truth but never at the expense of the population being studied. A possible solution is to tell participants at the very beginning that they cannot know the exact topic or purpose of the study, but that they will be informed of it as soon as their active participation ends. In this way, the participants are fully aware of the situation, and their consent is informed. Also, they still have the right to leave the study once they know the real topic or purpose of the study and, therefore, remain in full control. This can be done for both quantitative and qualitative studies. Dilemma 2: I want to continue the experiment/interview/observation, but I am not sure the participant really feels the same. It happens sometimes that a participant accepts to take part in the study but eventually does

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not feel comfortable answering questions or being observed. For various reasons, this participant does not dare to say stop, while the researcher would like the participant to continue because it is hard to find participants for the study. In this case, it is the researcher’s role to discuss potential issues with the participants and remind them that they can leave the study at any time. Sometimes the issue is easy to solve, for example by reassuring the participants of their anonymity and the confidentiality of the findings. Dilemma 3: How to care about (and not judge) people we dislike. This problem happens especially in qualitative research in a discussion between the researcher and the participant. Imagine, for example, that the participants in an ethnographic observation are having a joyfully racist, fascist discussion over dinner. Imagine also that the researcher who participates in this dinner has been hearing since her childhood how her father fought fascism in Spain in the 1930s and how he was imprisoned before fleeing his country with his wife and daughter. As a researcher, she should be caring and remain neutral about the participants’ statements. As a person, she certainly does not want to spend more time with the participants. If the researcher is not working as part of a team, she will have to find ways to avoid this discussion topic. A possible solution is to identify who in the group of participants generally triggers the discussion and whether this person is someone under ‘particular’ observation or just a member of the community observed. If it so happens that this person is an active participant, then the researcher must behave as she behaves with any other participant or find other participants/communities to study. Dilemma 4: Should I keep a participant’s identity secret after the participant has revealed information or behaved in a way that could harm one or more people? This dilemma is a choice between participants’ right to anonymity and society’s expectations of the benevolence of individuals in general and of researchers in particular. It can be a violent man who tells researchers he owns an unauthorized firearm or a mother who neglects her son and lives in unsanitary conditions. In these situations, no official requirement obliges researchers to violate the participant’s right to safety, which includes anonymity. But if the researcher does not disclose information, then he/ she takes the decision to put others’ lives at risk if the danger is real. From a legal perspective, the researcher could theoretically be sued for disclosing private information that should have been kept confidential or, on the flip side, for not disclosing critical information that could have prevented a crime! Fortunately, this situation is extremely rare. But when such a dilemma arises, the best thing to do (if there is no ethics committee) is to assemble a board at the researcher’s institution/company to share the problem and take a joint official decision. Dilemma 5: Should I try to change participants’ minds when I am convinced it will improve their lives? Many marketing researchers have an interest in transformative consumer research (TCR) and work on issues related to multiculturalism, stigmatization, identity and health, among others, with the objective of improving consumers’ well-being and quality of life. In this context, it happens that researchers may feel the need to play a role that goes beyond how they are expected to behave as researchers. For instance, imagine a marketing researcher trying to better understand anti-vaxxers in order to increase the number of vaccinations – at a moment when, according to the World Health Organization, anti-vaxxers are posing a serious threat to health in society. A participant wants to start a discussion about Big Pharma and conspiracy theories and finally tries to convince the researcher that vaccines exist only to control the population and enrich pharmaceutical companies. In this situation, researchers have to keep in mind that they are not supposed to play various roles with their participants – and should therefore not try to convince participants to think differently. While it is true that convincing participants of the benefits of vaccines is the ultimate goal of the research project, the researcher–participant relationship originated in a research context. For the researcher, this means remaining neutral and reserving judgement.

Box 5.3 Privacy issues with online observation As Kozinets (2015, p. 128) notes, the ‘Internet has become a series of territories divided by language, by nationality, by traditional religions, regionally, governmentally, economically, financially, by kinship line, and on and on’. These online territories invite researchers to redefine participants’ right to choose and to be informed. What is the meaning of privacy and anonymity on the internet, for instance, when people post messages on public pages displaying their names? What is privacy when Google knows our life even better than we do? And should we ask people for their consent for messages posted publicly? Online territories blur the public/private boundary (Ford

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2011; Markham and Buchanan 2012). To better deal with the public/private issue online, one should differentiate online non-participant observation from online participant observation. Online forms of participant observation – as we can find in netnography, for example – systematically include interactions with internet users. From the moment there is an individual or a collective1 interaction with internet users, the researcher has an obligation to fully disclose his/her identity and intentions and to obtain informed consent from the participants. Therefore, online participant observation does not really require knowing whether online spaces are public or private: the researcher’s presentation and informed consent are necessary, as is the case for offline participant observation. The public/private issue is much more complex in non-participant online observation, especially on social media. Indeed, can we consider a public Facebook page or Twitter account as a public agora where people would express themselves as if they were raising protest signs in physical public places? The Norwegian National Committee for Research Ethics in the Social Sciences and the Humanities (NESH) stresses the importance of differentiating the level of accessibility of online information from the sensitive nature of this information. For instance, online statements are made on a continuum between sensitive information shared in closed online forums and very general information posted on a wide-open public page targeting a broad audience. While these two extremes are easily identifiable and clearly require different behaviours from the researcher, NESH stresses that ethical issues usually concern this grey area between these two extremes. For instance, is sensitive information shared in open online environments considered to be private or public? Nowadays, users are generally more conscious of the public dimension of the internet than in the past (the context was different at the end of the 1990s and in the early 2000s, when the internet was quite new to many of us). Social media are sometimes structured around public and private spaces by giving participants the opportunity to create, decide about and/or access public or private pages, groups, messages or posts. This probably contributes to the public/private boundaries that internet users eventually identify. Another point to mention is the change of views regarding privacy in new generations. I often ask my students about their opinions regarding security cams in the streets or the fact that online personal data is collected and reused by companies for promotional activities. I am always surprised by how little2 interest they have in these issues and generally get the same response: ‘we have nothing to hide’. In the same vein, Madden et al. (2013) underline how teens show little concern for third-party access to their data. At the same time, they clearly see the importance of choosing private settings and engaging in personal branding strategies. On their side, Kruse, Norris, and Flinchum (2018) focused on a much broader population (i.e. Millennials and Generation X) to examine whether social media can be considered a Habermasian public sphere. Their findings reveal that internet users from this population do not behave with complete freedom on social media. In particular, they understand that the internet can be a place of surveillance. In other words, it seems that the people we are researching today tend to understand the potentially public character of the internet. They consider this to be problematic in some contexts and generally know how to keep things private if they want to do so (Beninger et al. 2014; Williams, Burnap, & Sloan 2017). What to conclude then, and how to behave ethically when conducting non-participant online observation? My view is that public pages available on social media apps and websites – and, more generally, all information accessible online on public pages (e.g. comments found at the end of a newspaper article) – should be considered public spaces that do not require any authorization to conduct non-participant observation, even if they contain sensitive content. This, however, does not prevent the researcher from ‘cloaking’ some of what is retrieved (see section I. Confidentiality, privacy, and anonymity). If the online territory is not easily accessible and/or restricted, and the researcher is required to register or ask permission to access a public forum or page, then the researcher should disclose his/her identity and intentions. Let’s say that, compared with my example of people holding up signs in the street, here it is like going to a bar, identifying a group of people talking about their lives, listening, and recording without permission before relating what has been said in the pages of a journal. Yes, the discussion happens in a public space, but the discussions among these people are semi-private (i.e. ‘I know someone can hear me, but there is a social consensus that the content should not be made public’).

Notes: 1 2

By collective interaction, I mean engaging in conversations on forums or social media, for example. Note that the reasons given for disclosing personal data are often the access to consumption and improved experiences of it (personalized ads, recommendations of movies and products, or simply access to content), which raise ethical questions of their own. See also Beninger et al. (2014).

For suggested readings to form your own judgement, see: Elgesem (2015), ESOMAR (2011), Kozinets (2015), Markham and Buchanan (2012; this paper contains a very rich and useful chart for conducting research online), Townsend and Wallace (2016) and Woodfield (2018).

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Research Community Marketing research involves a large number of practitioners and academics with different cultures, degrees and research traditions. Also, researchers can belong to public, for-profit or notfor-profit organizations with a variety of research objectives, cultures and traditions. Despite these differences, the most fundamental and critical research values give way to an informal and widely accepted code of conduct (IAC and IAP 2012). These values (e.g. telling the truth, avoiding errors, having integrity, protecting participants, having social responsibility, etc.) are formalized by our organizations through different ethical guidelines or codes that essentially provide the same list of dos and don’ts. For example, the American Marketing Association (AMA) highlights values of and/or related to honesty, responsibility, fairness, respect, transparency and citizenship. These values are also stressed, albeit in a different way, by the French Marketing Association (i.e. Association Française de Marketing – AFM) and in ICC/ESOMAR’s joint code of conduct, which it first published in 1977. Journal editors and publishers also provide ethical guidelines, just like universities, laboratories and research companies, which can be supported or inspired by national/international organizations and committees such as the Committee on Publication Ethics (COPE) and All European Academies (ALLEA). Very often, institutions do not have guidelines specifically tailored to marketing research. Rather, they develop existing codes found in the social sciences and place their full confidence in the researchers to do their job ethically. While these codes act as social contracts that should be respected, our everyday relationships with colleagues, co-authors, editors, reviewers, managers, clients or institutions cannot follow these codes exactly. Procedural ethics proposes an ideal that we should work towards, but the ethical guidelines included in these codes are certainly not respected in full. One of the reasons is that we do not operate alone in a crystal-clear environment: it is not uncommon for a reviewer to ask you to cite his/her work, for an editor to expect you to cite his/her journal but not another particular journal, for your co-authors or colleagues to decide to conduct a quantitative study before even reviewing the literature and then adapting the literature to the results for the manuscript, or for co-authors – especially senior researchers – to be ‘lazy’ but still credited as co-authors. Even if we assume that we are immaculate when it comes to ethical behaviour, others are not – and the chances that we are not either are quite high. In fact, we often accept

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such unethical behaviour when there is a risk of not being published or fear of being symbolically excluded from our department or community. How many of us have never acquiesced to a reviewer’s request to be cited? Or avoided citing a specific journal because it does not fit or will not please the targeted journal? As long as we remain silent, we are almost as responsible for unethical behaviour as the ones who commit the ethical violations. One possible reason for such silence is that, in the end, this silence by itself does no harm to participants and no direct, visible harm to society since it is ‘just’ marketing. In addition, these articles are mostly read by researchers and have a low impact on society – compared with biology, medicine or physics, for example. Considering the strong pressure on academics to publish if they do not want to perish, it has probably been more acceptable to skirt complete ethics by choosing partial ethics – at least, as long as universities, and schools, as well as companies, do not give researchers what they need the most for their activity: time. Ethical issues can also arise when the community’s guidelines, expectations and/or resources differ from our responsibilities towards other stakeholders in the triad. For instance, Molly Jackman, the former Head of Global Policy Research and Data for Good at Facebook, and Lauri Kanerva, the Research Management Lead at Facebook, stress how the US Common Rule,2 which guides most institutional review boards (IRBs), is not adequate for the specific context in which Facebook operates, thus making it necessary to create its own ethical guidelines that have a better fit and answer ethical challenges (Jackman and Kanerva 2016). As another example, it can happen in some countries that annual funds provided by the university and allocated to a department are not sufficient to compensate respondents fairly (at least the minimum wage).

Society As underlined in An EU Code of Ethics for SocioEconomic Research (Dench, Iphofen, & Huws 2004, p. 17), researchers should always ‘develop a set of research aims and objectives which benefit society and minimize social harm. This means that any benefits derived from the research should outweigh any harm caused.’ In marketing, the question of how science can contribute to human flourishing is a complex one. For instance, there are multiple ways of evaluating the ethics of a marketing researcher working on brand loyalty antecedents or on international branding issues. Some will regard these research topics as not ones that do benefit society (i.e. the

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benefits derived from the research do not outweigh any potential harm caused), while others will view them as valuable to society’s well-being (i.e. the benefits derived from the research outweigh any potential harm caused). To form a better judgement before starting research, one should ask a series of questions related to the implications of the research. How can the impact of marketing research on society be evaluated, particularly when the implications will be directed towards, for example, the classical marketing or brand managers of private companies whose ultimate objective is to be (even more) profitable? As De Maria (2006) writes, companies are places where profit-motivated interests can easily win out over ethics. Whenever it is possible, marketing researchers (especially consultants) should ask themselves: 1 Why should the company’s profits increase? For example, is it an obligation in order for the company to exist on the market? Is it only to sell more – and then pollute more and, eventually, harm people – and to please its shareholders? Or is it to save the company and its 500 employees? 2 How and where will the company reach these profits? For example, in which industry does the company compete? In what political, sociocultural context does the company evolve?

3 How will these profits affect the population and the environment? The ethical relationship between the researcher and the client company – when the research is commissioned – requires research managers to be critical of the research project before signing any contract. This analysis should be done in conjunction, for example, with the research analyst, operations manager and fieldwork manager, to identify potential problems related to data collection, findings and managerial implications that may arise. Once the contract is signed, the researcher is expected to conduct the research as planned and it will be too late to think about these questions. Finally, these questions are equally important in academia but are usually more difficult (though not impossible) to answer. We often have in mind what will be the type of companies interested in our findings; therefore, it is up to the researcher to anticipate the potential harm to society. Consumer society is a major actor in environmental issues as it can also contribute to inequality and unhappiness (Goodwin, Ackerman, & Kiron, 1997; Kasser, 2002). But just as it can cause many problems, it also provides the opportunity for solutions to be found. I would like to think that we, as marketing researchers, have a role to play in this.

Box 5.4 Glocalized ethics – The example of Te Ara Tika When developing ethical guidelines, New Zealand’s universities take account of not only the universal values and principles mentioned above, but also a M¯aori ethical framework developed in 2010 by M¯aori members of ethics committees (Hudson et al. 2010). This framework, called Te Ara Tika, provides researchers and ethics committees with the key ethical concepts for M¯aori to better engage with them when conducting research. Te Ara Tika is underpinned by four principles: Whakapapa refers to the ‘quality of relationships and the structures or processes that have been established to support these relationships’ (Hudson et al. 2010, p. 6). Examples of questions to be answered by researchers: Is there evidence of local consultation? How has the consent issue been dealt with, and is the suggested mode of informed consent appropriate? To what degree have the M¯aori been afforded the opportunity to have meaningful input and, thereby, influence the shape of the research? Are M¯aori participants and their iwi, hapu¯ and wh¯anau the prime recipients or contributors to the results? Which mechanisms are in place to optimize the benefits for the participants? Tika refers to the validity of the research. Examples of questions to be answered by researchers: In what way does this research project have an impact on the M¯aori? How will the M¯aori be included in this project? Is this an appropriate and respectful approach? Is there adequate participation by the M¯aori at different stages of the research project, including the research design, analysis and dissemination of the results? What knowledge will the community gain from this study? Manaakitanga refers to the cultural and social responsibility of the research(er) and respect for persons. Examples of questions to be answered by researchers: Are the participants being treated with dignity and respect? Is privacy and confidentiality being applied appropriately? Are M¯aori values or concepts used in this research project? Are the wh¯anau able to support participants within this project? Are the kaum¯atua required to guide the research team? Mana refers to participants’ rights and consent.

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Examples of questions to be answered by researchers: How equitable will the results be for the M¯aori? Are the ideas behind koha understood? Is there evidence of mana whenua goals, aspirations, development or expectations? Does the research include meeting M¯aori goals as an outcome? Is there evidence of engaging in a meaningful relationship with mana whenua, Mataawaka (M¯aori living in the area not related to local iwi), or iwi researchers? How is data ownership guaranteed under mana whakahaere?

CURRENT ETHICAL ISSUES FOR MARKETING RESEARCH The Good, the Bad and the ‘Questionable’ Marketing research is, of course, not exempt from cases of ethical violations. Top marketing journals such as the Journal of Marketing Research and the Journal of Consumer Research have had to retract papers3 for fraud4, as have journals in other disciplines, such as Appetite and Journal of the American Medical Association, which have published research conducted by marketing researchers. What these journals call fraud is research misconduct, which is generally a bunch of socially and scientifically discredited research and writing techniques, including: • plagiarism (including self-plagiarism) and t-hacking5 (i.e. borrowing concepts and theories from other scholars without mentioning them or voluntarily omitting existing research); • salami publishing (i.e. cutting up the same research project into smaller pieces to publish separately); • falsification of data (i.e. manipulation and voluntary omission of data to ‘make them talk’ in a statistically significant way, which is also called p-hacking, as well as manipulation of equipment or processes related to the research); • HARKing (i.e. Hypothesizing After the Results are Known, see Kerr 1998) while officially following a hypothetico-deductive model; • fabrication of data (e.g. manufacturing respondents, making up an interview with an imaginary friend, etc.); • ghost or honorary authorship (i.e. hiding some of the authors of a paper to conceal a conflict of interest or listing a researcher as an author while no contribution was made to the study, respectively); • conscious (but accepted and voluntarily deceptive) critical bias in the research design. Partly because retractions can damage a journal’s or an institution’s reputation, the cases that are revealed often involve very serious violations such

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as the fabrication and/or falsification of data. Ethical violations committed against participants are not made public as often by journals, which does not mean they do not exist but that they are probably more difficult to detect. Also, one should note that most retracted papers are often the result of only one fraudster. Does this mean that researchers cheat a lot but do not (yet) get caught or that violations are only made by a minority of researchers? Studies tend to show that (1) violations are not committed only by a minority of researchers and that (2) most researchers who commit ethical violations would score 5 on a scale ranging from 1 – Totally ethical behaviour to 9 – Totally unethical behaviour. This means that they stay in a grey area that includes what we often refer to as ‘questionable’ research practices, albeit ethical violations that should be sanctioned. For instance, in the field of psychology, John, Loewenstein and Prelec (2012) show that 66.5% of academic psychologists at major US universities (n = 2,155) have failed to report all of a study’s dependent measures, 58% have decided to collect more data after looking to see whether the results were significant, 50% have selectively reported studies that worked, and 43.4% have decided whether to exclude data after assessing the impact that doing so would have on the results. What is more, the respondents who answer ‘yes’ to 1 of the 10 items corresponding to 10 different unethical practices tend to think that their actions are defensible. In management, Bedeian, Taylor, and Miller (2010) stress that 91.9% of the members of staff in AACSBaccredited business schools (n = 384) know researchers who develop hypotheses after the results are known (i.e. HARKing), 79.2% know researchers who withhold methodological details or results, and 26.8% know researchers who have fabricated results. Bedeian et al. (2010) also alert us to the low difference in practice between tenured and non-tenured respondents, which indicates deep-seated misconduct within our institutions. Banks et  al. (2016) even find that about one-third of respondents have engaged in HARKing following suggestions made by supervisors and professors, reviewers or editors. Unfortunately, these practices belonging to a grey area of ethical research cannot really be

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improving ethical practices in research. Therefore, it is first and foremost the motivation to misbehave that should be fought. And this cannot be done as long as education relies on the business of rankings and accreditations that pushes researchers and institutions towards a disastrous publish-or-perish logic.

ati

It would certainly be easier for all of us pointing to the system to justify fraud in marketing research and, thus, protect our conscience from unpleasant truths about ourselves. But as already noted above, we are as responsible for unethical behaviour as the system is if we remain silent.7 Below, I outline five unethical practices that can be managed today without waiting for our system to undergo transformative change: 1 I have already mentioned research misconduct such as p-hacking, HARKing, and all the means a researcher has to make a paper more attractive to journals. One of the most promising (but not new – Hubbard and Armstrong 1992) solutions for journals is to accept the idea that publishing null findings also advances knowledge. Coupled with pre-registered research hypotheses and design, this solution allows journals to send a clear and strong signal to marketing researchers: papers are not ordinary products to be made attractive and sold on a market. Unfortunately, it may be more difficult for journals to identify dishonesty in qualitative research because

on cati tifi

Mo tiv

It’s Not All About the System!

Jus

Examples Career (no regular publications, no job) Publication bonuses Recognition More time for research, less time for teaching

on

sanctioned as long as they remain ‘questionable’. One of the direct consequences of this grey area in research is the ongoing deep replication crisis that affects all domains of science.6 Another consequence is the persistence and justification of misconduct. According to Cressey (1953), misconduct is more likely to happen when three conditions are met simultaneously. As Figure 5.2 shows, these three conditions, called the fraud triangle, are: the opportunity to misbehave, a motivation to misbehave, and a justification for misbehaving. It is this last condition, I think, that is partly supported by the persistence of a grey area in research. Drawing from psychology journals that offer provisional prestudy acceptance, some marketing and management journals like the Journal of Business Ethics have suggested pre-registering research before data collection begins. However, academic journals alone are not able to offer efficient and durable solutions (and pre-registration can also be ‘cracked’ – see for instance Yamada 2018). Fraud can be reduced if one of the three conditions of the fraud triangle is not available to potential fraudsters. But one condition – namely the motivation to misbehave – is probably more important than the other two as it fuels the search for opportunities and justifications to misbehave. For researchers, the motivation to misbehave consists of avoiding the negative consequences of a neoliberal, consumerist system of education and academic publishing, also well known as ‘publish or perish’. In other words, in this neoliberal educational and research landscape, the chances are rather high that motivational values of conservation (i.e. basically securing our career and possibly our family) win out over any other values

Opportunity

Examples “Institutions just want me to publish for university rankings; they don’t really care about ethics.” “The system is unethical; it’s not just me. Everyone does it.” “Marketing research has a very small impact outside of academia.” “If a more coherent story is told (e.g. thanks to HARKing), this will increase the likelihood of the paper being accepted for publication.”“Journals have extravagant expectations.” “My practices are considered questionable by the community but not firmly unethical. So this means they are tolerated.”

Examples No adapted tools to easily check data falsification Tons of articles submitted and lack of reviewers Collusion between co-authors and between authors and editors or/and reviewers

Figure 5.2

Cressey’s (1953) fraud triangle in light of the (marketing) research landscape

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pre-registered research is not possible. How can fabricated verbatims be detected? In the name of ethics, a researcher likely has the right to tell an associate editor that participants cannot be contacted because they want to remain anonymous. Also, qualitative research is often interpretive and does not look for generalization. This certainly makes the task of detecting misconduct even more challenging. 2 We have seen that questionable practices in institutions can be deep rooted (Banks et  al. 2016), which means there is a risk that the grey area in research becomes a tolerated territory – if it is not already. Apart from an ethics course for PhD students, which most institutions have but do not always give their full consideration, PhD students should be supervised by two professors, sign a code of good conduct, and dedicate a section of their manuscript to the ethical issues they encountered. This section could mention, for instance, how the students made sure that ethical guidelines were respected during the fieldwork or which dilemmas they had to manage (and how). It would also be beneficial for all academics to obtain internal validation from their department or laboratory regarding the hypotheses and research design before any data collection. This could allow the researcher to get advice from colleagues and better (i.e. jointly) choose the hypotheses to be tested. It could also act as a kind of informal pre-registration of hypotheses and, at the same time, as a collective and benevolent monitoring that potentially curbs unethical practices. 3 While questionable practices often deal with data manipulation, some other unethical practices currently happening outside the realm of methodology are worth mentioning, too. A very serious form of misconduct concerns participants’ compensation (Silberman et  al. 2018; Williamson 2016). On the one hand, researchers have to publish faster and better. On the other hand, never before has it been as easy to find participants in a quantitative study with the help of M-turk or Prolific, for example. But then comes the question of fair compensation, especially when funds come from the institution and are not unlimited. Journals have the duty (whenever possible) to ask the authors of quantitative studies who paid the crowdworkers for the invoice relating to data collection. With this invoice, journals can ensure that the participants were paid fairly: firstly, by checking the compensation per hour (some websites such as Prolific require researchers to pay participants at least $6.50/ hour, which can be very little, depending on the country or the state); and secondly, by ensuring the time that was announced, which served as

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a point of reference for paying the participants, was indeed the time required to complete the questionnaire. 4 Academic journals in marketing generally have a double-blind peer review process for submissions. One of the problems is that it happens that reviewers know who the author is, which can make the double-blind review a single-blind or even an open review.8 While it can happen that a reviewer accidentally knows who the author is, it is actually common practice for some authors to make sure first that they can be identified before submitting the paper. This is especially the case when the author is already known in his/her topic-based community and knows that reviewers will provide a more indulgent and supportive review if they know he/she is the author. It can also happen that authors working on the same topic share the ‘market’ related to this topic. For instance, researchers in group A work on research question X and ask to be reviewed by researchers in group B, while the latter work on research question Y and ask to be reviewed by the researchers in group A. To avoid these situations and to offer a better experience to the readership, it is critical that journals ask at least one researcher working on other topics to review the paper. 5 Finally, the presence of a reviewer who is not an expert on the paper’s topic or methodology (or even marketing – see Interdisciplinary Peer Review or IPR) would also prevent marketing researchers from risking echo production and censorship. Social networks have been blamed for their contribution to the development of echo chambers, that is a closed environment in which beliefs can only be reinforced as they are never challenged by external views. But if we consider how the review principles were developed (i.e. by asking experts on a particular topic to review a paper on the same topic) and then how marketing knowledge is produced (i.e. by publishing papers that are evaluated by experts sharing the same background), echo chambers can also exist in marketing and produce unethical research practices such as censorship.

CONCLUDING REMARKS (IN SEARCH OF AN ETHICS OF BEING) In this chapter, we have seen that the scientific community agrees on what is considered good or bad research practices, as illustrated by the numerous codes of ethics and guidelines that are available and more or less emphasize the same ethical

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and unethical practices. We have also seen that many researchers can be situated somewhere on a spectrum between having good and having bad practices: that is, they engage in some questionable research practices that constitute a grey area in research. Unfortunately, this grey area is sometimes considered acceptable within the research community and contributes to reinforcing a fraud triangle. While the existence of this fraud triangle can mainly be explained by a publish-or-perish system, it is important to remind researchers they are the system. Therefore, researchers are encouraged to engage in a proactive mood that does not make them victims of the system but partly responsible for its persistence. Apart from ethical guidelines and their grey area, I have proposed in this chapter to anticipate systematically the rights, needs and expectations of the different stakeholders involved in research. When researchers can respect such rights, needs and expectations of the participants, research community and society, complete ethical compliance is achieved. Because complete ethics can be hard to achieve when dilemmas confronting two different stakeholders arise, researchers switch to partial ethics. This is not a problem per se if researchers make a conscious decision that complete ethics is not possible for the good of the participants and/or society. Procedural ethics has limits: it cannot take account of all the complexities that social research entails and that create unique situations for researchers. As already said above, social research requires emotional intelligence, creativity and reflection, always on a basis of benevolence. It requires all this from researchers because it deals with a complex web of cultures, behaviours, ideologies, personal trajectories and collective history. In addition, procedural ethics cannot be effective if the economic system does not support it. In this context, it is critical that our institutions provide the conditions necessary for an ethics of being. The way we introduce ethical matters in doctoral programmes today is often inspired by procedural ethics (i.e. basically, ‘here is what you should and shouldn’t do’). But being ethical is different from following guidelines, codes or the law. And it is through socialization during the doctoral years that our field can teach us to be ethical rather than simply doing ‘the right thing’. I am not saying here that marketing research should reject procedural ethics. Procedural ethics is an essential parapet that prevents us from falling, but it does not help us move forward. By contrast, an ethics of being does. Ethical issues in marketing research will evolve as ethical standards adapt to their new environments. These new environments will be shaped,

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for instance, by new technological landscapes or an environmental emergency. Imagine a near future where, thanks to big data, Google Scholar will be able to suggest to us a research project and even a research design with potential interested co-authors (Alemany, Oliver, & Vayre, 2015). This is all the more plausible as Google already knows our publications, past searches in databases like Scholar, and our research interests. It is also easily and quickly informed of current trends in society as well as new findings in other disciplines. Now imagine one of the co-authors for this research project is a pre-programmed robot in charge of online data collection and analysis. What will be the ethical issues and guidelines at that moment? The future holds many other ethical challenges for us: the impact of post-truth on future researchers and their new reflection on ontological and epistemological questions, neuroethics in marketing practices, anonymity in an age of mass surveillance, and so on, but also the rationale of marketing research itself in light of climate change and the social disorders it will engender. Without an ethics of being that is firmly rooted in our field, these potential future ethical issues will continue to be answered through a procedural ethics that is largely inspired by very general codes of ethics not originally designed for marketing. At a time when marketing research may never have been as useful as it is today to move the market towards urgently needed sustainable business and consumer practices, developing an ethics of being that responds to the specificities of our discipline is no longer a simple option that should be discussed but a necessity.

Notes 1

2

3

4

5

In one of my research projects, for instance, I notified participants that ‘projective methods may eventually be used to help the participant to express his unconscious thoughts more easily’. The Common Rule outlines the criteria and mechanisms for an IRB review of research into human subjects. Readers can go to retractionwatch.com to stay informed of academic papers that have been retracted. In this chapter, I am not discussing papers retracted for an honest error such as incorrect data or calculation errors. The term ‘t-hacking’ or theory hacking was debated at an ACR conference roundtable (Dallas, 11–14 October 2018) chaired by Peter McGraw. The participants were: Margaret C. Campbell, Darren Dahl, Eileen Fischer, Rebecca Hamilton, Joel Huber, Gita Venkataramani Johar, Amna

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Kirmani, Mary Frances Luce, Deborah MacInnis, Page Moreau, Vicki G. Morwitz, Anirban Mukhopadhyay, Linda L Price, Stefano Puntoni, Priya Raghubir, Rebecca Ratner, Klaus Wertenbroch and Christian Wheeler. Despite several calls for replication (Evanschitzky et  al. 2007; Hubbard and Armstrong 1994; Hunter 2001; Lynch et  al. 2015), marketing research remains quite inactive on this topic. For interesting reflections on scientific misconduct and possible solutions, see Honig et al. (2018). Partly for this reason, the American Economic Review decided to move from double-blind to single-blind review in 2011.

REFERENCES Alemany Oliver, M., & Vayre, J. S. (2015). Big data and the future of knowledge production in marketing research: Ethics, digital traces, and abductive reasoning. Journal of Marketing Analytics, 3(1), 5–13. Banks, G. C., Rogelberg, S. G., Woznyj, H. M., Landis, R. S., & Rupp, D. E. (2016). Evidence on questionable research practices: The good, the bad, and the ugly. Journal of Business and Psychology, 31(3), 323–338. Bedeian, A. G., Taylor, S. G., & Miller, A. N. (2010). Management science on the credibility bubble: Cardinal sins and various misdemeanors. Academy of Management Learning & Education, 9(4), 715–725. Beninger, K., Fry, A., Jago, N., Lepps, H., Nass, L., & Silvester, H. (2014). Research using social media: Users’ views. NatCen Social Research Report. London: NatCen. Bruckman, A. (2006). Teaching students to study online communities ethically. Journal of Information Ethics, 15(2), 82–95. Cressey, D. R. (1953). Other people’s money: A study of the social psychology of embezzlement. Glencoe, IL: Free Press. De Maria, W. (2006). Brother secret, sister silence: Sibling conspiracies against managerial integrity. Journal of Business Ethics, 65(3), 219–234. Dench, S., Iphofen, R., & Huws, U. (2004). An EU Code of Ethics for Socio-Economic Research. IES Report 412. Brighton: the Institute for Employment Studies. Elgesem, D. (2015). Consent and information: Ethical considerations when conducting research on social media. In H. Fossheim & H. Ingierd, Internet Research Ethics (pp. 14–34). Oslo: Cappelen Damm Akademisk. Erikson, K. T. (1967). A comment on disguised observation in sociology. Social Problems, 14(4), 366–373.

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ESOMAR (2011). ESOMAR Guideline on Social Media Research. Available at: www.esomar.org/uploads/ public/knowledge-and-standards/codes-andguidelines/ESOMAR-Guideline-on-Social-MediaResearch.pdf Evanschitzky, H., Baumgarth, C., Hubbard, R., & Armstrong, J. S. (2007). Replication research’s disturbing trend. Journal of Business Research, 60(4), 411–415. Ford, S. M. (2011). Reconceptualizing the public/private distinction in the age of information technology. Information, Communication & Society, 14(4), 550–567. Foucault, M. (1978/2009). Security, territory, population: Lectures at the College De France, 1977–78. Basingstoke: Palgrave Macmillan. Goodwin, N. R., Ackerman, F., & Kiron, D. (Eds.). (1997). The consumer society. Washington, DC: Island Press. Honig, B., Lampel, J., Baum, J. A., Glynn, M. A., Jing, R., Lounsbury, M., & Van Witteloostuijn, A. (2018). Reflections on scientific misconduct in management: Unfortunate incidents or a normative crisis? Academy of Management Perspectives, 32(4), 412–442. Hubbard, R., & Armstrong, J. S. (1992). Are null results becoming an endangered species in marketing? Marketing Letters, 3(2), 127–136. Hubbard, R., & Armstrong, J. S. (1994). Replications and extensions in marketing: Rarely published but quite contrary. International Journal of Research in Marketing, 11(3), 233–248. Hudson M., Milne M., Reynolds P., Russell K., & Smith B. (2010). Te ara tika: Guidelines for M¯aori research ethics: A framework for researchers and ethics committee members. Auckland: Health Research Council of New Zealand. Hunter, J. E. (2001). The desperate need for replications. Journal of Consumer Research, 28(1), 149–158. IAC and IAP (2012). Responsible conduct in the global research enterprise: A policy report. Amsterdam: IAC. Jackman, M., & Kanerva, L. (2016). Evolving the IRB: Building robust review for industry research. Washington and Lee Law Review Online, 72(3), 442–457. John, L. K., Loewenstein, G., & Prelec, D. (2012). Measuring the prevalence of questionable research practices with incentives for truth telling. Psychological Science, 23(5), 524–532. Kasser, T. (2002). The high price of materialism. Cambridge, MA: MIT Press. Katz, D. (1960). The functional approach to the study of attitudes. Public Opinion Quarterly, 24(2), 163–204. Kerr, N. L. (1998). HARKing: Hypothesizing after the results are known. Personality and Social Psychology Review, 2(3), 196–217.

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Kozinets, R. (2015). Netnography: Redefined. Los Angeles: Sage. Kruse, L. M., Norris, D. R., & Flinchum, J. R. (2018). Social media as a public sphere? Politics on social media. Sociological Quarterly, 59(1), 62–84. Lynch Jr., J. G., Bradlow, E. T., Huber, J. C., & Lehmann, D. R. (2015). Reflections on the replication corner: In praise of conceptual replications. International Journal of Research in Marketing, 32(4), 333–342. Madden, M., Lenhart, A., Cortesi, S., Gasser, U., Duggan, M., Smith, A., & Beaton, M. (2013). Teens, social media, and privacy. Pew Research Center Report. Available at https://www.pewresearch.org/ internet/wp-content/uploads/sites/9/2013/05/PIP_ TeensSocialMediaandPrivacy_PDF.pdf Mamali, E. (2019). Researcher’s guilt: Confessions from the darker side of ethnographic consumer research. Consumption Markets & Culture, 22(3), 241–255. Markham, A. (2012). Fabrication as ethical practice: Qualitative inquiry in ambiguous internet contexts. Information, Communication & Society, 15(3), 334–353. Markham, A., & Buchanan, E. (2012). Ethical decision-making and internet research (Version 2.0): Recommendations from the AoIR ethics working

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committee. Available at http://aoir.org/reports/ ethics2.pdf Silberman, M. S., Tomlinson, B., LaPlante, R., Ross, J., Irani, L., & Zaldivar, A. (2018). Responsible research with crowds: Pay crowdworkers at least minimum wage. Communications of the ACM, 61(3), 39–41. Townsend, L., & Wallace, C. (2016). Social media research: A guide to ethics. Available at www2. port.ac.uk/research/ethics/CurrentDownloads/ filetodownload,198032,en.pdf Tybout, A. M., & Zaltman, G. (1974). Ethics in marketing research: Their practical relevance. Journal of Marketing Research, 11(4), 357–368. Williams, M. L., Burnap, P., & Sloan, L. (2017). Towards an ethical framework for publishing Twitter data in social research: Taking into account users’ views, online context and algorithmic estimation. Sociology, 51(6), 1149–1168. Williamson, V. (2016). On the ethics of crowdsourced research. PS: Political Science & Politics, 49(1), 77–81. Woodfield, K. (2018). The ethics of online research. Bingley: Emerald. Yamada, Y. (2018). How to crack pre-registration: Toward transparent and open science. Frontiers in Psychology, 9 (article 1831), 1–3.

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6 Female Sexualisation and Objectification in Advertising: Research Insights and Future Research Agenda for Advertising Ethics Caroline Moraes, Solon Magrizos and Lucy Hebberts INTRODUCTION The aim of this chapter is to review existing relevant literature on the societal impacts of female objectification and sexualisation (FOAS henceforth) in advertising. Advertisers have used sexual appeals in advertising for centuries (Reichert et  al., 2001), and this is a practice that remains prominent. Recent ads for luxury brands Choo, Dolce & Gabbana, Calvin Klein and Belvedere represent sexualised violence towards women (Abraham, 2010; Dray, 2017; Duncan, 2015; Forbes, 2012), trivialising instances of sexual assault and other types of objectification that can create distress and cause controversy among consumers (Sabri and Obermiller, 2012; Sabri, 2017; Chen and Berger, 2013). Capella et  al. (2010) suggest that ads depicting violence against women can increase acceptance of this behaviour, while Schooler and Ward (2006) argue that exposure to ads featuring FOAS increases viewers’ discomfort with their own bodies. Simultaneously, social movements like #MeToo (2018) raise awareness of sexual harassment and objectification issues, likely increasing consumer sensitivity towards FOAS in advertising.

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Research on advertising ethics has expanded over the past few years (Beltramini, 2003; Drumwright, 2007; Drumwright and Kamal, 2016, including studies addressing the ethics of controversial advertising using sexual appeals (KadićMaglajlic et  al., 2017; Moraes and Michaelidou, 2017; Putrevu and Swimberghek, 2013; Sabri, 2017). Nevertheless, the societal impacts of advertising using FOAS remain overlooked (Gurrieri et  al., 2016), particularly in the marketing discipline. The creative appeals used in marketing communications can push consumers’ moral boundaries (Beltramini, 2003; Jeurissen and Van de Ven, 2006). Relevant literature focuses on how consumers (Van Hellemont and Van den Bulck, 2012; Henthorne et  al., 1993), as well as advertising professionals (Zayer and Coleman, 2015) and client organisations (Gurrieri et  al., 2016), perceive and judge the morality of controversial sexual ads. Comparatively fewer studies examine the impact of these ads on viewers’ long-term attitudes and actual behaviours from a marketing perspective, despite the fact that advertising can propagate outdated and inaccurate gender stereotypes (Dobscha, 2012), taboo subjects (Sabri, 2017), and unattainable beauty standards (Zayer and Otnes, 2012). Consequently, further

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understanding of the societal impacts of FOAS in advertising is needed in our discipline, to reduce advertising scholarship and practice leading to negative societal impacts. In response, this chapter identifies and synthesises diverse, interdisciplinary research documenting the negative impacts of FOAS in advertising. By presenting literature review highlights based on 87 journal articles published over the past 30 years, we map the impacts of FOAS on three emerging dimensions: (1) gendered differences in consumer responses to ads depicting FOAS; (2) ad FOAS effects specific to female consumers; and (3) ad FOAS effects specific to male consumers. Literature review highlights suggest that FOAS in advertising can have negative long-term effects on viewers’ attitudes and behaviours towards sexual relationships, at times leading to normalisation of sexual violence and harassment. The chapter’s originality lies in its foregrounding of the negative effects of female sexualisation in advertising, contributing to the growing literature on ethical issues in advertising (Drumwright and Kamal, 2016; Drumwright, 2007). The chapter also contributes to the advertising ethics field by highlighting the current state of research on FOAS in advertising, by determining resonant propositions and illuminating new areas for future research, from a marketing ethics perspective, where knowledge gaps still exist in this area.

FOAS AS CONTROVERSIAL ADVERTISING Significant research topics in the field of advertising ethics include consumer deception (Chonko and Hunt, 1985; Darke and Ritchie, 2007), targeting of vulnerable populations (Nairn, 2015; Nantel and Weeks, 1996), stereotyping and misrepresentation (Fine and Rush, 2018; Shabbir et  al., 2014), problematic online marketing communications (Chonko and Hunt, 2018; Drumwright and Murphy, 2009), and controversial advertising (Jeurissen and Van de Ven, 2006; Nantel and Weeks, 1996). FOAS in advertising involves the representation of sexualised violence towards women, trivialising sexual assault and objectification. Consequently, we see FOAS as a type of controversial ad execution. This is because FOAS involves using ‘provocative images, words or situations that utilise or refer to taboo subjects or that can violate societal norms or values’ (Huhmann and Mott-Stenerson, 2008, p. 294; see also Dahl et  al., 2003; Fam et  al., 2004; Fam and Waller, 2003; Phau and Prendergast, 2001; Prendergast et al., 2002; Waller, 1999).

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Controversial ads test the boundaries of taste and decency, which vary fluidly across time and cultures (Hackley and Kitchen, 1999). Existing studies suggest that controversial advertising can ‘elicit reactions of embarrassment, distaste, disgust, offence, or outrage’ (Waller, 2005, p.7; see also Wilson and West, 1981). Whether due to the nature of the product or the ad execution style used (Wilson and West, 1981), controversial ads often push the boundaries of what society considers morally acceptable (Drumwright, 2007; Spence and van Heekeren, 2005). Recent resonant literature engages critically with the use of controversial advertising appeals, focusing on what consumers might find questionable and morally controversial (Kadić-Maglajlic et al., 2017; Moraes et  al., 2019; Moraes and Michaelidou, 2017; Putrevu and Swimberghek, 2013; Sabri, 2017). However, it would be an oversight to argue that such literature is exhaustive in scope. We suggest the effects of FOAS in advertising deserve additional research attention from marketing scholars and practitioners. This is because FOAS can have negative effects that go beyond negative consumer attitudes and moral judgements, potentially affecting how people behave towards women generally and when in sexual relationships. For example, Capella et al. (2010) find that violence against women in ads can increase acceptance of this behaviour, while Schooler and Ward (2006) conclude that exposure to ads featuring FOAS increases discomfort with viewers’ own body, leading to negative relationship outcomes. However, there is still ‘very little work in marketing on the societal impacts of advertising using FOAS’ (Gurrieri et al., 2016, p. 1449). Therefore, additional understanding of the societal impacts of female sexualisation and objectification in advertising is needed, to minimise advertising scholarship and practice leading to negative societal outcomes. This chapter seeks to enhance scholarly understanding of the societal effects of FOAS in advertising among marketing scholars. It does so by presenting literature review highlights of existing interdisciplinary research in this area.

LITERATURE SEARCH PROCEDURES Our FOAS literature search was informed by Tranfield et  al.’s (2003) procedures for literature reviews. The first stage involved searching for articles in academic business databases including JSTOR, Business Source Premier (EBSCO) and ABI/INFORM Global (ProQuest). We used nine

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keywords and terms, and many combinations and variations of such terms, to carry out an interdisciplinary search on relevant studies examining the impacts of ad FOAS on sexual harassment, sexual violence, and beliefs and attitudes towards sex within adult relationships. The keywords and terms included ‘sexual’, ‘object’, ‘marketing’, ‘relationships’, ‘female’, ‘effects’, ‘sexual harassment’, ‘sexual violence’ and ‘attitude towards sex’. This initial search generated 38,183 articles. The second stage entailed screening these articles by retaining manuscripts published between 1970 and 2018 in peer-reviewed journals, which resulted in 21,432 articles. The third stage of screening involved selecting articles published in journals within the fields of psychology, sociology, marketing and consumer behaviour, journalism, and youth and mental health, as these were the disciplines containing the most relevant articles on FOAS. Within this third screening stage, articles were selected if they covered at least one of the following seven areas: female objectification and sexualisation; sexual harassment and sexual violence; beliefs and attitudes towards sex; responses of men and women to ads depicting female objectification and sexualisation; gender stereotypes in ads depicting female objectification and sexualisation; effects of ads depicting female objectification and sexualisation on men and women; individual factors moderating the impact of FOAS on sexual harassment and sexual violence; or beliefs and attitudes towards sex. This process left us with 1,582 articles. The fourth screening stage encompassed reading the titles and abstracts of the articles shortlisted in the previous stage, and excluding works that were irrelevant to our research topic. This process resulted in 202 articles, which we subsequently read in full, assessing them for relevance, quality and contribution in the fifth screening stage. This last screening process reduced the number of research articles from 202 to 87 papers, all of which were published in 49 peer-reviewed journals across several disciplines; there were only 13 relevant papers published in marketing journals. Consequently, this remains an under-researched area in marketing ethics.

LITERATURE REVIEW HIGHLIGHTS The main literature review findings are organised around three main themes, covering: (1) gendered differences in consumer responses to ads depicting FOAS; (2) ad FOAS effects specific to female consumers; and (3) ad FOAS effects specific to

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male consumers. While the first theme focuses on gendered differences in types of consumer responses to ad FOAS, the second and third themes focus on ad FOAS effects that are specific to either female or male consumers, respectively. The tables within each section summarise these three themes, presenting a sample of relevant publications within each theme.

Gendered Differences in Consumer Responses to Ads Depicting FOAS Much research examining female objectification and sexualisation focuses on consumer responses to ads representing FOAS, suggesting genderbased differences in these responses (see Table 6.1). For example, Capella et al. (2010) argue that ads portraying violence against women can increase acceptance of this behaviour. Samson (2016) found differences in ad processing between males and females when investigating the recall effectiveness of using visual sexual appeals in ads. According to Samson (2016), men do not recall as much brand information as women when ads incorporate sexual appeals, rendering such ads ineffective. This is because men focus predominantly on sexual cues, such as FOAS displays of female bodies (Buss, 1989; Feingold, 1990), thus hindering brand-related information processing. Additionally, the literature suggests that, unlike females, males’ reliance upon visual cues moderates the impact of ad FOAS on male expectations of female attractiveness in sexual relationships; these expectations, in turn, affect their perceptions of female competence negatively (Nezlek et  al., 2014). Further research shows that reactions to FOAS cues in ads depend on personality factors such as introversion and extraversion, with such ads failing to be effective with introverts (Black et  al., 2010). Additional research suggests that individual characteristics may affect the relationship between FOAS and ethical evaluations. Expectedly, when students saw ads with different levels of sexual content, they judged the more sexualised ads as more unethical than those with less sexualised content (Mittal and Lassar, 2000). While gender did not influence any of their ad evaluations, it was found that an individual’s degree of sexual liberalism affected their attitudes towards, and moral judgements of, the ads (Mittal and Lassar, 2000). Other works focus more on consumers’ baseline attitudinal responses to ads featuring FOAS. For instance, research suggests that when consumers are under constrained cognitive processing capacity, men respond positively to ads using explicit

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Table 6.1 A sample of articles on gendered consumer responses to ad FOAS Authors

Year

Title

Journal

Methods

Findings

Black et al.

2010

The effect of personality on response to sexual appeals

European Journal of Marketing

Laboratory experiment

LaTour

1990

Mittal and Lassar

2000

Female nudity in print Psychology and Laboratory advertising: An analysis Marketing experiment of gender differences in arousal and ad response Sexual liberalism as Journal of Laboratory a determinant of Business and experiment consumer response to Psychology sex in advertising

Levels of extroversion directly affect responses to advertisements featuring FOAS Male arousal increases as advertisement sexual content increases

Morry and Staska

2001

Nezlek et al. 2014

Samson

2016

Sengupta 2008 and Dahl

Vezich et al. 2017

Magazine exposure: Internalisation, selfobjectification, eating attitudes, and body satisfaction in male and female university students Gender differences in reactions to the sexualisation of athletes

Canadian Journal of Behavioural Science

Laboratory experiment

Journal of Social Laboratory Psychology experiment

The effectiveness of using Journal of sexual appeals in Media advertising: Memory for Psychology sexual and nonsexual Theories visual content across Methods genders Fender-related reactions to Journal of gratuitous sex appeals Consumer in advertising Psychology

Laboratory experiment

Women’s responses to Journal of stereotypical media Consumer portrayals: An FMRI Behaviour study of sexualised and domestic images of women

Laboratory experiment

sexual cues, while women respond negatively to such appeals; this is supported by research suggesting that men demonstrate immediate, favourable but uncontrollable attitudinal responses to visual FOAS cues, with male arousal increasing as the ad’s sexual content becomes more pronounced (LaTour, 1990; Samson, 2016; Sengupta and Dahl, 2008). Relatedly, women demonstrate preference towards sexualised but gender-stereotyped

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Laboratory experiment

Males and females who found an advertisement featuring FOAS to be explicit demonstrated poor attitudes towards the advertisement For both males and females, the relationship between sexual objectification and body dissatisfaction is mediated by internalisation

Sexualised female athletes were perceived as more attractive but less competent than non-sexualised female athletes Males recalled less brand information with advertisements incorporating sexual appeals due to attention remaining with visual cues Males exhibit a more instinctive positive attitudinal response to advertisements featuring FOAS than females Women demonstrated arousal to advertisements that were sexual but depicted gender stereotypical roles

images; existing research suggests that female brain regions associated with reward (ventral striatum) and arousal (amygdala) present more activity while viewing gender-stereotyped, sexualised images (Vezich et al., 2017). Therefore, research indicates subconscious responses from both men and women towards ads featuring FOAS. Finally, research suggests that an individual’s psychological internalisation of sexual

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objectification mediates the relationship between body dissatisfaction and actual sexual objectification for both males and females (Morry and Staska, 2001). Therefore, the extent to which males and females internalise objectification can influence the impact of ad FOAS on perceived body image and, by extension, sexual relationships.

Ad FOAS Effects Specific to Female Consumers The existing literature also addresses the effects of ad FOAS on female consumers more specifically, primarily focusing on mental health issues resulting from negative body attitudes and image, and poor sexual health outcomes (see Table 6.2). Objectification theory helps to explain mental health risks for women who encounter sexual objectification (Fredrickson and Roberts, 1997). According to this theory, frequently women perceive themselves as objects, just as others are encouraged to do so when a woman is sexually objectified representationally; sexual objectification promotes self-objectification by encouraging girls to internalise an externally observed perspective on their bodies, resulting in appearance preoccupation (Fredrickson and Roberts, 1997; Fredrickson et  al., 1998). This preoccupation, in turn, leads to habitual body monitoring, increasing the potential for women to experience depression, sexual dysfunction and eating disorders, in their attempts to meet body image ideals and lessen shame surrounding the body (Fredrickson and Roberts, 1997; Sharp and Keyton, 2016; Tiggemann and Kuring, 2010). These states of poor mental health consume greater attentional resources, manifesting through diminished cognitive performance (Fredrickson et  al., 1998). Objectification theory thus offers a potential explanation as to why such mental disorders affect more women than men disproportionately (Fredrickson and Roberts, 1997; Tiggemann and Kuring, 2010). This is not just a prevailing issue among young women, however, as research with women over 60 suggests that such women experience poor mental health following exposure to FOAS within advertising (Hine, 2011). Objectification emphasises physical attractiveness and ideals, which explains why regular exposure to ads featuring FOAS is associated with decreased comfort with aspects of one’s real body, such as hair and sweat (Schooler and Ward, 2006). Research shows that female consumers who view ads featuring a thin idealised woman report greater self-objectification and body dissatisfaction, subsequently resulting in lower self-esteem;

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social comparison can provide mediation, with women who engage in social comparison possessing reduced body satisfaction (Bessenoff, 2006; Clay et  al., 2005; Harper and Tiggemann 2008; Hawkins et  al., 2004). Internalisation of socio-cultural beauty standards through exposure to mediated FOAS also increases body image self-consciousness during physical intimacy, with women possessing higher body surveillance and shame than men (McKinley, 1998; Moradi et al., 2005; Sinclair and Myers, 2004). Indeed, body surveillance mediates the relationship between exposure to ad FOAS and body shame, appearance anxiety and body image self-consciousness during physical intimacy (Aubrey, 2007).

Ad FOAS Effects Specific to Male Consumers Extant research discusses ad FOAS effects affecting male consumers, too, mainly with regards to the impacts of male attitudes towards the female body, body image ideals and sexual health outcomes (see Table 6.3). Ads containing FOAS promote a narrow ideal of female attractiveness. Increasingly this can result in males finding it difficult to identify an ‘acceptable’ partner and rating average women as less attractive after viewing thin ideal images of females (Kenrick and Gutierres, 1980; Schooler and Ward, 2006). Narrow ideals foreground female appearance over other attributes, with research demonstrating that men recall the appearance of female job applicants more than they recall information about their job suitability (Rudman and Borgida, 1995). Ad FOAS instils a preference for sanitised female bodies, leading to negative male attitudes towards female bodies that are not so; in some cases, these male attitudes also are associated with increased female objectification and generally negative attitudes towards women (Roberts et al., 2002; Schooler and Ward, 2006). These studies are significant because objectification can create unequal power dynamics, which in turn may result in coercive and risky sexual behaviours (Bowleg et  al., 2000; Soet et  al., 1999; Wingood and DiClemente, 1998;), where objectified females are not perceived as being worthy of respect (Schooler and Ward, 2006). Conversely, men who are more comfortable with women’s real bodies are less likely to objectify partners and subsequently engage in equitable, respectful and safe sexual relationships (Schooler and Ward, 2006). Further research suggests that male body shame can cause males to withdraw emotionally from

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Table 6.2 Article highlights for ad FOAS effects specific to female consumers Author

Year

Title

Aubrey

2007

Bessenoff

2006

Clay et al.

2005

Fredrickson and Roberts

1997

The impact of sexually Mass Laboratory Body surveillance mediated objectifying Communication experiment the relationship between media exposure and Society exposure to FOAS and on negative body body shame, appearance emotions and sexual anxiety and body image self-perceptions: self-consciousness during Investigating physical intimacy the mediating role of body selfconsciousness Can the media affect us? Psychology of Laboratory Social comparison mediated Social comparison, Women Quarterly experiment relationships of self-discrepancy, and exposure to thin-ideal the thin ideal advertisements increasing body dissatisfaction, negative mood and lowered self-esteem Body image and selfJournal of Research Laboratory Exposure to thin models esteem among on Adolescence experiment lowered female body adolescent girls: satisfaction and Testing the influence subsequent self-esteem of sociocultural factors Objectification theory Psychology of Conceptual Objectification theory states Women Quarterly that women are frequently encouraged to internalise an external observer’s perspective on their bodies That swimsuit becomes Journal of Laboratory Objectification theory states you: Sex differences Personality and experiment that women are frequently in self-objectification, Social Psychology encouraged to internalise restrained eating, and an external observer’s math performance perspective on their bodies The effect of thin ideal Sex Roles Laboratory Females who viewed media images experiment advertisements featuring on women’s selfa thin-idealised woman objectification, mood, reported greater selfand body image objectification, appearance anxiety and body dissatisfaction The impact of exposure Eating Disorders Laboratory Exposure to thin ideals to the thin-ideal experiment increased body media image on dissatisfaction, negative women mood states and eating disorder symptoms, subsequently decreasing self-esteem In the margins: The Sex Roles Laboratory Individuals over 60 experience impact of sexualised experiment poor mental health images on the mental following exposure to health of ageing FOAS within advertising women

Fredrickson et al. 1998

Harper and Tiggemann

2008

Hawkins et al.

2004

Hine

2011

Journal

Approach

Findings

(Continued )

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Table 6.2

97

(Continued)

Author

Year

Title

Journal

Approach

McKinley

1998

Sex Roles

Laboratory Relationships between body experiment surveillance, body shame and body esteem were stronger for females than for males

Moradi et al.

2005

Journal of Counselling Psychology

Laboratory Internalisation of socioexperiment cultural beauty standards mediated the relationship between sexual objectification and body surveillance, body shame and eating disorder symptoms

Sharp and Keyton

2016

Sex Roles

Laboratory Normative romance ideologies experiment are contributing to a desire to be thin/look attractive which increases risks of eating disorders for women

Sinclair and Myers

2004

Journal of College Counselling

Tiggemann and Kuring

2010

Gender differences in undergraduates’ body esteem: The mediating effect of objectified body consciousness and actual/ideal weight discrepancy Roles of sexual objectification experiences and internalisation of standards of beauty in eating disorder symptomatology: A test and extension of objectification theory Caught in a bad romance? The negative effect of normative dating and marital ideologies on women’s bodies The relationship between objectified body consciousness and wellness in a group of college women The role of body objectification in disordered eating and depressed mood

Laboratory Internalising socio-cultural experiment beauty standards also increases body-image self-consciousness during physical intimacy Laboratory Mental health issues such experiment as depression, sexual dysfunction and eating disorders disproportionally affect more women than men

British Journal of Clinical Psychology

sexual activity, distancing themselves from negative evaluations and potentially engaging in unsafe sex practices (Holland et al., 1990). If empathy lacks, this emotional withdrawal can result in sexual impulsivity, risk-taking and assault (Cooper et al., 2003). Where such males are exposed to ad FOAS, they can fail to perceive accurately a scenario as being one of sexual assault (Milburn et al., 2000).

DISCUSSION, LIMITATIONS AND AREAS FOR FUTURE RESEARCH The literature presented here allows us to draw a few propositions related to gendered consumer responses to ads depicting FOAS, and the

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Findings

attitudinal and behavioural effects of ad FOAS on both female and male consumers, and their relationships. The propositions, in turn, can be investigated further in future research through diverse methodological approaches. The literature review suggests a potential link between ad FOAS and sexual relationships, whereby exposure to ad FOAS can lead to harmful attitudes towards sex and subsequently influence sexual behaviour negatively (Murnen et al., 2002). Thus, we propose that: Proposition 1: Ad FOAS can affect beliefs and attitudes towards sex and, consequently, sexual behaviour. Further, exposure to ad FOAS results in increased acceptance and normalisation of interpersonal

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Table 6.3 A sample of articles on ad FOAS effects specific to male consumers Author

Year

Bowleg et al. 2000

Cooper et al. 2003

Holland et al. 1990

Kenrick and Gutierres

1980

Milburn et al.

2000

Roberts et al. 2002

Rudman and 1995 Borgida

Schooler and 2006 Ward

Soet et al.

1999

Title

Journal

Approach

Findings

Gender roles, power strategies, and precautionary sexual self-efficacy: Implications for black and Latina women’s HIV/AIDS protective behaviours Personality and the predisposition to engage in risky or problem behaviours during adolescence Sex, gender, and power: Young women’s sexuality in the shadow of aids

Sex Roles

Laboratory experiment

An unequal power dynamic may result in risky sexual behaviour

Journal of Personality and Social Psychology

Laboratory experiment

Avoidance coping is associated with impulsive and risky sexual behaviour

Sociology of Health & Illness

Laboratory experiment

Reduced male body satisfaction results in emotional withdrawal, compromising the ability for males to communicate with partners to engage in safe sex practices Males view females as less attractive following exposure to female thin ideals

Contrast effects and Journal of judgments of physical Personality attractiveness: When and Social beauty becomes a Psychology social problem The effects of viewing Sex Roles R-rated movie scenes that objectify women on perceptions of date rape ‘Feminine protection’: The Psychology of effects of menstruation Women on attitudes towards Quarterly women

Laboratory experiment

The afterglow of Journal of construct accessibility: Experimental The behavioural Social consequences of Psychology priming men to view women as sexual objects Average Joes: Men’s Psychology relationships with of Men & media, real bodies, and Masculinity sexuality

Laboratory experiment

The effects of ethnicity and perceived power on women’s sexual behaviour

Laboratory experiment

Psychology of Women Quarterly

Laboratory experiment

Individuals exposed to FOAS failed to perceive accurately a scenario as being one of sexual assault

Laboratory experiment

Advertisements containing FOAS provide a sanitised body ideal, which results in men further objectifying women Males recalled more information about the appearance of females in comparison to recalling other relevant information regarding female skills

Laboratory experiment

Regular exposure to advertisements featuring FOAS was associated with decreased comfort and aspects of one’s real body, such as hair and sweat An unequal power dynamic may result in risky sexual behaviour (Continued )

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Table 6.3

(Continued )

Author

Year

Wingood 1998 and Di Clemente

Title

Journal

Approach

Findings

Partner influences and gender-related factors associated with noncondom use among young adult African American women, in HIV/AIDS prevention through community psychology

American Journal of Community Psychology

Laboratory experiment

An unequal power dynamic may result in risky sexual behaviour

99

violence (Aubrey et  al., 2011), and violence against women more specifically (Capella et  al., 2010). This acceptance, in turn, can affect sexual relationships negatively, under the distorted belief that it constitutes socially acceptable behaviour. Thus:

women (Impett et al., 2006; Schooler et al., 2005), too. Thus:

Proposition 2: Ad FOAS can encourage sexual violence, thus affecting sexual relationships negatively.

Ad FOAS exposure also affects female body attitudes and image negatively, resulting in body image self-consciousness, diminished sexual activity and enhanced anxiety in intimate situations (Ackard et al., 2000; Faith and Schare, 1993; Schooler and Ward, 2006; Wiederman, 2000). Thus:

We would argue that the occurrence of this impact depends on behavioural factors. For males, reliance on aesthetic cues to assess their female partners when engaging in sexual behaviours can increase aesthetic expectations of their partners and influence their attitudes and behaviours in the relationship (Buss, 1989; Feingold, 1990; Kenrick and Gutierres, 1980; Nezlek et al., 2014; Schooler and Ward, 2006). For women, acceptance of female gender stereotypes will lead to positive responses to ad FOAS, affecting their sexual relationships accordingly (LaTour, 1990; Samson, 2016; Sengupta and Dahl, 2008; Vezich et  al., 2017). Consequently: Proposition 3: Reliance on, or acceptance of, idealised aesthetic cues (for males) or female gender stereotypes (for females) when choosing partners moderates the impact of ad FOAS on sexual relationships. Further, FOAS affects women in various ways including their mental health, cognitive capacity, body attitudes, body image and sexual health. Objectification through ad FOAS can result in habitual body monitoring, increasing the likelihood of women experiencing depression, sexual dysfunction and eating disorders (Fredrickson and Roberts, 1997; Fredrickson et al, 1998; Tiggemann and Kuring, 2010). This is likely to exert strain upon sexual relationships if an individual is experiencing mental health difficulties. Objectification results in diminished sexual health among young

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Proposition 4: The more women see and accept ad FOAS, the more they will be at risk of experiencing various health problems.

Proposition 5: Ad FOAS affects female body attitudes and image, in turn affecting female sexual relationships. Additionally, ad FOAS can have a negative effect on male body image, male attitudes and their sexual health, potentially leading to issues of sexual harassment and sexual violence against women. Ad FOAS can influence men to adhere to dominant sexual scripts, in which a woman is objectified and portrayed in a subordinate role. These issues can then exert pressure upon men and result in focus being diverted from their interests and those of their partners, subsequently stifling communication surrounding safe sex practices (Holland et al., 1990). Hence: Proposition 6: Ad FOAS can affect young males’ body image, attitudes and sexual health, in turn leading to negative effects on their sexual relationships with women. Finally, objectification within ad FOAS can be internalised by both men and women, to varying degrees, thus influencing body image perceptions and attitudes (Morry and Staska, 2001), and relationship outcomes. Consequently: Proposition 7: The degree of internalisation of objectification is an individual factor affecting male

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and female body attitudes and image perceptions, in turn also affecting young adult heterosexual relationships. The seven propositions above offer fruitful areas for future research. Nevertheless, there are limitations in our literature review, which we acknowledge. While the arguments and propositions we present are based upon existing research evidence, much of our commentary draws on research carried out outside the marketing ethics discipline. Another limitation is our specific focus on the effects of ad FOAS on heterosexual adults, failing to acknowledge its effects on relationships within the LGBTQ community. In addition, causality inference can be an issue within existing studies (e.g. Impett et  al., 2006; Schooler and Ward, 2006; Walsh and Ward, 2010; Wiederman and Hurst, 1998). Much of the literature we review draws on data collected through laboratory experiments and self-report questionnaires that can lack reliability and lead to social desirability bias (e.g. Buss, 1989; Cooper et al., 2003; McKinley, 1998). Further, many studies rely on limited samples (e.g. Buss, 1989; Feingold, 1990; Fredrickson et  al., 1998; Kenrick and Gutierres, 1980; LaTour, 1990; Rudman and Borgida, 1995; Tiggemann and Kuring, 2010; Wiederman, 2000), including only one gender or culture. Studies used young student participant samples predominantly, with some showing unclear or contradictory results (e.g. Aubrey, 2007; Pellizzer et al., 2016), and others limited generalisability (e.g. Holland et  al., 1990; LaTour, 1990). Consequently, more diverse populations can be examined in future research, to enable improved generalisation. Further, only a limited number of articles in our literature review drew on pilot studies, so future research can make use of pilot studies to test research design prior to fieldwork, in order to prevent methodological issues occurring when measuring ad FOAS effects (Bryman and Bell, 2003). Many are the areas for future research. For example, the majority of theories originate from psychology and sociology, while potentially relevant theories within biology (reproduction and mate selection theories), history (the historical role of women), law (surrounding relationship legislation) and marketing ethics (normative and descriptive theories) have remained largely neglected. Furthermore, psychological attachment theories, which focus on how enduring emotional connections between people develop and work, are likely to prove important in studies seeking to assess the impact of ad FOAS on relationships. However, research on ad FOAS has not drawn on such theories yet. Further, objectification theory fails to consider that exposure to objectification

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results not only in increased self-objectification, but also in the manifestation of the belief that other individuals should be judged on aesthetics (Fredrickson and Roberts, 1997; Zurbriggen et al., 2011). Therefore, objectification theory requires further development to determine the relationship between self-objectification and the objectification of others; such a study, in turn, would have the potential to inform the relationship between ad FOAs, self-objectification and the objectification of others more conclusively. Other areas for future research remain absent from the relevant extant literature. For example, future research can investigate the effects of ad FOAS on consumers of different ages, different sexualities and across cultures; comparing societies which possess different social norms regarding objectification is likely to reveal divergent impacts, especially when variables such as gender ideology, empathy and sexual beliefs are explored. This is absent from all existing research and consequently absent in our literature review. The relationship between exposure to FOAS messages and the triggering of self-objectification requires further exploration, especially when considering that such a triggering can result in long-term effects that are yet to be explored extensively (Fredrickson and Roberts, 1997; Fredrickson et  al., 1998; Tiggemann and Kuring, 2010). In addition, future research can pursue the impacts of male objectification on men, which can potentially affect their relationships and their views on ad FOAS if they experience objectification personally. This absence of focus on masculine perspectives must be addressed. Furthermore, future research can examine moderating and mediating factors between ad FOAS and relationship outcomes, including the relationship between ad FOAS and hostile masculinity toward women; the development and maintenance of harmful attitudes towards women; greater acceptance of interpersonal sexual violence; and these factors’ effects on adult relationships. The effects of personality on individuals’ attitudes towards ad FOAS is another area requiring further research, with different personality traits likely to influence responses to ad FOAS (Black et al., 2010). Comparative studies examining the impact of ad FOAS on sexual attitudes versus the impact of male-orientated media on such attitudes could shed light on the effects of sexualisation through different types of mediated communication (Morry and Staska, 2001). Additionally, attitudes towards sexual health require greater exploration; the social pressures that influence young females’ negotiation of sexual encounters impacts upon their ability to make decisions regarding sexual health and risk (Holland et al., 1990). Therefore,

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the extent to which ad FOAS normalises such social pressures and expectations of women should be explored further (Holland et al., 1990). Future research should continue to explore the impacts of ad FOAS on beliefs and attitudes towards sex because such impacts can hold implications for adult relationships and can shift over time. When such areas for future research are considered concurrently, it becomes evident that the effects of ad FOAS require further empirical examination, particularly in the field of marketing ethics.

CONCLUSION This chapter identifies and synthesises diverse, interdisciplinary research documenting the negative impacts of ad FOAS on consumers. It does so by highlighting some of the most relevant themes of a literature review including 87 articles published in interdisciplinary journals over the past 30 years. This literature review is summarised and reviewed according to consumer responses to ads depicting FOAS and the effects of such responses on both men and women, thus leading to seven propositions and additional areas for future research. Ad FOAS research requires further development by marketing ethics scholars so that we can enhance our theoretical explanations and highlight relevant ethical implications for advertising practitioners and policy makers, adding original contributions to marketing ethics scholarship and practice. Marketers must consider the negative consequences of exposing individuals to sexualised and objectified images that attract attention, but which undermine our ability to see people as individuals, as opposed to as objects (Nezlek et  al., 2014). Ad FOAS contributes towards the acceptance of sexual objectification that affects sexual relationships, continuing to play a role in influencing a mediated environment that promotes the derogatory treatment of women (Galdi et al., 2014). While operating under the notion of ‘sex sells’, marketers using ad FOAS must accept partial responsibility for influencing sexual beliefs, attitudes and behaviours. By reviewing existing research on the impacts of ad FOAS on consumers, it is apparent that ad FOAS can exert strain and present challenges to individuals and within relationships. In this respect, the Advertising Standards Authority’s (2019) policies attempting to curb negative gender stereotypes in UK advertising are welcome and needed. Despite the limitations of this literature review and the research it addresses, important

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implications for consumers and marketers can be drawn, and so can numerous areas for future research.

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7 Parental Mediation of Children’s Exposure to Online Media and Advertising P a t r i c k D e P e l s m a c k e r, K r i s t i e n D a e m s and Ingrid Moons

INTRODUCTION Households increasingly possess media devices (laptops, tablets and smartphones) that allow online media content consumption. Consequently, over the years, people’s media use has drastically changed. This is also the case for children and teenagers. Although they still watch television, they have also become heavy users of online media and content. For instance, in the USA, children between 0 and 8 years old spend 2 hours and 19 minutes a day with traditional (e.g. television) and online devices (computer and mobile) (Common Sense Media, 2017a). They watch traditional television for 1 hour and 40 minutes a day and 21 minutes a day via mobile devices (tablets). The rest is spending time (e.g. gaming) online, mostly on mobile devices. American tweens (8 to 12 years olds) on average use entertainment media 6 hours a day (Common Sense Media, 2017b). Tweens spend 2 hours a day watching television, 90 minutes of which is traditional television viewing, the rest online. The rest of their screen time is online (games, videos, etc.). Tweens spend 46% of their screen time on mobile devices. On average, tweens use social media for 16 minutes a day. Among American teenagers, 81% use social media and the frequency of using social media

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multiple times a day has doubled from 34% in 2012 to 70% in 2018 (Rideout & Robb, 2018); 38% of these teenagers say they use social media multiple times an hour and 16% of them admit to use social media almost constantly. This amount increases among teenagers who spend on average 1 hour and 11 minutes on social media (Common Sense Media, 2017b). Due to the increasingly integrated nature of contemporary online advertising formats, children’s exposure to media content on different media devices often implies exposure to advertising messages as well (Clarke & Svanaes, 2012). During childhood and adolescence children develop advertising literacy, namely advertising recognition, knowledge about advertising techniques and the underlying commercial and persuasive intentions of advertising (John, 1999; Rozendaal et al., 2011; Wright et al., 2005). Especially young children or pre-adolescents who have not fully developed advertising literacy are vulnerable for the persuasive attempts of advertisers (Rozendaal et al., 2010; Verhellen et al., 2014). In contemporary advertising formats, the commercial message is often integrated into media content and entertaining and interactive in nature (Hudders et  al., 2017; Owen et al., 2013; 2014; Panic et al., 2013). Consequently, it has become increasingly difficult

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to recognize and identify commercial messages as advertising and to understand their persuasive intent. Additionally, contemporary advertising formats often collect personal data or persuade individuals to disclose personal information to sell this data to other companies or personalize future advertising messages (Hudders et  al., 2017). Children often do not understand how online data collection works and are not aware of the purposes behind this strategy. This makes children and adolescents even more vulnerable to the sophisticated messages advertisers use. This vulnerability has given rise to concern and ethical considerations among consumer advocates, parents, academics and policy makers. Some feel that advertising to children is inherently unethical and may increase the risk of unconscious persuasion and intensified purchase requests, privacy concerns, materialistic attitudes, parent–child conflict and childhood obesity. They emphasize the moral obligation of public policy, advertisers, educators and parents to ensure and enhance an ethical approach to advertising targeted at children, and the equally important task to develop their advertising literacy (Mikeska et  al., 2017). Traditionally, media regulation has been the responsibility of the government and industry to restrict children’s exposure. Among concerns about online advertising targeting children is a lack of government regulations or specific guidelines to provide children with a safer online environment. This places greater responsibility on parents to actively supervise and educate their children regarding Internet and media use. Parents are the first and most important mediators of children, because children usually have their first media and digital experiences together with their parents. They are key influencing actors in children’s consumer socialization, especially prior to adolescence. Society relies heavily on parents for ensuring that children are kept safe from and learn how to cope with a host of online risks and seductions, and empowering children to acquire digital skills and to develop their media and advertising literacy. Parental mediation of media and advertising exposure has thus become a crucial moral obligation for parents. However, performing this task is more difficult nowadays than it has been in the era of offline media (Nelson et al., 2017). Mediating online content is much more complex than mediating television exposure. Online media are more versatile as different types of content, videos, games, social networking sites, websites and shops are available, whereas, for instance, television focuses on news and entertainment without the opportunity to interact with friends who are not present in the same physical environment (Sonck

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et al., 2013). By comparison with television, it is difficult to make Internet use a shared activity. Media devices (laptops, tablets and smartphones) are characterized by a smaller (screen) size. As a consequence, they are used more individually than on a family level, and often without the presence of a parent (Sonck et al., 2013). Importantly, online risks to children are more prevalent than are television-related risks. Additionally, with the current highly diverse, fast-changing, multi-platform landscape, it is not just children who struggle to identify messages of persuasive intent. Parents often do not understand the digital world very well, and they experience difficulties in recognizing the persuasive intent of subtly embedded advertising and to distinguish it from other content (Nelson et al., 2017). They are thus unlikely to protect their children or educate them about the persuasive intent of the more elaborate and subtle strategies used by marketers. Moreover, they often underestimate the impact of online advertising on children. They are more concerned with personal safety issues than with exposure to advertising, and they feel that more traditional forms of advertising are more prevalent and more effective in influencing their children than embedded, online advertising (Newman & Oates, 2014). On top of that, they believe that their children respond to online advertising the same way adults do, and because they themselves ignore or dismiss online advertising as an irritation, they assume that their children are likely to do the same. This reflects an inaccurate understanding of both the way in which online advertising works and the way in which children experience online persuasive techniques. It is therefore not easy for parents to monitor and supervise today’s techsavvy children, whose Internet knowledge and skills often exceed those of themselves. In the following sections we first deal with children’s online behaviour and their exposure to online advertising. Next, we discuss their advertising literacy. We then turn to discussing the role and nature of parental mediation, and its determinants and effectiveness. The concluding section offers implications for parents, public policy, educators, academics and the advertising industry.

CHILDREN AND ADVERTISING ONLINE In the past few decades, children have increasingly become heavy users of online media and content. For instance, American tweens (8–12 years) use entertainment media (media that provide agreeable occupation for the mind, diversion,

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amusement and pleasure) up to 6 hours per day (excluding their time spent on media for school or homework) and this increases up to 9 hours per day in teenagers (13–18 years) (Common Sense Media, 2017b). The use of mobile media devices in American children’s (< 8 years) lives has tripled from 15 minutes per day in 2013 to 48 minutes per day in 2017 (Common Sense Media, 2017a). British teenagers (12–15 years) spend most of their time on online devices (approximately 21 hours per week). They use their smartphone 18 hours per week and watch television on a TV set 14 hours per week (Ofcom, 2017). In Belgium, 57% of children between 6 and 12 years old have their own computer, 49% their own mobile phone and 67% their own tablet (Apestaartjaren, 2018); 95% of teenagers (12–18 years) possess their own mobile phone, almost 58% have their own laptop and 46% have their own tablet (Apestaartjaren, 2018). Apparently, mobile phone use increases and tablet use decreases as children grow older. Advertisers take advantage of children’s and teenagers’ use of a variety of media devices and their constant online connectivity by adjusting their campaigns to it and by specifically targeting children and teenagers. Consequently, advertising is ubiquitously present in children’s lives (Clarke & Svanaes, 2012; Common Sense Media, 2017b; Owen et al., 2013). Along with this, novel advertising formats have emerged (Rideout, 2014). Contemporary advertising formats differ from traditional advertising in three respects: integration, interactivity, and the collection and use of personal data. Integrated advertising formats embed a commercial message in an informative or entertaining content, resulting in blurred boundaries between the commercial message and the media content itself, such as brands integrated in movies, online games (in-game advertising, the integration of advertisements in games which are not specifically designed for advertising purposes), or sponsored posts, articles, videos or links on websites, social networking sites or search engines (Hudders et al., 2017; Panic et al., 2013). The paid integration of brands in media content like movies and television programmes is called brand placement. For instance, the movie Jurassic World contains a high number of placements for brands like Samsung, Nike, All Stars, Coca-Cola, Beats headphones, etc. (Brands & Films, 2015). In the movie scenes the actors are wearing clothes and headphones from these brands, are using a Samsung smartphone and are drinking Coca-Cola. The viewers are simultaneously exposed to commercial messages and the story of the movie, often without being aware of the commercial and promotional intentions of the brands. An example of in-game advertising is billboards for sport brands placed around the soccer

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stadium in the FIFA International Soccer game. In the FIFA game the player does not interact with the brand placed on the billboard; however, the brand remains present during the game. Sponsored posts are promotional messages that look like the content, articles and news that are posted on websites or messages and posts that are shared by someone’s connections in a social network (e.g. Facebook, Instagram) (Boerman et al., 2017a). Sponsored posts on the social networking site Facebook appear in the NewsFeed of a user among non-commercial posts posted by the connections in someone’s social network (Mescon, 2019). Sponsored posts are labelled as being ‘sponsored’. However, as they are almost identical to posts from connections in someone’s network and the label disclosing the sponsored nature is rather subtle, it is a challenge for children and teenagers to identify these commercial messages as being sponsored. Other advertising formats stimulate interaction with a brand, leading to content that has interactive and engaging features, or creates an entertaining experience which can result in unconscious reinforced persuasion, for instance interactive brand websites or branded applications such as advergames (Chen et  al., 2013; Liu & Shrum, 2009; Rideout, 2014). For instance, advergames are games that are specifically developed to promote a brand, a product, a service or an idea (Terlutter & Capella, 2013, p. 96). The advertising message takes the form of a game and the promoted brand, product, service, idea and brand logos or spokecharacters have a prominent role in the game. Advergames can be found on (brand) websites, a brand’s social media page, on game portals, on the website of distributors of the brand or on branded mobile applications that can be played on smartphones, touch devices and tablets. Advergames are usually freely downloadable or free of charge to play and players might have a chance to win prizes. An example of an advergame available as an application on tablets or smartphones is the Oreo: Twist, Lick, and Dunk game (PikPok, 2012). Players can win and purchase virtual currency to purchase different Oreo cookie varieties to play the game with (Allen, undated). By playing the game the player is constantly exposed to the brand. Often, integration and interaction are combined in one format, for instance an online game in which brands are integrated and players are stimulated to interact with it (for instance, a racing game with an existing car model). In the racing game Gran Turismo players can drive a car from the BMW, Mercedes or Aston Martin brand (Duran, 2017). Besides this exposure to car brands, the car functions as a key element in the game. The cars in

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the game have different characteristics which are congruent to the characteristics of the brands in real life and the player directly interacts with the car and gets a direct experience with the brand in the game. Moreover, contemporary advertising formats often collect personal data or persuade individuals to disclose personal information by requesting them to register, to create an account on websites or applications in order to be able to win a prize. This information is then used for targeted or personalized advertising (e.g. online behavioural advertising) (Boerman et  al., 2017b). An example of an advergame that collects personal data is a game to promote Lays chips from PepsiCo (PepsiCo, 2019). The advergame takes the form of a casual game which can be played for a short playing time.

CHILDREN’S ADVERTISING LITERACY Media literacy is the ability to access, analyse, evaluate and communicate messages in a variety of forms (Mendoza, 2009). Advertising literacy, as part of media literacy, relates to advertising recognition, knowledge about advertising techniques, and the underlying persuasive and selling intentions of advertising (Wright et  al., 2005). Persuasive intent is the advertiser’s attempt to influence consumers’ behaviour indirectly by changing their desires and beliefs about a product. The selling intent of advertising is the advertiser’s attempt to persuade consumers to purchase a product (Rozendaal et al., 2009). Advertising literacy develops during childhood and adolescence, together with cognitive development, exposure to advertising and advertising experience (Friestad & Wright, 1994; 2005; Wright et  al., 2005). Cognitive development is related to age (John, 1999; Roedder, 1981) and consumer socialization of children. Traditionally, three cognitive stages are distinguished: the perceptual stage (3–7 years), the analytical stage (7–11 years) and the reflective stage (11–16 years). In the perceptual stage children are able to distinguish advertising from other media content by means of perceptual cues (e.g. they notice that the traditional 30-second spot on television has a shorter duration than a television programme). In the analytical stage, children combine different sources of information, instead of relying on perceptual cues only. Children belonging to the analytical stage are able to understand that the goal of advertising is to sell products. Only from the reflective stage onwards do children develop

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a more in-depth and thorough advertising knowledge which makes them able to comprehend more subtle advertising intentions (e.g. this commercial message wants to influence my belief and attitudes about the brand to establish brand preference). Indeed, children have been shown to be more susceptible to advertising’s persuasion and advertisers’ influence than teenagers or adults (Hudders et  al., 2017; Rozendaal et  al., 2010; Verhellen et al., 2014). The aforementioned framework was developed in the context of traditional advertising. However, in contemporary advertising formats, the commercial message is often hidden in information-rich media content and interactive, entertaining and fun content or advertising that may divert children’s attention from its persuasive nature (Owen et al., 2013; 2014; Panic et al., 2013). Additionally, contemporary advertising formats often collect personal data or persuade individuals to disclose personal information to sell this data to other companies or personalize future advertising messages (Boerman et  al., 2017b). Consequently, it has become more difficult to recognize and identify commercial messages as advertising and to understand their persuasive intent and/or how online data collection works and what it is used for.

PARENTAL MEDIATION Types of Parental Mediation Parents or legal guardians are crucial stakeholders in the debate about media usage and children’s exposure to media content and advertising. Because of their crucial role in the upbringing of children, parents have the ethical obligation to provide the necessary guidance in their children’s media usage and advertising education (Spiteri Cornish, 2014). Parents’ motivation to mediate their children’s media usage and advertising exposure is to protect their children from negative effects, risks and dangers from media and advertising, which might result in harmful outcomes and to encourage and empower them in instructive learning and positive, beneficial effects (Nikken & Jansz, 2006; Sonck et  al., 2013). Parents, therefore, find themselves in a challenge during which they act as a mediator between their children and their children’s Internet use and advertising exposure. Parental mediation is ‘any strategy parents use to control, supervise or interpret (media) content for children and adolescents’ (Warren, 2001, p. 212). Parents use different strategies to mediate

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media usage and advertising effects on children (Clark, 2011). The most commonly used framework distinguishes three styles of parental mediation, two of them active and one passive: active restrictive mediation, active instructive mediation and passive co-viewing (Clark, 2011; Nathanson, 2001; Nikken & Jansz, 2006; Valkenburg et  al., 1999). Restrictive mediation is setting rules and restrictions or regulations on children’s media usage (Nathanson, 2001; Nikken & Jansz, 2006; Valkenburg et al., 1999). Parents can for example set screen time rules, for instance that their children’s use of a tablet is restricted to one hour a day or is only allowed at specific days or moments during the week (Buijzen & Valkenburg, 2005). Parents can also ban or restrict access to particular activities or contents (such as certain websites) (Livingstone et  al., 2017). A specific component of restrictive mediation is parental monitoring: tracking and checking children’s online activities (e.g. checking bookmarks and browser history for periodically visited websites). Parents can use this information to set limits on how much time they allow their children to use computers. Monitoring software displays warning messages in case the content children would attempt to access is inappropriate. Filtering and blocking tools enable parents to limit children’s access to some online content. Additionally, interaction restrictions can be imposed, such as banning email, chat, instant messaging, game playing and downloading (Livingstone & Helsper, 2008). Software packages have been developed that help parents perform and organize parental mediation (e.g. Bélanger et al., 2013). Active mediation refers to parents’ critical discussion of media or advertising content with their children (Valkenburg et al., 1999). Active viewing mediation means that parents can help the child with three processing tasks: categorization, showing whether and how the media world reflects the real world; validation, endorsing or condemning the accuracy and representativeness of media content; and supplementing, showing a child how media information can be used in the real world. In that perspective, active mediation should increase a child’s scepticism towards media content (Austin, 1993). Benefits of active mediation are that parents can be more confident about their children’s experience, can help children understand the media content, can encourage them to accept only those messages they endorse, can intervene in case of undesirable content, and can gain knowledge of their reactions to the content (Lwin et al., 2008). Co-viewing is watching media or advertising content together without actively discussing it (Valkenburg et  al., 1999). PadillaWalker et al. (2012) propose deference as an extra

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mediation strategy. This means that parents do not intervene, as long as there are no negative consequences for the child. Deference can be used as an active attempt to display trust for a child, particularly as children get older, and is positively associated with autonomy granting, but not with overall permissiveness. These different mediation strategies are not exclusive as parents can use different parental mediation strategies simultaneously (Newman & Oates, 2014). Some argue that in an online context, the focus on a shared screen and active decisions (where to click, what to select) required by Internet use invites social interaction, blurring the line between co-viewing and active mediation (Mascheroni et al., 2018). A couple of studies specifically focused on parental mediation of advertising exposure. Buijzen and Mens (2007) and Rozendaal et  al. (2009) argue that the role of mediation is to strengthen children’s cognitive and affective defences against advertising. The former are recognition of advertising, children’s ability to distinguish commercials from other media content, and their ability to understand the intent of advertising. However, while children may possess the necessary cognitive defences, they can still be persuaded to make a purchase by an attractive commercial. Consequently, affective defences also need to be developed. The authors distinguish three advertising exposure mediation strategies. Factual mediation is aimed at increasing children’s knowledge and understanding of the commercial and the advertised product (e.g. ‘this commercial wants to sell you those toys’). Evaluative mediation is aimed at negatively influencing children’s attitudes towards the commercial and the advertised product (e.g. ‘this commercial is stupid). Combined mediation combines factual and evaluative mediation (e.g. ‘this commercial is stupid, they just want to sell you those toys’).

Parents’ Use of Mediation Strategies Some studies indicate that parents commonly prefer and use restrictive mediation and monitoring to active mediation (Mascheroni et al., 2018). Shin (2015) states that restrictive mediation can be more salient than active mediation because children may have to deal with it on a daily basis. If children comply with ‘the rules’, they will, at least, decrease their chance to be exposed to less desirable media content. Therefore, restrictive mediation can be more convenient for parents. Parents believe that it works best when children are young and obedient and spend more time with

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them, but that its effectiveness weakens as children grow older. For the latter, parents believe that active mediation would be a better solution. While active mediation may be more effective than restrictive mediation, the former requires more effort, because parents need to have knowledge and understanding of advertising and the Internet and should also be keen to have a meaningful conversation about it with their children (Shin, 2015). Other research comes to different conclusions. Livingstone et  al. (2017) investigated the preference of parents for online mediation strategies. Active mediation is favoured most, while the use of monitoring, restrictions and technical controls are less popular. Parents engage in more active mediation for younger, more digitally skilled children. Those who judge the online risk for their child to be greater, undertake more active mediation. A study about parental mediation of 10–17-year-old smartphone users also shows that parents tend to perceive active mediation to be more desirable, as compared with restrictive mediation. The use of smartphones can expose children to various risks, including accidental or intentional exposure to child-inappropriate content, cyberbullying and privacy invasion. For these reasons, parents are highly concerned about their children’s use of smartphones and prefer active mediation (Shin & Kim, 2019). Van Neck (2019) investigated parental mediation of online advertising exposure, and identifies the use of three restrictive methods: taking preventive measures, monitoring and setting boundaries. As to the latter, parents often only allow children to go online for a limited time a day, or block some online information. As to the former, modern technology offers many options to restrict what children can or cannot see. Parents appear to be prepared to use these options. Most parents try to prevent unwanted media use by not allowing unsupervised use. They monitor their children’s behaviour by checking their YouTube search history and their WhatsApp or by watching on the screen every now and then. In a longitudinal study about parents’ use of restrictive and active monitoring and deference (Padilla-Walker et  al., 2012), active monitoring appears to be the most common approach at the first and second time points, while active monitoring and deference are equally common by the third time point. Restrictive and active monitoring decrease over time, while deference increases. Nikken and Jansz (2006) compared parental mediation of television and gaming. While television is often jointly watched by the whole family, in most families personal computers are located in the children’s bedroom. When children play video

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games with others, they join their peers online, and hardly ever play with their parents. The authors therefore speculate that mediating the behaviour of gamers who isolate themselves from family interaction may require different strategies than mediating watching television. However, they found that parents applied the same three forms of mediation to gaming as to television viewing. Nikken and Jansz (2006) compared parents’ and children’s perception of parental mediation and found that both groups have highly congruent views about the application of mediation. Parents apply more restrictive and active mediation when they feared negative behavioural effects and more often co-play with their children when they expect positive social–emotional effects of gaming. In a survey among 360 parent–child dyads (children aged 8–12 years), parent and child reports of parental advertising mediation activities were examined. Results show that agreement is highest in communication-oriented families and between parents and girls (Buijzen & Mens, 2007). On the other hand, Buijzen and Mens (2007) found that there is a relatively weak correlation between parent and child reports of family interactions, in that parents tend to report higher levels of interaction than do children.

Determinants of Parental Mediation The literature on parental mediation identified several variables as significant predictors of parental mediation strategies used, such as parental style, perceptions about media effects, digital skills of parents and children, age of the child, the gender, educational level and socio-economic status of the parent, and the type of media device.

Parental style

Parental style describes the communication strategies that parents perceive as appropriate during child-rearing and socialization. Mikeska et  al. (2017) distinguish four parental styles on the basis of the degree to which they maintain a warm versus hostile, and restrictive versus permissive, relationship with their children: authoritative (warm and restrictive), neglecting (hostile and permissive), indulgent (warm and neglecting), and authoritarian (hostile and restrictive). Authoritarian parents are highly demanding and limitedly responsive, using rigid rule structures that enforce expectations of child obedience without question. Indulgent parents are highly responsive and limitedly demanding, attuning to their children’s needs with low levels of discipline. Neglecting parents are also limitedly demanding,

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but do not attend to their children’s needs. Authoritative parents are both demanding and responsive, encouraging child autonomy within a structured, but flexible, set of rules. The latter try to balance children’s rights and responsibilities, encourage self-expression, and attempt to enrich their children’s educational and cultural opportunities. They expect their children to act maturely and in accordance with family rules but also allow a certain degree of autonomy. Research based on this typology found that authoritative parenting is positively related to restrictive, active and co-use mediation; neglecting and indulgent parenting is negatively related to restrictive, active and co-use mediation; and authoritarian parenting is positively related to restrictive mediation and negatively related to active and co-use television mediation. Neglecting parents have the lowest tendency to engage in control, co-viewing and discussion of children’s media consumption. (Mikeska et al., 2017; Warren & Aloia, 2019). In their study on mediation strategies of violent commercials on television, Vijayalakshmi et  al. (2019) identified four different parental styles. Media managers attempt to control and restrict their child’s media environment while educating their child about the effects of violent commercials. Enablers spend a lot of time co-viewing primetime TV, while engaging their child in conversations on violence, but not on violent ads. Harmonizers merely restrict viewing of violent commercials without educating their child about its effects. Agent evaluators co-view violent commercials, without discussing them with their child. Buijzen and Mens (2007) found that the relation between advertising exposure and materialistic attitudes was most effectively reduced among parent–child dyads who both reported that parents frequently discussed the role and nature of advertising. This is attributed to the expectation that an open communication environment is essential in obtaining a child’s awareness and acceptance of a parent’s interpretation of media messages and that highly communication-oriented parents put more effort into explaining their actions and intentions, which results in a higher level of parent–child agreement in reporting these actions.

Perceptions about media effects

Warren (2001) and Mendoza (2009) state that the strongest and most consistent predictive factor of television mediation is a parent’s belief about the positive or negative effects of television. Nathanson (2001) conducted a survey of 394 parents and second- to sixth-grade children to understand why parents mediate violent television and how children interpret mediation messages. She found that

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parents with negative attitudes towards violent television (parents who believe that television has antisocial effects on children or promotes aggression or fright reactions) used active and restrictive mediation, and parents with positive attitudes used co-viewing. According to children, restrictive mediation signals parental disapproval of the content, but active mediation and co-viewing served as endorsements. Some research reveals that parents are more likely to actively mediate television viewing when they are concerned that the media might affect their children’s thought processes. However, other studies found that neither concerns about sexual content on television, nor concerns over television-induced aggression and fright, explained a significant amount of variance in active mediation, or that active mediation is motivated by a variety of concerns. With respect to co-viewing, research indicates that this mediation strategy was used by both parents who believe television has positive effects and parents who believe it has negative effects. In Nikken and Jansz’s (2006) study, parents who were concerned about negative effects of video games restricted game behaviour more frequently, and discussed game content more often with their children. Conversely, parents with an optimistic view of game effects more often played together with their children (co-use mediation). Parents who played video games themselves were more optimistic about the positive effects and less worried about the negative effects, and parents who more often played themselves were not only also more prone to co-playing, but also more apt to apply the active mediation. Brito and Dias (2019) conclude that the type of parental mediation of online media content is related to the parents’ perceptions about the Internet. Parents who consider its use beneficial for pedagogic purposes encourage their children, monitoring and supporting them. Parents who hold a less positive view about digital media do not encourage their use, not even for pedagogic purposes, and frequently restrict screen time. In Symons et  al.’s (2019) study, the mother’s risk perception had a positive effect on the father’s engagement in parental mediation. Both parents contributed individually to their adolescent child’s safe Internet use.

Internet literacy of parents and children

Internet literacy is the ability to access, analyse, evaluate and create online content (Lee & Chae, 2012). The digital skills of both parents and children matter in mediating children’s Internet use. Parental mediation of the Internet is practised more by digitally skilled parents, and by parents

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of younger (and presumably less skilled) children. Livingstone and Helsper (2008) and Shin and Kim (2019) identified self-efficacy, the extent to which parents believe that they have control over their parental mediation practices, to reduce smartphone-related risks, as an important determinant of parental mediation intentions. Parents who use the Internet more, or who claim more skills in using it, presumably giving them the knowledge and/or confidence to mediate and a clearer awareness of the risks that can be encountered online, are more likely to mediate their child’s use. Livingstone et al. (2017) surveyed parents in eight European countries and found that active mediation is employed when the parent or child is relatively digitally skilled, while restrictive mediation is favoured when parent or child digital skills are lower, potentially keeping vulnerable children safe yet undermining their digital inclusion. The latter parents also set more inconsistent rules and prefer technical restrictions. The balance shifts towards active mediation as children gain skills. Remarkably, children frequently act as agents of change, by introducing new technologies in the family, guiding their parents’ use and mediating media effects (the so-called ‘child-effect’). Mediation then becomes a reciprocal process, whereby both parents and children influence mediation (Mascheroni et al., 2018).

Age of the child

As children’s advertising knowledge develops through different stages during childhood, one can assume that young children are more vulnerable to advertising effects compared with teenagers whose cognitive skills are more matured. Additionally, when children grow older, it is more difficult for parents to mediate their media use, because of the growing influence of peers and the fact that they have more social contacts and activities outside the house (Nikken & Jansz, 2006; Warren, 2001). Furthermore, some types of parental monitoring are not effective and may even backfire during adolescence, and certain strategies that worked well for early adolescents may be met with outright rebellion as the adolescent matures. Parents also become less concerned over potential harmful media effects when their children grow older. Consequently, parental mediation strategies used are related to the age of the child, with more parental media strategies being used towards younger children compared with older children, and deference is more effective and more frequently used with adolescents (Clark, 2011; Lee, 2012; Livingstone & Helsper, 2008; Nathanson, 2001; Shin & Huh, 2011; Sonck et  al., 2013; Valkenburg et  al., 1999). Beyens et  al. (2018)

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show that parents’ restrictive and active mediation follows a curvilinear pattern over time, whereby parents’ mediation efforts increase across early childhood and peak at around age 8, before slowly declining throughout middle childhood.

Educational level of the parent

Not every adult or parent is aware of contemporary advertising tactics and the risks and concerns of advertising exposure and Internet use involved (Nelson et al., 2017), and this may be more the case for lower educated parents than for highly educated ones. Research indeed shows that highly educated parents apply more parental mediation than lowly educated ones (Clark, 2011; Common Sense Media, 2017a; 2017b; Valkenburg et al., 1999; Van der Voort et al., 1992). Additionally, parents with a lower educational background apply more restrictive mediation on their children’s online activities and video game playing. A lack of advertising knowledge might hamper parents’ active discussion with their children about how advertising works on different media (Nelson et al., 2017).

Socio-economic status of the parent

In lower socio-economic status households, children’s socialization is based on hierarchy and obedience, while higher socio-economiclevel (SES) families stimulate children to think and be responsible, and promote self-control and opinion expression. The latter consider digital technologies as important tools for the future of their children and as a source of learning (Brito & Dias, 2019). Low-income parents often emphasize authority, obedience and conformity. Their interaction with children is more controlling, restrictive and disapproving than that of higher SES parents. Lower SES parents spend more time silently watching or even ignoring their children and use restrictive mediation most frequently and active mediation least often. Higher income parents more frequently use active mediation. In high-income countries, there is a shift from restrictive towards active forms of parental mediation (Livingstone & Byrne, 2018).

Gender of the parent

Mothers are more likely to use parental mediation strategies than fathers both for traditional and non-traditional media (Clark, 2011; Nathanson, 2001; Nikken & Jansz, 2014; Sonck et al., 2013; Valkenburg et al., 1999; Van der Voort et al., 1992; Warren, 2001), because mothers appear to be more concerned about media and advertising effects and might still see themselves as the primary caregivers (Valkenburg et al., 1999).

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Type of media device

In this section we report the results of a Belgian study with 340 parents (200 with young children aged 6–12 and 140 with teenagers aged 13–18 years), in which five parental advertising mediation strategies of exposure to four media devices are simultaneously studied, as well as the effect of parents’ gender and educational level on parental mediation strategies. Parents were asked for which media devices (television, computer use during leisure time, mobile phone and tablet) they used the following parental mediation strategies: restrictions, discussion or explanation of advertising in general, discussion or explanation of advertising techniques, discussion or explanation of advertising intention, and co-viewing. There were thus three questions related to active parental mediation and one question for restrictive mediation and for co-viewing. For each parental mediation question, parents had to indicate on which media device they used this strategy. Two variables were calculated. For each of the four media devices a 6-point scale ranging from 0 to 5 was computed based on the dummy variables (coded 0 or 1) of each parental mediation question. This variable thus refers to the number of parental mediation strategies used for each of the different media devices. Additionally, for each parental mediation question a 5-point scale ranging from 0 to 4 was computed based on the dummy variables (coded 0 or 1) for each media device. This variable thus measures the number of media devices on which a particular parental mediation strategy is used. Gender and educational level were also measured. Parents of young children use on average three to four out of five parental mediation strategies when mediating television use, two to three 4

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strategies for PC and tablet, and slightly over one strategy for mobile phones. Parents of teenagers on average use fewer mediation strategies than parents of young children. Television is the media device for which most parental mediation strategies are used (on average almost two), followed by PC (slightly more than one), mobile phone (almost one) and tablet (see Figure 7.1). This is in line with previous research indicating that parents are particularly concerned about advertising in media they are familiar with, such as television, and especially to monitor young children (Newman & Oates, 2014; Spiteri Cornish, 2014). The more mobile a device, the less parental mediation is applied. The reason might be that, due to the smaller (screen) size of mobile devices and the fact that mobile phones are often used in a more private context, resulting in individualized media consumption on these devices, it becomes more difficult to mediate the content that children encounter on them (Sonck et al., 2013). Parents of young children use restrictive mediation for on average almost three media devices, followed by co-viewing, discussing advertising in general and advertising intent (almost two media devices). Discussing advertising techniques is least often done. The limited use of the latter strategy could be expected, as it is relatively easy for a parent to set rules about media usage of young children (restrictive mediation), while discussing, explaining and educating children about specific advertising tactics used is less simple as it requires more advertising knowledge and effort from parents (Nelson et  al., 2017). The number of media devices for which parental mediation is applied is substantially smaller for parents with teenagers than for parents with young children, and there is no difference in the number of media devices

3.495

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1.271

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PC Children 6–12 years

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Figure 7.1 Number of parental mediation strategies used per media device for children and teenagers

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on which different parental mediation strategies towards teenagers are used. Figure 7.2 gives an overview of the number of media devices on which each parental mediation strategy is implemented for both children and teenagers. In line with previous research (Nathanson, 2001; Nikken & Jansz, 2014; Sonck et al., 2013), mothers use more parental mediation styles for television than fathers, and discuss and explain the intention of advertising on more media compared with fathers. In line with Valkenburg et al. (1999), parents with a higher educational level appear to implement all parental mediation strategies on more media compared with less educated parents.

The Effects of Parental Mediation There are different angles in previous research that studied the effects of parental mediation. Older studies focus upon television exposure. More recent studies deal with the Internet. The effects they study relate to many aspects of media issues, such as children’s privacy, the danger of cyberbullying or exposure to inappropriate content. Some studies specifically deal with mediating advertising exposure, both on television and on the Internet, although studies with respect to the latter are scarce.

Television

In general, active mediation of television watching appears to have the most positive outcomes,

3

such as learning more from educational television and increasing pro-social behaviour, more scepticism towards television news, more engagement in political socialization, decreased aggression, reduced effects of advertising, positive body image, more knowledgeable about television production, and reducing negative effects of violent and sexual aggression and the likelihood of behaviour or attitudes that might damage others (Livingstone & Helsper, 2008; Mendoza, 2009). Co-viewing can have positive, negative or no effects. Co-viewing is often said to be ineffective because co-viewing does not encourage critical reflection because there is no discussion about the media content. On the positive side, for instance, Keene et  al. (2019) found that co-viewing leads to greater arousal and resource allocation to encoding and processing the message, especially when the content is exciting. Children allocate fewer resources to encoding and have lower arousal responses when the television content is boring and they are co-viewing with a parent. Even worse, if the content is boring or not childfriendly, it is possible that the child will allocate more resources to the processing of potentially harmful or age-inappropriate content. On the negative side, co-viewing has also been associated with increased aggressive tendencies and endorsement of stereotypical gender roles, because parents’ lack of active communication leads to social facilitation and serves as a sort of ‘silent positive endorsement’ of the content. Thus, watching television with children may produce undesirable

2.855

2.5 1.960

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Restrictions

Discussing advertising

Discussing ad techniques

Discussing ad intentions

0.5

1.050

0

Children 6–12 years

Co-viewing

Teenagers 13–18 years

Figure 7.2 Number of media devices on which each parental mediation strategy is used for both children and teenagers

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effects if parents do not contradict the negative messages that are co-viewed (Keene et al., 2019; Livingstone & Helsper, 2008). Restrictive television mediation varies in effectiveness depending on the degree of restriction applied, though some suggest that restrictive television regulation does reduce risks (Livingstone & Helsper, 2008). Others found that restriction is inefficient because children who faced restrictions were just as likely as other children to be heavy media users. Restriction is difficult to implement, and children often have figured out ways to get around the rules (Mendoza, 2009).

The Internet

The effectiveness of restrictive mediation of the Internet is debatable. Media usage has become more interactive, less mass and more personalized, more mobile, and a more ingrained part of children’s lives (Mendoza, 2009). Restrictive mediation may have some beneficial effects in certain circumstances in that it helps to reduce Internet addiction and online risks such as cyberbullying (Livingstone et  al., 2017). However, many studies indicate that other parental mediation strategies, such as active mediation and co-use, produce more positive effects (Shin & Kim, 2019). In Lee and Chae’s (2012) study, parental restrictions on time and websites did not seem to alter children’s actual Internet usage. Other studies found, for instance, that rule making and restrictions reduce the risks of encountering cyberbullying, pornography and meeting strangers on the Internet. However, restrictions might cause children to have fewer opportunities for improving communication and socializing skills. On the other hand, in his study on cyberbullying, Mesch (2009) concluded that measures of restrictive parental mediation, such as use of software to block access to websites and to record online activities, did not have an effect on children’s exposure to bullying. However, in this study, active mediation did decrease the risk of exposure to online bullying. Some studies show that the exposure to online risks of children who have received more parental restrictions was lower. However, in one of these studies the association between online participation and online risks was still significantly positive, even for children who had more online skills and who had received more parental restrictions (Lee & Chae, 2012). In Livingstone and Helsper’s (2008) study, parents reported favouring active co-use of the Internet and interaction rules over technical restrictions using filters or monitoring software, because the latter were not effective in reducing risk. Parental restriction of online peer-to-peer interactions was associated with reduced risk, but

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other mediation strategies, including active couse, were not. On the other hand, Nikken (2018) found that (pre-)adolescents who are restricted in media use by their parents and who co-use media together with parents were about two times as likely to use media in a healthy manner than youngsters whose parents are not involved. Some other authors advocate combining restrictive and active approaches, because parents who enforce rules may be more successful when they stimulate their children’s autonomy, that is by taking their child’s perspective seriously (Livingstone et  al., 2017). Fikkers et al. (2017), in the context of violent media content, found that restrictive mediation resulted in accepting and following parental guidance in that it leads to less aggression and less exposure to violence, but only when communicated in an autonomy-supportive parental style. The latter more successfully promotes internalization of values and regulations. Merely restricting and controlling smartphone use and inconsistent parenting styles are related to adverse outcomes. Indeed, children often consider smartphone use a personal domain and smartphones have become indispensable parts of children’s lives. Thus, children may view mere restrictive mediation as a threat to their personal freedom, resulting in resistance to parents’ interventions. In Lee’s (2012) study, restrictive mediation was significantly associated with reduced amount of time spent online and reduced exposure to online risks, especially for children with low selfregulation. Children with higher levels of selfcontrol did not need parental restrictions to reduce online risks. In a study with adolescents from Singapore, Shin and Kang (2016) found that active parental mediation was more effective than restrictive parental mediation. Active mediation was also found to be positively associated with teenagers’ online privacy concerns and negatively associated with teenagers’ willingness to disclose personal information on commercial websites. Restrictive mediation appeared to be unrelated to online privacy concerns, although it has been found to be more effective than non-mediation in reducing personal information disclosure among children aged 10–14. Remarkably, parent–tween disagreement on restrictive mediation seems to be positively related to tweens’ information disclosure on the Web (Lwin et al., 2008; Shin et al., 2012).

Advertising

Research has also focused on parental mediation of advertising exposure, both on television and online. Buijzen and Valkenburg (2005) and Buijzen (2009) state that parental advertising mediation can affect children’s understanding of

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advertising, their scepticism towards advertising, their preferences or requests for advertised products, and their materialistic orientations. They found that active mediation (i.e. explaining the purpose and nature of advertising) combined with a socio-oriented consumer communication (i.e. emphasizing control and restrictions) was more effective in modifying advertising effects (i.e. reducing the relation between children’s advertising exposure, materialism, purchase requests, conflicts with their parents, and their consumption of energy-dense food products) than just restrictive mediation. Restrictive mediation was only effective among young children. Buijzen and Mens (2007) investigated whether mediation administered by an actively co-viewing adult during exposure to television advertising could strengthen 7–10-year-old children’s defences against advertising and reduce the effects of the advertisements. They distinguish factual and evaluative mediation. Factual mediation implies giving comments during particular exposure to advertising and providing information about the commercials and the advertised product. Evaluative mediation is aimed at developing the necessary knowledge and skills to counter a persuasive message, and develop defences against highly effective appealing advertising. Their results show that factual and evaluative mediation were ineffective among 5–6-year-old children. Factual mediation was also relatively ineffective among older children. Both evaluative and combined mediation were successful in reducing the effects of advertising among 7–8 year olds. The oldest children (9–10 year olds) only benefited from evaluative mediation (Buijzen & Mens, 2007). Vanwesenbeeck et  al. (2016) found that restrictive mediation is more effective in enhancing understanding of selling intent, but does not result in a better understanding of persuasive intent. Hudders and Cauberghe’s (2018) study of 180 children under 12 and their parents show that older children (10–11 years) are better able to detect the commercial intent and the source of brand placement than younger children (7–8 years). However, both restrictive and active parental advertising mediation appeared to increase (instead of decrease) brand attitudes for the younger children. Restrictive mediation had no significant effect on the brand attitudes of the older children, probably because they use media often without the presence of a parent. Their results do show a difference in the attenuating impact of active parental mediation for the 7–8 year olds versus the 10–11 year olds, but this effect is driven by the fact that active parental mediation increases brand attitudes for the youngest children instead of decreasing it.

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CONCLUSION AND IMPLICATIONS Parents do not often discuss advertising techniques with their children, especially online advertising. Moreover, parental mediation is far more often applied to media devices that parents are familiar with, such as television. Familiarity and trust in their own abilities might be an issue for parents in their educational effort towards their children. As parents are the most crucial stakeholders guiding especially young children’s media and advertising exposure, it is extremely important that parents themselves are educated about media devices and advertising effects. It is therefore crucial to develop initiatives to increase parents’ advertising literacy. The latter is a big challenge. Parents should be much better informed about contemporary advertising techniques in order for them to feel more comfortable and experienced to mediate effectively their children’s media usage and exposure to (online) advertising. Especially educating parents about the power and the potential deceptive and implicit effectiveness of online advertising formats is a necessity. Raising the advertising literacy of parents may be done by means of public policy campaigns, efforts by the advertising industry or media, or by organizing workshops, especially for less well-educated parents. Besides parents, developing advertising literacy in children and teenagers is a joint responsibility of public policy, the educational system and the advertising and media industry. Both governmental institutions and the advertising industry have formulated principles, guidelines, codes and (self-)regulation, regarding advertising aimed at minors. Examples of self-regulation initiatives are the ICC Code of Advertising and Marketing Communication practice, the EU Pledge and the CARU guidelines. The ICC (International Chamber of Commerce) Code provides guidelines about ethical and responsible advertising directed at children for self-regulated organizations (ICC, undated). The EU Pledge (undated) is a voluntary initiative from the food and beverages industry in which its members commit not to target advertising towards children under the age of 12 for food and beverages which do not meet the nutritional standards (so-called HFSS products) on television, in print and the Internet, and not to communicate about the products in primary schools (except for educational purposes requested by the school administration). The Children’s Advertising Review Unit is a US self-regulated initiative which implies standards (CARU guidelines) regarding the ethicality of advertising aimed at children (The Children’s Advertising Review Unit, 2014). However, despite these initiatives to protect minors against potentially misleading

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and deceptive advertising, there still exists a lack of regulation on novel and especially online integrated and/or interactive advertising formats. Public policy could do more to impose rules and restrictions on the advertising and media industry to target children and teenagers in a more fair and ethical way. The media and advertising industry should make (online) advertising transparent and honest and make easy-to-use tools available to enable parents to monitor and/or restrict their children’s media and advertising exposure and protect their privacy in terms of personal data collection. Examples of such initiatives are the efforts of the Media Smart organization in the UK, which is a non-profit educational programme from the advertising industry (MediaSmart, undated). The aim of the MediaSmart programme is to educate children between 7 and 16 so that they can identify, interpret and consume media in a critical manner. At a European level the European Commission (2019) instigated a European Media Literacy Week to focus on the importance of media literacy. In Ireland, the Be Media Smart Campaign is developed by the independent association of Media Literacy Ireland (Media Smart Ireland) to inform people about the difference between reliable and misleading or false information (Be Media Smart, 2019). Additionally, in order to help parents and children identify advertising and distinguish it from mediated content, advertising cues can be used. Cues are messages that function as a break between the editorial content and the advertising message and that allow viewers to recognize a message as advertising. Advertisers should use such a cue, or public policy could enforce such a clear transparent disclosure cue, that is uniform across media and advertising formats. The advertising industry could also facilitate the development of advertising literacy among both children and their parents and teachers, by developing awareness and educational campaigns themselves, aimed at their peers and the public at large, and by assisting schools in developing advertising literacy teaching materials. Informing children about advertising techniques is also a responsibility for the educational system. Primary schools should be incentivized to develop educational materials on advertising literacy and to use them explicitly in the classroom. Therefore, teachers and policy makers also should be educated about how contemporary advertising formats work and why these advertising formats are effective.

REFERENCES Allen, R. (undated). How Oreo created the number one app in the App Store. Retrieved 13 August

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2019, from https://www.sailthru.com/marketingblog/oreo-number-one-app/ Apestaartjaren. (2018, May). Onderzoeksrapport Apestaartjaren 2018: De digitale leefwereld van kinderen en jongeren (Research report Apestaartjaren 2018: The digital environment of children and youngsters). Retrieved from https://www.apestaartjaren.be/ nieuws/download-het-onderzoeksrapport-vanapestaartjaren-2018 Austin, E. W. (1993). Exploring the effects of active parental mediation of television content. Journal of Broadcasting & Electronic Media, 37(2), 147– 158. doi:10.1080/08838159309364212 Be Media Smart. (2019). Be Media Smart Campaign. Retrieved 13 August 2019, from https://www. bemediasmart.ie/ Bélanger, F., Crossler, R. E., Hiller, J. S., Park, J.-M., & Hsiao, M. S. (2013). POCKET: A tool for protecting children’s privacy online. Decision Support Systems, 54(2), 1161–1173. doi:10.1016/j.dss.2012. 11.010 Beyens, I., Valkenburg, P. M., & Piotrowski, J. T. (2018). Developmental trajectories of parental mediation across early and middle childhood. Human Communication Research, 45(2), 226– 250. doi:10.1093/hcr/hqy016 Boerman, S. C., Willemsen, L. M., & Van Der Aa, E. P. (2017a). ‘This post is sponsored’: Effects of sponsorship disclosure on persuasion knowledge and electronic word of mouth in the context of Facebook. Journal of Interactive Marketing, 38, 82–92. doi:10.1016/j.intmar.2016.12.002 Boerman, S. C., Kruikemeier, S., & Zuiderveen Borgesius, F. (2017b). Online behavioral advertising: A literature review and research agenda. Journal of Advertising, 46(3), 363–376. doi:10.1080/009133 67.2017.1339368 Brands & Films. (2015). Product placement in pictures: Jurassic World. Retrieved 13 August 2019, from http://brandsandfilms.com/2015/10/productplacement-in-pictures-jurassic-world/ Brito, R., & Dias, P. (2019). Technologies and children up to 8 years old: What changes in one year? Observatorio (OBS*), 13(2), 68–86. doi:10.15847/ obsobs13220191366 Buijzen, M. (2009). The effectiveness of parental communication in modifying the relation between food advertising and children’s consumption behaviour. British Journal of Developmental Psychology, 27(1), 105–121. doi:10.1348/ 026151008X334719 Buijzen, M., & Mens, C. (2007). Adult mediation of television advertising effects: A comparison of factual, evaluative, and combined strategies. Journal of Children and Media, 1(2), 177–191. doi:10.1080/17482790701339233 Buijzen, M., & Valkenburg, P. M. (2005). Parental mediation of undesired advertising effects. Journal

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of Broadcasting & Electronic Media, 49(2), 153– 165. doi:10.1207/s15506878jobem4902_1 Chen, Y., Zhu, S., Xu, H., & Zhou, Y. (2013). Children’s exposure to mobile in-app advertising: An analysis of content appropriateness. Paper presented at the International Conference on Social Computing (SocialCom), Washington, DC, USA. Clark, L. S. (2011). Parental mediation theory for the digital age. Communication Theory, 21(4), 323– 343. doi:10.1111/j.1468-2885.2011.01391.x Clarke, B., & Svanaes, S. (2012). Digital marketing and advertising to children: A literature review. Advertising Education Forum Report (Vol. 2016). Retrieved 14 August 2019, from http://www.aeforum.org/gallery/8612144.pdf Common Sense Media. (2017a). The common sense census: Media use by kids age zero to eight. Retrieved 14 August 2019, from https://www. commonsensemedia.org/research/the-commonsense-census-media-use-by-kids-age-zero-toeight-2017 Common Sense Media. (2017b). The common sense census: Media use by tweens and teens. Retrieved 14 August 2019, from https://www.commonsensemedia.org/research/the-common-sense-censusmedia-use-by-tweens-and-teens Duran, H. B. (2017). How car brands are driving awareness through video games. Retrieved 13 August 2019, from https://www.alistdaily.com/ strategy/car-brandsmarketing-video-games/ EU Pledge. (undated). About the EU Pledge. Retrieved 13 August 2019, from https://eu-pledge.eu/ about-the-eu-pledge/ European Commission. (2019). European Media Literacy Week. Retrieved 14 August 2019, from https://ec.europa.eu/digital-single-market/en/ news/european-media-literacy-week Fikkers, K. M., Piotrowski, J. T., & Valkenburg, P. M. (2017). A matter of style? Exploring the effects of parental mediation styles on early adolescents’ media violence exposure and aggression. Computers in Human Behavior, 70, 407–415. doi:10.1016/j.chb.2017.01.029 Friestad, M., & Wright, P. (1994). The persuasion knowledge model: How people cope with persuasion attempts. Journal of Consumer Research, 21(1), 1–31. doi:10.1086/209380 Friestad, M., & Wright, P. (2005). The next generation: Research for twenty-first-century public policy on children and advertising. Journal of Public Policy & Marketing, 24(2), 183–185. doi:10.1509/jppm.2005.24.2.183 Hudders, L., & Cauberghe, V. (2018). The mediating role of advertising literacy and the moderating influence of parental mediation on how children of different ages react to brand placements. Journal of Consumer Behaviour, 17(2), 197–210. doi:10.1002/cb.1704

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Hudders, L., De Pauw, P., Cauberghe, V., Panic, K., Zarouali, B., & Rozendaal, E. (2017). Shedding new light on how advertising literacy can affect children’s processing of embedded advertising formats: A future research agenda. Journal of Advertising, 46(2), 333–349. doi:10.1080/009133 67.2016.1269303 ICC. (undated). Marketing and advertising to children. Retrieved 13 August 2019, from https:// iccwbo.org/global-issues-trends/responsible-business/marketing-advertising/marketing-andadvertising-to-children/ John, D. R. (1999). Consumer socialization of children: A retrospective look at twenty-five years of research. Journal of Consumer Research, 26(3), 183–213. doi:10.1086/209559 Keene, J. R., Rasmussen, E. E., Berke, C. K., Densley, R. L., Loof, T., Adams, R. B., Mumma, G. H., & Marshall, A. (2019). The effect of plot explicit, educational explicit, and implicit inference information and coviewing on children’s internal and external cognitive processing. Journal of Applied Communication Research, 47(2), 153–174. doi:10. 1080/00909882.2019.1581367 Lee, S.-J. (2012). Parental restrictive mediation of children’s internet use: Effective for what and for whom? New Media & Society, 15(4), 466–481. doi:10.1177/1461444812452412 Lee, S.-J., & Chae, Y.-G. (2012). Balancing participation and risks in children’s internet use: The role of internet literacy and parental mediation. Cyberpsychology, Behavior, and Social Networking, 15(5), 257–262. doi:10.1089/cyber.2011.0552 Liu, Y., & Shrum, L. J. (2009). A dual-process model of interactivity effects. Journal of Advertising, 38(2), 53–68. doi:10.2753/JOA0091-3367380204 Livingstone, S., & Byrne, J. (2018). Parenting in the digital age: The challenges of parental responsibility in comparative perspective. In G. Mascheroni, C. Ponte, & A. Jorge (Eds), Digital Parenting: The Challenges for Families in the Digital Age (pp. 19–30). Göteborg: Nordicom, University of Gothenburg. Livingstone, S., & Helsper, E. J. (2008). Parental mediation of children’s internet use. Journal of Broadcasting & Electronic Media, 52(4), 581–599. doi:10.1080/08838150802437396 Livingstone, S., Ólafsson, K., Helsper, E. J., LupiáñezVillanueva, F., Veltri, G. A., & Folkvord, F. (2017). Maximizing opportunities and minimizing risks for children online: The role of digital skills in emerging strategies of parental mediation. Journal of Communication, 67(1), 82–105. doi:10.1111/ jcom.12277 Lwin, M. O., Stanaland, A. J., & Miyazaki, A. D. (2008). Protecting children’s privacy online: How parental mediation strategies affect website safeguard effectiveness. Journal of Retailing, 84(2), 205–217. doi:10.1016/j.jretai.2008.04.004

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Mascheroni, G., Ponte, C., & Jorge, A. (2018). Digital Parenting: The Challenges for Families in the Digital Age. The International Clearinghouse on Children, Youth and Media at Nordicom (Nordic Information Centre for Media and Communication Research) (pp. 1–244). Göteborg: Nordicom, University of Gothenburg. Retrieved 13 August 2019, from https://norden.diva-portal.org/smash/ get/diva2:1265024/FULLTEXT01.pdf MediaSmart. (undated). MediaSmart: Education from the advertising industry. Retrieved 13 August 2019, from https://mediasmart.uk.com/ Mendoza, K. (2009). Surveying parental mediation: Connections, challenges and questions for media literacy. Journal of Media Literacy Education, 1(1), 28–41. Mesch, G. S. (2009). Parental mediation, online activities, and cyberbullying. CyberPsychology & Behavior, 12(4), 387–393. doi:10.1089/ cpb.2009.0068 Mescon, J. (2019). The ins and outs of Facebook sponsored posts: Your guide to sponsoring posts and driving results on Facebook. Retrieved 13 August 2019, from https://nativeadvertisinginstitute.com/blog/facebook-sponsored-posts/ Mikeska, J., Harrison, R. L., & Carlson, L. (2017). A meta-analysis of parental style and consumer socialization of children. Journal of Consumer Psychology, 27(2), 245–256. doi:10.1016/j. jcps.2016.09.004 Nathanson, A. I. (2001). Parent and child perspectives on the presence and meaning of parental television mediation. Journal of Broadcasting & Electronic Media, 45(2), 201–220. doi:10.1207/ s15506878jobem4502_1 Nelson, M., Atkinson, L., Rademacher, M., & Ahn, R. (2017). How media and family build children’s persuasion knowledge. Journal of Current Issues & Research in Advertising, 38(2), 165–183. doi:10.1 080/10641734.2017.1291383 Newman, N., & Oates, C. J. (2014). Parental mediation of food marketing communications aimed at children. International Journal of Advertising, 33(3), 579–598. doi:10.2501/IJA-33-3-579-598 Nikken, P. (2018). Do (pre)adolescents mind about healthy media use? Relationships with parental mediation, demographics and use of devices. Cyberpsychology: Journal of Psychosocial Research on Cyberspace, 12(2), 1–13. doi:10.5817/ CP2018-2-1 Nikken, P., & Jansz, J. (2006). Parental mediation of children’s videogame playing: A comparison of the reports by parents and children. Learning, Media and Technology, 31(2), 181–202. doi:10.1080/ 17439880600756803 Nikken, P., & Jansz, J. (2014). Developing scales to measure parental mediation of young children’s internet use. Learning, Media and Technology,

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39(2), 250–266. doi:10.1080/17439884.2013.78 2038 Ofcom. (2017). Children and Parents: Media Use and Attitudes Report. Retrieved 13 August 2019, from https://www.ofcom.org.uk/research-and-data/ media-literacy-research/childrens/childrenparents-2017 Owen, L., Lewis, C., & Auty, S. (2014). Under the radar: How embedded commercial messages in TV and the new media influence children without their conscious awareness. In M. Blades, C. Oates, F. Blumberg, & G. Barrie (Eds), Advertising to Children: New Directions, New Media (pp. 178–198). Basingstoke: Palgrave Macmillan. Owen, L., Lewis, C., Auty, S., & Buijzen, M. (2013). Is children’s understanding of nontraditional advertising comparable to their understanding of television advertising? Journal of Public Policy & Marketing, 32(2), 195–206. doi:10.1509/ jppm.09.003 Padilla-Walker, L. M., Coyne, S. M., Fraser, A. M., Dyer, W. J., & Yorgason, J. B. (2012). Parents and adolescents growing up in the digital age: Latent growth curve analysis of proactive media monitoring. Journal of Adolescence, 35(5), 1153–1165. doi:10.1016/j.adolescence.2012.03.005 Panic, K., Cauberghe, V., & De Pelsmacker, P. (2013). Comparing TV ads and advergames targeting children: The impact of persuasion knowledge on behavioral responses. Journal of Advertising, 42(2– 3), 264–273. doi:10.1080/00913367.2013.774605 PepsiCo. (2019). Lays Chips Advergame. Retrieved 13 August 2019, from https://game.lays.nl/nl/game PikPok. (2012). Oreo: Twist, Lick, Dunk! Retrieved 13 August 2019, from https://pikpok.com/games/ oreo-twist-lick-dunk Rideout, V. (2014). Advertising to children and teens: Current practices. A Common Sense Media Research Brief. Retrieved 13 August 2019, from https://www.commonsensemedia.org/research/ advertising-to-children-and-teens-current-practices Rideout, V., & Robb, M. (2018). Social media, social life: Teens reveal their experiences. San Francisco, CA: Common Sense Media. Retrieved 14 August, from https://www.commonsensemedia.org/sites/ default/files/uploads/research/2018_cs_socialmediasociallife_fullreport-final-release_2_lowres.pdf Roedder, D. L. (1981). Age differences in children’s responses to television advertising: An information-processing approach. Journal of Consumer Research, 8(2), 144–153. doi:10.1086/208850 Rozendaal, E., Buijzen, M., & Valkenburg, P. (2009). Do children’s cognitive advertising defenses reduce their desire for advertised products? Communications, 34(3), 287–303. doi:0.1515/COMM.2009.018 Rozendaal, E., Buijzen, M., & Valkenburg, P. (2010). Comparing children’s and adults’ cognitive advertising competences in the Netherlands. Journal of

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Children and Media, 4(1), 77–89. doi:10.1080/ 17482790903407333 Rozendaal, E., Buijzen, M., & Valkenburg, P. (2011). Children’s understanding of advertisers’ persuasive tactics. International Journal of Advertising, 30(2), 329–350. doi:10.2501/IJA-30-2-329-35 Shin, W. (2015). Parental socialization of children’s Internet use: A qualitative approach. New Media & Society, 17(5), 649–665. doi:10.1177/ 1461444813516833 Shin, W., & Huh, J. (2011). Parental mediation of teenagers’ video game playing: Antecedents and consequences. New Media & Society, 13(6), 945– 962. doi:10.1177/11461444810388025 Shin, W., Huh, J., & Faber, R. J. (2012). Tweens’ online privacy risks and the role of parental mediation. Journal of Broadcasting & Electronic Media, 56(4), 632–649. doi:10.1080/08838151.2012.732135 Shin, W., & Kang, H. (2016). Adolescents’ privacy concerns and information disclosure online: The role of parents and the Internet. Computers in Human Behavior, 54, 114–123. doi:10.1016/j. chb.2015.07.062 Shin, W., & Kim, H. K. (2019). What motivates parents to mediate children’s use of smartphones? An application of the theory of planned behavior. Journal of Broadcasting & Electronic Media, 63(1), 144–159. doi:10.1080/08838151.2019.1576263 Sonck, N., Nikken, P., & de Haan, J. (2013). Determinants of internet mediation: A comparison of the reports by Dutch parents and children. Journal of Children and Media, 7(1), 96–113. doi:10.1080/ 17482798.2012.739806 Spiteri Cornish, L. (2014). ‘Mum, can I play on the internet?’ Parents’ understanding, perception and responses to online advertising designed for children. International Journal of Advertising, 33(3), 437–473. doi:10.2501/IJA-33-3-437-473 Symons, K., Vanwesenbeeck, I., Walrave, M., Van Ouytsel, J., & Ponnet, K. (2019). Parents’ concerns over internet use, their engagement in interaction restrictions, and adolescents’ behavior on social networking sites. Youth & Society, 1–13, doi:10.1177/0044118X19834769 Terlutter, R. & Capella, M. L. (2013). The gamification of advertising: Analysis and research directions of in-game advertising, advergames, and advertising in social network games. Journal of Advertising, 42(2– 3), 95–112. doi:10.1080/00913367.2013.774610 The Children’s Advertising Review Unit. (2014). SelfRegulatory Program for Children’s Advertising.

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Retrieved 13 August 2019, from https://www.asrcreviews.org/wp-content/uploads/2012/04/SelfRegulatory-Program-for-Childrens-AdvertisingRevised-2014-.pdf Valkenburg, P. M., Krcmar, M., Peeters, A. L., & Marseille, N. M. (1999). Developing a scale to assess three styles of television mediation: ‘Instructive mediation,’ ‘restrictive mediation,’ and ‘social coviewing’. Journal of Broadcasting & Electronic Media, 43(1), 52–66. doi:10.1080/0883815 9909364474 Van der Voort, T. H., Nikken, P., & Van Lil, J. E. (1992). Replication: Determinants of parental guidance of children’s television viewing: A Dutch replication study. Journal of Broadcasting & Electronic Media, 36(1), 61–74. doi:10.1080/08838159209364154 van Neck, L. (2019). As seen on screen: Influenced by vlogs and games: How do parents mediate between children and embedded advertising? Master’s thesis, University of Twente. Vanwesenbeeck, I., Walrave, M., & Ponnet, K. (2016). Young adolescents and advertising on social network games: A structural equation model of perceived parental media mediation, advertising literacy, and behavioral intention. Journal of Advertising, 45(2), 183–197. doi:10.1080/00913367. 2015.1123125 Verhellen, Y., Oates, C., De Pelsmacker, P., & Dens, N. (2014). Children’s responses to traditional versus hybrid advertising formats: The moderating role of persuasion knowledge. Journal of Consumer Policy, 37(2), 235–255. doi:10.1007/s10603-014-9257-1 Vijayalakshmi, A., Laczniak, R., & Brocato, D. (2019). Understanding parental mediation of violent television commercials. Journal of Consumer Marketing, 36(5), 551–564. doi.org/10.1108/JCM-082017-2325 Warren, R. (2001). In words and deeds: Parental involvement and mediation of children’s television viewing. Journal of Family Communication, 1(4), 211–231. doi:10.1207/S15327698JFC0104_01 Warren, R., & Aloia, L. (2019). Parenting style, parental stress, and mediation of children’s media use. Western Journal of Communication, 83(4), 483– 500. doi:10.1080/10570314.2019.1582087 Wright, P., Friestad, M., & Boush, D. M. (2005). The development of marketplace persuasion knowledge in children, adolescents, and young adults. Journal of Public Policy & Marketing, 24(2), 222– 233. doi:10.1509/jppm.2005.24.2.222

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Part III

Marketing Ethics and Social Issues

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8 Marketing to Vulnerable Consumers B r i a n Yo u n g

INTRODUCTION: THE SCOPE OF CONSUMPTION In order to grasp the problems certain consumers might face in the process of consumption I want to start by defining in very general terms the activities that constitute ‘consumption’ before we turn to the role of marketing in that process. Let’s start with an example. I am writing this early in the morning and I need coffee to think better and feel activated. This vague thought came from somewhere; maybe part of my cultural learning is that caffeine improves thinking or that possibly coffee and intellectual endeavour go together in some way. There is none in the house so I walk to the corner shop to buy some and I have a choice. I can buy powdered or ground. I choose ground because I feel that it is more ‘authentic’ although I don’t know why. I pass my card in front of a scanner, come home, prepare coffee and drink it. This sequence of behaviours has a rather ill-defined origin but consists of various behaviours and mental activities that are ritualistic or exploratory together with consummatory behaviour called buying where some sort of economic exchange occurs. I take the purchase home and open it with some anticipation and pleasure and prepare the coffee. Then I settle down to writing, which in itself is part of a much longer cycle of

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activity that involves consuming ideas and writings from others as part of a production process called ‘writing a paper’ where I as the author am the main actor. I could go on with further examples but my point is simply that consumption is a process, often not clearly and cleanly observed but linked into a complex network of consumer activity that in the twenty-first century takes us through most of the day and some of the night too. These consumption cycles can be accompanied by production that in some cases is confounded with it and given the name ‘prosumption’ (Boesel and Jurgenson, 2015). The example of coffee drinking could be seen as renewing a fast-moving consumer good (FMCG) and there are other examples such as buying a car or white good, a refrigerator for example, when further stages become recognisable. In particular, how to dispose of the good and how the good increases in value by being part of your household (see Young, 2018, Chapter 1). I am only one consumer out of 7.7 billion people on the planet. There are other dimensions in time and space to consider in order to get a complete framework for analysing consumption. Two of them will not be considered here; these are the history and prehistory of consumption, and the history of consumption in other species. We are left with (at least) two relevant dimensions to make

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sense of the consumption patterns of these 7.7 billion people. One is essentially cultural or part of social geography and deals with the behavioural and psychological similarities and differences of groups of people across the world. Families come in many shapes and sizes and most of us were raised and socialised in them. Demographic differences separate and unite us into strata defined by age, gender and socio-economic status. And much deeper differences and similarities can be found at the level of culture and language, usually listed under cross-cultural aspects of consumer psychology. There is one more dimension that I have left to the last. It is time based but a lot longer than just the annual or diurnal consumption routines that characterise our everyday lives, whether it is shopping for Christmas or disposing of daily household rubbish by sorting it into plastics, glass, paper, and so on. We are born, live and eventually die. All of us with no exception go through this life cycle although for some of us life is tragically cut short by famine or war, illness or accident. Of course the lifespan embraces various ages and settings, and coverage of all the niches and stages that constitute our time on this Earth together with the associated concerns of vulnerability would take more than one small chapter. We will, however, need to examine children and childhood carefully as this is for Homo sapiens a considerable slice of our time here. Before that, however, we need to deal with one essential part of the case I am putting and that is the promotional and commercial activity surrounding consumption that we call marketing.

ADVERTISING I shall start with one highly visible aspect of marketing which is called advertising and to set the stage I am selecting one brief and succinct definition of advertising and expanding on it. Advertising is ‘any paid message that a firm delivers to consumers in order to make its offer more attractive to them’ (Tellis, 2004, p. 9). This simple definition seems to me to distil the essence of advertising. It is commercial and it is aimed at consumers. The firm makes an offer (say of a good or service) in a competitive environment where other similar offers are being ‘advertised’ using a similar formula. It is the competition between rivals over a finite audience size that stimulates and shapes the characteristics of advertising. So the advertising has to attract the interest of the audience and make them feel good and amuse them. The pill is relevant information but there is also plenty of sugar.

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Rhetoric is often used and the brand can be transported into a world of dreams and desires with seductive illustration and fantastical imagery. All of these are designed to enable the brand to shout loudly and elbow out the other competition. But there is one essential component that defines advertising. In order to do justice to it, though, we need to take a brief excursion into linguistics, and pragmatics in particular. The branch of linguistics that I see as relevant is concerned with the context within which language is used and is of interest to both psychologists and advertising theorists (see e.g. Forceville, 1996, Chapter 5). One way of making sense of how language is used is to specify the rules that seem to operate when we use language in the everyday context of conversation. Language has structural rules for putting words together in certain ways and in conversations the rules are often recognised only when they are broken. Imagine the following fragment of conversation: Speaker: How’s the family getting on then? Hearer: It’s been a bit chilly this spring, hasn’t it? How’s your garden these days?

We can guess what’s happening here. Hearer does not want to talk about family so she breaks the implicit rule called ‘relevance’ that keeps conversations together (see Sperber & Wilson, 1986). She has been deliberately irrelevant and broken this rule in order to signal her discomfort at the way the conversation is going at that moment. Hopefully, the other party (Speaker) will recognise this and is socially skilled enough with language and the niceties of social interaction to avoid that topic for the rest of conversation. How does this example relate to advertising? As well as rules for conversation, and the principle of relevance, we can describe rules for more specific genres of communication. May (1981) laid out a rule for what he called ‘interested communication’ and although it was written almost 40 years ago it is still important today. Interested communication consists of ‘messages sent by authors who choose what they say – and when, where, to whom, through what channels – chiefly so as to sell a product, elicit a verdict, win an election, inspire an attitude, or otherwise generate a preferred response’ (p. 48). The rule for this kind of communication is known as Best Face: ‘Treat the case that is put as the strongest case that can be made’ (p. 56). As with other rules in the pragmatic approach to communication theory, we recognise the rule when it is broken and often search for other meanings. An example of rule breaching can be found in the brief history of ‘Death cigarettes’ (O’Shaughnessy & O’Shaughnessy, 2004). These were promoted with

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the symbol of the skull and crossbones. Together with the brand name the message was clear: Smoking kills. At the time there was no regulation to state that on the pack and the message was intended to appeal in a certain ironic way to some youth audiences. Of course nowadays the message that smoking kills is associated with tobacco as a necessary health message on cigarette packs. When I first became interested in children and advertising in the 1980s, finding and describing advertising was a relatively easy task. Usually, advertising was found in well-defined places such as television, as part of ‘ad breaks’ between programmes. Or on billboards and at bus stops. It was also in magazines, clearly separated from the content. Audiences were similarly identified and identifiable using simple demographics like age, gender and socio-economic status. Ads were expected to persuade and how we defended ourselves against such persuasion was theorised using models involving persuasive communications and how rational counterarguments can be employed against the persuaders. But if these persuaders became hidden (e.g. Packard, 1957) and if the audience consisted of children then a clear moral case had been made and the young innocents needed protection. Nowadays, at the beginning of the third decade of the twenty-first century, things are not so simple and clear lines of demarcation cannot be drawn. With the advent of the World Wide Web in the 1990s and the rise and rise of social media in the twenty-first century, it can be said that we live in a digital world that is perceived, acted upon and lived in with few if any boundaries imposed by time of day, geography or accessibility. Our friendships or ‘friends’ are mediated and we enter this world through a portal that can fit into the palm of my hand. The smartphone is as ubiquitous as the watch and telephone used to be in the latter part of the twentieth century. Age is not a barrier nor is poverty, and the most recent figures at time of writing suggest that there are over 5 billion mobile phone users from a total world population of 7.7 billion. These figures were obtained by me in less than a minute using my smartphone and you can probably now update them by asking the fridge. One of the consequences of living in this mediatised world is the spread of interested communication, a genre that I have described above. Indeed it would be difficult to find any communication where someone, any kind of source, does not have an axe to grind or a position to take or a prejudice, biased opinion or other slant to give. Why? Because survival in the superficially egalitarian world without limits, and that is an apt description of the internet, depends on being seen and heard and this is not possible without some exaggeration

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of one’s points of view to the extent of distortion at best and lying at worst. Disinterested communication, searching for the truth and delivering it irrespective of whether you are proved wrong or right are not the norm. Truth seeking is a dying profession and perhaps it always was a minority sport although resurrected 250 or so years ago in Enlightenment Edinburgh, Paris and Amsterdam. Today it can be found in universities that are rich and prestigious enough to afford the luxury of employing those who can think and speak what they want and like and believe to be true. For the rest of us: Welcome to the world of fake news! I have painted this somewhat gothic picture of the first two decades of the twenty-first century redolent with social media like Facebook and Instagram because one of the dominant functions of advertising, and I think the most essential one, fits very easily into any nook and cranny of the mediatised world. Advertising is promotional. It obeys the rule of Best Face, just like traders in the marketplace who place their fruit carefully so as not to show the bruised or rotting side. Or the celebrity, this strange welding of brand and human being who is so meticulous in every part of self-presentation: smile and speech and clothes and hair. But this is not a frozen image like film stars in the 1950s, because every aspect of living is dramatised and becomes a camp version of reality as long as we are able to see and understand enough to join in the knowing wink.

VULNERABILITY TO ADVERTISING It was so much simpler in the old days. Advertising was corralled on TV in groups of spots that occurred several times in a programme and were known as commercial breaks. Billboards shouted out the virtues of Camel cigarettes and the slogan ‘Players Please’ appeared on ashtrays or on the sides of buildings. Often narrative in nature, the TV commercial extolled the virtues of different brands and we sang the jingles when we saw the ads: ‘You’ll wonder where the yellow went, when you brush your teeth with Pepsodent’; ‘1001 cleans a big, big carpet for less than half a crown’. Of course we were vulnerable to ads – why would advertisers pay all that money to make them? We saw them coming. We expected them and erected cognitive defences against them. ‘We’ here mean adults. The idea that our rational selves at all ages need protection from potentially invasive and persuasive messages, often larded with rhetoric, has a history and has been a respectable line of research to the present day (see e.g. Rozendaal, Buijs, & Reijmersdal, 2016).

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One of the most regular fixtures in any list of classes in consumer psychology would be the elaboration likelihood model often given the acronym ELM (for a detailed review see Kitchen et al., 2014). Elaboration means that we consider thoughtfully the message received and evaluate it and this will occur if we want to do it (we are motivated) and can do it (i.e. are capable). It is driven by involvement, such as interest in the brand or product being advertised. In today’s digital environment, however, much more information will be perceived by consumers and much of that will not be elaborated. The ELM model assumes there are two kinds of information processing. One is called peripheral and the other is named central, and the model is part of a family called dual-process models as there are other similar theories of how the mind works (see e.g. Kahneman, 2011). Peripheral processing occurs when involvement is low and we are using cues that can be processed rapidly such as colour and deploying heuristics such as ‘it was good last time so I’ll choose it again this time’. Whether these are two separate systems coexisting and utilised in individual consumers, or ends of a continuum with peripheral at one end and central at the other, is still discussed (Kitchen et al., 2014, pp. 2039–2040). However, in my opinion consumption takes place in complex environments that are saturated with promotional activity. In addition, each individual consumer might be part of the process of several co-occurring consumption cycles. I can be planning my new kitchen while having a meal and browsing advertising on social media on my smartphone. The consumption cycles that I am participating in and thinking about need not just be concerned with the preparatory stages of consumption as I can buy on my smartphone and discuss with my family at table when we are going to clear out the ‘junk’ that has accumulated in the closet under the stairs. Some of these parts will be mediated and articulated with thoughtful discussion. Others, like a passing ad as I scroll, seemingly indefinitely on my smartphone, will be processed peripherally. So vulnerability to advertising is not just a matter of being unable to counter-argue in the face of the convincing deep rhetoric of persuasive advertising. It is also happening when we are not consciously aware of advertising as we are not paying attention to it.

What Is Vulnerability? It is now appropriate to examine the idea of vulnerability in more detail and depth. Brenkert (1998) in one of the earlier papers in this area classified consumers into (at least) two categories

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of consumer, normal [sic] and vulnerable, with the latter possessing certain characteristics that render them vulnerable. The final link in his argument was to state that marketers treat these vulnerable people unfairly when they take advantage of those characteristics. Although the paper is somewhat short on examples I guess that targeting problem gamblers or hoarders by marketing to them directly would be unfair. As advocatory communication only emphasises the positive sides of the brand being promoted, then some form of warning or contrary information should be provided in a similar way it is provided in many countries for products such as tobacco and foods high in fat, sugar and salt that are harmful to the population at large. Although many readers might be familiar with Brenkert’s paper, the issue or fairness has been raised again recently by Rowthorn (2017). His argument is that although there is good evidence that younger children cannot understand that advertising is trying to sell them something, this does not inevitably imply that advertising to young children is inherently unfair. If we make a distinction between process and outcome, however, then clarification of the concept of fairness will emerge. So children who are too young to understand advertising will process advertising differently from older children. If we assume that this processing of the information in advertising is limited in that the average older child can ‘read’ advertising in a more subtle and sophisticated way than the average younger child, then there is a good case that advertising to children is unfair. But we can also argue that the consequences of this misunderstanding and lack of complete comprehension can be relatively benign. For example, if children only see advertising for adult products that do not interest them then their limited understanding is irrelevant. Also, it is well known that younger preschool children only see advertising as there to entertain them (see e.g. Lawlor and Prothero, 2003). It is then possible that the more insidious forms of advertising of the type ‘buy me or else you will have no friends, be isolated from the crowd, etc.’ wash over the children rather like water off a duck’s back and are only seen and appreciated as ‘funny stuff you see on TV’. ‘Inverted U’ curves can be found in research in child development (Brainerd, 2004) and could be relevant here. A simple rule for young children like ‘ads = fun’ will result in simplistic processing, whereas a rule that emerges say in 5–6 year olds that also adds ‘and ads are to do with things you can buy’ without any hint of an understanding of persuasion and the ways persuasive communications work is the danger zone in child development. If we plot this vulnerability with age we find

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that partial understanding provides peak vulnerability from say 5 to 7 years with lesser vulnerability on either side. For the younger children there is less vulnerability because they cannot understand the relationship between the ad and the brand apart from the catch-all comment ‘they’re funny’, whereas older children are much more sophisticated. More recently the question of consumer vulnerability has been revisited and discussed in more detail with two special issues devoted to it in the Journal of Macromarketing and Journal of Marketing Management in 2005 and 2016 respectively. These and other single papers have informed my conclusions discussed below. As we are all vulnerable to marketing and advertising to some extent it is necessary to clarify what the concept means and entails. Baker et al. (2005) provide us with a thoughtful analysis. They emphasise that there are many factors that can contribute to consumers’ sense of vulnerability such as, sudden trauma caused by death of a loved one that produces prolonged grief, changes in family structure such as divorce, and sudden shifts in socio-economic circumstances caused by unemployment and resulting in financial loss and unanticipated poverty. Often these are accompanied by a sense of loss in control over one’s affairs with the onset of ‘learned helplessness’ a real possibility. At this point it might be appropriate to take Baker et al.’s analysis a bit further by introducing the distinction between chronic and acute, borrowed from the medical literature. It is quite possible then to look at large swathes of a population who suffer from chronic unemployment, say, and describe them as locked into the benefit system and unwilling to seek work through learned helplessness, a chronic condition in itself. Baker et al. do recognise that a distinction between long term and short term needs to be drawn and their analysis of vulnerability concludes with the assertion that ‘vulnerability is a short-run phenomenon that does not become an equilibrium state’ (p. 136). I do not share this optimism but we all hope that some solution can be found. Another concept that has a resonance in consumer research as well as in these papers on vulnerability summarised in Baker et al. is ‘the self’. The self extends into other areas such as ownership and friendship including pets and one’s home and family, so being and becoming vulnerable can affect one’s self-esteem. In summary, Baker et  al. make a convincing case that vulnerability is a core issue that can affect us all at times and influence many aspects of our existence and life. Consumer vulnerability ebbs and flows as the circumstances of people change and these can occur within families. Fox and Hoy (2019) explored the ways new mothers shared the joys and travails of their baby

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on social media. Such an experience would fit the bill that Baker et  al. (2005) describe in their classic paper on consumer vulnerability as identity is being transformed not only within the role changes that occur in new motherhood, but also in the hothouse of social media with participants being swept up (and away) in its unrestricted chatter. The authors not only detect this but also argue that the emergence of vulnerability spills over into the young child by the mother disclosing personally identifiable information (PII) which can then be identified on social media. Given the rise and rise of social media across all ages, the dangers cannot be underestimated. Homelessness hits hard. To lose one’s home is to enter a world of dependency and shared spaces where privacy and dignity are often absent. Often this state can be temporary or partial where an end is in sight or apartment space is shared with others who come and go, but too often doorways, parked cars and other innovative shelters become ‘home’ for many. The range and types of homelessness can vary across the world but they share the insecurity, risk and humiliation that characterise this style of life (I hesitate to use the term lifestyle). Kaufman-Scarborough (2019) has explored the role of digital support for these vulnerable people in the form of blogs that were focused on mutual sharing of information on support, connections and practical advice. It is assumed that access would not be a problem as it would be available as a public resource in churches, libraries and free access shelters. The author uses the phrase ‘spatial vulnerability’ to describe the condition of homelessness and the process of blogging will create a ‘digital space’ which can increase control by the homeless of their vulnerability as consumers. The author also provides examples of initiatives and comments from the homeless that for me were heart-warming in their creativity and resilience. Digital space is not just a metaphor and for these respondents they were enabled to function again. However, many of these authors writing on vulnerability are strangely silent on one group in society who constitute about 26% of the world’s population (Statista, n.d.) and these under 15-year-olds are seen differently and treated differently in most societies. There does seem to be a prima facie case that children and vulnerability need to be examined and this has been done by Spotswood and Nairn (2016). They start their paper by arguing that the available analyses of vulnerability cannot easily be applied to children and although age has been considered as an important demographic dimension in the identification of vulnerability, the focus has been on the ‘elderly’. They recognise, however, what Baker et al. (2005) emphasised: that vulnerability occurs

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at the intersection of several factors that are found in individual consumers such as their perception of their own situation and the particular hazards they face. Spotswood and Nairn (2016) advocate an approach to childhood and consumption where the collective and agentive qualities of children in society are brought to the fore, and children together take an active and participatory role in consumption. Their criticism, however, of psychological approaches to children’s vulnerability is in my opinion somewhat misplaced and, just as sociologists have recognised the power of social factors in child development, so we should acknowledge that there is a biological aspect too as children ‘grow up’. In fact these two aspects of social and biological are recognised by most writers working in the psychology tradition. Vygotsky for example has argued for two lines of development in children; the process of growth and maturation and mastering culture (see Van der Veer and Valsiner, 1991, pp. 223–226). The agency of children and the extent to which they construct and are influenced by their own changing ecologies are key features of the writings of Bronfenbrenner for example (see Bronfenbrenner and Morris, 2006). There was a large but manageable set of English language sources on consumer vulnerability but restricting the search to children reduced this considerably.1 It would appear then that the vulnerability of children has been largely ignored in the literature. However, there are some useful observations that can be taken from the research and of course those of Spotswood and Nairn (2016) have already been discussed.

THAT SPECIAL AUDIENCE: CHILDREN We are all vulnerable to advertising to some extent but some of us are more vulnerable than others. Is it possible to identify these people and, if so, in what sector of the consuming population will they be found? The most obvious group and the group that has received the most attention are children. If the audience consists of children then we have a conflict which Packard (1957, Chapter 15) called ‘The psycho-seduction of children’. The significance of that title becomes apparent when we consider the various ways children and childhood have been represented in the vast and fascinating literature about them since Aries’ (1965) classic study where he discussed the nature of the idea of childhood and children. More recent research (Sorin, 2005) has identified 10 different ways we can conceptualise and think about children. Whether the litany proposed by Sorin is valid or

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not is not the point. The fact that we do frame children in various different ways suggests that childhood itself is a difficult concept to use as it will evoke different thoughts and feelings in different people. However, there are two main ways of talking about and generally thinking about these younger ones that are used in conversations at all levels including policy concerns about children, and they can be described as the imp and innocent. We all know imps. They are lovable rogues, wild, untamed, cheeky, preferring play like rough and tumble to school. The innocent on the other hand is the child as pure, amenable to and receptive of education, quiet, attentive and a willing receptacle of adult wisdom. Of course real children are mixtures of both but these idealisations drive a lot of our visions of what children and childhood are and also could be. To return to Packard, the title, in my reading of it, reflects the child as innocent and advertising as seducer of the innocence of childhood. The vulnerability of the child uneasily sits with the other image of younger people as imps who are smart, street-wise and savvy. When children are placed in the commercial world in the form of advertising to children then they are vulnerable. But if we think of imps or, in the current parlance, kids then we are a bit more comfortable imagining or talking about kids and advertising. And the media and those with a commercial interest in young people will use the term kids to describe these youngsters, whereas educators, doctors and law-makers will talk about child protection, not kid protection, and the stages of child development rather than kids being too young to appreciate or understand advertising. Why do we go through childhood? Why didn’t our mother, like other mammalian mothers, simply pick herself up after birth, scoff the placenta and get on with living with the rest of the pack? Well it’s a bit more complicated than that, but Homo sapiens is a species that spends a relatively long time growing up compared with other species with similar or even longer lifespans. The simplest reason is that we need time to achieve the highly sophisticated mind that the average adult member of our species possesses and be able to learn and adapt to the cultures and skills that are required of us in 2020. This slow process of change from immaturity to maturity suggests that our children are shielded from some of the wilder excesses of adult life from birth to whenever we deem the end of childhood to occur, and if this protection is lacking children being vulnerable are in need of protection. Often they are cultural products that are commercially available like pornography, gambling, drugs like tobacco and alcohol, all of which are for adults only. There are other areas, though, where a consensus on whether we should

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allow our children to participate or not does not exist. For example, the extent to which we allow our children the freedom to explore on their own, like finding their own way to school or making their own friends or visiting each other’s homes. Decisions like these are complex and depend on the environment we choose to live in, whether it is urban or rural, and also where parents stand on issues like risk-taking and independence being good for children. Allowing children access to the internet seems to me to fall into that category and it is a parental decision on what restrictions to impose. And in the twenty-first century as a generation who have never known an internet-free world grows into adulthood we are revisiting the same controversies that emerged in the 1970s and 1980s, albeit in a very different regulatory and technological context. What lessons can be learnt from that time? Certainly any review and distillation of the results from a swathe of research and theory that was done in a different era needs to be prefaced by the phrase ‘with the benefit of hindsight’. What appeared insightful then can often seem banal now. But there are themes that provide us with hooks to hang our ideas on. One of these is methodology. How do we find out what is going on in the child’s mind? This is also inextricably linked with theory. What models of the mind are appropriate for the child at different ages? The earliest work was summarised by Young (1990, Chapters 3, 4). Early studies simply interviewed children, asking them questions about television commercials such as ‘What are television commercials? What do they try to do?’ Older children aged 9–10 years might reply ‘they try to make you buy stuff’ while the younger 5–6-year-olds might say ‘it’s funny – makes you laugh’. These findings are not unexpected for anyone who knows that young children are driven largely by what they see and information from other senses, whereas older ones are mentally more mature and able to think about the reasons why things happen. However, academic credibility requires some child psychology and the most well-known theorist at that time was Jean Piaget who in the first half of the twentieth century had written most of his main work which was then rediscovered in the USA in the 1960s. Research in this field of course is not solely of academic interest. Regulatory bodies want to do their job properly. They would want their decisions of either recommending to parents how to avoid advertising to children or finding some way to restrict advertising to children in programmes that children watch to be informed by the latest research on the age below which children cannot understand advertising. At that time the procedures that Piaget used, interviews with

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children, were seen as a poor methodology to use with preschool children as such interviews could be assessing the child’s skills, or lack of them, of language use and understanding. Consequently, procedures for measuring the child’s understanding of advertising that involved children pointing at pictures were used so language use was minimised and these so-called non-verbal procedures demonstrated that young children under 5 years of age were able to point to the ‘right’ answer (see e.g. Esserman, 1981). However, as students who have sat multiple choice exams are all too aware, the ‘right’ answer can be reached for the wrong reasons depending on the quality of the distractor items, and all we can conclude from these sorts of experiments is that some preschool children are vaguely aware that shopping and TV ads go together. It is well known that, from about 5 or 6 years of age, children see TV advertising as different from the programmes (Young, 1990). This does not mean they understand what the function of advertising is at this age and I suspect that the simple perceptual fact that ads are short bits between programmes enabled young children to say they were different. However, this does provide a useful first step towards a better understanding of the nature of promotional activity and surely is a necessary one. However, much advertising is now found on internet web pages. Young people play games on these pages, often using a smartphone, and the ecology of this kind of viewing is radically different from the twentieth century when the family was gathered around a TV set at home in the evening. In addition, these ads are often processed without attention by the child while the game is being played. Ali et  al. (2009) showed children of different ages invented web pages with ads on them which had been pretested with adults who had correctly identified the ads as advertising. The results showed the majority of children aged 10–12 recognised the ads as advertising but younger children did not. Contrast this with spot advertising on TV where even 5-year-olds were capable of seeing ads as different from programmes. It would be naive to assume that research into issues such as children’s understanding of advertising is politically neutral. As I have argued in this chapter already, images of childhood dominate discussion of children and childhood, especially when their vulnerability as consumers faced with advertising and promotion is concerned. The general public and other, more involved sectors of society such as marketers, health promotion groups, government departments such as health and education, and concerned parents, to name but four, will want clear unequivocal statements on the lines of ‘when is it safe to market to children

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(if at all)?’ and ‘what are the risks of marketing to children?’. The other stakeholder in this mix would be academics who would see themselves as dealing in and searching for the truth. At that time (the 1980s) Piaget’s account of the mental development of children younger than 6 years or so of age was being challenged. For example, Hughes and Donaldson (1979) examined Piaget’s claim that young children cannot imagine what another person’s view of a scene would be. He assumed that children in the preschool years thought that all other people would perceive the world as it looks from their own vantage point. Using a more reallife scenario than Piaget had done, it was shown very clearly that the preschool child had skills and could work out what a person could see and coordinate possible views of different people. After all, children are not bad at hide and seek. To employ a more up-to-date description about child development, if the ecology was a familiar and accustomed part of the child’s life and the child was motivated and engaged in the activity then sophisticated and subtle behaviour can emerge. One can only wonder how today’s infants born into the digital technology of the internet of things and instant communication between people will survive and thrive. Our brains have not changed very much for thousands of years, ‘human infants today are born with essentially the same brain that their infant ancestors 40,000 years ago were born with [they] … are “prepared” for the same type of lifestyle their ancestors faced’ (Bjorklund, 2007, p. 33). The difference, however, is that they are faced with a radically different world from their parents and grandparents in which to adapt, rather than the one which existed in the Upper Palaeolithic such is the present pace of change across generations. So one of the trends in developmental psychology since the latter part of the twentieth century has been to attribute skills to infants and preschoolers that previously were seen as only emerging later in development and this is partly due to a more sophisticated methodology where patterns of behaviour in young children were looked at in settings that reflected the natural life of the child. Given the political nature of the issue of the regulation of advertising to children and the two images of the savvy kid and the innocent defenceless child that dominate much of the discourse on advertising to children, then it is not surprising that the debate became at times quite heated. However, there is a distinction that has been ignored and that is the difference between what children can do and what they actually do. I shall explore this now and start with one of the most seminal academic papers in the debate surrounding advertising to children (Roedder John, 2008). Apart from providing us with a magisterial coverage of the

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field known as consumer socialisation, Roedder John uses a developmental framework based on information processing (see also Roedder, 1981). In her words information processing approaches ‘all share a focus on children’s developing skills in the areas of acquisition, encoding, organization, and retrieval of information’ (Roedder John, 2008, p. 223). The computer metaphor that underlies this analysis is well known in psychology since the 1960s and development then becomes very much a learning process subject to maturational and developmental influences. Computers have changed beyond all recognition in the last decade or so and new ways of thinking about child development need to be considered. In addition the contrast between this analysis and Piaget’s needs to be emphasised. Piaget called himself a genetic epistemologist, literally one who studies the growth of knowledge, and his relevance to psychology was in the underlying principles of this process within the individual mind. The main periods of development (sensorimotor, preoperational, operational and formal operational) stages had characteristics like egocentrism (self-centred) moving towards allocentrism (other-centred) operating in each stage but on different kinds of content. This system was a novel, maybe rather odd, mixture of logic and psychology and it framed his observations of how children developed. He included his own children to obtain evidence. However it would be difficult to challenge the tenets of his theory. What would happen a stage did not occur as predicted by the theory? It could be argued by a Piagetian that actually the stage did occur but we were unable to observe it at that time. Or maybe the child did not perform and show us any evidence but the stage did still occur mentally but was not exhibited behaviourally. Roedder John’s use of an information processing approach, however, is taken from the standard psychology of that time and she was able to identify three age-related sets of processes. I have paraphrased her descriptions with particular reference to advertising. Younger children were at the perceptual stage between 3 and 7 years. They would ‘centre’ on single features of the perceptual array and there was a lack of integration of their knowledge. They would be familiar with brands. During the analytical stage from 7 to 11 years children move from perceptually driven thinking to a more analytic way of thinking and that would include of course a developing and deeper understanding of advertising rather than just perceiving it as fun like a cartoon can be. And then the early teens from 11 to 16 when thinking about thinking and other manifestations of reflexive thought appear, including symbolic value of goods and how they create a desirable self.

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Although the description and the literature cited are different from Piaget, the basic three periods of development (neglecting infancy) of preschoolers, middle childhood and adolescence remain. The message then would be that preschoolers do not really understand advertising, they then begin to understand it more fully during middle childhood and by adolescence they are aware of the symbolic functions of advertising and how one’s social identity can be affected by ownership and possession of desirable things. Where does this leave us as far as the question of susceptibility is concerned? As a general rule preschoolers or children under 5 years of age will not really be capable of understanding advertising. Being dominated by what they see and hear rather than what they can think, they will surely want things they do not need simply because they find the advertising attractive and what they see on the box will dominate over what’s actually in the box or pack of sweets. However, susceptibility to advertising at this stage is not usually accompanied with the financial wherewithal to consummate this want or desire as access to the Bank of Mum is rationed as limited pocket money or else non-existent for the younger ones. Friction within the family can occur and the problems of pester-power are well attested in the literature, although a positive and more constructive position can be found when it is viewed as part of a family decision-making framework (see Anitha & Mohan, 2016). However, seeing the family as a consumer decision-making unit where children play an active role with their interest in the purchasing of a new family car or helping to choose a holiday destination, is probably best left to the analytical stage of development. Certainly, by the time the child becomes an active consumer as an adolescent then he or she will have both the interest and the skills (and some of the cash from part-time casual work) to participate in the economy, often spending on ‘teen stuff’ that is frequently identified with the groups and sub-groups that he or she belongs to. For consumption and identity management are closely related. It also is characteristic of younger children who often do not have the money for buying and a classic study by Elliott and Leonard (2004) demonstrated that in those days when Nike trainers (sport shoes) were de rigueur, poorer children would wear them to gain credence with their peers at school. The selves of these ‘tweenies’ could be enhanced and completed by wearing them and these were children who were yet to achieve adolescence with all the well-known identity upheavals that occur at that age as the body and mind go through rapid change. Adolescence is a time when children become young adults and, although a transition phase, is also a time when many cultures set up expectations not just of expected behaviour but also

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what thoughts, plans and feelings one should be having and going through. The adolescent is not short of roles to slip into when secondary sexual characteristics make their appearance. So fashion styles are experimented with that characterise membership of various tribes or groups, and one’s taste in music is also similarly orchestrated [sic]. Marketing is omnipresent and changes to the latest tastes and styles are rung at regular intervals. It would be naive to deny that marketing plays a significant role here and that preteens (tweenies), teenagers and young adults are targeted intensely with an emphasis on market segmentation and rapid seasonal change as well as identity issues as a member of the teen clan. Even psychologists have elevated this time of life to a stage and Erikson (see Young, 2018, Chapter 7) sees adolescence as a time of a particular type of conflict resolution. Erikson thought that resolution of mental conflict was an important driver for growth and change in the mind. The conflict here was between what is known as one’s identity and the identity confusion one feels in, for some, the maelstrom of feelings and emotions that accompany the changing body and mind of the adolescent. I say ‘for some’ as in practice many young people navigate this time in their lives without these experiences. The vulnerability of adolescents to marketing at this time in their lives is linked with being the same as others and simultaneously different from them. Clothes, jewellery, hair style, skin adornment like tattoos, piercing and scarification are all attempts to be simultaneously an individual and a member of a group. Marketing is sending similar contradictory messages where one is told to stand out and be oneself (‘not a member of the crowd’) and also to be the same, as fashionistas have this hair and these clothes now. Keeping up with the pace of change is also important as one knows that all this will change tomorrow and nothing is worse than yesterday’s style.

CONCLUSION In this chapter I have reviewed some of the key concepts, evidence and theory that inform our understanding of vulnerability in consumers. Although I mentioned the lifespan as an integral dimension in any full description of the extent of vulnerability, space precludes a full analysis and review of this area. We know that vulnerability as a concept can be located not only in different kinds of people but also in their circumstances and cultures and their ways of coping with them. However, the trajectory of life after childhood is characterised by variety rather than developmental stage, although some scholars have made brave

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attempts to impose stages on lifespan development (Young, 2018, Chapter 7). As one nears the end of natural life there are cognitive and affective changes occurring in some of us that can affect patterns of consumption and we need more research here, given the growth of this demographic. Also, how people of any age with learning difficulties cope with consumption has also been a largely neglected potential area of research. But there are also events in one’s life such as childbirth, job loss and marriage or other committed relationship that require adaptation to changing circumstances and potential disruption to one’s lifestyle. Adolescents do not have a monopoly over role confusion and how to behave, and what is expected of you can shift and change. These and other changes and their potential to disrupt accustomed patterns of consumption and create vulnerability need to be explored and it is to be hoped that future researchers will take up that challenge.

Note 1

Using Business Source Complete with the search vulnerab* AND consum* produced 4,269 papers on 6 September 2019. Adding AND child*, however, reduced this to 140.

REFERENCES Ali, M., Blades, M., Oates, C., & Blumberg, F. (2009). Young children’s ability to recognize advertisements in web page designs. British Journal of Developmental Psychology, 27(1), 71–83. Aries, P. (1965). Centuries of childhood: A social history of family life. Oxford: Vintage Books. Baker, S. M., Gentry, J. W., & Rittenburg, T. L. (2005). Building understanding of the domain of consumer vulnerability. Journal of Macromarketing, 25(2), 128–139. Bjorklund, D. F. (2007). Why youth is not wasted on the young: Immaturity in human development. Oxford: Blackwell. Boesel, W. E., & Jurgenson, N. (2015). Prosumption. In D. T. Cook & J. M. Ryan (Eds), The Wiley Blackwell encyclopedia of consumption and consumer studies (pp. 95–97). Chichester: Wiley. Brainerd, C. J. (2004). Dropping the other U: An alternative approach to U-shaped developmental functions. Journal of Cognition and Development, 5(1), 81–88.

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Brenkert, G. G. (1998). Marketing and the vulnerable. Business Ethics Quarterly, Special Issue: Ruffin series: New approaches to business ethics, 7–20. Retrieved 30 June 2019 from https://www.jstor. org/stable/41968759 Bronfenbrenner, U., & Morris, P. A. (2006). The bioecological model of human development. In W. Damon & R. M. Lerner (Eds), Handbook of child psychology, Vol. 1: Theoretical models of human development (6th edn, pp. 793–828). New York: Wiley. Elliott, R., & Leonard, C. (2004). Peer pressure and poverty: Exploring fashion brands and consumption symbolism among children of the ‘British poor’. Journal of Consumer Behavior, 3(4), 347–359. Esserman, J. (1981). A study of children’s defenses against television commercial appeals. In J. Esserman (Ed.), Television advertising and children: Issues, research and findings (Chapter 2). New York: Child Research Service. Forceville, C. (1996). Pictorial metaphor in advertising. London: Routledge. Fox, A. K. & Hoy, M. G. (2019). Smart devices, smart decisions? Implication of parents’ sharenting for children’s online privacy: An investigation of mothers. Journal of Public Policy & Marketing, 38(4), 414–432. Hughes, M., & Donaldson, M. (1979). The use of hiding games for studying the coordination of viewpoints. Educational Review, 31(2), 133–140. Kahneman, D. (2011). Thinking, fast and slow. London: Penguin. Kaufman-Scarborough, C. (2019). Marketplace engagement by consumers who are homeless: Internet communities as a resource for consumer resilience and coping. Social Business, 9(1), 7–28. Kitchen, P. J., Kerr, G., Schulz, D. E., McCall, R., & Pals, H. (2014). The elaboration likelihood model: Review, critique and research agenda. European Journal of Marketing, 48(11–12), 2033–2050. Lawlor, M.-A., & Prothero, A. (2003). Children’s understanding of television advertising intent. Journal of Marketing Management, 19(3–4), 411–431. May, J. D. (1981). Practical reasoning: Extracting useful information from partial informants. Journal of Pragmatics, 5, 45–59. O’Shaughnessy, J., & O’Shaughnessy, N. (2004). Persuasion in advertising (pp. 114–115). New York: Routledge. Packard, V. (1957). The hidden persuaders. London: Longmans. Roedder, D. L. (1981). Age differences in children’s responses to television advertising: An information processing approach. Journal of Consumer Research, 8, 144–153.

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Roedder John, D. (2008). Stages of consumer socialization: The development of consumer knowledge, skills, and values from childhood to adolescence. In C. P. Haugtvedt, P. M. Herr, & F. R. Kardes (Eds), Handbook of consumer psychology (pp. 221– 246). Hove: Psychology Press. Rowthorn, D. (2017). Is child advertising inherently unfair? Journal of Business Ethics, 158, 603–615. Rozendaal, E., Buijs, L., & van Reijmersdal, E. A. (2016). Strengthening children’s advertising defenses: The effects of forewarning of commercial and manipulative intent. Frontiers in Psychology, 7. DOI:10.3389/fpsyg.2016.01186 Sorin, R. (2005). Changing images of childhood: Reconceptualising early childhood practice. International Journal of Transitions in Childhood, 1, 12–21. Sperber, D. and Wilson, D. (1986). Relevance: Communication and cognition. Oxford: Blackwell.

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Spotswood, F. & Nairn, A. (2016). Children as vulnerable consumers: A first conceptualisation. Journal of Marketing Management, 32(3/4), 211–229. Statista (n.d.). Proportion of selected age groups of world population in 2018, by region. Retrieved 19 July 2019 from https://www.statista.com/statistics/ 265759/world-population-by-age-and-region/ Tellis, G. J. (2004). Effective advertising: Understanding when, how, and why advertising works. Thousand Oaks, CA: Sage. Van der Veer, R. & Valsiner, J. (1991). Understanding Vygotsky: A quest for synthesis. Oxford: Blackwell Young, B. M. (1990). Television advertising and children. Oxford: Oxford University Press. Young, B. M. (2018). Consumer psychology: A lifespan developmental approach. Cham: Palgrave Macmillan.

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9 Cross-Cultural and Sub-Cultural Issues in Marketing Ethics Daniel E. Palmer

INTRODUCTION This chapter explores the ethical issues unique to cross-cultural marketing and marketing to ethnic minorities. While traditional concerns of marketing ethics are pertinent in these contexts, the intercultural nature of these exchanges raises ethical issues unique to these forms of marketing as well. The chapter will first explicate the nature of cross-cultural marketing and marketing to ethnic minorities. It will then be shown that these forms of marketing and the ethical issues that they raise should be viewed in terms of the ethics of intercultural communication. Having situated these marketing practices within the general context of intercultural communication, the chapter will then explicate three ethical concerns of specific relevance to cross-cultural marketing. These three areas of ethical concern are connected to the potentially vulnerable populations involved in such marketing, the role of stereotypes or cultural bias, and the possible exploitation of intercultural misunderstanding. The chapter will conclude with an explication of some guidelines for developing ethical marketing standards in cross-cultural contexts. Cross-cultural marketing and marketing to ethnic minorities can be defined as a form of targeted marketing segmentation. Market segmentation is a

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common feature of marketing which involves differentiating distinct demographic groups within markets. In conjunction with segmentation, targeted marketing can be used to direct marketing efforts toward groups identified as having specific characteristics relevant to consumer behavior. As not all potential consumers will respond in the same manner to marketing efforts, targeted marketing allows companies to develop marketing strategies that will appeal to individuals sharing certain common characteristics and desires. As noted by Blythe, ‘segmented markets consist of significant numbers of people with similar needs’ (2009, p. 120). For instance, age, gender, income, and lifestyle habits have all been used as categories by which companies have segmented markets and developed targeted marketing campaigns. In this sense, we can think of marketing efforts specifically directed at minorities and cross-cultural marketing efforts as just another type of targeted marketing in which the targeted segment is a distinct ethnic or cultural group. For the purposes of this chapter, marketing to minorities will be taken to refer to marketing efforts directed toward a distinct cultural or ethnic minority within a dominant majority culture and marketing cross-culturally will refer to marketing efforts directed toward cultural groups distinct from one’s own. On this definition,

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cross-cultural marketing can include marketing to minority cultures within a dominant culture as well as marketing internationally to cultures distinctive from one’s home culture. Thus, marketing to ethnic minorities can be viewed as a special type of crosscultural marketing. Both cross-cultural marketing internationally and marketing to ethnic minorities within a larger population have the potential to raise similar ethical issues and concerns.

BACKGROUND Scholarly interest in cross-cultural marketing has grown in conjunction with globalization and the corresponding increase in international business. As noted by Carrigan et al., ‘the need for addressing the issues of international marketing ethics arises from the increased internationalisation of multinational companies (MNCs) and the process of globalisation of business’ (2005, p. 485). Cultural issues are of particular prominence in discussions of international marketing ethics because of the questions involved in applying ethical norms in differing cultural contexts. Similarly, an increased sensitivity to the rights and interests of minority groups in recent decades has led to a greater consideration of the ethics of marketing to ethnic minorities (Pires & Stanton, 2002). In both cases, a greater exposure, and sensitivity, to distinct cultural or ethnic groups has led to a consideration of how marketers can appeal to different cultural groups in an ethically sensitive manner. Much of the extant literature on intercultural marketing has focused on three main areas of research. One significant area of research has been empirical in nature, with a number of studies on intercultural marketing being devoted to determining the extent to which culture informs the perception of ethical issues. As Javalgi and Russell assert, ‘international marketing scholars and practitioners are finding that there may be differences in ethical standards, values, and beliefs between their home country and the host country’ (2018, p. 706). Numerous studies, in this regard, have dealt ‘with cross-cultural comparisons of management’s attitude towards ethical issues’ (Quester and Simpson, 1998, p. 52). Javalgi and Russell (2018) identify, for instance, empirical studies in the academic literature on international marketing involving comparisons of ethical attitudes or perceptions involving well over a dozen countries. Often, this literature looks at the way in which ethical attitudes or perceptions can be linked to cultural background using some typology such as Hofstede’s

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cultural dimensions. For instance, Javalgi and Russell claim that ‘culture cannot be discussed without considering Hofstede’s six dimensions of culture: uncertainty avoidance, masculinity versus femininity, individualism vs. collectivism, power distance, long-term orientation, and indulgence versus restraint’ (2018, p. 710). While nuanced, this empirical research does seem to indicate some differences in ethical attitudes based upon culture, but the extent and significance of that difference is still an open question. Further, some researchers, such as Murphy (1999), also see significant points of congruence in the values appealed to by managers from diverse cultures. While the empirical research on intercultural marketing ethics has focused on comparing ethical perceptions or attitudes between businesspersons or consumers in different cultures, the theoretical focus has largely been on questions concerning the normative foundations of intercultural marketing ethics. Here, two main issues come to the forefront. One involves the question of moral relativism versus moral universalism. The question here is whether, despite an apparent diversity of moral values among cultures, there are universal moral standards that can be applied to all cultures. Universalists maintain that we can appeal to some moral standards that are independent of any particular cultural context to determine ethical standards, while moral relativists see all ethical standards as culturally dependent. As Carrigan et al. remark, ‘in marketing terms ethical relativism can justify different ethical standards applied to various countries and evolve over time’ (2005, p. 482). This issue is significant since the extent over which moral disputes can be adjudicated cross-culturally will depend to some extent upon the degree to which we see values as culturally bounded versus universal in application. Secondly, at the theoretical level, much work has been done in examining the application of various normative ethical theories, such as utilitarianism, contractarianism, stockholder theory, or stakeholder theory, to international marketing ethics (Javalgi & Russell, 2018). Here, proponents of various normative theories have argued that one or the other of these normative theories are better able to provide guidance in dealing with problems in intercultural marketing ethics. Other approaches seek to integrate elements from a number of different normative theories in developing moral guidance for intercultural marketing ethics. An approach to international marketing ethics that integrates both of these theoretical issues, to some extent, has been taken by Murphy (1999) who argues in favor of a virtue-based approach to intercultural ethical issues. This approach, Murphy maintains, can avoid issues of moral relativism

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since ‘certain virtues and character traits appear to be universal across cultures and applicable in both global and domestic contexts’ (1999, p. 107). Murphy identifies the virtues of integrity, fairness, trust, respect, and empathy as central character traits necessary to the development of an ethical approach to international, and intercultural, marketing. Murphy also argues that there is empirical evidence to show that an ethical orientation that embraces these virtues is common to managers from a diverse group of cultures. While questions about the justification and limits of this approach may remain, Murphy makes a persuasive case that there are widely shared virtues that can serve as productive touchstones for discussions of crosscultural ethics. Indeed, the discussion of specific ethical issues in intercultural marketing to follow will rely heavily on notions such as fairness, empathy, and respect as well. A third area of research in intercultural marketing ethics has involved ‘the inventory and description of problems encountered in international marketing’ (Quester & Simpson, 1998, p. 52). This research is devoted to indicating specific moral problems that can occur in intercultural marketing ethics as well as examining potential ethically appropriate means of responding to the concerns uncovered. The remainder of this chapter will largely be concerned with this area of inquiry. Such cases can both better make us aware of potential moral problems within the field and help guide the ethical decision making of those involved in intercultural marketing. While theoretical issues will remain important areas of concern, the examination of specific cases can also help sharpen our understanding of the concepts and issues that any adequate theory must account for. As the specific ethical cases we will look at are all manifested within a context of intercultural communication, the next section will be devoted to an examination of some fundamental issues of intercultural communication.

ISSUES IN INTERCULTURAL COMMUNICATION As noted in the introduction, many of the ethical issues unique to cross-cultural marketing are best viewed within the broader framework of intercultural communication. Intercultural communication involves any attempt by members of one culture to communicate with those in another. As different cultures have different histories, assumptions, practices, and even values that can affect how they understand the world, intercultural

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communication always involves the potential for misunderstanding. Considering the nature of intercultural communication in cross-cultural marketing is important because marketing, and advertising in particular, is the primary means by which businesses communicate to consumers about their services or products. In essence, marketing and advertising are the mediums through which companies communicate, including the manner in which they choose to communicate with ethnic minorities or with cultures distinct from their own as they seek to penetrate or expand markets. In this respect, marketers obviously attempt to communicate a message in a language that they believe their target audience will understand. As such, cross-cultural marketing and marketing to ethnic minorities are forms of intercultural communication. Ethical issues are attached to intercultural business communication when such communication has the potential to result in misunderstanding, conflict, or harm. Communication is a form of interpersonal interaction, and there is always the potential for conflicts of value and interest when two cultures interact, particularly when there are significantly different cultural assumptions and values at work. For this reason, it is important to consider how intercultural communication might give rise to ethical concerns. This is because the potential for misunderstanding, misrepresentation, and conflicts of value are compounded when the parties involved come from distinct cultural groups. A central thesis of this chapter is that potential concerns identified within the field of marketing ethics can be significantly intensified when put into a cross-cultural context. The ethical analysis of marketing practices is challenging enough, but the application of moral norms to marketing practices becomes even more complicated when we consider marketing efforts directed at cultures distinct from one’s own. Given the global and interconnected nature of the contemporary business world, the potential for ethical issues in business to have cross-cultural repercussions is greater than ever, as is the need to develop appropriate standards for intercultural communication in these contexts. All intercultural communication involves the potential for misunderstanding or offense, both because of the differences of experience of the cultures involved and due to the difficulty of ‘translating’ the cultural norms and values inherent in one language into that of another. As Mayo aptly puts it, ‘there are potential communication problems when people start from different conceptual frameworks’ (2005, p. 87). Not all failures of intercultural communication are of great ethical significance, but they can be if they lead to serious offense or give rise to potential harms as a result. This is true of

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all forms of intercultural communication, but the potential for miscommunication to rise to the level of ethical consequence is even more likely when the primary purpose of the communication is not mere understanding but commercial in nature. When the intent to communicate information is intertwined with an intent to persuade for economic gain there is always the potential worry that the latter intent can overshadow or even distort the former. Marketers who are not sensitive to the ethical nuances of intercultural communication may trade on misunderstanding or miscommunicate precisely in order to increase sales. Of course, it is nearly impossible, at the practical level, to avoid all misunderstanding in intercultural communication in marketing, whether it be a verbal lapse (not understanding the connotations of certain words) or a non-verbal misstep (utilizing a color that has cultural significance in an inappropriate context). Victor (1992) has aptly termed these as cases of pseudo-conflict, since the conflicts they engender do not stem from any deep conflict of values, but merely from a failure to appreciate the nuances of communication in another language. It is important to see that in cases of mere pseudo-conflict, the cultural clash in question need not represent an ethical failure. All persons involved in intercultural communication must be sensitive to the fact that such communication is unlikely to ever go perfectly smoothly as it were, and we should allow persons (and businesses) some leeway in making honest mistakes when they enter into the language of another culture. Of course, one does have a duty of care to attempt to be sensitive to such potential missteps and people should be encouraged to take reasonable efforts to avoid making such mistakes. A person who simply refuses to make any effort to be sensitive to another culture when engaging in communication with that culture would indeed be showing a failure to respect those in it. Negligence in communicating cross-culturally certainly is a form of ethical failure. We can thus say that marketers have a moral duty of care to avoid such pseudoconflict where possible. Inattention to detail or context is certainly no excuse for routine miscommunication. Companies and marketers have an obligation to make themselves aware of the basic cultural values, assumptions, and forms of communication distinctive of other cultural groups before engaging those cultures. Nonetheless, even well-intentioned persons are likely to make occasional mistakes that can lead to pseudo-conflict of the sort noted. The standard for marketing ethics should not be so high that persons are unwilling to engage in intercultural communication at all for fear of the occasional misunderstanding. Likewise, all parties should be sympathetic to the sporadic

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unintentional failure of communication as long as disrespect was not intended. But businesses should also be expected to take reasonable efforts to understand the relevant cultural assumptions and values before engaging in cross-cultural communication, particularly for marketing purposes.

THREE AREAS OF ETHICAL CONCERN UNIQUE TO CROSS-CULTURAL MARKETING The considerations explored in the section below show that it is important to distinguish, both conceptually and empirically, cases of unintended pseudo-conflict from issues in intercultural communication which raise more substantial ethical concerns in cross-cultural marketing or marketing to ethnic minorities. What is common to all of these more substantial areas of potential ethical concern, and thus what distinguishes them from merely inadvertent pseudo-conflict, is that they all involve a failure to respect the legitimate values and interests of other stakeholders and have the potential to violate the applicable moral norms discussed earlier in this chapter. Unlike cases of pseudo-conflict in intercultural communication, these ethical failures of communication involve more than a mere inattention to detail. As previously noted, all of these issues can also be seen as amplifications of areas of ethical concerns already present in more general discussions of marketing ethics. The remainder of this chapter will be devoted to an examination of three specific ethical concerns that can occur in marketing directed toward ethnic minorities and cross-cultural marketing as well as a brief consideration of some general considerations for developing ethically appropriate marketing campaigns in these contexts. The first area of ethical concern to be discussed involves the marketing of potentially harmful products to vulnerable ethnic populations. A second area of concern focuses upon cross-cultural marketing efforts that use demeaning stereotypes or that reinforce cultural biases against certain groups of people. The third ethical issue examined in the chapter concerns cross-cultural marketing efforts that intentionally take advantage of the potential for intercultural misunderstanding in order to sell products or services.

Vulnerable Populations Cross-cultural marketing and marketing to ethnic minorities may raise issues if the groups targeted

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include vulnerable populations. The literature on marketing ethics has been sensitive to the fact that some potential consumers are more vulnerable than others and thus are deserving of unique moral consideration. Most generally, the concept of vulnerability refers to susceptibility to harm (Smith & Cooper-Martin, 1997). Vulnerable consumers may be more subject to harms in the marketplace if there are internal or external factors that inhibit ‘their ability to participate effectively in the marketplace’ (Kennedy et  al., 2019, p. 1481). For example, in the context of marketing, consumers who lack the ability to understand advertising, or whose capacity to act autonomously in relation to marketing is limited, may be considered vulnerable if these potential limitations open them to harms in the marketplace. Marketing efforts involving vulnerable populations raise specific ethical concerns and marketing practices may be exploitive if they involve attempts to unduly manipulate such populations. Concerns about exploitative marketing to such groups can be compounded given the level of harms posed by the products involved as well. Vulnerable populations typically are taken to include children and other groups that are viewed as subject to conditions that might prevent them from making fully rational choices or could make them subject to undue influence by others, either because of their capacities or because of their circumstances. Vulnerability need not be thought of as an all-ornothing concept, as there are degrees of vulnerability and vulnerability can be situational as well (Baker et al., 2005). As noted, individuals or groups may be vulnerable either because of internal capacity or due to external circumstances. In either case though, the vulnerability may cause them to be more easily manipulated by certain kinds of marketing practices, leaving them, as noted by Baker et al. (2005), powerless in the face of market forces. For example, children under a certain age may lack the developed intellectual capacity to rationally evaluate certain kinds of claims. Whereas an adult, for instance, may easily be able to discern the nature of puffery in advertising, children may take such exaggerated claims as literal truth given their more limited cognitive capacities. But again, it is not just capacity that can affect how persons react to marketing. Even in the case of children, certain environments may further limit their ability to respond autonomously to marketing. For instance, Kennedy et  al. (2019) argue that children are particularly subject to vulnerability in the online context because the technologies involved present advertising in a manner that is more difficult for children to discern than in offline contexts.

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A person’s circumstances may affect their ability to respond rationally to marketing in other ways as well. Persons who are severely and terminally ill, for instance, may possess the intellectual capacity necessary to make rational judgments, but might, due to their situation, be more likely to be influenced unduly by others given their circumstances. Those with terminal illnesses or other serious medical conditions, for example, might be more willing to accept claims about potential cures based upon desperation rather than on a fully rational evaluation of the claims involved and thus could be unduly manipulated by unscrupulous marketers of dubious medical products or procedures. Unfortunately, it is no surprise in this regard that ‘quackery is an ancient problem’ as ‘desperate patients and their loved ones – especially when facing serious or untreatable illness – are inclined to believe in miracles’ (Cassileth & Yarett, 2012, p. 758). Other groups such as the homeless, functionally illiterate, and impoverished may be vulnerable given their circumstances as well (Hill, 2019). Many cultural or ethnic populations may be vulnerable as well. Of course, minority ethnic or cultural groups are obviously not vulnerable in the same way that children are; certainly they do not lack mental capacity in any general manner. As shown above, though, groups can also be vulnerable not as a matter of capacity but as a matter of circumstances. In this sense, some ethnic minority groups may be considered vulnerable if they face significant economic or social barriers given their position in a larger society. Such barriers may make it very difficult for members of those groups to act upon their rational desires and render them more prone to manipulation by marketers, given their lack of options or other features of their situation. For instance, Hill (2002; 2016) has argued that poverty and impoverishment are often strongly correlated with vulnerability in the marketplace. This connection could manifest itself in a multitude of ways. Impoverished persons might be more willing to engage in potentially harmful clinical medical trials if they lack proper access to healthcare. In this case, such persons might be more likely to ignore or underestimate potential risks of involvement in such clinical studies. Similarly, persons living in food deserts, defined as areas in which affordable food options are very limited, may have very little options in terms of their food choices. As such, they may be particularly suggestive to marketing efforts that push unhealthy food options, given their inability to reasonably access more healthy alternatives. As a final example we might note that when populations lack access to traditional banking options, they may be more susceptible to marketing efforts

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driving them toward so-called payday lending, leading them to fail to consider the exceedingly high cost of such loans and their potential downsides in the long run. In these examples, the impoverished circumstances involved may make it easier for marketers to deceive or to manipulate the choices of those involved. Of course, there may be matters of degree here, as some circumstances are worse than others. While the impoverished are not an ethnic group, these examples illustrate how circumstances, such as lack of access to healthcare, can lead to the potential for manipulation. Unfortunately, many ethnic minorities face these kind of socio-economic circumstances and thus are arguably more vulnerable as a group. The issue becomes compounded when the products marketed have the potential to further harm persons in the groups in question. While unhealthy food and high-interest loans can certainly harm persons, an even more potent example of this issue would involve the marketing of tobacco or alcohol products to certain ethnic minorities. Many ethnic minorities that have been historically discriminated against and that face socio-economic challenges related to their minority group status also face significantly higher rates of tobacco use and alcohol addiction. For instance, in the USA, tobacco usage rates are significantly higher among Native American and African American populations than they are among whites (American Lung Association, 2019). Such groups often suffer greatly from the ill-effects of such product use as well and struggles with addiction in these communities can often further exacerbate the poor social and economic conditions that such groups already find themselves within. While the lack of economic options in such communities may make it understandable why tobacco use and alcohol abuse are much more prevalent or more damaging than in communities not facing such socio-economic woes, the use of these addictive products only further worsens an already bad situation for those involved. Though disappointing, but perhaps not surprisingly, some companies have specifically targeted ethnic minorities with marketing campaigns that only further encourage the use of such products. Two notorious examples of this include the marketing of menthol cigarette brands such as Newport or Kool to African Americans and the marketing of malt liquor in African American communities. In the case of menthol cigarettes, which pose even greater health risks than nonmenthol cigarettes, there was a concerted effort by a number of tobacco companies to target African Americans specifically in the marketing of these products (Bach, 2018). This advertising often pictured seemingly successful African Americans in

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glamorous or festive contexts with messages that stressed the refreshing nature of menthol cigarettes and often targeted younger members of the population as well. Likewise, alcoholic beverage companies have often specifically marketed products to African Americans in campaigns designed to specifically appeal to this audience. The most notorious of these was perhaps the PowerMaster malt liquor marketing campaign directed toward inner-city African Americans in the early 1990s (Brenkert, 1998). Malt liquor is a high-alcohol form of beer and the advertisements, as with similar malt liquor campaigns by other companies, appeared to stress its potent nature. The vulnerable cultures targeted in these manners can include non-ethnic sub-cultures as well. For instance, the LGBT community has historically faced discrimination and social stigma that have rendered members of this community vulnerable to marketing practices in a similar manner. This is well illustrated by the so-called ‘Project SCUM’ plan by R. J. Reynolds to market cigarettes to gays and the homeless in San Francisco in the 1990s (Dingfelder, 2013). SCUM is an acronym for ‘Sub-Culture Urban Marketing’ and Project SCUM was specifically designed to target these socially marginalized groups. Members of the LGBT community smoke at about double the rate of the general population (Dingfelder, 2013) and are generally more likely to engage in risky behavior, such as tobacco and alcohol use, as a result of their marginalized status (Washington, 2002). In these cases, the companies involved in such marketing efforts were clearly aware that the African American and LGBT communities were facing significant problems with tobacco use or alcohol abuse and arguably tried to market products in a manner that intentionally attempted to glamorize these products and downplay their negative effects. As the social–economic circumstances involved in these cases already made addiction much more prevalent than in the general population, it is plausible to view the populations involved as vulnerable to these marketing efforts in a manner that was ethically problematic. Given the severe harm that tobacco and alcohol can cause, the ethical concerns with these sorts of marketing campaigns are that much more poignant. Targeting populations that are both socio-economically unstable and vulnerable to alcohol abuse and tobacco addiction with marketing campaigns that purposefully downplay the harms caused by these products represents a significant failure of moral responsibility. The general lesson to be learned from considerations of these cases is that marketing efforts directed toward ethnic minorities or vulnerable

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sub-cultures needs to be considerate of any social or economic disadvantages that such minorities or groups may face because of their status in relation to the broader society. While not all ethnic minorities are vulnerable, those that have faced discrimination because of their ethnic status may well live in socio-economic circumstances that make them more vulnerable as a group. In such situations, marketers have a duty to avoid further harming such groups through attempts to exploit their situation to sell products or services. This is particularly true when the products or services have the potential to cause significant long-term harm and further exacerbate the negative situations that such minorities find themselves a part of already. Marketing efforts to ethnic minorities or sub-cultures, in this respect, should be sensitive to any disadvantages that such groups face simply as a result of their ethnic or social status as well as to how marketing products or services could further exacerbate such disadvantages. Either companies should avoid targeting ethnic minorities or subcultures specifically at all in such cases or they should avoid doing so in a manner that has the potential to further exacerbate problems in those communities.

Stereotypes and Cultural Biases A second important consideration in marketing cross-culturally or to ethnic minority groups centers upon the potential use of demeaning stereotypes or messaging that reinforces cultural biases against certain groups of people. While few marketers would directly seek to offend a group of people that they are attempting to market products to, as obviously that would be unlikely to generate a successful marketing campaign, there is always a potential to rely upon cultural stereotypes in a manner that can have harmful, even if unintended, consequences. As noted earlier, marketers have a duty of care to avoid miscommunication, but that duty of care is magnified when it involves how we characterize groups of people that are culturally distinct from us and who may face circumstances and issues that we do not. These ethical concerns become amplified when the messaging has the potential to reinforce harmful stereotypes or further reinforce cultural biases that disadvantage certain groups. These issues can be particularly complicated as they may involve disputed aspects of other cultures in addition to intercultural concerns. An example that well illustrates how marketing can reinforce cultural biases and, in doing so, further harm persons within a culture involves the

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promotion of skin whitening, or so called fairness, products in India. In India, in part because of its colonial history, there has been a historical bias against darker skinned persons and a corresponding tendency to look more favorably on whiter skinned individuals. This bias can significantly hamper the social and economic prospects of darker skinned Indians and this bias tends to affect women particularly negatively (Nagar, 2018). As such, a number of companies, including international companies, began to market products designed to lighten skin color in India. Products such as Fair & Lovely by Unilever had major campaigns targeting women and often showed dramatic images of the ability of their products to lighten, and thus make more desirable, women’s skin tone and improve their lifestyle (Leistikow, 2003). In this case, a cultural bias against darker colored women in India was utilized by companies to market products specifically designed in a manner that reinforced this negative cultural bias. There are several ethically problematic features of this example, particularly insofar as international companies attempted to market cross-culturally based upon an appeal to a form of cultural bias. In the first place, it should be noted that the products involved do pose significant health risks, often understated in the advertising, and encouraging their use based on the insecurity of those who face discrimination would seem to fall under the concerns covered earlier concerning the appeal to vulnerable populations. However, and independently of the potential harms of the products themselves, the aggressive marketing of these skin-whitening products in the context of India is morally problematic because it also reinforce a negative cultural bias against darker skinned persons. Whether intentionally or not, the marketing of these products relies upon negative stereotypes and continues to foster the narrative that whiteskinned persons are somehow better. This has serious implications for whole groups of people who both feel the effects of discrimination already and feel further pressured to somehow ‘change’ the nature of who they are. By accentuating these cultural biases and stereotypes, marketing campaigns for these products only further reinforce discrimination against groups already significantly harmed by such unwarranted biases. While some stereotypes or biases, such as those involving darker skinned persons in the Indian case referenced above, are obviously negative, it should be noted that others can manifest themselves in more subtle, but no less problematic, ways. For instance, Asian Americans are often portrayed as a model minority in the USA, given their higher levels of educational attainment and larger household incomes, as a group, compared

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to the general population (Taylor et  al., 2005). However, as Taylor et al. argue, ‘while the “model minority” stereotype may appear “positive” on the surface, it has been observed that it, along with other stereotypes of Asian Americans, contributes to vulnerability’ (2005). These stereotypes, as Taylor et al. illustrate, may cause conflict with peers, limit access to resources, cause emotional stress, and lead to anxiety and depression stemming from expectations to live up to the ‘model minority’ image. Ironically, this seemingly virtuous and positive stereotype of Asian Americans in marketing may make some members of the Asian American community more susceptible to depression, cultural isolation, and feelings of unfulfilled expectations. Marketers should thus be particularly careful to avoid stereotyping or appeals to negative biases in cross-cultural marketing. Principles of fairness and respect for others require that we do not reinforce negative biases that have the potential to significantly affect persons. Marketers should be particularly careful to avoid reliance upon cultural stereotypes when engaging in advertising campaigns and should make extra effort in such contexts to make sure that products or messaging do not exacerbate existing biases. In general, marketers have a duty of care to avoid promoting cultural tensions or disputes as well and should be very careful not to rely on demeaning characterizations of vulnerable groups or other portrayals which may harm persons in the cultures involved. As we have seen in the case of the ‘model minority,’ even seemingly positive stereotypes can indirectly harm individuals in a culture.

Intercultural Misunderstanding The third ethical issue that can arise in marketing cross-culturally or to ethnic minorities involves marketing efforts that deliberately or negligently make use of the potential for intercultural misunderstanding in order to sell products or services. Unlike cases of pseudo-conflict, in these sorts of situations marketers are, or should be, aware that a type of message or promotion is likely to be misunderstood or confusing, but they nonetheless ignore this potential. In such cases, there is a clear violation of the obligation to be transparent in marketing and an attempt to undermine the autonomy of the potential consumers. If, because of their cultural context, consumers are likely either to fail to understand the marketing message or to understand a marketing message incorrectly, then they are more likely to make choices that do not reflect their true preferences. In such cases,

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consumers may be harmed both financially and in other ways as a result of such misunderstanding. Companies that attempt to trade on such potential for misunderstanding thus violate the interests of consumer stakeholders. For instance, in a widely discussed case, the Nestlé Corporation was criticized for its promotion of infant formula in developing Third World countries. Nestlé’s promotional efforts involved dressing marketers as healthcare professionals and giving mothers free samples of formula in hospitals (Shaw & Barry, 2001). The women in these cultural contexts tended not only to be vulnerable economically and socially but also likely to perceive these promotional tactics as an endorsement of the healthcare establishment given their situation and background. Unfortunately, the increased use of infant formula often led to both economic problems and health issues, particularly given that in many of these countries the water available to mix with the formula was often not properly sanitized (Shaw & Barry, 2001). Given the health and economic problems associated with moving mothers away from breast feeding in these countries, there was widescale criticism of Nestlé’s efforts to aggressively market infant formulas in these contexts. Whether we view Nestlé’s promotion of infant formula in these cultures as intentionally designed to deceive or merely negligently misleading, it seems clear that the marketing effort was likely to result in misunderstanding given the cultural context. As such, the company failed to properly account for the interests of a large part of the population it was marketing to, and in doing so failed to fully respect those persons and their interests. Marketers should be sensitive to the manner in which promotional campaigns are likely to be perceived given the cultural context in which they are deployed, and avoid the potential for misunderstanding as much as is reasonably possible, particularly when there are significant potential harms at stake. While we noted that cases of pseudo-conflict can also involve misunderstanding, the difference here is largely one of intention. Again, intercultural communication always has the potential to involve misunderstanding, but that in itself does not entail a significant ethical violation. However, if marketers knowingly attempt to use potential misunderstanding as a means of selling products or services, then clearly there is a failure of both respect for others and the commitment to transparency. In these cases, the potential for misunderstanding is not merely an honest mistake, but is intentionally or negligently utilized in order to misrepresent or misinform consumers. Ethical marketing requires a basic commitment to honesty and respect and cross-cultural marketing efforts

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should not attempt to use the potential for misunderstanding as a form of market advantage.

CONCLUSION Of course, there are likely many other ways in which marketing directed at minority groups or other cultures can potentially raise ethical issues. Nonetheless, the three issues discussed in this chapter are significant enough to show the need for particular care on the part of marketers in developing marketing campaigns designed for culture groups distinct from their own. Intercultural communication is difficult to navigate even under the most ideal conditions, but can be even more complicated in commercial contexts. Ethical marketing in such contexts should involve concerted efforts to make sure that marketing campaigns are appropriate within a specific cultural context and do not risk harming the groups involved. In the remainder of this chapter I will suggest a few general considerations for marketing cross-culturally in an ethically responsible manner. Firstly, we have seen that marketers have a duty of care to communicate with other cultures or ethnic minorities in a manner that is sensitive to their history, values, and practices. While inadvertent misunderstanding is always possible in intercultural communication, businesses should make special efforts to understand different cultures before promoting products directly to them. More specifically, marketing campaigns designed to appeal to other cultures or ethnic minorities would do well to include persons from those cultures in the design and implementation of marketing promotions. Having, and valuing, expertise from those with cultural experience can help companies better create messaging that is culturally appropriate. Companies would also be well advised to carefully vet marketing campaigns directed at other cultures or ethnic minorities with appropriate experts or sample audiences before launching widescale campaigns. There are certainly widely available consultants who specialize in cultural competency and marketing groups would be wise to make use of such expertise in developing crosscultural marketing campaigns. Again, by putting a little more time and care into how marketing materials are created and deployed in cross-cultural contexts such efforts can help minimize both careless and ill-intentioned campaigns from causing offense or harm. Secondly, businesses need to be sensitive to the challenges that certain minority or cultural groups face when engaging in marketing to those groups.

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These challenges could include historical discrimination, poverty, lack of economic opportunity, lack of access to healthcare, and other socioeconomic factors that create significant barriers to individuals within those cultural groups. Being aware of such potential issues facing some minorities or cultural groups, companies should then be cognizant of the manner in which such conditions can make these populations more vulnerable to certain types of messaging. Marketers should avoid marketing campaigns that put undue pressure on populations that are potentially vulnerable and ideally should take extra care to make sure that information provided is appropriate to the audience in question. Considering the situation of the cultural groups targeted, marketers should also realize that some products may pose particular harms within those groups, as we have seen in the case of tobacco and alcohol products. Ideally, marketers should seek to promote products that have the potential to truly benefit members of these groups and avoid promoting products aggressively that may only further exacerbate existing problems within those communities. Finally, intercultural marketing should pay careful attention to any reliance on negative stereotypes or misleading portrayals, even if positive, of cultural groups in developing marketing campaigns interculturally. If cultural awareness is superficial or poorly acquired, marketers are likely to use messaging or imagery that is insensitive and, in the worst case, harmful to the groups in question. Even within other cultures, there may be nuances, biases, or distinctions that marketers need to be aware of lest they further perpetuate harmful biases. Again, there are certainly other areas of ethical concern that can arise in marketing cross-culturally and marketing to ethnic minorities than those covered in this chapter. Nonetheless, the issues discussed here present some of the most common and most ethically pressing concerns that can arise in such contexts. Ethical marketing in intercultural contexts needs to be sensitive not only to the usual ethical norms governing marketing practices, but also to the uniqueness of the cultural context involved. The potential for significant offense or harm is intensified in intercultural contexts and marketers need to make a special effort to avoid exacerbating problems that may already exist in those contexts. Cross-cultural marketing and marketing geared toward ethnic minorities should be based upon a solid understanding of the cultures involved as well as of any specific problems faced within those cultures. It should also avoid any messaging, or the promotion of any products, that has the potential to worsen identifiable problems within those cultural groups. And it should

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certainly avoid further promoting biases or negative stereotypes. Marketing cross-culturally can be done in an ethically appropriate manner as long as those involved are aware of the potential problems inherent to such forms of marketing and make reasonable efforts to promote products or services in a transparent, respectful, fair, and culturally sensitive manner.

REFERENCES American Lung Association. (2019). Tobacco use in racial and ethnic populations. Retrieved from https://www.lung.org/stop-smoking/smokingfacts/tobacco-use-racial-and ethnic.html Bach, L. (2018). Tobacco company marketing to African Americans. Retrieved from https://www. tobaccofreekids.org/assets/factsheets/0208.pdf Baker, S., Gentry, M., & Rittenburg, T. (2005). Building understanding of the domain of consumer vulnerability. Journal of Macromarketing, 25(2), 128–139. Blythe, J. (2009). Key concepts in marketing. London: Sage. Brenkert, G. G. (1998). Marketing to inner-city blacks: PowerMaster and moral responsibility. Business Ethics Quarterly, 8(1), 1–18. Carrigan, M., Marinova, S., & Szmigin, I. (2005). Ethics and international marketing: Research background and challenges. International Marketing Review, 22(5), 481–493. Cassileth, B., & Yarett, I. (2012). Cancer quackery: The persistent popularity of useless, irrational ‘alternative’ treatments. Oncology, 26(8), 754–758. Dingfelder, S. (2013). Trash the ash. Monitor on Psychology, 44(3), 34. Hill, R. P. (2002). Stalking the poverty consumer: A retrospective examination of modern ethical dilemmas. Journal of Business Ethics, 37, 209–219. Hill, R. P. (2016). Poverty as we never knew it: THE source of vulnerability for most of humankind. Journal of Marketing Management, 32(3–4), 365–370.

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Hill, R. P. (2019). Freedom of the will and consumption restrictions. Journal of Business Ethics, https:// doi.org/10.1007/s10551-019-04274-w Javalgi, R., & Russell, L. (2018). International marketing ethics: A literature review and research agenda. Journal of Business Ethics, 148, 703–720. Kennedy, A., Jones, K., & Williams, J. (2019). Children as vulnerable consumers in online environments. Journal of Consumer Affairs, 53(4), 1478–1506. Leistikow, N. (2003). Indian women criticize ‘Fair and Lovely’ ideal. Women’s eNews. Retrieved from https://womensenews.org/2003/04/indian-womencriticize-fair-and-lovely-ideal/ Mayo, M. (2005). ‘Lost in Translation’? Sharing experiences across differing contexts as well as languages. International Association for Community Development (IACD) and Community Development Journal (CDJ) study tour of Cuba, 6–13 March 2004. Community Development Journal, 40(1), 86–96. Murphy, P. (1999). Character and virtue ethics in international marketing: An agenda for managers, researchers and educators. Journal of Business Ethics, 18, 107–124. Nagar, I. (2018, April–June). The unfair selection: A study on skin-color bias in arranged Indian marriages. SAGE Open, 1–8. doi:10.1177/ 2158244018773149 Pires, G., & Stanton, J. (2002). Ethnic marketing ethics. Journal of Business Ethics, 36, 111–118. Quester, P., & Simpson, J. (1998). International marketing ethics: A cross-cultural study. Australasian Marketing Journal, 6(2), 51–61. Shaw, W., & Barry, V. (2001). Moral issues in business (8th ed.). Belmont, CA: Wadsworth. Smith, N., & Cooper-Martin, E. (1997). Ethics and target marketing: The role of product harm and consumer vulnerability. Journal of Marketing, 61(3), 1–20. Taylor, C., Landreth, S., & Bang, H. (2005). Asian Americans in magazine advertising: Portrayals of the ‘Model Minority’. Journal of Macromarketing, 25(2), 163–174. Victor, D. A. (1992). International business communication. New York: Harper Collins. Washington, H. (2002). Burning love: Big tobacco takes aim at LGBT youths. American Journal of Public Health, 92(7), 1086–1095.

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10 Stereotyping in Marketing Martin Eisend and Sofiia Kanevska

INTRODUCTION A stereotype is an over-generalized concept of and belief about a social category of people. Research has provided ample evidence that stereotypes are prevalent and persistent in marketing, particularly in advertising. Because stereotyping can be dysfunctional and elicit adverse social effects, it raises ethical questions and concerns about marketing practices. In this chapter, we will discuss the dysfunctionalities that stereotyping creates in society, particularly for stereotyped social groups. We describe how stereotyping occurs in marketing, particularly in advertising, and what kinds of consequences it yields. An intriguing question concerns whether and to what extent marketers and advertisers are responsible for stereotyping’s consequences. Finding ways to avoid and eliminate stereotyping in marketing not only contributes to marketing performance (e.g., by directing positive responses toward advertising or by a more positive social perception of marketing practices), but also helps cultivate a more just society that provides equal opportunities for all people, regardless of gender, race, age, sexual orientation, etc.

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THE DYSFUNCTIONALITY OF STEREOTYPING Stereotypes are concepts and beliefs pertaining to a social category that can be used to over-generalize (Vinacke, 1957). For instance, gender stereotypes are beliefs that certain attributes differentiate women from men and associate genders with certain occupations (e.g., females as nurses, males as soldiers). Aside from what the connotation suggests, stereotyping is not necessarily a negative judgment and can be functional and lead to expectations that can provide simplified, but useful, orientations in everyday life. For instance, certain cultural stereotypes (e.g., Germans are punctual) help us develop certain expectations about people in foreign countries that can be useful in daily encounters when visiting these countries (e.g., be on time when meeting with Germans). However, because stereotypes are rather simplified conceptions of subjects in a social category, they can lead to misapplied knowledge and, thus, to inaccurate evaluations of members of a particular social group. Furthermore, stereotypes often are normative because they describe qualities or behavioral tendencies believed to be desirable or appropriate for subjects in a social category

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(Eagly, Wood, & Diekman, 2000). This can lead to negative consequences, particularly for the stereotyped group. For instance, research into gender stereotyping has shown that when evaluations of job applicants are based on stereotypes, men are favored over women for jobs that men traditionally do, such as top management positions (Tosi & Einbender, 1985). The so-called ‘stereotype threat’ of gender (i.e., the activation of negative stereotypes when gender is salient) contributes to gender gaps. It also has been shown to impact testtakers’ mindset at school, contributing to girls’ and boys’ performances diverging in math-intensive fields (Lewis, 2005). Similarly, racial and ethnic stereotypes impact minorities’ education and occupational opportunities due to prejudices about their abilities and intelligence. For instance, Asian Americans experience more pressure to meet high academic expectations due to the high-performing Asian ‘model minority’ stereotype (Naumann, Guillaume, & Funder, 2012). This stereotype threat, in turn, generates stress and may cause mental health problems (Lee, Juon, Martinez, Hsu, Robinson, Bawa, & Ma, 2009). Blascovich, Spencer, Quinn, and Steele (2001) showed that exposure to stereotypes increases blood pressure among African Americans. Stereotypes also cause African Americans to bear additional emotional burdens and anxiety, leading to academic underperformance and reduced engagement (Aronson, Fried, & Good, 2002). Beyond gender and ethnicity, stereotyping occurs with other social categories as well, in which affected groups can assume either a dominant or disadvantaged role, depending on which social category they fall under. The Alberta Council for Global Cooperation (2017) systematized privileged and oppressed groups in Western societies along the following categories and characteristics (with the dominant or privileged group mentioned first and the disadvantaged or oppressed group mentioned second): • Gender: male vs. female/transgender/intersex • Age: adults vs. children/elders • Ability: people without impairments vs. people with impairments • Religion: Christianity vs. other faiths • Ethnicity: European/whites vs. people of color • Social class: middle/upper vs. poor/working • Sexual orientation: heterosexual vs. LGBTQ+ • National origin: citizens vs. immigrants/refugees Typically, dominant groups’ privileges strengthen over time, while non-dominant groups remain disadvantaged. Negative outcomes from these distinctions occur on three levels: personal; cultural; and

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structural (Davis, 2018). The personal level relates to stereotypes that can form negative thoughts and attitudes among members of the dominant social group that are directed toward the disadvantaged group. The cultural level relates to ethics by providing social norms and judgments based on the idea that certain actions that favor the dominant group are socially acceptable. The structural level refers to the legalization of dominance and oppression, for example, by governments and other institutions, including the media. By fostering stereotypes that can lead to outcomes at the personal, cultural, and structural levels, marketers and advertisers contribute to oppression and dominant social groups maintaining their privileges, as well as disadvantages among the remaining social groups. Therefore, stereotyping becomes problematic and dysfunctional when it leads to normative expectations and judgments that restrict life opportunities for members of a particular social group. Due to its many potentially negative outcomes, such as health problems, stereotyping also raises ethical concerns, which imply that stereotypes should be avoided. Another main goal is to achieve equal life opportunities for subjects from different social groups in different spheres of life (e.g., income, career, healthy lifestyle, etc.). Equal representation in different spheres of life is in line with the fundamental human right of equal opportunities regardless of gender, race, sexual orientation, age, etc. Thus, stereotyping has become a central concern of social policy in many societies.

THE NATURE AND SOCIAL EFFECTS OF STEREOTYPING IN ADVERTISING Stereotyping occurs in different marketing areas, such as service encounters, personal selling, segmentation, product differentiation, communication, etc. For example, in service encounters, it has been shown that because of a negative criminal stereotype, black male customers often are monitored vigilantly when they enter stores, thereby contributing to a belief in minorities’ low status and adding to their emotional burden (Crockett, Grier, & Williams, 2003). Age stereotypes also exist, and consumers tend to relate a service employee’s age with quality of service, that is, the younger the service employee, the better the service quality is perceived (Luoh & Tsaur, 2011). Stereotyping seems to appear in segmentation and targeting practices as well, as marketers tend to target white customers and use white spokespeople in

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advertising, based on the stereotype that white customers are more wealthy and consume luxury goods and status products (Burton, 2009; Davis, 2018). Stereotypes also can lead to price discrimination that disadvantages, among others, ethnic minorities or elders through, for instance, unfairly high mortgage interest rates (Rugh & Massey, 2010; Smith & Cooper-Martin, 1997). Still, most research on stereotyping occurs in advertising and typically is related to gender and ethnicity.

Gender Stereotyping Several male and female characteristics have been examined through content analyses to investigate how gender is stereotyped in advertising. The most often used coding scheme in these content analyses comes from a study by McArthur and Resko (1975) and proposes seven coding categories tied to the central character’s qualities in an ad: gender; credibility; role; location; arguments given on behalf of a product; rewards offered for using a product; and type of product advertised. This scheme has been applied with these categories or with an extended, shortened, or slightly altered list of categories in a considerable number of studies, and several reviews and a meta-analysis have attempted to summarize findings using the method (Eisend, 2010; Furnham & Lay, 2019; Furnham & Mak, 1999; Furnham & Paltzer, 2010). The meta-analysis by Eisend (2010) reveals – among other findings – that women are three times more likely to be presented as product users (vs. authority figures), four times more likely to be presented in a dependent (vs. autonomous) role, over two times more likely to be associated with domestic products (e.g., body, home, food), more than three times more likely to be younger, and more than three times more likely to be presented in a domestic (vs. work) environment than men. The findings provide strong evidence that gender is stereotyped in advertising in ways that disadvantage women in terms of equal representation in different spheres of life. The largest difference between men and women appears to be in categories that refer to occupational status (e.g., role and location), suggesting that stereotyping is disadvantaging women against men in an area (career opportunities) that is of particular importance from a gender-equality perspective. While the degree of gender stereotyping in advertising, as evidenced by research, is considerably high and, as such, raises ethical concerns, the meta-analysis also showed that the degree of stereotyping has decreased over the years. Furthermore, the degree of gender stereotyping in advertising differs across countries that vary

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in terms of gender equality and empowerment and gender-related values (Shaw, Eisend, & Tan, 2014). However, recent research indicates that this difference seems smaller than commonly thought (Matthes, Prieler, & Adam, 2016). Most content analyses focus on women as a disadvantaged group due to gender stereotyping in advertising, with men more often depicted as hard-working professionals in ads, mostly in independent roles. However, such depictions can lead to high expectations for men that can put them under more pressure, but research in this area is rather scant (Gentry & Harrison, 2010; Zayer & Coleman, 2015). Interestingly, more recent advertising has portrayed males as caregivers and loving fathers (Fowler & Thomas, 2015), but these depictions are still rather uncommon (Grau & Zotos, 2016). As for the social effects of gender stereotyping in advertising, most studies have looked at brandrelated and marketing-relevant outcomes, and have neglected social outcomes. The media influence a wide array of users’ perceptions, attitudes, values, and behavior; thus, gender stereotyping in advertising (which is part of media) not only influences brand-related attitudes and consumers’ behavior, but also can contribute to non-brandrelated and social effects. Research shows that creation or reinforcement of gender stereotypes through advertising weakens women’s professional performance, achievement aspirations, and positive self-perceptions, thereby hindering the provision of equal opportunities for both genders in society (Davies, Spencer, Quinn, & Gerhardstein, 2002; Davies, Spencer, & Steele, 2005; Yoder, Christopher, & Holmes, 2008). Furthermore, advertising tends to focus on female endorsers’ physical attractiveness (Plakoyiannaki, Mathioudaki, Dimitratos, & Zotos, 2008), thereby setting high beauty standards. Stereotyping of physical characteristics, such as idealized body portrayals (e.g., slim female bodies, muscular male bodies), was found to correlate with reduced body satisfaction and self-esteem (Baird & Grieve, 2006; Dens, Pelsmacker, & Janssens, 2009; Grabe, Ward, & Hyde, 2008). This is due to a dissonance between body images depicted in advertising and consumers’ body images, which can lead to bodyfocused anxiety and even eating disorders among ad viewers (Halliwell & Dittmar, 2004).

Ethnic Stereotyping Most studies on stereotyping of ethnic minorities in advertising were conducted in the 1990s and 2000s in the USA (Bailey, 2006; Baker, 2005; Bang & Reece, 2006; Bowen & Schmid, 1997;

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Coltrane & Messineo, 2000; KnoblochWesterwick & Coates, 2006; Lee & Joo, 2006; Mastro & Greenberg, 2000; Mastro & Stern, 2003; Paek & Shah, 2003; Plous & Neptune, 1997; Taylor & Bang, 1997; Taylor, Landreth, & Bang, 2005; Taylor & Lee, 1994). Most of these studies investigate African American and/or Asian minorities in the USA, while some examine the Hispanic minority. The results show that all ethnic minorities are under-represented in advertising and often are depicted stereotypically (e.g., Asians often are depicted as being interested in technology). Moreover, stereotyping often leads to portrayals that disadvantage ethnic minorities (e.g., showing them as less successful in their professional careers). When African Americans were first depicted in advertising in the middle of the last century, they often were portrayed as slaves or servants (Davis, 2018). Male and female representations were endowed with different roles. Portrayals of male African Americans emphasized loyalty and obedient servants. Female portrayals expressed, on one hand, loyal and caring nannies, for example, Aunt Jemima’s brand logo featuring an African American woman cooking pancakes (Davis, 2007). On the other hand, African American women also were depicted in movies and ads as aggressive, seductive, oversexualized women who concentrated on carnal pleasures, for example, Lola Falana in a tiger bodysuit imitating a predator in Fabergé’s Tigress perfume commercial (Anderson, Holland, Heldreth, & Johnson, 2018; Baker, 2005). Reminiscent of the historic incident of human zoo exhibitions (Davis, 2018), some brands still utilize comparisons to animals in ads featuring African Americans, for example, Animale perfume by Suzanne de Lyon, which created an ad depicting an African American woman with animal makeup, or a very recent H&M ad that featured an African American child wearing a sweatshirt that states ‘Coolest Monkey in the Jungle.’ Although African American portrayals in advertising have become less stereotypical, an unequal representation of occupations remains today, but in a new form, as African American entertainers or athletes now often appear in ads to promote low-cost products (Henderson & Baldasty, 2003; Li-Vollmer, 2002; Taylor, Lee, & Stern, 1995). Compared with other ethnic minorities, Hispanic endorsers in US advertising are even more under-represented (Coltrane & Messineo, 2000; Henderson & Baldasty, 2003; Mastro & Stern, 2003; Taylor et al., 1995; Wilkes & Valencia, 1989). Some advertisers accentuate negative traits and depict Hispanic endorsers’ criminal activities, for example, a character stealing products,

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like the Frito Bandito ad of Frito-Lay’s chips (Dirks & Mueller, 2007). Like African American endorsers, Mexican endorsers, compared to white American endorsers, more often promote lownutrition snacks or fast food, are oversexualized, and are depicted as servants or migrants (Davis, 2018; Mastro & Stern, 2003; Wilkes & Valencia, 1989). Recent examples include Salitos’ beer ads with actor Danny Trejo playing an aggressive Mexican, a Doritos ‘Mexican beauty’ commercial featuring a naked Mexican man who eats chips, or 84 Lumber’s Super Bowl ad ‘The Entire Journey,’ depicting a mother with her daughter during their migrant journey. In the past, Asian endorsers in US advertising often played background characters (Coltrane & Adams, 1997) or were portrayed negatively, e.g., connected to drugs or World War II, conveying the idea that they are malicious and dangerous (Davis, 2018). Nowadays, their portrayals are different, with Asian men in particular often portrayed as dedicated business executives or high-tech workers or experts (Paek & Shah, 2003; Taylor et al., 1995). Asian women are depicted as polite and silent, mostly young and extremely thin (Mastro & Stern, 2003; Paek & Shah, 2003). These Asian stereotypes also are found in today’s advertising, for example, Domtar’s ad depicting an Asian child receiving an A+ for a math assignment, Cathay Pacific Airways’ ad featuring an Asian stewardess with the motto ‘I just like to listen more than talk,’ and the ‘Find Your Japan’ ad in which an Asian woman who launched a genome-testing company is interviewed. As for the effects from ethnic stereotypes in advertising, most studies have focused on brand-related effects on consumers, showing that congruity between endorser and consumer leads to positive effects on consumer responses (e.g., Aaker, Brumbaugh, & Grier, 2000; Elias & Appiah, 2010). However, research on social effects from ethnic stereotyping in advertising is scarce, but studies on stereotype threat suggest that ethnic stereotyping negatively affects stereotyped individuals and society.

Stereotyping in Other Social Categories Research on stereotyping of other social categories in advertising is less prevalent than gender or ethnic stereotyping. As for age stereotyping, older female and minority endorsers are under-represented, and although their positive traits are often emphasized, they often only have background roles (Zhang, Harwood, Williams, Ylänne-McEwen,

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Wadleigh, & Thimm, 2006). Portrayals of senior citizens are rather one-sided, focusing on a few stereotypes (Downs & Harrison, 1985; Loos & Ekström, 2014). For instance, older people are depicted either as healthy, wealthy, and wise or in poor health, lonely, or dependent. Advertising mostly excludes endorsers with visible disabilities (Ganahl & Arbuckle, 2001). Research shows that ads portraying both people with impairments and those without any impairment can lead to negative audience responses (Panol & McBride, 2001). Religious stereotypes rarely are discussed in academic literature. Depictions of poor and workingclass endorsers in ads reveal stereotypes around consumption habits, for example, high tobacco consumption (Barbeau, Wolin, Naumova, & Balbach, 2005). Research on endorsers with diverse sexual orientations in advertising has focused on advertising effects, rather than on the depictions of members of the LGBTQ community or social effects of these ads (Eisend & Hermann, 2019). Another potential new area of stereotyping in advertising focuses on national origins tied to immigration. Although some recent examples of ads featuring refugees exist (e.g., the aforementioned 84 Lumber Super Bowl ad), consumers’ perception of this social category in advertising has not yet been investigated.

THE QUESTION OF RESPONSIBILITY The dysfunctional social consequences of stereotyping and corresponding ethical concerns over marketing, particularly advertising, have sparked political debate, as these effects counter political and societal goals of equality and equal opportunities, and impact mental and physical health. The discourse suggests that marketing and advertising are responsible for stereotyping and its negative outcomes, but the answer to the question of responsibility does not seem to be an easy one. The long-standing debate about marketing and advertising’s consequences for society and marketers’ respective responsibility has elicited two opposing positions: the mirror vs. the mold (Holbrook, 1987; Pollay, 1986; 1987). These positions involve the relationship between particular societal values (including norms, perceptions, and behavioral patterns) and, among other aspects, stereotypes in advertising. The ‘mirror’ argument states that advertising reflects values that already exist in society (Holbrook, 1987), that is, portrayals in ads reflect cultural expectations toward certain members of a social category, and advertisers are just ‘mirroring’

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these often normative and simplified conventions and wishes among people in a society. As changes occur in the cultural climate (e.g., shifts in society’s views on gender roles or ethnic diversity), advertisers adapt their images so that they are more widely accepted. The ‘mirror’ argument is supported by the idea that, given the many factors that influence a society’s value system, advertising’s impact is almost negligible. These advertisers are aware of this marginal influence and, thus, use existing values in society to promote their brands, rather than try to alter these values. The ‘mirror’ view is held by advertisers who often do not reflect on their role in perpetuating stereotypes (Shao, Desmarais, & Weaver, 2014). The ‘mold’ argument assumes that advertising can shape its target audience’s values (Pollay, 1986; 1987). It supports the view that portrayals in advertising create, shape, and reinforce stereotypical beliefs and values in a society (Ganahl, Prinsen, & Netzley, 2003). The argument here is that changes in attitudes and behavior can be elicited from exposure to media and advertising, and that people learn from media. This position is in line with cultivation theory, which suggests that TV (as the exemplar medium) elicits small, gradual, indirect, long-term effects on viewers, but that these effects are cumulative and significant. Repeated TV viewing cultivates viewers’ perceptions and beliefs to be more consistent with the world presented on TV programs than with the real world (Gerbner, Gross, Morgan, Signorielli, & Shanahan, 2002). The theory is supported by research that has shown, for instance, that children’s TV viewing contributes to their developing stereotypical perceptions (McGhee & Frueh, 1980). However, the findings in cultivation studies are based on cross-sectional data and must be treated with caution, as the interpretation of correlational relationships is problematic and does not allow for inferences on causal relations. Furthermore, advertising is only a minor part of media content and presumably contributes only little to cultivation effects. Empirical findings comprising meta-analytic data on gender stereotyping in advertising suggest that gender stereotyping in advertising depends on developments related to gender equality in society, rather than shaping them, supporting the mirror argument over the mold argument (Eisend, 2010). While these findings are inconsistent with the idea that advertising leads to long-term cultivation effects, the results do not contradict short-term effects from learning, for example, gender roles through depictions in the media and advertising. Thus, the truth might lie somewhere in the middle. Advertising is a cultural system that creates meaning, and, as such, it reflects and contributes

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to culture, including the creation and promotion of stereotypes (Albers-Miller & Gelb, 1996; Grau & Zotos, 2016). Therefore, it is justified to assume that marketers and advertisers should take some responsibility for stereotyping and its outcomes, and several measures can be taken to reduce or avoid stereotyping in advertising.

MEASURES AGAINST STEREOTYPING Successful representatives of a disadvantaged group or relevant information on the disadvantaged group’s accomplishments can decrease negative outcomes from the stereotype threat (McIntyre, Paulson, & Lord, 2003; Steele, 1997). As for marketing and advertising, the inclusion of diverse endorsers and company representatives can contribute to more equal opportunities and, therefore, to more positive social outcomes. Alluding to disadvantaged groups’ achievements that are relevant for the advertising message can reduce stereotyping in advertising and lead to positive social responses. Policy implications regarding stereotyping in advertising need to consider different stakeholder groups’ interests that might not be easily aligned. Consumers do not want to see the mundane aspects of daily life in advertising; therefore, advertisers need to appeal to consumers’ dreams to sell their products, while society might benefit from realistic portrayals that might contradict both consumers’ and advertisers’ interests. Regulating stereotypes in advertising has been discussed for several years (e.g., European Parliament, 2008). The Advertising Standards Authority in the UK recently banned two TV commercials under new rules introduced in June 2019 to stop gender stereotyping in advertising. Although the decision has led to much controversy, with the need for regulation questioned (Andrews, 2019; Ellson, 2019), the examples show that stereotyping in marketing is a persistent and prevalent topic, that more political debate is needed, and that appropriate regulation might be justified.

REFERENCES Aaker, J. L., Brumbaugh, A. M., & Grier, S. A. (2000). Nontarget markets and viewer distinctiveness: The impact of target marketing on advertising attitudes. Journal of Consumer Psychology, 9(3), 127–140.

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between women and men. Retrieved November 20, 2008, from www.europarl.europa.eu/sides/ g e t D o c . d o ? t y p e = R E P O R T & re f e re n c e = A 6 2008-0199&language=EN&mode=XML Fowler, K., & Thomas, V. (2015). A content analysis of male roles in television advertising: Do traditional roles still hold? Journal of Marketing Communications, 21(5), 356–371. Furnham, A., & Lay, A. (2019). The universality of the portrayal of gender in television advertisements: A review of the studies this century. Psychology of Popular Media Culture, 8(2), 109–124. Furnham, A., & Mak, T. (1999). Sex-role stereotyping in television commercials: A review and comparison of fourteen studies done on five continents over 25 years. Sex Roles, 41(5/6), 413–437. Furnham, A., & Paltzer, S. (2010). The portrayal of men and women in television advertisements: An updated review of 30 studies published since 2000. Scandinavian Journal of Psychology, 51(3), 216–236. Ganahl, D., & Arbuckle, M. (2001). The exclusion of persons with physical disabilities from prime time television advertising: A two year quantitative analysis. Disability Studies Quarterly, 21(2). Ganahl, D. J., Prinsen, T. J., & Netzley, S. B. (2003). A content analysis of prime time commercials: A contextual framework of gender representation. Sex Roles, 49(9/10), 545–551. Gentry, J. W., & Harrison, R. (2010). Is advertising a barrier to male movement toward gender change? Marketing Theory, 10(1), 74–96. Gerbner, G., Gross, L., Morgan, M., Signorielli, N., & Shanahan, J. (2002). Growing up with television: Cultivation processes. In J. Bryant & D. Zillmann (Eds.), Media effects: Advances in theory and research (2nd ed., pp. 43–67). Mahwah, NJ: Lawrence Erlbaum. Grabe, S., Ward, L. M., & Hyde, J. S. (2008). The role of the media in body image concerns among women: A meta-analysis of experimental and correlational studies. Psychological Bulletin, 134(3), 460–476. Grau, S. L., & Zotos, Y. C. (2016). Gender stereotypes in advertising: A review of current research. International Journal of Advertising, 35(5), 761–770. Halliwell, E., & Dittmar, H. (2004). Does size matter? The impact of model’s body size on women’s body-focused anxiety and advertising effectiveness. Journal of Social and Clinical Psychology, 23(1), 104–122. Henderson, J. J., & Baldasty, G. J. (2003). Race, advertising, and prime-time television. Howard Journal of Communications, 14(2), 97–112. Holbrook, M. B. (1987). Mirror, mirror, on the wall, what’s unfair in the reflections on advertising? Journal of Marketing, 51(July), 95–103. Knobloch-Westerwick, S., & Coates, B. (2006). Minority models in advertisements in magazines

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popular with minorities. Journalism & Mass Communication Quarterly, 83(3), 596–614. Lee, K.-Y., & Joo, S.-H. (2006). The portrayal of Asian Americans in mainstream magazine ads: An update. Journalism & Mass Communication Quarterly, 82(3), 654–671. Lee, S., Juon, H.-S., Martinez, G., Hsu, C. E., Robinson, S., Bawa, J., & Ma, G. X. (2009). Model minority at risk: Expressed needs of mental health by Asian American young adults. Journal of Community Health, 34(2), 144–152. Lewis, D. (2005). Mathematics: Probing performance gaps. Science, 308(June 24), 1871–1872. Li-Vollmer, M. (2002). Race representation in childtargeted television commercials. Mass Communication & Society, 5(2), 207–228. Loos, E., & Ekström, M. (2014). Visually representing the generation of older consumers as a diverse audience: Towards a multidimensional market segmentation typology. Participations, 11(2), 258–273. Luoh, H. F., & Tsaur, S. H. (2011). Customers’ perceptions of service quality: Do servers’ age stereotypes matter? International Journal of Hospitality Management, 30(2), 283–289. Mastro, D. E., & Greenberg, B. S. (2000). The portrayal of racial minorities on prime time television. Journal of Broadcasting & Electronic Media, 44(4), 690–703. Mastro, D. E., & Stern, S. R. (2003). Representations of race in television commercials: A content analysis of prime-time advertising. Journal of Broadcasting & Electronic Media, 47(4), 638–647. Matthes, J., Prieler, M., & Adam, K. (2016). Genderrole portrayals in television advertising across the globe. Sex Roles, 75(7), 314–327. McArthur, L. Z., & Resko, B. G. (1975). The portrayal of men and women in American television commercials. Journal of Social Psychology, 97, 209–220. McGhee, P. E., & Frueh, T. (1980). Television viewing and the learning of sex-role stereotypes. Sex Roles, 6(2), 179–188. McIntyre, R. B., Paulson, R. M., & Lord, C. G. (2003). Alleviating women’s mathematics stereotype threat through salience of group achievements. Journal of Experimental Social Psychology, 39(1), 83–90. Naumann, L. P., Guillaume, E. M., & Funder, D. C. (2012). The correlates of high parental academic expectations: An Asian-Latino comparison. Journal of Cross-Cultural Psychology, 43(4), 515–520. Paek, H. J., & Shah, H. (2003). Racial ideology, model minorities, and the ‘not-so-silent partner’: Stereotyping of Asian Americans in US. Magazine advertising. Howard Journal of Communication, 14(4), 225–243.

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11 Cultural Appropriation Ann-Marie Kennedy and Marian Makkar

INTRODUCTION The Washington Redskins, The Cleveland Indians, The Atlanta Braves, The Kansas City Chiefs, Chicago Blackhawks, Jeep Cherokee, Chief Crazy Horse liquor – are these brand names offensive? Unfortunately, much of the imagery, brand names or ‘sham rituals’ such as war chants used misrepresent indigenous communities as primitive savages with blatant racism. The marketing of misappropriated ‘indigenousness’ appears in many facets of popular culture from advertising to paraphernalia such as clothing. Retail and brand marketing, for example, have been transformed into a multibillion-dollar industry bearing objectionable trademarks (Kelber, 1993). Many consider the unsanctioned use of indigenous peoples’ cultural traditions, symbols and folklore as offensive or inappropriate. Here we keep our discussion of cultural appropriation to the context of appropriation of indigenous culture. Appropriation takes many forms: nonindigenous people that want to learn the native’s traditional spirituality that turn it into a business (e.g. sweat lodge ceremonies); movies and books adopting real or imagined native traditions (e.g. Dances with Wolves movie); paintings, jewellery or pottery using native symbols; or the

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natural health marketplace that adopts a multitude of healing philosophies from Chinese traditional medicine (Thompson & Troester, 2002). In short, indigenous culture can become a commodity that is sold, exploited and probed by outsiders in the marketplace. This may be due, in part, to their small population relative to other ethnic groups such as African Americans or Asian Americans, who have experienced increasing political and economic power over recent years (Brown, 2002). Representation of indigenous peoples in higher socio-economic and political power is still minimal to this day. Many activists in different countries have sought to legitimise concerns with appropriation by addressing these social ills and voicing them to media, government agencies and legislators as stereotypical and misrepresentative of indigenous people (Brown, 2002). Beyond the offensiveness of these unapproved uses of indigenous culture, cultural appropriation stems from the Western European approach to property, which requires ownership by an individual human for a limited time and is born from the history of colonialisation (Coombe, 1997). Appropriation and its implications are not determined by the intent or awareness of nonindigenous people but are instead shaped by, and

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in turn shape, the social, economic and political environments in which they occur (Rogers, 2006). While some appropriation is understood by non-indigenous peoples because it mimics situations where copyright law or trademarks might apply (e.g. dances, symbols), it is often harder for those same people to understand the whole gamut of unprotected tangible and intangible cultural aspects such as stories and artistic themes (Tsosie, 2002). However, according to the UN Declaration on the Rights of Indigenous Peoples, all aspects of indigenous peoples’ culture deserve to be protected, stating the indigenous peoples’ rights to their own ‘cultural, intellectual, religious and spiritual property’ (Article 11, Declaration on the Rights of Indigenous Peoples, 2007). There is little research in the field of marketing that discusses cultural appropriation and even less that explores the implications on the less powerful, disadvantaged minority and indigenous groups, with few exceptions (Kennedy & Laczniak, 2014; Nill & Geipel, 2010). There has been, however, much research in the legal (Brown, 2002; Miller, 2010), sociological (Lee & Littrell, 2003), anthropological (Brown, 1998; Nicholas & Bannister, 2004) and arts and cultural (Rikoon, 2004; Young, 2005) domains that have attempted to unpack cultural appropriation and its implications for the economy, politics and society. The aim of this chapter is to explore this issue from a marketing perspective along with its ethical implications.

WHAT IS CULTURE? Culture could be based on ethnic groups (e.g. Māori in New Zealand), nations or regions. It is the ‘customs, values, and rule systems of a social group’ (Ziff & Rao, 1997, p. 2). It is ‘the material, spiritual, and artistic expression of a group that defines itself or that others define as a culture, both according to daily lived experience and according to practice and theory’ (Hart, 1997, p. 138). Culture refers to the language, religion, history, customs, beliefs and activities of a group of people which form their cultural identity and heritage (Kennedy & Laczniak, 2014). It is a way of living (Young, 2005). Culture can be tangible or intangible including symbols (Upton, 2005), ritual, spiritual and other religious practices (Young & Brunk, 2012) and traditional knowledge (Janke, 2005). Traditional knowledge includes myths, experiences, rituals, customs, stories, practices, etc., that are passed down through generations, collectively owned and not time-bound (Bannister & Solomon, 2009), but is the cultural context.

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Culture links the collective past with the collective future (Coffey & Tsosie, 2001). ‘Tribal’ stories or ‘oral histories’ are the most intangible aspect of indigenous peoples’ existence (Coffey & Tsosie, 2001). These stories, known to nonindigenous people as ‘folklore’ (Janke, 2005), range from recounts of their origins and migrations, instances in their nation’s history such as battles and historic leaders, and the philosophical core of tribal cultures such as norms and values, to recounts of everyday stories from the lives and journeys of the indigenous people (Tsosie, 2002). Culture is an inseparable aspect of indigenous peoples’ daily existence, their self-identity, and maintains their survival. Despite culture being so hard to conceive, especially with a lack of shared conditions for membership, we may view culture as one that contains a family of resemblances. It may not be defined by necessary conditions but at least by some basic core values, beliefs and a set of basic characteristics that are essential to a culture (Young, 2005). This allows for a basic division between insiders (people of a culture) and outsiders (people outside a culture).

WHAT IS APPROPRIATION? Appropriation is ‘the making of a thing private property … taking as one’s own or to one’s own use’ (Oxford English Dictionary, 2012), ‘the taking – from a culture that is not one’s own – of IP [Intellectual Property], cultural expressions or artefacts, history and ways of knowledge’ (Writers’ Union of Canada, 1992), ‘the making of what belongs to one individual or group into the property of another individual or group’ (Hart, 1997, p. 138). It implies that the person thinks they have an unquestionable, uncontested right to such possession (Hart, 1997). In this case, adding cultural to appropriation means ‘any instance in which a group borrows or imitates the strategies of another – even when the tactic is not intended to deconstruct or distort the other’s meanings and experiences’ (Shugart, 1997, p. 211). It is an active process of ‘taking’, regardless of whether there is intent to further a dominant, more powerful cultural group’s own self-interests. To appropriate something is to make it one’s property, which entails a right to privileged use and to restrict access to it (Heyd, 2003, p. 37). In this chapter, we refer to natives, indigenous, aboriginal and first peoples interchangeably to identify minority communities (in comparison with the dominant ‘settler’ culture) that are native

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to a land/place. Indigenous cultural artefacts, myths, designs and songs (among other aspects) are often free to be exploited by marketers for business gain. Hence cultural appropriation is not the mere exposure to another culture, but it is the active ‘making one’s own’ of another culture’s elements, albeit under a variety of conditions, and with varying functions and outcomes (Rogers, 2006). It can also be used to demonstrate colourblind ideologies and deny the reality of racial discrimination and inequality (Rodriquez, 2006). For instance, a study finds that white Americans not only consume African American hip hop art forms but also appropriate these forms for their own purposes (Tate, 2003). Yet separating the culture from its people may lead to forms of appropriation that not only exploit indigenous cultural knowledge, but may also nullify cultural meanings specific to the native people (Hall, 1997; Rodriquez, 2006). Conditions under which acts of appropriation can occur are historical, social, cultural, economic and political. Appropriation (at times referred to as misappropriation) has been perceived as positive by non-indigenous people (cf. Brown, 2002) and marketing scholars as well (Suh et  al., 2016). Some appropriative acts appear to indicate honouring of the indigenous cultures, not ill-intended, or they demonstrate acceptance or positive evaluation of an indigenous culture by the dominating culture, yet these function to establish their dominance, especially in the context of neocolonialism (Buescher & Ono, 1996; Rogers, 2006; Tsosie, 2002). Even with IP rights, scholars have found a difference in judgement between property rights related to technological innovations or software and copyrighted musical work – free access to knowledge is perceived as essential for education and business development while free access to entertainment is not critical to global advancement, therefore may be given less importance (Nill & Geipel, 2010). Indigenous medicinal knowledge is argued by appropriators as important to share, for instance, due to its societal benefits from commercialisation.

WHAT IS APPROPRIATED? Cultural appropriation may take many forms, from knowledge and intellect to people and tribes. In the arts’ realm, three types of cultural appropriation have been identified (Young, 2005, p. 136): (1) subject appropriation where outsiders make the culture or lives of insiders the subject of a painting, story, film or other work of art;

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(2) content appropriation where outsiders use insiders’ cultural products in the production of their own art; and (3) object appropriation where possessions of a tangible object are transferred from insiders to the possession of outsiders. On top of this, anthropologists have historically undertaken verbatim appropriation when they have recorded tribal songs and then sold them to record companies. However, this form of appropriation by marketers is less common today and so the more common types of appropriation by marketers – subject, thematic and knowledge appropriation – will now instead be covered in more depth. Subject appropriation is the representation of another’s culture in the appropriator’s creative work (Young & Haley, 2012). For instance, setting a novel in a specific Māori tribe when one is not a member of that tribe. This is also known as voice appropriation. Quite different from verbatim or thematic appropriation, voice or subject appropriation can be argued to be freedom of speech. However, while the appropriators incorporate these elements into their own work and feel it becomes theirs through the fruits of their labour, Coombe’s (1997) argument against this is that it takes away the ability of the indigenous population to be able to use that same context in a unique way for their own commercial gain. For instance, if an appropriator creates a novel set in a particular tribe, readers may see another novel set in that tribe as unnecessary and not purchase it, limiting their audience (Hart, 1997). Beyond this, the impact of representing another’s culture, even in creative fiction, is a solemn responsibility and it is up to the appropriator to avoid causing harm or offence to indigenous peoples (Alcoff, 1991). Thematic appropriation is the most common form of appropriation that brings about ethical rather than legal issues. This is the use of styles (e.g. Australian Aboriginal artistic styles), topics, forms or parts of images of another’s culture without permission (Ziff & Rao, 1997). The Māori people of New Zealand have been the subject of thematic appropriation numerous times. For instance, Lego Bionicle uses their words and myths without approval (‘Lego game irks Māoris’, BBC News, 2001); an Israeli cigarette brand owned by Philip Morris is named after them and uses their native designs on its packaging (New Zealand Herald, 2005); and one of their types of dances – the Haka – has repeatedly been used for commercial gain without recompense or permission (Copyright Laws to Protect Māori Heritage, 2001). Australian Aborigines have feared the same in that their sacred and religious designs have continually been used without permission on carpets, T-shirts and other tourist products (McDonald, 1997). As a final example, though by no means

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the last case of misappropriation, American Indian tribal member names have continually been commercialised as product or team names (e.g. Jeep Cherokee, Crazy Horse liquor, North Dakota Fighting Sioux) with over 337 being registered as trademarks since 1998 (Brown, 2002). The popular video game, World of Warcraft, was also found to appropriate North American indigeneity using a fictional race, Tauren, that highly resembles this indigenous community (Nash, 2016). If considering artistic cultural artefacts such as art, legends, myths, songs and dances, one also has to acknowledge that misappropriation could occur if the aspect is aesthetically inaccurate or its meaning misinterpreted or reinterpreted. Such editing of meaning could be harmful if derogatory or disrespectful, thus profaning the sacred (Young & Brunk, 2012). Knowledge appropriation is different still from thematic, verbatim and subject appropriation. While thematic appropriation uses indigenous styles and themes, and subject appropriation uses voice or context, knowledge appropriation is about the use of technological, medicinal, scientific and geographical facts. For instance, knowledge of plant and animal uses for medicines, plant propagation and farming, and ecosystem resources, represent some examples (Roht-Arriaza, 1997). This intangible cultural heritage (often only transmitted orally) is often esoteric in that knowledge is only possessed by specially trained and/or initiated members of a group and held as secret by the members or group (Nason, 1997). Thus, while it may also be sacred knowledge, at the very least, it is considered as IP among the indigenous group. However, is it legally classed as IP?

IS IT LEGAL? In short, in most countries, the appropriation of indigenous IP including thematic, subject and knowledge appropriation is legal. However, some countries protect indigenous IP by enforcing legal action against those that misuse it, by financially benefiting those indigenous peoples or through licensing the use of IP. For instance, countries like the Philippines employed Section 32 of the Indigenous Peoples Rights Act to protect traditions, arts, designs or literature. Similarly, Panama has done the same with Law No. 20 of the ‘Special IP Regime Governing the Collective Rights of Indigenous Peoples, for the Protection and Defence of their Cultural Identity and their Traditional Knowledge, and Other Provisions’. The USA commissioned specific laws to protect

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Native American Indians’ IP such as the Indian Arts and Crafts Act (2000) or the USPTO Database of Official Insignia of Native American Tribes that explicitly prevent non-Native-American Indians from producing products representative of this indigenous group and the producer must live in the USA. However, this Act does not mention how the indigenous group can benefit from the sale of products or how the visual and performing arts, oral traditions, designs, literature or music are protected. Other countries such as Australia and New Zealand do not have specific general copyright laws to protect indigenous peoples. While there is a Māori Council and Māori Trademarks Advisory Committee in New Zealand that provide advice to the New Zealand Commissioner of Trademarks, there is still much debate about businesses appropriating Māori culture. Recently, Air New Zealand faced public backlash over its appropriation of the New Zealand koru (fern) symbol and its current trademark application of the Māori greeting, kia ora, for the airline’s magazine’s logo (Junn, 2019; Roy, 2019) with no existing rules or regulations to protect these cultural properties. New Zealand’s laws provide property rights to the owner of the IP where the owner is seen to be the person who first fixes the IP in tangible form and for a limited timeframe of 50 years. Thus, we can see that a few moral minima about IP are enshrined in some laws around the world; however, in most countries it is legal for marketers (indigenous or not) to use indigenous cultural work if they are seen as the owner of that IP. Common law countries (e.g. the UK and USA) are perceived by some scholars as generally void of ‘moral rights’ for creators. If authors or artists are concerned about their reputation, they may file lawsuits based on defamation which are held higher than ‘moral rights’ (Nill & Geipel, 2010). Many nations accept the political sovereignty of indigenous peoples and the need to protect their rights of exercising jurisdiction (Coffey & Tsosie, 2001). However, they are considered dependents on the government. For example, in the USA, Federal Indian Law is structured around the notion that indigenous Indian nations are separate political sovereigns and are considered to be ‘domestic, dependent nations’. Their dependence means that their rights to land (among other political sovereign rights) are under the jurisdiction and sole control of the federal government. Only then can they acquire a ‘right to occupancy’ (Tsosie, 2002). But the question is not about ‘political sovereignty’ as that is set in law, but around the government’s own interpretations of the content of indigenous sovereignty. These issues may be one of the roots as to why culture (or cultural sovereignty) is not covered under the law.

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Further, while governments understand the need to tolerate other peoples’ cultural traditions, they essentially hold all citizens under the same set of constitutional democracy, freedom and protection. How does one argue for cultural and intellectual rights controlled by one party – the indigenous peoples? Some scholars have a pessimistic view of future changes and warn against strict legislation of copyright laws in favour of indigenous cultures (Brown, 1998). They believe this battle cannot be won easily against predatory corporate interests that enact indigenous appropriation for commercial purposes or governments committed to equality and public rights. This, ultimately, is a reason why non-indigenous peoples and liberals fail to understand why indigenous culture (and its representation) should be controlled by indigenous peoples and not free for public use. For instance, in New Zealand it is difficult to protect words, symbols and place names which have become common usage or can be legitimately used by others, such as the incorporation of Māori words into New Zealand English (e.g. kai meaning food) (Frankel, 2005). With freedom of speech and practice comes another argument that what is now available to all, that is cultural knowledge (songs, stories and symbols), is perceived as the common property of everyone and is assimilated into society’s cultural expression, translating it into different sets of meanings and forms. Why, then, should governments set laws to protect what is naturally everybody’s? It is through this perspective that we see indigenous peoples losing their rights to exclude others from cultural knowledge or condition non-indigenous people from their use of such knowledge in their hope for more inclusivity and a multicultural society. One concern with current copyright laws is that they provide protection for the fixed expression of culture based on the lifetime of its creator plus a certain number of years. This does not protect ‘non-fixed’ expressions of culture that have not been recorded (e.g. rituals, songs, oral histories, etc.) that have not been written down or recorded through audio or visually (Kennedy & Laczniak, 2014). It also does not take into account nonhuman authors. This is pertinent for groups who believe that nature (e.g. the wind, a tree, etc.) or animal, insect or bird created a curing invocation or song (Seeger, 1997). It also does not take into account group ownership or intergenerational ownership (Kennedy & Laczniak, 2014; Seeger, 1997). Because culture, as explained earlier, is based on stories, symbols and designs, indigenous peoples’ claims of IP seem ambiguous and intangible, therefore it is near impossible to prove it is a ‘property’ claim that the legal structure can account for (Frankel, 2005; Tsosie, 2002). It does

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not take into account the intergenerational ownership of cultural artefacts and knowledge, which is not time-bound (Janke, 2005; Mittelstaedt & Mittelstaedt, 1997). It also does not take into account group ownership, which is the case for most cultural IP (Janke, 2005). IP is ‘a truly artificial construct. It is not based on a natural right that has been discovered and is worthy of protection’, but it is ‘to create scarcity where none naturally exists’ (Nill & Geipel, 2010, p. 34). Copyright is concerned with literary and artistic creations, often expressed in words, symbols, music, images or a combination of these (May & Sell, 2006). In theory, artists are free to use underlying ideas from existing works as long as the original creation is not reproduced without permission from the owner of the rights – not the creator (Nill & Geipel, 2010). It implies that marketers can freely commercialise artistic, historical, musical and narrative themes from indigenous groups without remuneration or recognition (Janke, 2005; Kennedy & Laczniak, 2014; Mittelstaedt & Mittelstaedt, 1997; Nill & Geipel, 2010; Pask, 1993). The mere imitation of the ‘look and feel’ of indigenous cultures’ work is a form of cultural theft (Brown, 1998). Challenges to patent and trademarking agencies of names and logos may be a means for indigenous communities to curb the use of such monikers by demonstrating that they are disparaging to native culture (Brown, 2002). However, this is not foolproof, as with the example of the US patent on genetic samples of the Hagahai of the Western Schrader Mountains in Papua New Guinea. This can create a philosophical debate on whether this means that the patentors ‘owned the person’ who gave them their genetic material. The argument as to whether human genetic material can be ‘owned’ is based on whether one can have a ‘sovereign right’ over genetic material and thus ask for compensation from its use. It implies control over and being allowed to do whatever one wants to with it, which is of course problematic when ‘it’ is a person (e.g. human trafficking – Dickenson, 2004). The problem comes about when considering indigenous beliefs about body parts (and thus genetic material) as being sacred. It may also be against indigenous peoples’ beliefs and religion to introduce their genetic materials to another, or it may be improper to interfere with the natural course of health-related events (Indigenous Peoples Council on Biocolonialism, 2000). However, increased cases of human genetic patents originating from indigenous peoples sparked UNESCO’s ‘Universal Declaration on the Human Genome and Human Rights’ (1997) with the statement that ‘the human genome in its natural state shall not give rise to financial gains’

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(p. 117). A point to note here is that it does not state that there should be no commercialisation, but instead that sharing information from genetic materials is needed, but people should be compensated, and benefits shared too (National Research Council, 2006). With regard to scientific, technical and medicinal knowledge of plants and other natural resources, most countries’ patent laws fail indigenous populations as well (Brown, 1998; Kennedy & Laczniak, 2014; Nicholas & Bannister, 2004). For example, many biotechnology firms are able to observe the use of certain plants for medicinal purposes and then analyse them for the exact chemical that is patentable and commercial. For instance, medicines have been developed from indigenous knowledge, like Quinine for malaria, Rosy Periwinkle for leukaemia treatments, and the Neem tree for many different products and treatments. But because indigenous peoples often do not cultivate and farm plants as Western populations do, and instead leave them in their natural habitats, the plants are considered to be ‘wild’ by Western definitions and thus free for the taking (Roht-Arriaza, 1997). For such things to be patentable it is necessary to demonstrate commercial application and innovation. Plants in their natural states do not often meet these requirements (especially the latter) and so only the specific chemical within the plant is patentable. Additionally, cultural property encompassed in scholarly work through anthropological ethnographic fieldnotes, feature films, historical works and other media where indigenous peoples appear, whether literally or imagined, expressed or parodic embellishment of cultures, is demanded by indigenous peoples to be considered appropriated and should be under their control (Brown, 1998). Among archaeologists, researchers unearth artefacts, establish chronology and precontact history in correlation with oral history, which illuminates processes when things happened (Nicholas & Bannister, 2004). Their outputs that include site reports, artefacts, feature descriptions, faunal remains and radiocarbon dates are specific to indigenous peoples’ traditions and ways of life. Regretfully, anthropologists and archaeologists are often guilty of appropriation. Not only should they be more sensitive to the commodification and appropriation of indigenous cultures, but also they may sometimes assume that ancient objects are separate from contemporary cultural impacts when they enter the public domain (Nicholas & Bannister, 2004). Current debates over the protection of indigenous IP involve injustices over the exclusion of indigenous peoples from legislation and regulatory decisions, and indigenous peoples’ cultural

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and social exploitation and government sanctions (Rikoon, 2004). Indigenous peoples continue to be distanced from such major decisions as long as government discussions of IP are positioned as property-centred rather than people-centred. It is, therefore, a systemic issue that many societies today face between corporate and individual rights over cultural knowledge and traditions. Some marketers using symbols or images may not consider the broader spiritual or cultural significance. They may even argue they are ‘part of a shared human heritage’ (Nicholas & Wylie, 2012, p. 25) but this is not agreed upon by many groups. Previous literature also calls for consideration of the power imbalance between indigenous and non-indigenous people in misappropriation due to post-colonial inequalities (Young & Brunk, 2012). Representatives of indigenous peoples often link the protection of cultural knowledge to economic issues, human rights, cultural identity and sustainable livelihoods, which demonstrate a correlation of poverty and powerlessness (Rikoon, 2004). Indigenous groups often do not have the resources either to fight misappropriation or to undertake scientific studies to provide patentable evidence of their knowledge. Under a biocolonialist view, even informed consent and benefit sharing for use of an indigenous group’s knowledge or genetic materials are just examples of dominance and bribery (Dickenson, 2004). Using such Western remedies mainly enforces power imbalances (Posey, 1999). This power difference can also be seen in the Western approach to seeing the world as a bricolage of cultural resources (Coleman, Coombe, & MacArailt, 2012). It also assumes resource equality in being able to ‘fix’ cultural heritage and protect it. Because culture is intertwined with politics, it is involved in ‘assimilation and exploitation of marginalised and colonised cultures and in the survival of subordinated cultures and their resistance to dominant cultures’ (Rogers, 2006, p. 474). Disputes over cultural appropriation, according to indigenous peoples, are about their political, cultural and intellectual sovereignty. Many have argued for a sovereignty that allows natives to exercise their rights and have a voice within traditional systems and outside of them to evaluate their experiences as distinct nations and cultures within a colonial structure (Warrior, 1995).

IS IT UNETHICAL? While misappropriation of indigenous IP is legal, is it ethical? Many indigenous and non-indigenous

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scholars and activists have argued over appropriation’s ethicality. Scholars have found several issues with cultural appropriation. Ziff and Rao (1997) identified four concerns around acts of cultural appropriation in terms of exploitation of indigenous peoples: cultural degradation (distortions of heritage); preservation of cultural elements (best understood in their native contexts); deprivation of financial gains (IP and compensation for claims of ownership); and failure to recognise sovereign claims (indigenous peoples not offered formal authority over the use and adaptation of their cultural artefacts). Kennedy and Laczniak (2014) focus on the commercial harms of cultural appropriation, while others emphasise its cultural and social harms (Tsosie, 2002). Such harms may embody forms of social resentment of the dominant, nonindigenous culture. Being in positions of political and economic power, a dominant group borrowing from oppressed indigenous peoples can be intolerable (Rowell, 1995). Young (2005) argues that this is not a case of harm but of ‘profound offense’. According to him, harm is a setback to someone’s interests where they might be robbed or cheated. In contrast, an offence is more of a state of mind that one dislikes, which causes disgust or outrage. A profound offence is one that affects the moral sensibilities and strikes a person’s core values and sense of self. To indigenous peoples, cultural appropriation is not just harmful, but can be profoundly offensive in a manner that is insulting, derogatory and abusive to them. Young (2005) claims that such offences and resentment towards ‘outsiders’ are not justified, and moral judgement should be based on the quality of the appropriated work and not the act of cultural misappropriation. Similarly, within academic research reporting (e.g. ethnography, anthropology, archaeology), non-indigenous researchers often misappropriate indigenous culture, possibly without ill-intentions, but simultaneously argue for fear of losing control and censorship which are concerns that relate to the suppression of academic freedom and publication restrictions (Nicholas & Bannister, 2004).

Harm So, misappropriation of indigenous intellectual property is perceived by several scholars as unethical when it causes harm or offence. In this case, harm can be about violating another’s property rights, but, as we have seen, because of the basis of Western laws, indigenous culture is often not classed as property within those laws. Therefore, harm can be defined as an ‘attack on the viability

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or identity of cultures or their members’ and could lead to their poverty, discrimination or inability to gain from that property in the way of profits or education (Brown, 2005; Kennedy & Laczniak, 2014; Young & Brunk, 2012, p. 5). It is this protection for exclusive use by the marketer that may cause harm in this instance. This can be especially harmful as many indigenous groups are in disadvantaged positions financially due to colonialisation (Hughes, 1997). Unfortunately, it is hard to argue within a Western framework that indigenous peoples have exclusive rights to broader beliefs in deities and creation stories, which could be seen as general knowledge (Young & Brunk, 2012). Other harm that could occur is through the collection of natural resources that are traditionally used by indigenous groups. This can harm their ability to access these natural resources, as well as the biodiversity of the area (Collective Statement of Indigenous Peoples on the Protection of Indigenous Knowledge, 2004). Further, the use of symbols or other themes has harmed their meaning, such as with the swastika (Ziff & Rao, 1997), or further identify the indigenous group as part of the ‘other’, perpetuating stereotypes, for example with Crazy Horse liquor. Scholars argue that such misrepresentation of culture can lead to stereotypes, discrimination, an erosion of cultural identity and inauthentic representations or products (Young & Haley, 2012). It may also harm a practice itself or damage it if it is treated sacrilegiously. As culture is a part of self-identity, inappropriate use of it by marketers can cause harm to young indigenous peoples who are exposed to the marketers’ version first. It can be argued that indigenous peoples’ rights to preserve their culture and to belong to a culture can be marginalised in this instance (Taylor, 1994). Part of the argument is a call for respect held for the person who is authorised to conduct a ritual or tell a story (e.g. a Kaimatua or elder) and when it is appropriate to share these. For instance, those from outside an indigenous group who become ‘experts’ in an indigenous practice and then sell their experiences are not the rightful tellers of that knowledge, which can possibly dilute the cultural meaning of the aspect (Young & Brunk, 2012). Scholars contend that without protection from commercialisation, there can be a loss of cultural identity with language, educational practices, agricultural knowledge and land, as well as religion (Brendon, 2004). Based on the previous literature, we understand an indigenous group’s cultural right is to ‘unique resources necessary to enable distinct futures to be articulated’ (Coleman et al., 2012, p. 176). Music may be related to ceremonies and sacred or significant events or times such as marriages,

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and can be a source of knowledge transfer. It might show entitlement, fulfil duties or be used to share history and create relational bonds. It is often performative rather than just of aesthetic value and acts as a transfer of rights (Coleman et  al., 2012). Songs are often mnemonic devices to record codes to interpret and remember historical events and legal information (Goody, 1998) or land ownership as with the Australian Aborigines (Koch, 1997). Appropriation and distortion of the culture’s tribal rituals or songs for ‘new age’ religions or practices have been found to leave indigenous peoples feeling violated and manipulated (Brown, 1998). The portrayal of indigenous groups and tribal culture in movies, art and literature, whether accurate or misrepresented, can also be seen as cultural appropriation, and one that can be degrading, stereotypical and damaging to the harmony of a nation’s multiculturalism (Tsosie, 2002). When observing indigenous artefacts, some appropriation and commodification take less obvious forms. Nicholas and Bannister (2004) discuss how images of archaeological records of artefacts and sites cherished by past and present indigenous peoples appear in marketable products such as T-shirts, or billboards, or AT&T telecommunications brand digitally inserting its logo into Egyptian tomb carvings. The authors argue that the objectification of the past through marketising cultural artefacts in ways parallel to contemporary ideas and resources may distort their original meaning and remove or alter the accomplishments of earlier societies from the original context. Not only are artefacts appropriated by non-indigenous peoples, but the authors also lay out cases of cultural information being exploited, such as the controversy around the 9,000-year-old Kennewick Man for which Aboriginal groups have been requesting the repatriation of his human remains, and which, so far, have failed. Archaeologists questioned these remains as belonging to Aboriginal groups. Further, Nicholas and Bannister (2004) also highlight the misrepresentations that take place in cultural tourism, such as living museums and theme parks, with re-enactments of life in the past (e.g. clothing, speech, people) that blatantly exploit and stereotype indigenous peoples. Marketing efforts, specifically with the use of visual media, dominate our perceptions of life, who we are and where we have come from. The result is a commodification of the indigenous culture: that is, the dominant culture abstracts the value of a cultural element, removing that element from its native context, thus changing its meaning and function, and possibly engaging in cultural degradation (Rogers, 2006).

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Offence Cultural appropriation can be perceived as offensive when indigenous people have not given their consent or permission, thus leaving them feeling exploited (Kennedy & Laczniak, 2014; Young, 2005). It can also be offensive when the act misrepresents their culture, or, worse, misuses what is sacred, making it profane. Because consent can be difficult to identify (e.g. who has the authority to approve uses of stories or styles; how would others know of this offered consent?), some scholars adhere to the idea that certain unauthorised uses of content can constitute a moral, if not legal, violation (Young, 2005). Profound offence belittles the values attached to the self-identity of a person. Profound offence is caused when appropriating religious aspects because it causes feelings of revulsion and violation (Feinberg, 1985). This could be through the desecration of the sacred, and through its derogatory or disrespectful use by marketers (Feinberg, 1985; Janke, 2005). For example, people sell and practise rituals outside of their cultural heritage and context which are then misrepresented, or deformed (Churchill, 1994), as with sweat lodge ceremonies, healing rituals, or sun and rain dances. Derogatory uses of culture such as names for sports teams in the USA can cause image injustice (e.g. Redskins – Jojola, 1993), as another example. Religious symbols or cultural images, symbols and names that are used by marketers for emotional brand image creation may also be offensive and potentially dehumanising (Cherokee cars; Crazy Horse liquor). The use of the symbols is decontextualised, and thus profaned. In these cases, the indigenous group seeks to stop offensive commercial use of its culture rather than seek commercial remuneration (Kennedy & Laczniak, 2014).

ETHICAL RESPONSES From a cultural perspective, indigenous peoples’ desires for control of knowledge is at the heart of their issues and not just for economic rights – control is integral to the restoration of cultural identity for the preservation of present and future indigenous communities (Nicholas & Bannister, 2004). Ethically, Nicholas and Wylie (2012) propose that misappropriation depends not only on what is appropriated, but also on the mode, the purpose and the response to appropriation, echoing Garrett’s (1966) Principle of Proportionality. Kennedy and Laczniak (2014) propose that

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marketers should avoid doing harm or causing offence to indigenous peoples when applying duty-based ethics in the principle of nonmalfeasance. This is especially important as many indigenous groups are seen as vulnerable populations. According to Rawls’ (1971) Difference Principle, further disadvantaging such a group through commercialising their culture would be unethical. One can also argue that it is not moral to publish songs in terms of a speech act, according to Kant (1993). So, the author retains the rights to the work because they cannot become property as they do not exist in and of themselves, but within the person exclusively. Thus, this would not be about the material itself, but its performance (Coombe, 2003) and eventually cannot be used for anything not agreed upon by the author/performer; not even re-recording. Further, it may be even harder to achieve distributive justice, the fair assignment of benefits in a community according to standards of ethics (Laczniack & Murphy, 2008). It is difficult to define what is a fair and ethically desirable outcome as it is value-laden and subjective to different stakeholders. Even more so, indigenous IP agendas reflect the ability and motivations of stakeholders’ power in influencing political developments for their self-interests, for example business organisations (Nill & Geipel, 2010). Based on a distributive justice perspective, IP rights require ‘normative principles to determine fairness in the allocation of economic and social resources’ (Ferrell & Ferrell, 2008, p. 27). The ethical question persists to this day and requires a deeper philosophical argument that is beyond the scope of this chapter (for a review see Nill and Geipel, 2010) – is it the owner’s right to produce and distribute or the original creator’s moral right to get recognition and protect their work from misrepresentation? Where a culture whose beliefs and practices have been appropriated is able to make a reasonable claim that the manner of that appropriation threatens the identity of that culture within the larger dominant culture, then the moral obligations of respect for cultural identity and integrity would take precedence over a simple declaration of the religious rights of the appropriators. (Young & Brunk, 2012, p. 102)

Practices and rituals related to religious beliefs are the praxis of cultures or groups that are often expressed via myths or traditions and stories. These deserve protection just as any Western author’s work does because it is their expression and application of knowledge (Young & Brunk, 2012).

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More recently, responses in North America to claims of misappropriation of indigenous names, signs and symbols by organisations such as sports teams and academic institutions such as universities and high schools are, however, promising. Teams have dissuaded fans from practising offensive, and arguably racist, dances, chants and hand movements, and even removed or changed their names. Academic institutions are choosing to change indigenous school nicknames and mascots to avoid any degradation towards Native Americans (Casey, 2019). This trend is starting to head in the right direction where organisations are, at least, acknowledging their indigenous misappropriation of culture and seeking to avoid this. There is still some way to go. However, it is noteworthy to mention that opinions are split among indigenous peoples and not all members believe that appropriation is offensive or harmful. For example, a recent poll of Native Americans found that the majority were not offended at all by the name of the American football team, the Washington Redskins (Vargas, 2019). The responses were unanimous: ‘it is just a name, it honours or represents their heritage, and people are overly sensitive’. This, once again, alludes to the fact that it would be beneficial (not to mention ethical) for indigenous peoples to be consulted about and involved in decisions on IP and trademarking, and the use in marketing of indigenous cultural knowledge, regardless of the outcomes.

FUTURE DIRECTIONS 1 Understand the culture: Cultural sovereignty is an internal phenomenon, and native understandings of sovereignty are rooted ‘within the way of life from which each of us emerges’ (Coffey & Tsosie, 2001, p. 203). Legal protection of indigenous peoples’ cultural and traditional knowledge is suggested to be constructed from a context-oriented perspective (Rikoon, 2004). By understanding the people that are laced with social, cultural, economic, biophysical and political variables, we can begin to understand issues with cultural borrowing, and macro influences of their realities. Culture can be reconceptualised not as a bounded entity but as relational, changing and dialogic (Rogers, 2006). Applying ethical standards: Kennedy and Laczniak (2014) suggest selecting and applying ethical standards which marketers can use to analyse the use of cultural appropriation. They outline that ‘with positive intent, as defined by the

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proportionality framework, it is ethical to use indigenous IP if Respect, Citizenship and Responsibility are also taken into account’ (Kennedy & Laczniak, 2014, p. 311). They propose these standards to be understood by marketers yet with ethical tenets that put people first, being of social benefit to both customers and other stakeholders (Laczniak & Murphy, 2008). Setting protocols as appropriate procedures as a country’s way of dealing with possible cultural appropriation and IP rights can help with compliance. For instance, eight main principles of the Australia Council Protocol include respect; indigenous control; communication, consultation and consent; interpretation, integrity and authenticity; secrecy and confidentiality; attribution; proper financial returns; and continuing cultures have become leading guides for Australian policy makers and the relevant industries (Janke, 2005). 2 Marketers and academic scholars are encouraged to have a more active role when working with indigenous peoples or representations of their culture in considering implications of their appropriated outputs. Nicholas and Bannister (2004) suggest that archaeologists, for example, should utilise participatory research approaches, with meaningful collaborations with indigenous peoples, involving them in decisions and benefiting them in their research processes and outcomes. Marketing the culture: There is a growing trend among consumers that are motivated to buy cultural products to connect with others from their communities and as an affirmation of social responsibility (Lee & Littrell, 2003). Some are labelled as cultural creatives that value world cultures and are attentive to global issues. They have strong desires for product authenticity and integrity and value interpersonal equality and cooperative relationships. Consumers are socially aware and need to know everything about a product; how it is made, who made it, and how it will be disposed (Ray & Anderson, 2000). By listening to consumers, this should be motivation enough for marketers and product managers to represent and credit indigenous peoples for their creations. Storytelling the culture represented by the product would not only expand consumers’ knowledge of different world cultures and indigenous traditions, but also entice those consumers looking for unique and meaningful artisan pieces or those motivated towards affirming their social responsibility and concerns about artisan enterprise and ecological sustainability (Lee & Littrell, 2003). 3 Consumers are taking an active role in resistance to cultural dominance. The agency and inventive-

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ness of subordinated cultures are demonstrated through their opposition to imposed products and ideas by creating alternative meanings and identities (Rogers, 2006). Given the lucrative nature of the current brand marketing industry, a potential method for indigenous peoples is to capture the attention of organisations they believe are blatantly racist or culturally insensitive trademarks, therefore influencing popular culture and challenging the ‘purse strings’ of these organisations (Brown, 2002). Petitioning existing trademarks as disparaging can be very challenging, as already demonstrated, but inspiring the public’s sensibilities towards such appeals can weaken the market power of the trademark and become rewarding (eventually). However, with historic examples, appealing to the public’s ‘ordinary sensibilities’ that do not see such monikers as racist or offensive is difficult, hence why it has been undermined in the past. One might also use philosophical ideologies when considering whether acts of cultural appropriation are moral or immoral, and whether it is justifiable for governments to regulate this immoral behaviour (not all that is illegal is immoral and not all that is immoral is illegal). One approach would be to use Feinberg’s (1985) approach to evaluating and regulating offensive actions. We might pay considerable attention to an act’s social value and the value of free expression, the availability of alternatives that would lessen or eliminate the offensive act, whether the act is tolerable, and the level of reasonableness of the offence (Young, 2005). Such acts of cultural appropriation may produce more value that outweighs any offence it causes. 4 Young (2005) believes that if outsiders/creators acted in good faith in response to a compelling imperative for expression and self-realisation, and contributed to knowledge, then their cultural appropriation would not be wrong/immoral, even if it appears to be offensive. There is another consideration of whether the act is performed in private or public and whether it is to provoke offence in others. Even with these suggestions, it still remains a difficult feat for the legal system to sustain permanent protection and systems in place for entire cultures when determining who is an indigenous person, what qualifies as indigenous knowledge and which indigenous person(s) are qualified to take power of decisions and ownership of such rights. If general artists and curators of knowledge face copyright violations, one can imagine how difficult it will be to police imitations and borrowings of indigenous cultural knowledge.

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CONCLUSIONS The ethical analysis of cultural appropriation can be very complicated. Some scholars claim that the degree of ‘free’ tolerance, compared with indoctrination or coercion, among a minority culture is a signifier of whether the act is ethical or not (Young, 2005). So, a more difficult question is: what is a tolerable, reasonable offence when, according to Young (2005), the size of the group of offended indigenous peoples also matters? For example, he argues that not all Aboriginal people might be offended by a non-Aboriginal person playing a didgeridoo at a cultural festival, and thus is under fewer moral restrictions. However, if an act violates appropriate norms of conduct (such as racist slurs), it is reasonably or profoundly offensive and should be considered, especially if they have been historically disadvantaged. Morally, if an act of cultural appropriation takes place in public spaces and is demeaning to an indigenous group, then it can be an offensive act deemed unethical. However, philosophers argue that considering social value, freedom of speech, and the times and places the acts occur, not all acts of cultural appropriation that are deemed offensive are essentially wrong, and therefore unethical (Young, 2005). Unfortunately, like Young (2005), there are many non-indigenous peoples that believe appropriation should not be a criterion when it comes to government laws and funding – just the quality of the piece of work. Their arguments can blur our understanding of what is and is not ethical about cultural appropriation and ignore the viewpoints of the indigenous peoples themselves. More compelling reasons have been made around the scepticism of indigenous IP rights such as the demands for religious freedom, basic rights and material expression (Brown, 1998). However, all is not lost: the Model Act from the World Intellectual Property Office (WIPO) defines its boundaries of protection as the ‘totality of the traditional artistic heritage of the traditional heritage developed and maintained’ (1985, p. 15–16). The Act protects verbal, musical, performative and material expressions of culture and while it is not widely enacted into law, it could be used as a basis for ethical marketing practices. It aims to stamp out commercialisation of indigenous culture without permission and is not time- or creator-bound. The Mataatua Declaration (United Nations, 1993) also ‘asks UN member states to recognise the rights of individual peoples to control in all respects their cultural and IP and to be inherent beneficiaries in the first instance of such property’ (p. 127). While it may be difficult to untangle the origins of cultural and intellectual knowledge, it is not so difficult to assess whether that knowledge is

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identified, recognised and protected within a community and is present in IP legislation (Rikoon, 2004). There are several indigenous groups with their own internal IP governing bodies. It is critical that governing bodies seek their advice and legal authority when addressing injustices as a matter of moral rights. Questions around copyright issues and the economic, political and moral rights of indigenous peoples that can influence their cultural and intellectual knowledge remain to this day unanswered and unsolved. Today’s laws and legislation are not based on a natural right or clear ethical principles, rather they reflect power struggles of opposing stakeholders (Nill & Geipel, 2010). Arguments about cultural appropriation regarding the cultural degradation that can occur through misrepresentation, and the weakening of cultural identity that accompanies this, are ensuing, demonstrating that the laws are often in favour of the majority and those with power. There is little public debate or recognition of minorities’ moral rights and authentic representation. However, we hope that future research will impact societal mores in this area.

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Appropriation (pp. 31–51). New Brunswick, NJ: Rutgers University Press. Hart, J. (1997). Translating and resisting empire: Cultural appropriation and postcolonial studies. In B. Ziff & P. V. Rao (Eds), Borrowed Power: Essays on Cultural Appropriation (pp. 1–27). New Brunswick, NJ: Rutgers University Press. Heyd, T. (2003). Rock art aesthetics and cultural appropriation. Journal of Aesthetics and Art Criticism, 61(1), 37–46. Hughes, J. (1997). Philosophy of intellectual property. In A. Moore, A. (Ed.), Intellectual Property: Moral, Legal, and International Dilemmas (pp. 107–179). Boston: Rowman & Littlefield. Indigenous Peoples Council on Biocolonialism (2000). Indigenous Research Protection Act. Retrieved on 12 September 2019, www.ipcb.org/publications/ policy/files/irpa.html Janke, T. (2005). Managing indigenous knowledge and indigenous cultural and intellectual property. Australian Academic & Research Libraries, 36(2), 95–107. Jojola, T. (1993). Negative image exploited to undercut Indian self-government. Albuquerque Journal, June 27. Junn, J. (2019). From kia ora to kimono: The trademarks accused of ‘cultural appropriation’. The Spinoff. Retrieved on 30 October 2019, https:// thespinoff.co.nz/business/13-09-2019/fromkia-ora-to-kimono-the-trademarks-accused-ofcultural-appropriation/ Kant, I. (1993 [1798]). Of the injustice of counterfeiting books. In Essays and Treatises on Moral, Political and Various Philosophical Subjects (Vol. 1). Bristol: Thoemmes Press. Kelber, B. C. (1993). Scalping the Redskins: Can trademark law start athletic teams bearing Native American nicknames and images on the road to racial reform? Hamline Law Review, 17, 533. Kennedy, A. M., & Laczniak, G. R. (2014). Indigenous intellectual property rights: Ethical insights for marketers. Australasian Marketing Journal (AMJ), 22(4), 307–313. Koch, G. (1997). Songs, land rights, and archives in Australia. Cultural Survival Quarterly, 20(4), 38. Laczniak, G. R., & Murphy, P. E. (2008). Distributive justice: Pressing questions, emerging directions and promise of Rawlsian analysis. Journal of Macromarketing, 28(March), 5–11. Lee, S. E., & Littrell, M. (2003). Web sites for cultural products: Marketing potential for US consumers. Journal of Fashion Marketing and Management: An International Journal, 7(4), 356–370. May, C., & Sell, S. (2006). Intellectual Property Rights: A Critical History. Boulder, Colorado: Lynne Rienner. McDonald, I. (1997). Copyright and Intellectual Property Concerns of Australia’s Indigenous People.

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Australian Copyright Council, Sydney. Retrieved on 12 September 2013, www.copyright.org.au/ information/indigenous-culture/indigenous.html Miller, R. J. (2010). American Indian and tribal intellectual property rights. Tulane Journal of Technology & Intellectual Property, 13, 179. Mittelstaedt, J. D., & Mittelstaedt, R. A. (1997). The protection of intellectual property: Issues of origination and ownership. Journal of Public Policy & Marketing, 16(1), 14–25. Nash, C. (2016). Cultural appropriation, postcolonial fetishism, and indigenous-settler relations in Blizzard Entertainment’s World of Warcraft. Master’s Thesis. University of Guelph, Ontario, Canada. Nason, J. D. (1997). Native American intellectual property rights: Issues in the control of esoteric knowledge. In B. Ziff & P. V. Rao (Eds), Borrowed Power: Essays on Cultural Appropriation (pp. 1–27). New Brunswick, NJ: Rutgers University Press. National Research Council (2006). Reaping the Benefits of Genomic and Proteomic Research: Intellectual Property Rights, Innovation, and Public Health. Washington, DC: National Academies Press. New Zealand Herald (2005). Maori Mix cigarettes in Israel ignites row. Retrieved on 13 December 2011, www.nzherald.co.nz/nz/news/article.cfm? c_id=1&objectid=10359703. Nicholas, G., & Bannister, K. (2004). Copyrighting the past? Emerging intellectual property rights issues in archaeology. Current Anthropology, 45(3), 327–350. Nicholas, G. & Wylie, A. (2012). Archaeological finds: Legacies of appropriation, modes of response. In J. O. Young, & C. G. Brunk (Eds), The Ethics of Cultural Appropriation (pp. 11–54). Chichester: Wiley-Blackwell Nill, A., & Geipel Jr, A. (2010). Sharing and owning of musical works: Copyright protection from a societal perspective. Journal of Macromarketing, 30(1), 33–49. Pask, A. (1993). Cultural appropriation and the law: An analysis of the legal regimes concerning culture. Intellectual Property Journal, 8(December), 57–86. Posey, D. A. (1999). Safeguarding traditional resource rights of indigenous peoples. In V. D. Nazarea Ethnoecology: Situated Knowledge/Located Lives (pp. 217–229). Tucson: The University of Arizona Press. Rawls, J. (1971). A Theory of Justice. Cambridge, MA: Harvard University Press. Ray, P. H., & Anderson, S. R. (2000). The cultural creatives: How 50 million people are changing the world. New York: Harmony Books. Rikoon, J. S. (2004). On the politics of the politics of origins: Social (in)justice and the international

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agenda on intellectual property, traditional knowledge, and folklore. Journal of American Folklore, 117(465), 325–336. Rodriquez, J. (2006). Color-blind ideology and the cultural appropriation of hip-hop. Journal of Contemporary Ethnography, 35(6), 645–668. Rogers, R. A. (2006). From cultural exchange to transculturation: A review and reconceptualization of cultural appropriation. Communication Theory, 16(4), 474–503. Roht-Arriaza, N. (1997). Of seeds and Shamans: The appropriation of the scientific knowledge of indigenous and local communities. In B. Ziff & P. V. Rao (Eds), Borrowed Power: Essays on Cultural Appropriation (pp. 1–27). New Brunswick, NJ: Rutgers University Press. Rowell, J. (1995). The politics of cultural appropriation. Journal of Value Inquiry, 29(1), 137–142. Roy, E. A. (2019). M¯aori anger as Air New Zealand seeks to trademark ‘Kia Ora’ logo. Guardian. Retrieved on 30 October 2019, https://www.theg u a rd i a n . c o m / w o r l d / 2 0 1 9 / s e p / 1 2 / m a o r i anger-as-air-new-zealand-seeks-to-trademark-kiaora-logo/ Seeger, A. (1997). Ethnomusicology and music law. In B. Ziff & P. V. Rao (Eds), Borrowed Power: Essays on Cultural Appropriation (pp. 1–27). New Brunswick, NJ: Rutgers University Press. Shugart, H. A. (1997). Counterhegemonic acts: Appropriation as a feminist rhetorical strategy. Quarterly Journal of Speech, 83, 210–229. Suh, Y., Hur, J., & Davies, G. (2016). Cultural appropriation and the country of origin effect. Journal of Business Research, 69(8), 2721–2730. Tate, G. (2003). Everything but the Burden: What White People Are Taking from Black Culture. New York: Broadway. Taylor, B. (1994). Multiculturalism: Examining the Politics of Recognition. Princeton, NJ: Princeton University Press. Thompson, C. J., & Troester, M. (2002). Consumer value systems in the age of postmodern fragmentation: The case of the natural health microculture. Journal of Consumer Research, 28(4), 550–571. Tsosie, R. (2002). Reclaiming native stories: An essay on cultural appropriation and cultural rights. Arizona State Law Journal, 34, 299. UNESCO (1997). Universal Declaration of the Human Genome and Human Rights. Retrieved on 12 September 2013, www.unesco.org/new/en/social-andhuman-sciences/themes/bioethics/humangenome-and-human-rights/ United Nations (1993). The Mataatua Declaration on Cultural and Intellectual Property Rights of Indigenous Peoples. New York: Commission on Human Rights, Subcommission on prevention of discrimination and protection of minorities, Working group on indigenous populations.

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United Nations Declaration on the Rights of Indigenous Peoples (2007). Retrieved on 13 December 2009, www.un.org/esa/socdev/unpfii/documents/ DRIPS_en.pdf Upton, D. (2005). What the Mormon cultural landscape can teach us. Journal of Mormon History, 31(2), 1–29. Vargas, T., (2019). A survey explores how Native Americans feel about the name Washington Redskins. No, it’s not that survey. This one is new. Washington Post. Retrieved on 13 November 2019, https://www.washingtonpost.com/local/a-survey-explores-how-nativeamericans-feel-about-the-name-washington-redskinsno-its-not-that-survey-this-one-is-new/2019/08/09/ e38553bc-b581-11e9-8949-5f36ff92706e_story. html Warrior, R. A. (1995). Tribal Secrets: Recovering American Indian Intellectual Traditions (pp. 117– 118). Minneapolis: University of Minnesota Press. World International Property Office (1985). Model Provisions for National Laws on the Protection of

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Expressions of Folklore. Working group on the intellectual aspects of folklore protection. Writers’ Union of Canada (1992). Resolution on Cultural Appropriation. July. Young, J. O. (2005). Profound offense and cultural appropriation. Journal of Aesthetics and Art Criticism, 63(2), 135–146. Young, J. O., & Brunk, C. G. (Eds). (2012). The Ethics of Cultural Appropriation. Chichester: WileyBlackwell. Young, J. O., & Haley, S. (2012). ‘Nothing comes from nowhere’: Reflections on cultural appropriation as the representation of other cultures. The Ethics of Cultural Appropriation (pp. 268–289). Chichester: Wiley-Blackwell John Wiley & Sons. Ziff, B., & Rao, P. V. (1997). Introduction to cultural appropriation: A framework for analysis. In B. Ziff & P. V. Rao (Eds), Borrowed Power: Essays on Cultural Appropriation (pp. 1–27). New Brunswick, NJ: Rutgers University Press.

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12 Appearances Matter: The Impact of Unattainable Idealizations of an Individual’s Physical Self Lynne Eagle and Rachel Hay

Advertising is in an odd position. Its extreme protagonists claim it has extraordinary powers and its severest critics believe them. Advertising is often effective. But it is not as powerful as is sometimes thought, nor is there any evidence that it actually works by any strong form of persuasion or manipulation. (Ehrenberg, 2000, p. 39)

INTRODUCTION The influence of marketing communications has been debated for decades, particularly in relation to whether it is a strong or weak force (see e.g. Jones, 1990). Part of this ongoing debate is whether it changes people’s values or mirrors contemporary social values, albeit in a way that distorts reality with unintended consequences such as misrepresenting and marginalizing many sectors of society (Gopaldas & Siebert, 2018; Pollay, 1986). It is suggested that beauty pays, both in personal relationships and in the labour market (El Jurdi & Smith, 2018; Madan, Basu, Ng, & Lim, 2018). Portrayal of idealized beauty for women and masculinity for men is therefore based on socially grounded perceptions of the importance of physical attractiveness although

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this perception has changed over time and varies across cultures. The market for beauty-related products is estimated to be worth almost US$500 billion by 2020 (Madan et al., 2018), making it a potentially lucrative sector for marketers. However, marketing strategies that use unrealistic and unattainable depictions of the target segments coupled with encouragement to improve appearances have been criticized for a range of negative impacts due to the perceived pressures on both males and females to conform to these ideals (Burkley et  al., 2014; Kling, Rodgers, & Frisén, 2016). For example, dissatisfaction with body image is linked to eating disorders, with approximately 10 million women and 1 million men officially diagnosed globally (Krawitz, 2014) and an estimated 70 million sufferers (Cavusoglu & Dakhli, 2016) with this problem. Table 12.1 outlines the ‘lengths that people go to in the pursuit of beauty. From simple things such as hair colour through to drastic measures such as amputating the little toe to be able to wear Jimmy Choo/ Manolo Blahnik shoes (Foo, 2010). We note a weakness in several studies in this area in that study participants have frequently been drawn from undergraduate university students (especially those studying psychology) who gain academic credit for participation, raising questions about what these participants are

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Table 12.1

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Historical and contemporary beauty trends

High-heeled shoes

Chinese foot binding

Corsets

Weight-loss surgery and dieting

Fattening rooms

Tanning of the skin

Fashion/beauty statement; increased foot problems; shortening and/or removal of toes, narrowing of feet; associated with aristocracy and wealth

(Benamou, 2006; Harris, 2003; Phelan, 2002; Sherrow, 2001; Thompson & Coughlin, 1994; Volandes, 2006) Lotus feet (broken and bound), erotic attraction (sexual (Benamou, 2006; Gates, 2007; gratification), caused deformities, symbol of aristocracy, Jeffreys, 2005; Kippen, 2005; created value in young women; testament to withstand pain, Mackie, 1996; Ross, 2001; abolished early twentieth century Schnabel & Schnabel, 1986; Thompson & Coughlin, 1994) Symbol of self-discipline, beauty and erotic allure; instrument (Davies, 1982; Gau, 1998; of women’s oppression; class-appropriate contours; protect Phelan, 2002; Summers, their class hegemony; hallmark of virtue; reduces the 2001) wearer’s lung capacity Transform one’s appearance from the unacceptable to the accepted ideal; fad diets and crash dieting; disordered eating behaviour or eating disorders; physiological changes; harmful, destructive, and most often unnecessary Thinness is associated with illness, poverty, unattractiveness and infertility vs corpulent women associated with wealth, sexual desirability and high social status; symbolizes successful husbands; described as women of substance; perfect embodiment of health, feminine beauty and fertility; accelerate puberty and enhance the marriageability of girls; physical pain and force-feeding daily Premature aging, skin cancer, bronzed skin highly prized, tanning addiction or tanorexia (body dysmorphic disorder)

(Gimlin, 2002; Goss & Gilbert, 2002; Jeffreys, 2005; Phelan, 2002; Sarwer, Grossbart, & Didie, 2003) (Bernus, 1991; Brink, 1995; Hawks, 2001; Onishi, 2001; Popenoe, 2004)

(Draelos, 2002; Kornblum, 2004; Nolan, Taylor, Liguori, & Feldman, 2009; Phillips et al., 2006; Rawe & Scully, 2006) (Al-Saleh, Elkhatib, Al-Rouqi, Al-Enazi, & Shinwari, 2012; Corson, 2003; Counter, 2003; Dadie & Petit, 2009; Fuller, 2006; Glenn, 2008; Hunter, 2002; Olumide et al., 2008; Phelan, 2002; Pointer, 2005; Sherrow, 2001) (Chapkis, 1986; Sherrow, 2001)

Whitening of the skin

Pale skin – beauty, higher social status, purity; face whiteners made out of lead, radiation, arsenic, hydroquinone, mercury, neurological and kidney damage, fatal to the development of a foetus, ravages the skin, poison, hair loss, irreversible skin damage, loss of self-esteem

Body hair

Body hair – a sign of unattractiveness or a sign of poor personal grooming; lack of femininity; linked with insanity and witchcraft; time-consuming, vanquishes women to a narrow beauty ideal Personal adornment, disguise or religious reasons; stage operas; (Corson, 2003; Sherrow, 2001) personal adornment; signified social class; to cover thinning; causes sores, skin abscesses; can be harmful to both the scalp and natural hair of the wearer; acute hair loss; acute allergic dermatitis Role in self-image; hair cutting – coming of age, rites of (Harrison & Sinclair, 2004; Patlak, passage; dictates fashion and feminine beauty; symbolizes 1993; Rosenthal, 2004; rebellion; fulfil the ideals of attractiveness; expression of Sherrow, 2001; Synott, 1987) individuality; chemical dyes caused poisoning (nose bleeds, death); modern hair dyes increased allergy, cancer rates and birth defects; permanent styling irritates scalp, can cause permanent damage, emulates skin whitening

Wigs and hair extensions

Hair – dyeing and permanent styling

(Continued)

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Table 12.1

171

(Continued)

Female genital cutting

Partial or total removal of the external female genitalia; aesthetic attractiveness of the vagina; become marketable for marriage; unethical and illegal; harm women’s health; gender inequality; cultural definition of the ideal womanhood; equivalent to the amputation of the penis; denies sexuality and reproductive rights; blood-borne diseases to death; septicaemia; severe pain; urinary tract infections, painful intercourse, infertility and childbirth difficulties; violation of human rights; unlawful child abuse Female genital Remodels labias and vaginas; a standard feminine perfection; cosmetic surgery designer vagina – believe genitals are not normal or ideal; influenced by pornography and provocative fashion advertising; enhancing ‘vulvar appearance and orgasmic functions’; risks – scarring, difficulties in sexual functioning, discomfort, loss of sensation and overtightening of the vaginal opening Double eyelids Considered desirable; more appealing; double-eyelid surgery; and Asian stitching a permanent crease into the eyelids; achieve the blepharoplasty desired aesthetic outcome; motivated by the need to look their best as women; Western culture and fashion fuel individuals’ desire; unnatural and self-hating; self-mutilation; intraoperative haemorrhage; ptosis (drooping of the eyelid); scarring; reinforces ideal beauty projected by media and advertising Botox and antiDefy the signs of aging; elixir of youth; leave the face lacking aging products in facial expressions or appearing frozen; temporary muscle paralysis; complications – eyelid or lip ptosis, bruising and, rarely, ‘irreversible histologic changes in muscles that have been injected’; anti-aging products should be tested and licensed like medicines Teeth and cosmetic Signify youth and good health; symbols for higher economic dentistry and social status; facial attractiveness

(Cook, Dickens, & Fathalla, 2002; Mackie, 1996; Morison et al., 2001; Oldfield Hayes, 1975; Tabrizi, 2004; Toubia, 1995)

(Braun, 2009; Essen & Johnsdotter, 2004; Green, 2005; Lloyd, Crouch, Minto, Liao, & Creighton, 2005; Tabrizi, 2004; Tiefer, 2008)

(Chua, 1982; Kang, Koo, Choi, & Park, 2000; Kaw, 1993; Kobrin, 2004; Kruavit, 2009; Liao, Tung, Tsai, Wang, & Lin, 2005; Zane, 2003)

(Caputo, 1996; Carmichael, 2009; Klein, 2004; Niamtu, 2009; Sarrabayrouse, 2002; Singh, Hankins, Dulku, & Kelly, 2006)

(Nalbandian & Millar, 2009; Sherrow, 2001)

Source: Adapted from Foo (2010)

representative of and what impact this has on the generalizability of research findings.

CONCEPTS AND THEORIES Space prevents a discussion of all the concepts and theories that have been proposed to explain the impact of repeated exposure to unrealistic images. We have therefore reviewed only those most frequently cited. We note that many of these are largely descriptive, offering little empirical evidence of any predictive power (see Table 12.2 for examples). Criteria to guide theory evaluation have been available for more than two decades (Wacker, 1998) but have only recently received close critical evaluation. When appropriate theoretical frameworks are closely followed, their predictive power and

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prospects for successful outcomes will increase. Rundle-Thiele et al. (2019) postulate: the degree to which a theory successfully provides a framework for generating testable hypotheses, integrating empirical evidence and ultimately, providing a road map to guide the design and implementation of interventions, depends largely on the quality of the theory (or theories) chosen and the quality of their subsequent application. (2019, p. 5)

CHANGING IDEALS – HISTORICAL TRENDS The pursuit of ways to enhance attractiveness is not a recent phenomenon – cosmetics for both men and women have been used for centuries, with a range of

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Table 12.2 Relevant concepts and theories that may explain the impact of repeated exposure to unrealistic images Social cognitive theory

Cultivation theory

Proposes that behavioural, personal and environmental factors are reciprocal, interacting determinants of each other. Individuals learn by observation and model their own behaviour on the behaviour of others. Changes in one of the three factors has implications for the others The extended version of SCT now contains an additional social influence dimension (see Figure 12.1) Suggests that the more unrealistic and unattainable images are seen, the more people will perceive them as reflecting reality

Self-concept theory Social comparison theory

Proposes that people act in ways to portray themselves as they want to be seen by others, links to skin whitening Originally developed in the 1950s, suggests that individuals compare themselves to others in order to achieve actual or vicarious social acceptance and that people may feel inferior if the person or group they are using for comparison is seen as being ‘better’ than them Social identity Closely linked to social comparison theory, social identity theory theory suggests that a person’s sense of who they are is based on their group membership. Positive social identity is based on positive comparisons with others, thus the use of beauty-related products is an integral part of identity construction and enhancement Cognitive Refers to the mental discomfort experienced when there is a mismatch dissonance between an actual and ideal state, leading to behaviours such as purchase of products or services that will reduce this discomfort Self-discrepancy Shares concepts with cognitive dissonance, but focuses on a theory comparison of the perceived actual self to a desired ideal self and the self that the individual believes others whose views are important to them support SelfSuggests that socialization leads to the perception of an individual as objectification a physical object viewed by others, increasing the perception of the theory need to present as positive a physical appearance as possible Reactance theory Suggests that a direct or potential threat to personal freedom results in action by an individual to regain control – and thereby regain the threatened freedom. In this context ‘femvertising’ challenges and rejects traditional stereotypical images in favour of personal freedom

products evident as far back as 10,000 BC in ancient Egypt (Chaudhri & Jain, 2014). The thin ideal for women is a relatively recent phenomenon. Artworks from previous centuries show the female form to be well rounded and even in the middle of the twentieth century, a Western ‘curvaceous ideal’ was evident in the celebrity status of actresses such as Marilyn Monroe (Borau & Nepomuceno, 2016; Dittmar, Halliwell, & Stirling, 2009). The ideal changed in the mid-1960s, with the global popularity of skinny models such as the UK’s Twiggy (Swami, 2015). While much of the literature is focused on female ideals, masculine ideals have been evident for some time, such as the styles promoted by George ‘Beau’ Brummel and his ‘dandies’ in the early nineteenth century (Pappas, 2008). The

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(Bandura, 2001; Rana & Dwivedi, 2015)

(Burkley et al., 2014; Grau & Zotos, 2016; Stokes, Clemens, & Rios, 2016) (Rehman, 2018, also see Table 12.1) (Diedrichs & Lee, 2010; Stokes et al., 2016)

(Bochatay et al., 2019; El Jurdi & Smith, 2018)

(Eagle, Dahl, Lloyd, & Czarnecka, 2014) (Higgins, 1989; SolomonKrakus et al., 2017)

(Burkley et al., 2014)

(Åkestam, Rosengren, & Dahlen, 2017; Shen & Coles, 2015; Veldhuis, Konijn, & Seidell, 2014)

preoccupation of some males with grooming and appearance has been well documented (Mitchell & Lodhia, 2017). Mitchell and Lodhia describe metrosexuality to have three dimensions: ‘trendiness, concern with appearance and the use of grooming practices, which are mediated by masculinity and vanity’ (2017, p. 349).

Idealized Masculinity Bano and Sharif cite the term metrosexual: to describe the narcissistic and aesthetic oriented who love shopping and like to spend money and time on their appearance. Metrosexual men live in

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Personal determinants

Behavioural determinants

Environmental determinants

Additional dimension: social influence

Figure 12.1

Social cognitive theory factors with addition of fourth factor

big cities and consider themselves as a virile people who challenge the traditional view of masculinity by demonstrating the new and trendy lifestyle. They spend a lot of money on their appearance in order to enrich their self-image. (2016, p. 114)

collective hallucination, since men can’t live up to the ideal and it harms them to try’.

However, there are claims that the masculine ideal has changed in the last 20 years to emphasize ‘lean and well-defined muscle mass’ (Lefkowich, Oliffe, Hurd Clarke, & Hannan-Leith, 2017, p. 454). Asian masculinity is being redefined from stagnant to sensual, uniquely erotic, stylish and sexy (Ng, 2019). Middle Eastern men on the other hand are moving from chauvinistic in favour of humility (Taji, 2018). ‘Men, by virtue of their position in the imbalance of power over women, have never had to fight to claim their bodies and sexualities’ (Ng, 2019). However, the feminist movement is influencing the narrow ideals of what a man should be and the ideal of ‘toxic masculinity is being actively challenged’ (Ng, 2019). While the age-old ideal of ‘muscular, tall and sharp jawed’ remains, masculinity is ‘moving towards a more healthy understanding and appreciation for male bodies’ (Ng, 2019). Masculinity is also well defined in various occupations. Masculinity in the workplace stems from what Fasteau (1974) identifies as the ‘Male Machine’. The working man (albeit a professional or bluecollar) strives to tackle jobs, override obstacles, attack problems, overcome difficulties and seize the offensive, which is presented as competition and reinforced by victory (Fasteau, 1974). However, this armour-plated view of manhood leads men to vulnerability and emotional instability, as identified by Kaufman (2002, p. 81): ‘masculinity is a

Mass media portrayals of idealized beauty and glamour are claimed to play a significant role in creating and maintaining body dissatisfaction due to repeated exposure to idealized images (Arendt, Peter, & Beck, 2016; Fardouly & Holland, 2018). This dissatisfaction leads to a range of strategies based on ‘appearance investment’ (Kling et  al., 2016). Images of the ideal female body as portrayed in all forms of Western mass media have become thinner over time with claimed links to unhealthy dieting, body dissatisfaction and a range of psychological problems including depression (Arendt et al., 2016; Solomon-Krakus et al., 2017). The typical model is now claimed to be 20% underweight (Dittmar et al., 2009). While idealized portrayals are undoubtedly predominant in this sector, advertisements that stress female empowerment (also termed ‘femvertising’) have also appeared in recent years. In some studies, ultra-thin models are seen as ‘vain, vindictive and self-obsessed’ (Beale, Malson, & Tischner, 2016, p. 378). Responses to the advertising are classically identified as reactance theory (Brehm & Sensenig, 1966; Brehm & Brehm, 1981) where pressure to respond to the environment results in perceptual or judgemental changes of behaviour. Perceived pressure to conform is seen as a restriction on personal freedom, thus femvertising challenges, and rejects traditional stereotypical images in favour of personal freedom (Åkestam et al., 2017).

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Idealized Female Beauty

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Ageism and Aging While fashion is doing a better job at being more inclusive, the beauty industry is somewhat lagging behind. Age inclusivity is being embraced faster than other factors like size (Jerslev, 2018). Aging women have in the past been shunned in beauty campaigns because of the negative portrayal of aging. The term anti-aging brings with it a negative connotation of growing older. However, recently two senior celebrity models have adorned successful beauty magazines (Feldman, 2017; The Moscow Times, 2019) who acknowledge that ‘growing older is something that should be embraced and appreciated rather than resisted or talked about as if it’s a condition that drains away beauty’ (Feldman, 2017). Jerslev (2018) posits: these examples may illustrate what Wykes and Gunter (2005) claim about visual representations of the beautiful body today (outside of beauty ads): ‘there is no longer a unitary and relatively stable model of beauty but one in which the body itself is less an object of beauty than a structure to be adorned beautifully’ (pp. 50–51).

In 2017, Allure magazine announced it would no longer use the term ‘anti-aging’ (https://www.allure. com/story/allure-magazine-phasing-out-theword-anti-aging). By contrast, Clarke, Bennett, and Liu (2014) ‘revealed that older men were largely absent, and when portrayed, were positively depicted as experienced and powerful celebrities or as healthy and happy unknown individuals’.

CULTURAL AND SOCIAL INFLUENCES We note that some cultures, such as those from Africa and Polynesia, do not desire small bodies and have different perceptions of ideal body shapes to those in Western cultures (Ashley & Jung, 2017; Swami, 2015). In Africa, thinness is associated with illness and poverty (Foo, 2010). However, in a French study, participants with high body mass indices (BMIs) reacted negatively to ‘natural’ versus ideal female models (Borau & Bonnefon, 2017). There is a limited body of research suggesting that the use of average-sized models can aid in promoting positive body image among young women (Diedrichs & Lee, 2011). Traditional Asian ideals tether the female body to harmonious relationships in family and society (Siu & Kai-ming Au, 1997). Those who move outside of marriage, into careers for example, have previously been seen as unattractive to potential

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husbands. However, as Western influence increases, Asian women’s social expectations are changing. A recent study of advertising content in China showed that only 8% of women were depicted as nurturers (domesticity, nurturance, softness), whereas 12% were depicted as flower vase (glamourous, charming, attractive) and 44% were depicted as urban sophisticates emphasising women’s appearances, style and tastes rather than traditional or revolutionary roles (Hung & Li, 2006). The flower vase image combines Chinese and Western ideals including women using skin-whitening products, age-defying cosmetics, cosmetic surgery and new hairstyles to enhance their looks (Hung & Li, 2006) and meet Western ideals. However, this trend may diminish given that consumer products giant Unilever aims to “remove words such as ‘fair’, ‘whitening’ and ‘lightening’” from its products to create a skin care range that is inclusive of all skin tones to celebrate the diversity of beauty (1 News, 2020).

FEMALE EMPOWERMENT Airbrushing Common strategies to ‘improve’ even on the appearance of professional models include the use of Photoshopping tools and retouching techniques such as airbrushing (Burkley et  al., 2014). These practices are claimed to be inherently deceptive by presenting an unachievable body image and thus contributing to body dissatisfaction (Borau & Nepomuceno, 2016; MacCallum & Widdows, 2016). There also appears to be a growing backlash against ‘blatant’ airbrushing/retouching (Schirmer et al., 2018). However, people now edit ‘their own images to reflect appearance ideals before sharing them on social media’ (Guest, 2016, p. 444), suggesting some degree of tolerance of the practice.

Fair Skin and Strategies to Achieve it Light skin colour is ‘valued almost ubiquitously’ globally (Watson, Thornton, & Engelland, 2010, p. 185) and its perceived importance cannot be underestimated. ‘White skin’ has emerged as a central desideratum of consumer culture in affluent Asia. Not only does skin lightness affect perceptions of a woman’s beauty, but it also ‘affects her marital prospects, job prospects, social status, and earning potential’ (Li, Min, & Belk, 2008, p. 444). Two main themes are evident in the literature. The first is that the desire for pale skin is a direct consequence of the era of colonization and slavery. In the USA, the slavery era resulted in ‘a colourcaste system that placed dark-skinned persons at

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the bottom, light skinned persons in the middle and Caucasians at the top’ (Watson et al., 2010, p. 186). Similar colour-caste systems also developed in Latin America during the era of Spanish colonization and slavery. Negative impacts from colonization are also claimed in South East Asia, parts of which were colonized by Spain, then the USA, and also in South Africa (Glenn, 2008). While colonization and slavery had an undoubted impact on the perceived value of light skin tones, its origins are considerably older in many cultures, traceable back for two millennia in Korea and to at least the seventeenth century in Japan (Krishen, LaTour, & Alishah, 2014). In India, ancient mythological figures were fair skinned while demons were dark (Rehman, 2018), and dark skin has long been associated with manual labour across South Asia (Shankar & Subish, 2016). Even in cultures where pale skin predominates, attempts to lighten skin tones further have been made for centuries: ‘European ladies are known to have lightened their skin since the 16th century, while upper-class Egyptian, Greek and Roman women used a recipe consisting of mercury and lead compounds to reassert their aristocratic upbringing’ (Chia et al., 2012, p. 189). Mass media are claimed to reinforce this ‘yearning for white skin’ (Li et al., 2008, p. 444) and the global market demand for skin-lightening products which was estimated to have been worth US$4,800 million in 2017 (Future Market Insights, 2017). The ethical issue relating to the marketing of these products is that, while marketers claim the products meet a legitimate social need, critics assert that it entrenches the belief that people with lighter skin are more attractive and have better employment and marriage prospects (Chia et al., 2012; Shevde, 2008). A second issue relates to the fact that this market is largely unregulated, being classified as cosmetic rather than pharmaceutical. Two points arise from this. Firstly, that there is no consistent requirement for ingredient labelling and, secondly, that repeated testing has shown that many products, especially those marketed in developing countries, contain products such as mercury (Peregrino, Moreno, Miranda, Rubio, & Leal, 2011). Other potentially dangerous ingredients identified include hydroquinone, classified as carcinogenic (cancer causing) and mutagenic (causing genetic mutations), and now banned in Europe, Australia and several other countries (Cristaudo et al., 2013; Naidoo, Khoza, & Dlova, 2016).

Obsession with Tanning The irony of the discussion of skin lightening in the introduction is that, in spite of evidence

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regarding increased skin cancer risk and premature aging of skin, some Western cultures value tanned skin (Kemp & Eagle, 2009). While its effects may be medical, the root cause is cultural. Coco Chanel is credited with promoting the tan back in the 1920s, since which time both the mass media and the fashion and beauty industry have promoted the message that suntanned skin is sexy and – perversely – healthy (Aldahan, Shah, Mlacker, & Nouri, 2016). A range of tanning facilities are offered at gyms, implicitly linking tanning with good health but ignoring the proven link between indoor tanning and increased skin cancer risk (Howell & Paulins, 2016). Strategies to achieve a tan may range from simple sunbathing to more extreme measures by some segments of the population. For example, ‘Tanorexia’, a term first used by the British Medical Association in 2004, is an obsession with achieving the ‘perfect’ tan and is most prevalent in young women. (Heckman et al., 2015). Unsafe practices may include the use of ‘sun tan jabs’ of unlicensed and unregulated products containing melatonin which are used to darken skin tones, with a range of potential negative health consequences (Langan, Nie, & Rhodes, 2010; Langan, Ramlogan, Jamieson, & Rhodes, 2009).

Cosmetics, Cosmetic Surgery and ‘Cosmeceuticals’ Body features of dominant cultures are desired (Ashley & Jung, 2017). ‘Xinhua News Agency estimated that Chinese women annually spent 20 billion yuan (approximately US$ 2.42 billion) on changing their looks, and consequently, cosmetic surgery industry loomed the third largest growth in the country’s economic landscape after real estate and tourism’ (Luo, 2013, p. 1). One-third of South Korean women aged 19–29 have had some form of cosmetic surgery (Madan et  al., 2018). Cosmetic surgery, particularly eyelid surgery (blepharoplasty) and nose alteration (rhinoplasty), is extremely popular, with the suggestion that in Asia it has ‘become as easy as getting dental braces’ (Aquino & Steinkamp, 2016, p. 431). The drivers of this behaviour are debated in terms of whether it reflects conformity to a Western standard or, in Japan at least, a rejection of traditional impassive looks and adoption of a ‘newly emancipated feminine beauty’(Aquino & Steinkamp, 2016, p. 437). The industry has been criticised for its aggressive marketing tactics and a failure adequately to disclose risks and potential complications (Goodman, 2017; Vlahos & Bove, 2016). An example of unethical marketing relates to the

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marketing of cheap breast implants to women on welfare (Milligan, 2018a). Some types of textured breast implants and tissue expanders have recently been banned in the USA, Canada, Australia and France, with other countries soon to follow (Australian Government, 2019; Government of Canada, 2019; Vaysse, Laurent, Ysebaert, Chantalat, & Chaput, 2019). Breast implants have been linked to breast implant associated anaplastic large cell lymphoma (BIAALCL), ‘a serious but rare type of non-Hodgkin lymphoma (a cancer that affects the immune system)’ (Government of Canada, 2019). Those who have already received a breast implant or tissue expander have been advised that the risk of developing BIA-ALCL is very rare; and while the ban is precautionary, all breast implant and tissue expander products have been recalled and surgeries in Australia have been cancelled (Australian Government, 2019). Side effects from other common practices such as cosmetic filler injections have included ‘injection site pain and bleeding, muscle weakness, upper respiratory infection, hoarseness or trouble speaking, loss of bladder control, trouble breathing or swallowing, double vision, neck pain, flu symptoms, blurred vision and drooping eyelids’ (Mello, 2012, p. 386). In rarer cases, serious complications such as ‘vascular occlusion’, namely blocking of blood vessels, may occur (Rzany & DeLorenzi, 2015). A recent example of this relates to a woman who was blinded in one eye after a ‘cosmetic filler’ was injected into the artery supplying the eye (Milligan, 2018b).

Shame and Guilt In the context of obesity, obese people are reported as feeling stigmatized (Kemper & Ballantine, 2017) and there is evidence that even inadvertent stigmatizing of the obese in behaviour change interventions actually decreases their motivation to adopt actions such as dietary changes and commencing or increasing exercise (Vartanian & Smyth, 2013). These effects have been found in other sectors where guilt and shame leads to inaction rather than desired actions (Key & Czaplewski, 2017). For example, anti-smoking activity, particularly where fear-based messages are used, has been shown to stigmatize people with smokingrelated illnesses such as lung cancer (Riley, Ulrich, Hamann, & Ostroff, 2017).

Portrayal of Disabilities and the Disabled Content analyses of magazine ads have shown that the percentage of ads featuring disabled people is considerably lower than the percentage of people with visible disabilities in the population, with the suggestion that this stigmatism is due to the ‘failure’ of disabled people to conform to the idealized norm (Parashar & Devanathan, 2006). The notable exceptions relate to those involved in sports performances such as Paralympian athletes (Quinn & Yoshida, 2016).

Outmoded Portrayal of Farmers Disclaimers/Warnings One strategy that has been championed to counter the use of thin models is the use of messages on advertisements noting that images have been retouched and that trying to emulate the model’s appearance could be dangerous. However, the evidence of the effectiveness of these strategies is mixed at least, with little evidence of these messages having any lasting effect on body satisfaction (Ata, Thompson, & Small, 2013; Fardouly & Holland, 2018; Tiggemann, Slater, & Smyth, 2014). Alcohol warning labels use a similar strategy with limited success. The findings show that that while warning labels may increase awareness of the risks associated with excess alcohol consumption, the increased awareness does not necessarily translate to behavioural changes in at-risk groups (Abraham, Southby, Quandte, Krahe, & Sluijs, 2007; Agostinelli & Grube, 2002; Thomas, 2012).

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Male farmers who have previously been identified as ‘symbolically representing a strong, traditional or hegemonic form of masculinity based on stoicism’ (Roy, Tremblay, Robertson, & Houle, 2017) are now shaped by their social conditions, moving away from being relentless workers towards more open and flexible masculine identities (Roy et al., 2017). Increasingly targeted by environmental extremists, protein farmers are portrayed as callous and uncaring of their livestock. Advertising takes advantage of guilt-ridden appeals to ‘demonise meat as a food group’ which is exemplified in television advertising such as Tesco’s ‘Daddy I don’t want to eat animals anymore’ campaign, where the daughter exclaims that she does not want to eat meat any more and the father changes a family favourite recipe to use a meat-free sausage (https://youtube/_3PW8BlNDl4). Female farmers on the other hand have previously been portrayed as wives and mothers who stay in the house and complete household duties,

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disadvantaged by rural residency and a lack of social and economic equality between genders (Little, 2009; Penley, 1991), recognized as responsible only for the ‘domestic reproduction of a household’ (Little, 2009, p. 316). Previously, women have not been recognized for the work that they did outside of the household (on the farm, they were seen to be invisible) (Bryant & Pini, 2006). In early magazines, women farmers were depicted as glamourous additions to the farming family (The Farmers Wife: A Magazine for Farm Women, 1932; Foust Prater, 2018) and in advertising they are demonstrating the use of household goods (Hay, 2018). While working in the home and raising children, women have long been expected to fill in on the farm when emergency labour is required (Alston & Wilkinson, 1998). Emergency labour might require the woman producer to participate in a vast array of farming tasks, which are equally as arduous and valuable as men’s work. This in turn may challenge male producers’ perceptions of ‘traditional’ masculinity (Saugeres, 2002). This might shed some light on the gender divide that is often cited in extant literature. But given the age of the articles, and that many of the cited studies only investigate the motives of men not women, these perceptions may no longer be current (Bock, 2006; Brandth, 2006; Bryant & Pini, 2006; Doss & Morris, 2000; Gasson & Winter, 1992; Kelly & Shortall, 2002). Women involved in Australian beef production suggest that there is very little division of gender within the industry. Rural women see women and men as being on a level playing field: ‘it’s about being together, men and women on farms don’t see themselves as having a gender-based role, but as the job getting done by whomever is available to do it’ (Hay, 2018). Beach (2013) states: ‘while the discourses of the family farm and masculinization do occur … neither one is the primary discourse expressed by farmers’ (p. 225), supporting Australian rural women’s views. The shift in perception is evident in current advertising where women are portrayed in many roles in agriculture outside of motherhood or being the homemaker.

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wider advertising codes of practice and associated regulations, there is far from global coverage and the expansion of digital media platforms makes monitoring and effective regulation difficult. Where potentially serious health risks may occur as a result of cosmetic procedures (see e.g. Craddock, 2016), action from health professional bodies and legislation is also required. It is unlikely that the industry members themselves will take collective action on their own. However, as an example of the impact of consumer advocacy it is interesting to note that in late 2019 Amazon bowed to pressure from lobby groups and announced it would cease selling skin-lightening products with high levels of mercury. These organizations had collected 23,000+ signatures on a petition protesting both the ethics of perpetuating the colourism (preference for pale skin tones) myth and the sale of dangerous products. The petition was supplemented by a newspaper advertisement that declared the selling of such products to be ‘dangerous, racist, and illegal’ (CBS News, 2019). Amazon continues to sell some skin-lightening products in spite of the criticism of this helping to perpetuate colourism. While consumer advocacy is creating pressure on industry, some major regulators are taking notice. In 2018, the Food and Drug Administration launched an investigation into safety practices and manufacturing standards, targeting the cosmetics industry, stating that an investigation is long overdue. Canada and the European Union (EU) have also acted. The EU has banned just over 1,000 chemicals from cosmetics and introduced ‘premarket safety assessments, mandatory registration and government authorization for the use of materials’ (Narayan 2018), while Canada has restricted hundreds of chemicals that present health risks (Campaign for Safe Cosmetics, 2019). It would appear that, with this and other product categories discussed earlier, in order for major, industry-wide change to occur, action from legislators is required, the threat of which may impel industry regulators and professional bodies to take action to self-regulate rather than being compelled to conform to legislation. Ongoing advocacy and consumer pressure may also help by keeping awareness of ethically questionable products and practices high via the media and lobbying of regulators.

CONCLUSION: THE FUTURE As with so many other areas of marketing in which there are significant ethical issues, awareness of unethical practices will not, of itself, stop consumers from ‘buying into’ the idealized agenda. While some regulation of health and beauty claims exists in many countries as part of

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13 Ethical Issues in Marketing to the Lgbt Community: Of becoming Visible and being targeted Stephan Dahl

INTRODUCTION Marketing to and marketing featuring lesbian, gay, bisexual, transgender/transsexual (LGBT)1 characters is a relatively recent phenomenon, which occurred concurrently with the increased visibility and social acceptance of LGBT people in society, at least in Western democracies. Reflecting upon the significant political and social progress in terms of visibility and acceptance of the LGBT community, the purpose of this chapter is to review the emerging, constantly changing extant literature on about marketing to this community, with a focus on the debate touching upon ethical issues. In addition, areas for future research are pointed out.

SOCIAL AND HISTORICAL CONTEXT In many Western countries, a commercial LGBT culture emerged after the decriminalisation of homosexuality, which occurred largely during the late 1960s to the 1980s (Illinois: 1961; UK: 1967; Germany (East): 1967; Germany (West): 1968; Connecticut: 1971; South Australia, 1975; and so on). While there are few surviving examples of

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pre-legalisation marketing, specifically to gay men, these were relatively rare and covert (e.g. using specific symbolism that could only be understood by the target audience). Similarly, mainstream advertising used to pick up gay and homoerotic themes, but in such a way that straight consumers were unlikely to recognise this as such (Klara, 2013). The early LGBT liberation movement was largely non-commercial, if not anti-capitalist, in nature. Instead of promoting economic inclusion, it focused on political and social ideals. This changed during the late 1980s and into the 1990s, when gay identity started to be promoted more openly based upon a consumerist expression of identity. Central to this stance was the idea of achieving equality through emphasis on consumption and emphasising the supposedly significant purchasing power (the pink pound/dollar), and thus portraying gay men in particular as a profitable target market for marketers. Thus, gay men were portrayed as conspicuous consumers, who are wealthy, hedonistic and particularly receptive for upscale products (Badgett, 2003). During the 1990s, marketing to the LGBT community also drew increased academic interest. The publication of a seminal (double-)issue of the Journal of Homosexuality looking at marketing to the LGBT community in 1996 foreshadowed

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many of the topics that have since been debated in the literature: from the effects of using homosexual imagery (Bhat et  al., 1996) and marketplace discrimination (Jones, 1996; Walters & Curran, 1996) to the uneasy relationship between the LGBT movement and the marketplace (Peñaloza, 1996). Inclusion of and marketing to LGBT consumers does indeed appear to make economic sense: several studies suggest that gay consumers long for the feeling of social acceptance assumed to be given by inclusion in marketing/media. In return, these consumers reward companies with fervent brand loyalty (Kates, 2004; Tuten, 2006). The perception of advertising portrayals as ‘role models’ plays a dominant role in this positive effect for marketers: LGBT media role models have been found to elicit feelings of pride in LGBT consumers (Nölke, 2018), who identify with the role models and feel represented by them. The positive effect appears to persist even if portrayals are perceived as highly stereotypical and the message is considered commercialised (Tsai, 2011).

POPULARITY OF LGBT-TARGETED ADVERTISING Marketing to LGBT consumers is particularly popular in three areas: tourism, lifestyle and social marketing. Space prevents a full discussion of each of these areas; however, it is useful to review these briefly, in order to discuss some of the ethical aspects covered in this chapter later on. Gay, and to a much lesser extent lesbian, tourism has been important to the LGBT community as a place to escape, experience community and to ‘let go’ (Johnston, 2012). LGBT tourism has many economic advantages, and is considered an attractive business opportunity and marketing strategy for many destinations (Melián-González et  al., 2011). Not surprisingly then, the LGBT tourism market has grown and diversified significantly, ranging from exclusively gay cruises to spiritual retreats (Dahl & Barreto, 2020). Lifestyle-based marketing specifically to, or featuring, LGBT people is mostly centred on fashion, design, technology and alcoholic beverages. For instance, Amazon Kindle used a married gay couple to market the e-Reader (Um, 2016), DocMartins and Nike have released rainbow-coloured shoes, and many Pride events are sponsored by alcohol brands (Spivey et al., 2018). Finally, a number of social marketing campaigns target LGBT people specifically. For instance, the majority of social marketing campaigns promoting

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HIV testing are designed specifically for men who have sex with men (Olawepo et al., 2019). Because of increased risk of being a smoker, there are LGBT specific anti-tobacco campaigns (Navarro et al., 2019) and there is increasing discussion on how to tackle the increased risk of mental health incidences among LGBT people.

Criticisms: ‘Selling Out’ and ‘Going to the Market’ Notwithstanding the advances the LGBT community has achieved with the strategy of promoting the pink pound/dollar, there has been outspoken criticism against the perceived ‘selling out’ of the LGBT movement (Chasin, 2001). Much of the criticism is based on the effects that commercialisation, specifically the marketing towards and representation of LGBT characters in marketing to a wider audience, has had of an originally political and social movement. Many of these criticisms could be described as bitter sweet: on the one side, as alluded to above, representation is often seen as something positive, but on the other side, the portrayal is frequently criticised as stereotypical or even derogative. This stems from a heavily sensitised concern for the impact of marketing activities on the group interest (Peñaloza, 1996). In order to discuss the ethical issues related to marketing to and featuring LGBT people, I will now first discuss the central role of representation with a media environment.

Representing the LGBT Community – Or What Is Represented? Representation, or display of LGBT characters in marketing, is pivotal to many of the ethical issues covered in this chapter. The term representation itself is somewhat ambiguous, and often used interchangeably with portrayal. For the terms of this chapter, representation refers to all portrayals of LGBT characters – that is, where they are visible. I acknowledge, though, that invisibility, as the opposite of representation, has been described as either absolute (i.e. no representations at all) or relative (i.e. no positive, reaffirming representations) (Fryberg & Townsend, 2008). A few decades ago any form of representation was mostly non-existent outside of specifically LGBT+-targeted media. Increasingly, though, companies are including LGBT+ characters in their advertising (Grau & Zotos, 2016; Nölke,

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2018). Today, overt gay and lesbian imagery appears regularly in mainstream advertising, especially of gay men and for brands and in product categories which are associated with edgy and unconventional imagery, such as travel, design, fashion and alcohol (Tsai, 2011).

REPRESENTATION AS PROVIDER OF GUIDANCE, SUPPORT AND TO ESTABLISH SOCIAL NORMS Media representation is important to establish social norms, and provides support and guidance for LGBT people particularly during the process of coming out and in constructing their own identity (Dhoest & Simons, 2012). For LGBT people, the desire to be portrayed as ‘normal’, that is to say part of the fabric of society and not reduced to simple stereotypes, is important (Dhoest & Simons, 2012); that is, different facets of diverse personalities are represented, rather than a reductionist portrayal focusing on sexual orientation alone. Representation of minorities in the media usually follows a pattern originally observed by Berry (1980), and going through three stages: a stereotypic phase, which is followed by a phase of ‘new awareness’, and finally a stabilisation phase, where minority characters are largely integrated and appear equal to the majority culture in the representation. Although somewhat dated, an analysis of the 2001 fall season of US television found that in terms of gay and lesbian representation, this had only partially progressed beyond the first stage (stereotypic representation). This mirrors a concern often found in the literature, where LGBT people consider media representation of LGBT characters as being stereotypical and/or subject to ridicule (Tsai, 2011).

of this chapter, I note that the majority of studies find that media (including advertising) representation has a strong impact on the target audience (see also Chapter 12 in this Handbook for some theoretical explanations and further details of this interaction in Gomillion & Giuliano (2011) for a fuller review).

The Question Therefore Is: How Diverse and Representative Is Media Representation? There are indications that a diverse representation is improving; however, LGBT characters overall are far from representative. On the whole, studies looking at LGBT characters, including those in advertising, found these depictions to be reductionist, and limited to certain ‘acceptable’ or perceived wisdom representations. Specifically, the overwhelming majority of represented characters were white, middle-class, gender-normative, and mostly male (Tsai, 2004) – otherwise described as ‘youthful, shirtless, hairless and muscular’ (Marshall, 2011, p. 4). Contrary to this representation, the LGBT population as a whole is actually more ethnically and gender-diverse than the population identifying as heterosexual (Diaz & Kosciw, 2009). More recent studies have found some improvement, particularly a decline in hypersexual representation and a more complex character representation. Despite the improvement, representation still remains largely unrepresentative (Nölke, 2018), and most characters conform to what has been described as a heteronormative and domesticised version of largely male, white, gay consumers. Contrary to previous studies, though, Nölke (2018) finds that the dominant gay male character is not young as previously reported, but middleaged, middle-class and Caucasian – an indication that marketers aim to target the more affluent middle-aged gay consumers, whereas before the target seemed to be more younger gay consumers.

REPRESENTATION AND SELF-PERCEPTION Cultural factors affect an individual’s self-perception and contribute to building their personal identity (Hammack, 2005). Role models shown in the media affect individuals’ self-perception, with individuals showing higher levels of self-esteem when they are perceiving themselves to be similar to the displayed role models (Gomillion & Giuliano, 2011). While an extensive review of the interaction of media displays of a target audience and the target audience itself is beyond the scope

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Under-representation of Lesbian Consumers On the other hand, the scarcity of ethnic diversity and under-representation of lesbian consumers being portrayed has caused concern amongst researchers (Ginder & Byun, 2015). Sender (2012) speculated that the inadequate representation of lesbian consumers is linked to the ‘stereotype of the dour, unsexy lesbian female’

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(p. 200). Nölke (2018) in her analysis finds that the majority of lesbians portrayed in advertising are indeed a ‘femme’, meaning they adhere to societal beauty standards (e.g. look feminine, often with longer hair, and do not look ‘butch’) and are shown as being in a loving, committed relationship. Other lesbian imagery was relatively rare, which may support Sender’s (2012) argument that only those LGBT characters that do not overtly challenge the societal norms are allowed to feature in mainstream (and to some extent LGBTtargeted) advertising.

PERCEPTION OF LGBT CHARACTERS BY NON-LGBT VIEWERS There is a body of research which, in turn, looks at how LGBT characters in advertising are perceived by non-LGBT-identifying viewers. Much of this research relies on advertising characters making oblique references to being LGBT, rather than overt display of same-sex attraction. For example, adverts may show two men on a beach together, but without physical contact. Such oblique references are used to avoid a potential negative backlash against a brand, as studies have shown that overt references have the potential to lead to negative brand evaluations (Um, 2014; 2016). Importantly, though, a meta-analysis of studies related to homosexual imagery found that there was no net effect on persuasion of either using or not using LGBT imagery (Eisend & Hermann, 2019). While a full discussion of the literature is beyond the scope of this chapter, broadly the literature converges towards two conclusions (Tsai, 2004). Firstly, many oblique references are not picked up by non-LGBT-identifying viewers, that is the characters are not perceived as being LGBT. Secondly, of those viewers who do recognise the LGBT characters as such, those viewers who hold more positive attitudes towards LGBT people tend to respond positively, while others respond negatively.

HOMONORMATIVITY – OR THE REPRESENTATION OF LGBT CHARACTERS AS (NEARLY) STRAIGHT Central to the critical discussion of representation is which aspects of LGBT people are made visible, the overwhelming feeling from the critical

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discourse and reflection upon the portrayals is that largely socially acceptable characters, which do not challenge any societal norms, are being portrayed as role models and repetitive of the far more diverse and complex LGBT community. While even the limited representation is, on the one side, validating, confining and emancipating, depending on which values are portrayed, representation can, on the other side, also reinforce aspects of the status quo and the majority culture. This is because minority consumers strive to elevate their social status and acceptance in the existing social hierarchy (Tsai, 2011) by comparing themselves with portrayed role models and living up to the portrayals. As Tsai (2011) further points out, minority consumers often display constant concerns about social stigma and are conscious of their marginality. At the same time, many aspire for mainstream membership, an aspiration that can only be fulfilled through assimilation of LGBT consumers through what authors on the critical side of the debate call ‘normalisation’, meaning reducing the stigmatic distinctiveness of their sub-culture. That is to say, the long-term effect is that LGBT consumers, instead of celebrating their diversity and finding more acceptance, are themselves mimicking norms of the heterosexual world in an LGBT environment. This process has become known as ‘homonormativity’, or the result of a politic of assimilation (Duggan, 2002). That is to say, the majority norms and values of an ascribed superior heterosexual society, particularly in relation to lived sexuality and personal relationships, become dominant: that is, monogamy, gender binary and cisgenderism should be replicated and lived in the LGBT community.

WHOLESOME NORMALITY FOR ADVERTISERS For advertisers, promoting homonormativity solves a conundrum of targeting specifically gay male consumers (Sender, 2012). During the early days of media targeted at LGBT people, advertisements targeting gay males often featured sexual activities, such as advertising for sex clubs, pornography and telephone sex. During the 1980s and 1990s, overtly sexual advertising was largely dropped and replaced with a more ‘wholesome’ depiction of sexuality, or indeed only implied sexuality. Sender (2012) discusses the issues related to the more conservative approach taken by LGBT media at length, noting that some in the LGBT community saw this as a move towards a more highbrow and sophisticated depiction of the (gay male) community. Advertisers at the time

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stated that their intention was to contradict the stereotypical depiction of the gay male as hypersexual. This leads to a rather challenging dilemma: on the one side, sexual orientation is per definition related to, but not limited by, sexual expression, yet, on the other side, that very sexual expression was normalised, or largely dropped, in pursuit of other activities being depicted. Another aspect that changed with time has been the rise of the loving, committed and presumably monogamous homosexual couple as the backbone of LGBT representation. As Nölke (2018) finds, both gay male and lesbian characters in advertising fall into this category, often being shown with their respective partner. Again, this leads to a rather complex situation: on the one hand, the depiction reflects the changing social and legal reality of many LGBT people, while on the other hand it neglects the more diverse constructions of relationships found in LGBT relationships (Bonello & Cross, 2009). The socially acceptable depiction of, for example, monogamous homonormativity increases social acceptance of (some) LGBT people, and supports the argument that LGBT people are ‘just like us’. Thus, it is not surprising that slogans emphasising similarity between LGBT and straight love are common: slogans or implied meanings of ‘Love is love’ and ‘all families are wholesome’ are reoccurring themes in advertising depicting LGBT characters (Nölke, 2018).

INTERSECTIONALITY A different lens with which to observe representation of the LGBT community in marketing communications and mainstream media is to focus on the representation of ‘intersectional personalities’. Intersectionality has its roots in feminism, and is a way to explore multiple points of marginalisation, such as gender, race, class, sexuality, disability, etc. The assumption is that all political and social identities of a person overlap and potentially result in multiplicative oppression. For instance, a person may be black, disabled and bisexual. Intersectional analysis of representation leads to a richer picture of representation than conventional analysis by challenging the assumption that race, gender, sexual orientation and so forth are independent demographic variables. Specifically in regard to the LGBT community, the sole focus on sexuality as the only locus of identity results in a simplistic analysis of representation, and is in danger of ignoring how sexuality intersects with other social categories. Thus, intersectional analysis is an important tool in researching marketplace diversity (Gopaldas, 2013).

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In terms of advancement of representation, a diverse representation, that is to say representing a multitude of intersectional personalities, is also a sign of a more advanced representation, such as the stabilising phase of the Berry (1980) framework. To date, many authors have lamented a lack of diverse representation of LGBT characters, yet few authors have systematically approached the subject. The only systematic study was conducted by Nölke (2018), who found only very limited intersectional representation. Thus, Nölke concluded that ‘the analysis highlights how the erasure of multiply marginalized groups in mainstream advertising continues to perpetuate a heteronormative, domesticized version of “gayness”’ (p. 224). Moreover, Trans* characters are sparsely represented in advertising. As Nölke (2018) finds, a small number of trans men appeared around 2015, all middle-class and Caucasian. On the other hand, transfemales were invisible – only drag queens were represented. As Nölke concludes, this may lead to a ‘likely association … by unknowing audiences’ (p. 242). Homonormative and non-intersectional representation has its vocal critics: Duggan (2002) laments the lack of political ambition in a homonormative world, where ‘politics … does not contest dominant heteronormative assumptions and institutions but upholds and sustains them while promising the possibility of a demobilized gay constituency and a privatized, depoliticized gay culture anchored in domesticity and consumption’ (p. 179). In a similar way, Kates (2004) critiques the observed assimilationist representation of LGBT characters in media as a hetero-normalized understanding of the LGBT community that contradicts modern queer activism. The main concern that all of these authors share is that through current representation, LGBT consumers internalise such representations and the displayed values into their self-concept (e.g. Peñaloza, 1996; Tsai, 2011) and thus lose the political, social and progressive agenda of the early LGBT movement. Despite these criticisms, based on a qualitative analysis of a Belgian LGB cohort, Dhoest and Simons (2012) note that overwhelmingly respondents were happy with the perceived improved representation of LGBT characters in mainstream media. They also note the absence of voices mentioning homonormativity or critically reflecting on it in their sample.

EFFECTS OF TARGETED MARKETING – BEYOND BEING SEEN Beyond the concerns regarding homonormativity and intersectionality, other ethical issues related to

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targeting LGBT consumers are more similar to concerns of the effects of marketing to mainstream consumers.

Promotion of a Negative Body Image A line of literature has voiced concerns over the body image shown in LGBT-targeted marketing communications. In general, LGBT populations, and especially gay men, are significantly more likely than the general population to suffer from low body satisfaction, eating disorders and low selfesteem related to their appearance (Lanzieri & Hildebrandt, 2016). Much of this has traditionally been attributed to a combination of ‘minority stress’, where members of a stigmatised group have chronically high levels of stress in response to internalised homophobia, expected stigma, discrimination or prejudice and experiences of physical attacks, as well as a desire to conform to perceived ‘masculine norms’ (Kimmel & Mahalik, 2005). However, increasingly the role that advertising plays is also being questioned. For example, Saucier and Caron (2008) investigated the images used in advertisements in gay-targeted magazines, and concluded that the vast majority of men represented were under 30, lean and muscular, shirtless – and 95% white. They concluded that these images are what ‘men compare their bodies to and potentially reinforce or create feelings of low selfworth and esteem’ (p. 520).

Age, Size and Body Image and the LGBT Community – A Complex Issue The issue, though, may be more complex: pressure to look young and attractive is a frequently mentioned trait of the gay community, and certainly predates LGBT-targeted advertising. Thus the pressure originates both within the gay community itself and is reinforced through gay-targeted media and marketing, leading to a complex interaction of actual and portrayed social norms not dissimilar to those found in skin-whitening products (see Chapter 12 for a discussion of this). For instance, Suen (2017) notes that ageism is rife within the gay community, and constantly reinforced by gay men themselves. As a result of this, gay men are said to invest more in their appearance and have a higher frequency of shopping each month for apparel and grooming-related products than straight men (Strubel & Petrie, 2018). This ‘catch-22’ situation makes the target group more attractive to advertisers, who then reinforce the existing and unobtainable beauty ideals.

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Related to the exclusion of older gay men is the inclusion of larger gay men: Nölke (2018) suggests the ‘absolute invisibility of non-lean characters’ (p. 244) is likely to result in a feeling of double marginalisation for those who do not approximate this (and other) beauty standards. Marginalised on the one side because of their sexual orientation, and then on the other side marginalised again, within their community, because of failing to meet an unachievable beauty standard. Notwithstanding the above, within the gay male community there is a relatively prominent subculture of larger men, who describe themselves as ‘Bears’. This sub-culture appears more diverse than the traditional ‘lean and young’ gay culture, emphasising maturity, body hair and larger body frames (Manley et  al., 2007). Despite the growing popularity of this ‘counter culture’ to the portrayed gay scene, ‘Bear’ characters feature seldomly in LGBT advertising. However, celebrating a more body-shape-inclusive culture also has its potential for unintended consequences: concerns have been raised that celebrating an ‘obese’ culture is likely to result in health problems for those aiming to obtain the ‘Bear’ beauty ideal (Gough & Flanders, 2009).

An Even Less Diverse Representation of Lesbian Characters While the representative representation of (gay) males, and thus also the construction of role models, may be problematic, representation of women is even less diverse: As Gill (2008) notes: ‘older women, disabled women, fat women and any woman who is unable to live up to the increasingly narrow standards of [the heteronormative] female beauty and sex appeal that are normatively required’ (p. 42) are virtually invisible. More outspokenly, Ginder and Byun (2015) conclude: ‘[T]he lack of female representation continues to propagate patriarchal dominance and a history of lesbian invisibility within the marketplace’ (p. 838). The lack of lesbian and bisexual female representation versus gay male representation has been attributed to lesbians being perceived as less powerful and more supportive of anti-capitalist, feminist ideals. Notably, though, this myth is largely the result of another myth: that of the wealthy gay (male) consumer.

The Myth of the Affluent Gay Male The enduring myth of the affluent, well-educated and spending happy gay consumer is, despite

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overwhelming evidence to the contrary, still much used as an argument to attract businesses to market to gay consumers. Yet, gay males have been found to be significantly less well off than their straight counterparts (McDermott 2014). For instance, 29% of LGBTQ adults experience food insecurity in the USA (16% of the general population). The poverty rate among gay men aged 18–44 is 20.5% (compared with 15.3% for heterosexual males). In fact, precariousness of LGBT consumers remains a complex area, in which many different intersectional factors combine, including overall lower wages, limited legal protection and higher rates of poverty in addition to an ethnically more diverse population (for a full review see Hollibaugh & Weiss, 2015).

These concerns do not only relate to event-related funding, but also extend to funding given directly to community organisations (Drabble, 2000). One of the most spectacular cases of tobacco marketing also concerns the LGBT community (among others). Project ‘SCUM’, short for SubCulture Urban Marketing, was a programme designed by the tobacco industry to market specifically to gay men and homeless people. As Stevens et al. (2004) note in their review of the project, smoking rates increased in the LGBT population concurrent with the project. While direct-to-consumer advertising has been heavily restricted for tobacco products, the tobacco industry has been using cigarette packages to target different social demographics, including the LGBT community (Cruz et al., 2019).

BEYOND COMMUNICATION: TARGETING THE LGBT MARKET WITH HARMFUL PRODUCTS

From Safe Sex to Stressful Sex

While marketing communications make up the bulk of research related to marketing to the LGBT target group, other areas, despite being less visible in the research streams, throw up significant ethical concerns about targeting sexual minority groups with advertising of unhealthy products (and health-related marketing).

Smoking and Tobacco-Related Products In terms of consuming potentially harmful products, LGBT people are not only significantly more likely to smoke in general, but also less likely to smoke supposedly less harmful ‘smokefree’ cigarettes than their heterosexual counterparts (Azagba et  al., 2019). With large numbers of smokers, more gay men are forecast to die from smokerelated illnesses than HIV/AIDS (Max et  al., 2019). Moreover, LGBT people have consistently been found to have a higher binge-drinking frequency (Hess et  al., 2015), particularly among younger men who have sex with men (Mutchler et al., 2014), and overall gay men have been found to start drinking at a younger age than their straight counterparts (Grosso et al., 2019). While it is notoriously difficult to link marketing activity to specific behaviours, concerns have been raised in relation to the large-scale sponsorship of LGBT events, such as Pride parades, parties and cruises, by three types of marketers: the alcohol, tobacco and pharmaceutical industries.

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As a response to the promotion of unhealthy products and other health inequalities, social marketing campaigns have targeted LGBT people. Most well known among these are social marketing campaigns to prevent HIV infection, with the most notorious examples of scaremongering among the early campaigns (e.g. the falling tombstones campaign of the late 1980s in the UK). Many lessons have been learned from the early days, and many campaigns running today have more positive evaluations. For example, social marketing interventions, such as the social branding programme CRUSH, which targets LGBT youth by organising smoke-free party events, are promising to reduce tobacco use among their target audience (Fallin et al., 2015). However, even well-meaning campaigns for promoting safer sex, for example, may have unintended consequences, as Starks et  al. (2013) found, in the presence of minority stress. In this case, even HIV-negative individuals might experience stress based on expected negative evaluations by the majority culture if they were to be diagnosed positive. This stress can potentially be increased by exposure to safer sex advertising.

The Moral behind HIV– Prevention A different ethical conundrum is the provision of PrEP. PrEP is a medication, originally used to treat HIV infection, that can also be taken daily to reduce the chances of contracting HIV, even with unprotected sex, to levels similar to those with condom use (Spinner et al., 2016). However, provision of PrEP is expensive – and there has been

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concern that sexual promiscuity and with it other forms of sexually transmitted infection (STI) could rise. While the scientific evidence does not support this claim, there are some claiming that an observed rise in STIs among men who have sex with men (MSM) is likely part of an overall rise in STI (Ramchandani & Golden, 2019), and others have found that PrEP use actually decreased the number of sexual partners and condom use did not change (Spinner et al., 2016). Nevertheless, there is an often morally charged debate on whether or not to provide PrEP as part of state health systems. Data from different European countries, as of September 2019, shows that PrEP is available in some countries without cost and fully accessible to people who request it (e.g. in Scotland), while other countries currently run ‘trial programmes’ admitting a specific number of users (e.g. England), and others have made PrEP available formally, though do not cover the cost (Italy), while yet other countries have not made PrEP available at all (e.g. Hungary).

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advocates homophobic policies, while these companies supposedly also supported LGBT rights (Ruggiero, 2019). A highly controversial issue is the supposedly strategic marketing of Israel as a gay-friendly country: As Schulman (2011) reports, the Israeli government created a marketing plan embracing the gay community to reposition its global image. This plan included a $90 million campaign positioning Tel Aviv as a ‘gay vacation destination’. In the case of Israel, the underlying logic was that some people, especially in Western Europe and North America, judge a country’s advancement by how advanced the country responds to LGBT issues (Schulman, 2011). Critics were quick to point out that gay rights in Israel were far from world-leading, and that the campaign appeared to attempt to offset human rights violations in other areas (Puar, 2010).

… THE EVOLVING SOCIAL MEDIA SIDE CSR: PAINTING THE WORLD IN PINK, SOMETIMES LGBT images feature relatively prominently in marketing communications in Western countries, as previously noted (Grau & Zotos, 2016; Nölke, 2018). LGBT causes also feature strongly in many CSR initiatives, and have been linked to increased recruitment selection, better retention and financial performance (Pichler et  al., 2018). A full review of CSR ethics is beyond the scope of this chapter, and covered later in Chapter 21 of this Handbook. In respect to CSR initiatives involving LGBT themes, ethical issues arise when there is an incongruence between an organisation’s internal and external position, most prominently when an organisation takes little or no internal LGBT rights promoting CSR action, while making external CSR claims about their inclusiveness. This position is known as a ‘Washing Position’(Ginder et al., 2019). In short, the washing position refers to an organisation failing to practise what it preaches, particularly when the company engages in marketing communication seemingly supporting the cause. A different issue can arise when organisations donate to conflicting causes. For instance, several organisations which support Pride events in the USA donated to politicians opposing LGBT protection (Champlin, 2019). Similarly, several companies were found to support Brazilian president Bolsonaro, who openly

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Finally, no marketing text would be complete without touching upon social media. Despite the popularity, though, research into the effects and potential ethical issues of marketing on social media targeting the LGBT community remains scant. At the same time there is an ongoing debate about how social media as a medium and as a tool to meet other people are affecting the LGBT community, which I will briefly summarise here. (Self-)portrayal of LGBT people on social media has been characterised as in many ways empowering, playing the part of a role model, particularly in the early stages of coming to terms with one’s own identity and sexual orientation. Craig and McInroy (2014) find that social media enabled participants to access resources, which in turn allowed them to explore their own identity, find likeness, and cumulating in a ‘digital coming out’. Similarly positive conclusions are drawn by Giano (2019), who found online experiences catalysed the coming-out process, play a significant role in realising one’s own sexual orientation, and are helpful in affirming one’s sexual identity. Contrasting the positive views, concerns about online bullying, particularly towards and among younger LGBT people, have been voiced (Walls et al., 2019). There have also been concerns raised as to the effect of algorithms and moderation guidelines used by social media platforms on the types of posts being displayed to friends and followers. While there is little academic research specifically on the topic of LGBT posts, the mainstream press reported that some social networks

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are overly zealous in banning LGBT content (Hern, 2019) or in other ways hide or restrict LGBT content (Allen, 2018). A large focus of the debate about online and digital media has been the plethora of different dating and hook-up apps, some of which are geared towards often specific segments of the LGBT community, such as Grindr for gay men and Scruff for ‘Bears’,2 while others are inclusive of all gender and sexual identities (such as Tinder). All of these platforms are location-based social networking tools, meaning that they show other users who are within a particular distance of the current user. Thus, they enable both users to meet relatively easily. Strong concerns have been raised that these apps encourage risky sexual behaviour and lead to more sexual contacts, although the evidence of this points to a more complex picture (Byron, 2017). Both traditional social media and hook-up apps have been studied as tools to deliver health promotion messages to the LGBT community, in particular HIV and sexual health-related messages. Two systematic reviews (Cao et al., 2017; Muessig et  al., 2015) have reviewed these interventions and concluded that they offer an effective way to deliver health-related messages. Most of the campaigns reviewed used Facebook or Grindr as a medium. Unfortunately, no similar studies are available for commercial marketing messages sent/targeted to the LGBT community on social media/hook-up apps. To summarise, while there is some extant research into the effect of social media on the LGBT community, future research is needed to evaluate how marketing using the social media channel affects the LGBT people.

towards positive marketing advances, because these instil a feeling of recognition and acceptance, a situation that is potentially shared with other minority groups. thirdly, the (mis)use of the Lgbt community as a progressive ‘anchor point’, particularly in the context of pink washing and deflecting from other, less ethical practices. The question thus is: how can we improve current marketing practice? Pointing out the unethical or potentially problematic practices will not, in itself, lead to a solution, particularly in the absence of research examining the effects. The case of marketing to the LGBT community highlights an interesting issue from an ethical perspective in relation to calls for a more diverse, representative and inclusive representation: Dhoest and Simon’s (2012) research shows that there is possibly little in-community support for calls for greater diversity. This is supported by Tsai (2011), who also found that even where LGBT community members felt that the portrayal of LGBT people was highly stereotypical, the effect on the brand was still positive overall. Of course, such divergence is by no means unique to the LGBT community. For example, the issue is similar to the situation of skin-whitening products, which are seen as both empowering and disempowering at the same time (Li et al., 2008).

Notes 1

There is an extensive debate about the term LGBT and how reflective it is of the wide variety of gender and sexual orientations manifest in the non-heterosexual/non-heterophile community. In this chapter I use the term as the term most commonly associated with the community, and understand it as an all-encompassing term. Men with a larger body frame.

CONCLUSION: MOVING TOWARDS THE FUTURE …

2

In relation to ethical issues concerning marketing to LGBT people, there are three main concerns expressed in the literature:

REFERENCES

Firstly, the homogeneous, and stereotypical, representation of Lgbt individuals in marketing materials, leading to internalised norms in different areas, ranging from beauty ideals to how to conduct romantic relationships. In short, is it advisable to normalise diverse groups through assimilation? Or is there a way to include diverse representations? Secondly, the promotion of unhealthy products to the community, which in turn is receptive

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Allen, S. (2018, October 12). Social media giants have a big LGBT problem. Can they solve it? The Daily Beast. https://www.thedailybeast.com/ social-media-giants-have-a-big-lgbt-problem-canthey-solve-it Azagba, S., Shan, L., Latham, K., & Qeadan, F. (2019). Disparities in adult cigarette smoking and smokeless tobacco use by sexual identity. Drug and Alcohol Dependence, 107684. https://doi. org/10.1016/j.drugalcdep.2019.107684

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and health. International Journal of Men’s Health, 8(3), 235–253. https://doi.org/10.3149/jmh. 0803.235 Grau, S. L., & Zotos, Y. C. (2016). Gender stereotypes in advertising: A review of current research. International Journal of Advertising, 35(5), 761–770. https://doi.org/10.1080/02650487.2016.1203556 Grosso, A. L., Downing, M. J., Thomann, M., Chiasson, M. A., Schrimshaw, E. W., & Hirshfield, S. (2019). Age of onset of alcohol consumption and subsequent negative health outcomes in gay and bisexual men who have sex with men. Journal of Homosexuality, 66(11), 1609–1625. https://doi. org/10.1080/00918369.2018.1505757 Hammack, P. L. (2005). An integrative paradigm. Human Development, 48(5), 267–290. https://doi. org/10.1159/000086872 Hern, A. (2019, September 26). TikTok’s local moderation guidelines ban pro-LGBT content. Guardian. https://www.theguardian.com/technology/ 2019/sep/26/tiktoks-local-moderationguidelines-ban-pro-lgbt-content Hess, K. L., Chavez, P. R., Kanny, D., DiNenno, E., Lansky, A., & Paz-Bailey, G. (2015). Binge drinking and risky sexual behavior among HIV-negative and unknown HIV status men who have sex with men, 20 US cities. Drug and Alcohol Dependence, 147, 46–52. https://doi.org/10.1016/j.drugalcdep. 2014.12.013 Hollibaugh, A., & Weiss, M. (2015). Queer precarity and the myth of gay affluence. New Labor Forum, 24(3), 18–27. https://doi.org/10.1177/ 1095796015599414 Johnston, L. (2012). Queering skiing and camping up nature in Queenstown: Aotearoa New Zealand’s Gay Ski Week. In J. Caudwell & K. Browne (Eds), Sexualities, Spaces and Leisure Studies. Routledge. https://doi.org/10.4324/9780203722190 Jones, D. A. (1996). Discrimination against same-sex couples in hotel reservation policies. Journal of Homosexuality, 31(1–2), 153–159. https://doi.org/ 10.1300/J082v31n01_09 Kates, S. M. (2004). The dynamics of brand legitimacy: An interpretive study in the gay men’s community. Journal of Consumer Research, 31(2), 455–464. Kimmel, S. B., & Mahalik, J. R. (2005). Body image concerns of gay men: The roles of minority stress and conformity to masculine norms. Journal of Consulting and Clinical Psychology, 73(6), 1185– 1190. https://doi.org/10.1037/0022-006X.73.6. 1185 Klara, R. (2013, June). Gay advertising’s long march out of the closet. ADWeek. https://www.adweek. com/brand-marketing/gay-advertising-s-longmarch-out-closet-150235/ Lanzieri, N., & Hildebrandt, T. (2016). Using objectification theory to examine the effects of media on

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gay male body image. Clinical Social Work Journal, 44(1), 105–113. https://doi.org/10.1007/s10615015-0562-1 Li, E. P. H., Min, H. J., & Belk, R. W. (2008). Skin lightening and beauty in four Asian cultures. Advances in Consumer Research, 35, 444–449. McDermott, N. (2014, March 21). The myth of gay affluence. The Atlantic. https://www.theatlantic. com/business/archive/2014/03/the-myth-ofgay-affluence/284570/ Manley, E., Levitt, H., & Mosher, C. (2007). Understanding the Bear movement in gay male culture: Redefining masculinity. Journal of Homosexuality, 53(4), 89–112. https://doi.org/10.1080/0091 8360802103365 Marshall, A. (2011). Visual images in advertising to the gay market. Australian and New Zealand Marketing Academics Conference, Perth. Max, W. B., Stark, B. B., Sung, H.-Y., & Offen, N. B. (2019). Deaths from smoking and from HIV/AIDS among gay and bisexual men in California, 2005– 2050. Tobacco Control, tobaccocontrol2018-054850.https://doi.org/10.1136/tobaccocontrol2018-054850 Melián-González, A., Moreno-Gil, S., & Araña, J. E. (2011). Gay tourism in a sun and beach destination. Tourism Management, 32(5), 1027–1037. https://doi.org/10.1016/j.tourman.2010.08.015 Muessig, K. E., Nekkanti, M., Bauermeister, J., Bull, S., & Hightow-Weidman, L. B. (2015). A systematic review of recent smartphone, Internet and Web 2.0 interventions to address the HIV continuum of care. Current HIV/AIDS Reports, 12(1), 173–190. https://doi.org/10.1007/s11904-0140239-3 Mutchler, M. G., McDavitt, B., & Gordon, K. K. (2014). ‘Becoming Bold’: Alcohol use and sexual exploration among black and Latino young men who have sex with men (YMSM). The Journal of Sex Research, 51(6), 696–710. https://doi.org/10.1 080/00224499.2013.772086 Navarro, M. A., Hoffman, L., Crankshaw, E. C., Guillory, J., & Jacobs, S. (2019). LGBT identity and its influence on perceived effectiveness of advertisements from a LGBT tobacco public education campaign. Journal of Health Communication, 24(5), 469–481. https://doi.org/10.1080/1081073 0.2019.1615582 Nölke, A.-I. (2018). Making diversity conform? An intersectional, longitudinal analysis of LGBT-specific mainstream media advertisements. Journal of Homosexuality, 65(2), 224–255. https://doi.org/10 .1080/00918369.2017.1314163 Olawepo, J. O., Pharr, J. R., & Kachen, A. (2019). The use of social marketing campaigns to increase HIV testing uptake: A systematic review. AIDS Care, 31(2), 153–162. https://doi.org/10.1080/0954012 1.2018.1533631

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Peñaloza, L. (1996). We’re here, we’re queer, and we’re going shopping! A critical perspective on the accommodation of gays and lesbians in the US marketplace. Journal of Homosexuality, 31(1–2), 9–41. https://doi.org/10.1300/J082v31n01_02 Pichler, S., Blazovich, J. L., Cook, K. A., Huston, J. M., & Strawser, W. R. (2018). Do LGBT-supportive corporate policies enhance firm performance?: LGBT policies and firm performance. Human Resource Management, 57(1), 263–278. https://doi. org/10.1002/hrm.21831 Puar, J. (2010, July 1). Israel’s gay propaganda war. Guardian. https://www.theguardian.com/ commentisfree/2010/jul/01/israels-gaypropaganda-war Ramchandani, M. S., & Golden, M. R. (2019). Confronting rising STIs in the era of PrEP and treatment as prevention. Current HIV/AIDS Reports, 16(3), 244–256. https://doi.org/10.1007/ s11904-019-00446-5 Ruggiero, R. (2019, January 5). Bolsonaro backlash: Event honoring Brazilian leader calls into question corporate support for gay rights. NBC News. https://www.nbcnews.com/feature/nbc-out/ bolsonaro-backlash-event-honoring-brazilianl e a d e r- c a l l s - q u e s t i o n - c o r p o r a t e - s u p port-n1000431 Saucier, J. A., & Caron, S. L. (2008). An investigation of content and media images in gay men’s magazines. Journal of Homosexuality, 55(3), 504–523. https://doi.org/10.1080/00918360802345297 Schulman, S. (2011, November 22). Israel and ‘Pinkwashing’. New York Times. https://www.nytimes. com/2011/11/23/opinion/pinkwashing-andisraels-use-of-gays-as-a-messaging-tool.html Sender, K. (2012). Business, not politics: The making of the gay market. Columbia University Press. http://grail.eblib.com.au/patron/FullRecord. aspx?p=908995 Spinner, C. D., Boesecke, C., Zink, A., Jessen, H., Stellbrink, H.-J., Rockstroh, J. K., & Esser, S. (2016). HIV pre-exposure prophylaxis (PrEP): A review of current knowledge of oral systemic HIV PrEP in humans. Infection, 44(2), 151–158. https://doi. org/10.1007/s15010-015-0850-2 Spivey, J. D., Lee, J. G. L., & Smallwood, S. W. (2018). Tobacco policies and alcohol sponsorship at lesbian, gay, bisexual, and transgender pride festivals: Time for intervention. American Journal of Public Health, 108(2), 187–188. https://doi. org/10.2105/AJPH.2017.304205 Starks, T. J., Rendina, H. J., Breslow, A. S., Parsons, J. T., & Golub, S. A. (2013). The psychological cost of anticipating HIV stigma for HIV-negative gay and

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14 Ethical Perspectives on Sustainability in Marketing Mark Peterson

INTRODUCTION: OVERVIEW The objective of this chapter is to provide readers with a better understanding of the ethical dimensions of sustainable business practices in marketing. Macromarketing (which focuses on how marketing and society influence each other) offers valuable insights about the challenges and possibilities in pursuing sustainability in marketing. The systems view of marketplace activity inherent in macromarketing leads to consideration of stakeholder theory (Freeman et  al., 2010). To better understand how the stakeholder concept might be applied in markets, Costco, Inc., a major retailing corporation ranked 15th in the Fortune 500 list of major corporations (Fortune, 2019) receives consideration. The chapter closes by presenting implications for scholars and future research directions.

HOLISTIC DEFINITION OF SUSTAINABILITY An examination of the topic of sustainability must begin with consideration of the meaning of ‘sustainability’ because the concept of sustainability

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can take several forms within and without marketing (Kemper et  al., 2019). Prior to 1987, most persons understood sustainability to mean the maintenance of a rate or level of performance. But in 1987, the UN’s Brundtland Commission offered the world a definition of sustainable development (defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs (WCED, 1987, chapt. 2, sect. 4)). In the ensuing decades since 1987, a holistic definition of sustainability has come to mean those concepts and practices of actors in markets (buyers, sellers and government regulators) that benefit future generations through (1) the reduced negative impact on the resources and systems of the natural environment and/or (2) the positive effect on local communities and society at large (Eagle and Dahl, 2015, p. 5). For those researching sustainable business practices and their relevance to intergenerational justice, the holistic ‘triple bottom line’ of people, planet and profit (Elkington, 1994) is the preferred definition of sustainability. This is so, because of (1) its breadth, (2) its correspondence to the concept of corporate social responsibility (CSR) (Eagle and Dahl, 2015, p. 5), (3) its emerging consensus in use across corporations (Haugh and Talwar, 2010), as well as (4) its alignment with the UN’s twenty-first-century effort to

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boost holistic development in countries around the world through its Sustainable Development Goals (SDGs) (United Nations, 2019). However, researchers of sustainability still might encounter those who (1) use ‘sustainability’ with a narrow focus on the natural environment, or (2) ignore (naively or intentionally) both the natural environment and the social aspects of market activities and use sustainability to be synonymous with terms such as ‘durability’ or ‘maintaining performance’ (Lunde, 2018). Amory Lovins, founder of the Rocky Mountain Institute based in Boulder, Colorado, is one of the leading proponents of properly valuing nature and people when doing business. He does not use the word ‘sustainability’ because he believes it means many things to different people (Hopkins, 2009). So what is one to do when using the term ‘sustainability’? Make sure one quickly defines ‘sustainability’ in order to signal to others what view of ‘sustainability’ is being employed. In this chapter, the holistic, ‘triple-bottom-line’ version of ‘sustainability’ for pursuing intergenerational justice will be used.

ETHICAL DIMENSIONS OF SUSTAINABILITY Lim (2016) presents three approaches to ethics for sustainability. The first is a consequentialist approach which proposes that the rightness or wrongness of an action is determined by its consequences (good or bad). With a utilitarian view, this means that the rightness (wrongness) of an action depends on how much good (bad) is produced for the greatest number of persons. The second is a deontological approach which proposes that there are distinct moral imperatives (such as rules and duties) so that violation of such imperatives is intrinsically wrong and observance of such imperatives is intrinsically right. The deontological approach depends on how intrinsic value is assigned to different elements in the environment (such as humans, non-human living things, and ecological systems). The third is a virtue approach in which correct actions are taken by actors with a virtuous character (wise and honest). The notion of a good life becomes the most fundamental moral question and directing valued behavior to others (charitable or benevolent) manifests the inner qualities of a virtuous person (Hursthouse, 1999). In such a way, sustainable behaviors of a person manifest the virtue of a person. The consequentialist, deontological, and virtue approaches correspond to the three distinct streams

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of thought that make up ethics – specifically, (1) outcomes, (2) actions related to principles and rules, as well as (3) agents and their character. Jennings (2010) asserts that a fourth dimension must be part of ethical analysis – an evaluation of the context within which actions take place. Specifically, does the action support or undermine the system or context which makes an action possible and meaningful in the first place? For example, could a person establish a social business that is (1) profitable, (2) legal, and (3) uses its profits to benefit a local community, but despoil the natural environment in such a way as to disrupt entire ecosystems on which life in the local community depends over time? In the Age of the Anthropocene, in which humans represent the most dominant impact on the natural environment, this appears to be happening in local communities as well as at a macro level of planetary dimensions (Jennings, 2015). All four aspects (of ethics) are relevant to sustainability, which is not only about living with constraints, parameters, and limits but also about prescribing some inherently wrong or causally harmful types of action, and about creating the proper kind of sensibility, motivation and moral commitment in people. In sum, virtue, rightness, consequence, and context are all ethically important in navigating sustainability. (Jennings, 2010, p. 27)

Understanding the multidimensional approach to sustainability ethics brings the importance of the macro- or societal-level view. A sustainable society lives within the carrying capacity of its natural and social system (Jennings, 2010). In the realm of business scholarship, macromarketing has taken a systems view of how marketing and society influence each other (Peterson, 2016).

MACROMARKETING PERSPECTIVES ON SUSTAINABILITY Schools of Macromarketing Sustainability Thought Among macromarketing scholars, two schools of thought have emerged about sustainability – the developmental school and the critical school (Mittelstaedt et  al., 2014). The developmental school views markets as the most efficient provisioning mechanism for economic growth, human development, and quality of life. Accordingly, questions about sustainability would focus on how

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existing marketing systems can be improved to provide sustainability to societies. By comparison, the critical school offers a critique of marketing and what it sees as marketing’s inherent dependence on neoliberal ideas of competition in markets as allocating society’s resources. Critical marketers also regard business leaders as ill-disposed or woefully inadequate to the ‘mammoth task of reversing the terrifying reality of ecological devastation’ (Bradshaw and Zwick, 2016, p. 268). Those in the critical school regard exchange as being based too much on the materialism and status needs of consumers – a dominant social paradigm (DSP) (Kilbourne et al., 1997). In sum, the developmental school sees markets and marketing as part of the solution for moving towards sustainability, while the critical school sees markets and marketing as part of the problem – moving societies away from sustainability. Currently, consumers in developed countries consume resources well beyond their real needs as part of the materialistic lifestyle, and consumers in less developed countries aspire to consume beyond their needs (Ger and Belk, 1996). Long-time macromarketing scholar George Fisk was known to repeat the following question to stir reflection on the implications of the materialistic lifestyle being passed to those in developing countries: ‘What are we going to do in twenty years when 500 million Chinese start their cars in the morning to drive to work?’ (G. Fisk, 1997, personal communication). Fisk overestimated a bit as Chinese consumers registered more than 300 million cars 20 years later in 2017 – close to the population of 324 million in the USA (Zheng, 2017). However, he was right in that a surge of consumer acquisition of autos in China would cause problems. Ten of the most congested cities on the planet were in China in 2017. Chinese auto sales accounted for 25% of global auto sales then, too. In April 2006, a dense cloud of soot, toxic chemicals, and gases from smokestacks of coalburning plants in northern China along with dust and desert left China and swept over Seoul, Korea. A US satellite spotted the cloud as it came across the Pacific. As a result of such weather-born exports from the developing world, air filters in places such as Lake Tahoe and eastern California become dark (Bradsher and Barboza, 2006). Particles of sulfur, carbon, and other compounds can work their way deep into the lungs, contributing to respiratory damage, heart disease, and cancer. A conservative estimate of deaths from air pollution alone in the USA each year is 130,000 (Diamond, 2005, p. 492). In China, sulfur dioxide from burning coal results in 400,000 premature deaths each year (Bradsher and Barboza, 2006, p. 1). In sum, as scientific measurements have

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become more sophisticated, the global aspect of air pollution has become undeniable. China’s problems are now the world’s problems. Much of the particulate pollution in Los Angeles originates in China according to the Journal of Geophysical Research (Kahn and Yardley, 2007, p. 1). Fisk’s rhetorical question implies an endorsement of the critical school’s indictment of the ideology that the meaning of life is to be found in buying things which undergird the DSP (Ger, 1997; Kilbourne et al., 1997). If the DSP does not radically change, marketing systems will ruin the environment. Kotler (2011) envisions stakeholders will have to accept many difficult changes if companies are to attain sustainability. Environmental sustainability considers the impact of business on (1) the quality and quantity of natural resources, (2) the environment, (3) global warming, (4) ecological concerns, (5) waste management, (6) lowering energy and resource use, (7) renewable energy production, and (8) improved pollution and emissions management (Townsend, 2008). Kotler envisions CEO and senior executive compensation packages as having to change. For example, senior executives must have to show not only economic success but also success in achieving predetermined goals for the company in the eight areas of environmental sustainability.

Can the DSP Be Changed? The critical school asserts that a radical change needs to be made in the DSP. Although this suggests that a catastrophic climate event might be the precipitating event leading to such a devaluing of wealth accumulation (Gilding, 2011), another way could be less sudden and more gradual over time. Prothero is one scholar from the critical school who sees the way forward as marketing environmental stewardship as a commodity (Prothero and Fitchett, 2000). In other words, can green become ‘cool?’ This would imply deemphasizing consumption while emphasizing citizenship (Prothero et al., 2010). The existence of a consumer segment termed ‘lifestyles of health and sustainability’ (LOHAS, for short) implies that there is a chance that the DSP could be radically changed over time. One estimate of the LOHAS segment suggests that 25% of adults in the USA fall into this category or the ‘cultural creatives’ category (those whose consumption is strongly influenced by values related to environmental concern) (Sung and Woo, 2019). These US consumers number 41 million and spend $290 billion each year on goods and summers. Current distinctive consumption for this

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segment includes organic foods, energy-efficient appliances, alternative medicines, and eco-tourism (Kotler, 2011, p. 134). Research suggests that a sustainability discourse in the marketplace and in the media might be moving many toward a more holistic and global perspective (Prothero et  al., 2010). The global economic meltdown that began in 2008 brought questioning of key assumptions for the DSP that the institutions of the economy were rationally configured and resistant to volatility. Al Gore’s An Inconvenient Truth was viewed by millions around the world. Television shows focused on helping people lead greener lives have taken to the air waves in the UK and the US. Businesses have begun embracing the idea of green. Firms such as Nike, Coca-Cola, and Starbucks have begun emphasizing ‘green living’ to serve LOHAS consumers and their demand for sustainability-related products and services (Sung and Woo, 2019). The concept of buying local to avoid the carbon emissions incurred in long-distance transportation has begun to be part of consumer thinking. It now is even green and chic to many. The rise of these elements as part of a green commodity discourse suggests that social marketing of an idea, cause, or behavior might prove to weaken the current DSP and possibly shift cultural norms to a sustainability mindset (Kotler, 2011, p. 135). In this way, a convergence of the views of the developmental and critical schools of macromarketing might occur. The positive aspect of marketing (the social marketing of environmental stewardship and the de-marketing of overconsumption) might save marketing from destroying the very foundation on which it exists for ‘without a habitable natural environment, there will be no quality of life’ (Kilbourne et al., 1997, p. 19).

Pursuing Five Forms of Capital – Rather Than Two Amory Lovins uses a wide lens to view capitalism and not only see capitalism as the productive use Table 14.1

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of financial and physical capital (money and goods), but also sees two additional forms of valuable capital – people and nature. In firms across 30 sectors of the economy, Lovins and his team from the Rocky Mountain Institute (RMI) have seen that firms that use all four kinds of capital ‘make more money, do more good, and have more fun.’ Despite some widespread (but dated) thought among business executives that taking an approach to business with the four types of capital in mind would result in higher costs, Lovins’ RMI projects with industry (totaling more than $30 billion) for new facilities or for retrofitting of existing facilities typically save approximately 30% to 60% on energy consumption. This significant benefit comes with a two- to three-year payback – one of the highest returns lowest risk investments possible. Pursuing such a green course for a firm means that a firm turns waste into profit. Wastes and emissions are reduced because they are designed out of the systems of the firm. This quickly leads to enormous innovation and competitive advantage. Dow Chemical invested $1 billion to save $9 billion in energy expenses. United Technologies cut its energy intensity by 45% in five years. Similar to Lovins’ view of capitalism, a fivecapital view of capitalism partitions the ‘people’ dimension in Lovins’ view into two kinds of capital – human capital (talents, abilities, and focused interests of people) and social capital (the willingness and capability of people to cooperate with others). This can be seen in Table 14.1. Firms pursuing a five-capital approach to capitalism become poised to take advantage of other benefits that increasingly elude firms with a two-capital approach to capitalism. Five-capital firms, which use a triple-bottom-line or a balanced scorecard, are the kinds of businesses that people want to do business with because people feel good about supporting such firms. More and more, environmental and social blunders lead to devastating setbacks for firms that are perceived as violating a tacit license agreed upon by the public and the firm (Rousseau’s idea of the social contract). According to Lovins, networked activists

Comparison of the two- and five-capital views of capitalism

Two-capital view of capitalism

Five-capital view of capitalism

Financial capital (money) Physical capital (goods)

Financial capital (money) Physical capital (goods) Human capital (talents, abilities, and focused interests of people) Social capital (willingness and capability of people to cooperate) Natural capital (sum total of the ecological systems that support life and cannot be produced by human activity)

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today scare the leaders of two-capital firms more than regulators do. In sum, five-capital firms see the landscape of business in a more complete way and are positioned to maneuver across the landscape of business in a more nimble fashion than two-capital firms. Firms that take such an approach can be characterized as taking a five-capital marketing approach that articulates a firm’s tactical marketing moves with the other functional areas of the firm in order to achieve triple-bottom-line success. Such success means earning profits while doing the best for the planet and people (and communities). In this way, five-capital firms manifest the broad view of markets and marketing characteristic of macromarketing. Lovins points to the importance of taking a broad view of the firm’s scope of influence (and sources of influence) in the following way: If you are a company that sticks to its knitting, minds its own business and doesn’t pay attention to what’s happening in the world around you, you’re probably riding for a fall and missing some big business opportunities, because in any business I can think of – 30 sectors we’ve worked in so far – it’s the hidden connections between your business and other opportunities that you think are well outside your boundaries that create extraordinary opportunity or risk, depending on

the way you handle them. This is another way of saying that you need a really wide-angle lens. You can still have a sharp focus, but you sure need peripheral vision. (Hopkins, 2009, p. 40)

The Importance of Employing a Stakeholder Orientation Stakeholder theory proposes that there are groups or entities beyond the owners of firms to whom a firm has obligations (Freeman et al., 2010). While different lists of stakeholders have emerged in the twentieth century, Peterson (2013) and others have proposed two sets of stakeholders for firms – primary and secondary stakeholders (Figure 14.1). Primary stakeholders include (1) society and local communities, (2) partnering firms, (3) Investor/ owners, (4) customers, and (5) employees. Secondary stakeholders include (1) NGOs, (2) competitors, (3) government, (4) the natural environment and future generations, and (5) the media. A business case for employing a stakeholder orientation is emerging now (Freeman et  al., 2020). Scholars in marketing and marketing strategy understand that the reasons for adopting a stakeholder orientation for the firm now go beyond the idea of being the ‘good guy.’ Firms are increasingly understanding that their focus should

Figure 14.1 Primary stakeholders (inner circle) and secondary stakeholders (outer ring). Primary stakeholder: society and community

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not be on transactions in marketplaces, but rather on relationships and the interconnections among actors in markets (Hillebrand et al., 2015). In 2019, members of the Business Roundtable, composed of the chief executives of 192 of the largest companies in the USA, signed a statement declaring that making profits for shareholders is not a corporation’s sole responsibility (Ignatius, 2019). Instead, firms have a broader mission to serve customers, employees, suppliers, and communities, too, according to the statement. This represents what could be viewed in future years as a watershed moment in business history as the leaders of major corporations publicly proclaim that increasing shareholder value should not be the sole focus of a firm (as held by many business thinkers (Stoll, 2019)). Instead, the focus should be broader and should be on multiple stakeholders of the firm (Ferrell et al., 2010).

COSTCO – AN AGENT FOR ITS MEMBERS WITHIN ITS ENTERPRISE NETWORK Jeff Brotman and Jim Sinegal founded Costco Wholesale (Figure 14.2) in 1983 before the triple bottom line had been conceptualized. But today, Costco offers a glimpse at what a firm might look like if it views marketing as the advocate for the consumer with all resource providers within the networked enterprise, as recommended by Lusch and Webster (2010). A number of Costco’s suppliers are featured in this book as examples of unique companies that understand a stakeholder orientation. From its inception, Costco’s leadership imparted to its employees an almost fanatical commitment to its customers who pay an annual fee to be members of its network (Costco, 2010a). More than 60 million people comprise Costco’s membership (with Business, Gold, and Executive membership levels costing from $50 to $100 per year). As an indicator of customer loyalty, 87% of Costco’s members renew their membership each

Figure 14.2

Costco logo

Source: http://media.corporate-ir.net/media_files/ irol/83/83830/CostcoLogoStandards.pdf

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year. In 2010, Costco’s revenue on its membership fee alone totaled $1.7 billion. When considering that Costco’s profits amounted to $1.3 billion in the same year, one can see (1) how low the margins are for Costco customers and (2) how important customer loyalty and membership fees are to Costco’s financial well-being. For its members, Costco serves as a buying agent, preselecting popular products in sizes that offer the best value. Today, Costco operates an international chain of more than 550 membership warehouses (with an average store size of 143,000 square feet (13,300 m2)) that carry brand-name merchandise (including food and gasoline) at substantially lower prices than typically found at conventional wholesale or retail stores. According to Jim Sinegal, the company’s CEO: Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing and accounts receivable. We run a tight operation with extremely low overheads which enables us to pass on dramatic savings to our members. (Costco, 2011a)

Headquartered east of Seattle in Issaquah, Washington, Costco ranks number 28 in the Fortune 500 (Fortune, 2011) with revenues of almost $78 billion posting a razor-thin 1.7% profit margin. Although Wal-Mart Stores posts the largest revenues in the world atop the Fortune 500 (with $422 billion in sales in 2010), Costco is the leading specialty retailer in the USA (followed by Home Depot, Best Buy, and Lowe’s). In 2011, Costco led all specialty retailers in Fortune’s list of admired companies. In 2003, Fortune cited Costco as the only company feared by Wal-Mart (Helyar, 2003). Currently the third largest retailer in the USA, Costco is the eighth largest retailer in the world with 92% of its warehouses in the USA and Canada, and the rest in the UK, Taiwan, South Korea, Japan, Australia, and Mexico (Costco, 2010a). Costco’s mark-ups are capped at 14% (by comparison, department-store mark-ups can reach 40%), but across the store, the average mark-up is less than 11% (Costco, 2010a). What this means for the customer is that when Costco fortuitously comes across an unusual price on goods, the customer receives the benefit. For example, if Reebok manufactures too many running shoes one quarter, it might approach Costco about buying the excess run at a steep discount. If Costco buys this excess run of shoes, it would only add 14% on top of the price Costco would pay to Reebok, instead of taking a larger mark-up (putting the shoes on sale at a

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near normal price) and opportunistically capturing more profit for itself. Another way Costco cares for its customers is by extending them blanket permission for returns up to 90 days after purchase – no receipts, no questions. Costco offers the best wages and benefits in retailing. As a result, Costco’s employee turnover among its 147,000 employees is one–third the average in retailing (Helyar, 2003). As a result, Costco enjoys lower training costs for employees because of the low turnover. Notably, the average tenure of store managers is more than 15 years (Helyar, 2003). Another benefit of attracting highquality employees is minimal inventory shrinkage (as a result of theft and breakage). Costco’s inventory shrinkage rate of less than two-tenths of 1% is well below those of typical discount retail operations (Costco, 2010a). Figure 14.3 depicts the quarterly returns of the share price for Costco (the darker line) compared with the line representing the S&P 500 over the past 20 years (the lighter line). As shown, Costco’s stock performance has exceeded the S&P 500 throughout the 1999–2019-year period. In any year over this period, investing in Costco proved to be more rewarding than investing in the S&P 500 (a basket of the 500 largest US stocks based on market capitalization representing 80% of all US market capitalization (Motley Fool, 2019)).

Figure 14.3 2019)

Costco’s Mission and Code of Ethics

Costco’s mission

The Costco Board of Directors, which has guided Costco to such success in the stock market, has 15 members (Costco, 2010a). These include Bill Gates, currently Co-chair of the Bill and Melinda Gates Foundation; Susan Decker, former President of Yahoo! Inc.; and Charlie Munger, ViceChairman of the board of Berkshire Hathaway, a hugely successful investment company chaired by Warren Buffet. The Costco board meets quarterly. Costco proves to be an attractive entity for some of the best business minds today. Costco’s mission is ‘to continually provide our members with quality goods and services at the lowest possible prices’ (Costco, 2010b, p. 1). Notably, this succinct statement can be readily understood by employees and stakeholders. ‘Our Mission’ precedes ‘Our Code of Ethics’ in a fourpage document available on Costco’s website for investor relations. ‘We’re not doing brain surgery,’ as Jim Sinegal says, Costco Senior Vice-President for Ecommerce and Publishing Ginnie Roeglin said. She emphasized that ‘trust with our members is extremely important to our success. We’re fanatical about the things that go into this. We live and die with the Code of Ethics because there are no short cuts

Costco’s stock performance 1999–2019 compared with S&P 500 (Big Charts,

Source: www.bigcharts.com

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to providing true, honest value’ (G. Roeglin, personal communication, 2011).

Costco’s Code of Ethics

Costco’s Code of Ethics addresses the primary stakeholder groups of Figure 14.1. The code includes five points as depicted in Figure 14.4. Ethical Code #1: Obey the Law. The first point in the code of ethics, obey the law, is a direct way Costco addresses the stakeholders of society and community. Costco’s history plays an important role in shaping its first ethical code. Early inklings of Costco began with Sol Price, who was a pioneer in developing the warehouse club concept with his Fed-Mart in the 1950s (which he sold to a German company in 1975) (Helyar, 2003). He then launched Price Club stores in 1976. Sinegal worked in both operations for Price before launching Costco with current Costco Chairman Jeff Brotman in 1983. In 1993, Costco bought Price Club, further reinforcing the imprint of Price on the corporate DNA of Costco’s culture. When Fed-Mart began, competitors put government inspectors on Fed-Mart. As a response, Price and Fed-Mart had to be above reproach. As time went on, Price believed such an approach was good business. Retailers face multiple temptations to give local officials zoning bribes, to allow the retailer’s buyers kickbacks from vendors, and to finagle health and safety requirements. None of these actions benefit customers or employees, and they were never tolerated by Price, or later Sinegal. Another effect of Costco’s first ethical code is that community stakeholders are better served when firms obey governmental regulations and laws. One way that Costco serves its community stakeholders is through price competition: ‘In fact, our mere presence in a community makes pricing better throughout the area,’ Sinegal said, ‘Because when you have a tough competitor in the marketplace, prices come down’ (Costco, 2009, p. 2). Price competition is helpful not only to consumers and communities themselves but also to maintain

1 2 3 4 5

Obey the law Take care of our members Take care of our employees Respect our suppliers Reward our shareholders

Figure 14.4 The five points of Costco’s Code of Ethics

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a healthy market by encouraging competition and discouraging economic domination. Such domination leads to monopolistic behavior by firms in the form of higher prices to consumers or insensitivity to customer preferences. Ethical Code #2: Take Care of Our Members. The second point in the code of ethics, take care of our members, could be said by all retailers. However, Price early on came to view his role as a fiduciary for the customer. ‘We tried to look at everything from the standpoint of, “Is it really being honest with the customer?”’ Price said. He continued, ‘If you recognize you’re really a fiduciary for the customer, you shouldn’t make too much money. If you get something for a lower price, you pass on the savings’ (Helyar, 2003, p. 164). Underscoring this point, Costco’s profits in 2010 represented 1.7% of revenues (Costco, 2010a). Costco managers who post average margins above 10% have to explain to Sinegal why they did not lower prices for the quarter (Helyar, 2003). For example, fresh foods buyer Jeff Lyons makes an allowance for product spoilage. Because his department had almost no spoilage one October, his profit margin widened by one-half percentage point (Helyar, 2003). ‘Our margin goal is 10%, and there’d better be a very good reason you did better than that,’ Lyons said. Costco gives an annual ‘Salmon Award’ to Costco buyers who identify a supplier who improves quality, increases volume, and reduces the price of a product sold in Costco warehouses over time. This happened with a supplier of salmon for Costco who improved quality, saw the sales of salmon increase in Costco stores, and then responded by bringing down the price of salmon with the help of Costco managers. With the Salmon Award, Sinegal wants to reinforce its buyers in trying to create the next ‘salmon story’ (G. Roeglin, personal communication, 2011). Costco’s vigilance for its customers’ welfare translates into increased trust, which results in customers being more willing to try new products that appear in the stores. ‘With trust, customers know we’ve done our homework on products,’ Roeglin said. ‘So they will take a chance on an item’ (personal communication, 2011). One of the elements elaborated in the second point of the code of ethics is ‘giving back to our communities.’ This is done through employee volunteerism and both employee and corporate contributions to United Way and Children’s Hospitals. In response to natural disasters, Costco has used its scope of operations to the advantage of those who have suffered. For example, in the major earthquake of March 11, 2011, in Japan,

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two people died as a result of the collapse of the parking ramp at the company’s Tamasakai warehouse, which sustained significant damage (Costco, 2011b). To assist in the relief efforts, all Costco locations around the world began accepting donations at cash registers for the Red Cross/ Red Crescent Relief Funds. Ethical Code #3: Take Care of Our Employees. The third point of the code of ethics, like the first two points, depends on Costco constraining itself to follow rules. Roeglin commented: There is an employee agreement or handbook. It says ‘here are the rules.’ A manager can’t just fire a worker. It requires two levels of approval for those who have been with us more than two years. After the 90-day probationary period, they are our employees. The result is that you don’t have to watch your back. This fosters a very productive environment without a lot of politics or passive/aggressive stuff. I know a fifteen-year employee who left ten years ago who still says ‘we’ when referring to Costco. (Personal communication, 2011)

Ethical Code #4: Respect Our Suppliers. The fourth point in the code of ethics strives to find win–win opportunities for suppliers and Costco. ‘We want to be top-of-mind to our suppliers,’ Roeglin said. ‘We want them to send us their best concepts.’ Because a Costco warehouse carries only 4,200 stock-keeping units (SKUs) compared with more than 100,000 for a Wal-Mart supercenter with dry goods and food (Retailing Works, 2011), or 30,000 to 50,000 at a grocery store, such as Kroger (Berman, 2011), Costco limits the choice for its customers with its narrow product lines. Each SKU represents a differently packaged product in the store. For example, a 12-oz. (340 g) shampoo and a 24-oz. (680 g) size of the same brand represent two separate SKUs. However, the gain for suppliers whose products are sold at Costco’s warehouses is dramatic. In 2009, the average sales per SKU at Costco were $18.4 million. By comparison, the average sales per SKU at Kroger were $1.5–2.6 million (Berman, 2011, p. 68). Suppliers that sell to Costco must abide by Costco’s Supplier Code of Conduct, a six-page document that also is available on the investor relations website. This code addresses issues about the supplier’s treatment of employees, compliance with labor and environmental laws, as well as encouraging suppliers to achieve ‘Above and Beyond Goals’ (Costco, 2011b). Costco reserves the right to conduct audits of suppliers’ facilities, its operations, and its books, as well as those of subcontractors the suppliers might use.

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As with the other stakeholder relationships detailed in the Costco Code of Ethics, Costco imposes constraints upon itself with suppliers. ‘We are mindful of the percentage of business we account for with our suppliers,’ Roeglin said. ‘We can devastate a supplier if we suddenly walk away. So, we never let that be too large of a percentage’ (personal communication, 2011). Compared with the notoriously brusque treatment suppliers receive at Wal-Mart’s headquarters in Bentonville, Arkansas, a supporting element for respecting suppliers is to ‘treat all suppliers and their representatives as we would expect to be treated if visiting their places of business’ (Costco, 2010b). Ethical Code #5: Reward Our Shareholders. The fifth element in the code of ethics is written as follows: ‘If we do these four things throughout our organization, then we will achieve our ultimate goal, which is to reward our shareholders’ (Costco, 2010b, p. 1). Costco has a website separate from its main website (www.costco.com) that presents a variety of documents and information to investors, such as earnings, conference call notices, legal settlements, and the annual report. Costco’s generous health benefits and aboveaverage pay attract criticism from some on Wall Street who follow its performance in the NASDAQ Stock Market. ‘Costco continues to be a company that is better at serving the club member and employee than the shareholder,’ Deutsche Bank analyst Beil Dreher said (Helyar, 2003). In response, Sinegal gives a shrug, and comments: You have to take the shit with the sugar, I guess we think when you take care of your customer and your employees, your shareholders are going to be rewarded in the long run. And I’m one of them. I care about the stock price. But we’re not going to do something for the sake of one quarter that’s going to destroy the fabric of our company and what we stand for. (Helyar, 2003, p. 160)

Costco and its secondary stakeholders

Costco also addresses its secondary stakeholders: the government, the media, competitors, NGOs, as well as future generations and the environment (see Figure 14.1). Secondary Stakeholder #1: The Government. For the stakeholder of the government, unlike other major corporations, Costco pays taxes. In 2010, Costco’s income tax expense was $731 million on income before taxes of $2.05 billion (Costco, 2010a). This amounts to an effective tax

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rate of 35.6%, a bit over the US corporate income tax rate of 35%, second only to Japan’s 39.5% (Kocieniewski, 2011). As discussed in earlier chapters, the relationship between private firms and the public sector can be contentious and complex. Some of the criticisms aimed at Costco originate from Costco’s activity in issues involving the public sector, such as the courts or the writing of laws. The Institute for Justice has identified Costco as a corporate beneficiary of eminent-domain takings sites (Berliner, 2011). These occur when local developers use the courts to force land owners to sell their property for public or civic use (highways, utilities, or railroads) or, in some cases, economic development. Costco does not have any registered Washington lobbyists, but it is not averse to petitioning the government for selected interests important to the firm. In late March 2009, Costco, Starbucks, and Whole Foods announced they had formed the Committee for a Level Playing Field to propose a ‘third way’ be found to reform the nation’s labor laws (Blumenthal, 2009). In this way, these firms, which are regarded to have some of the most progressive labor practices, jumped into the most contentious organized labor issue in decades. Later, they found themselves facing sharp criticism from all sides in a nasty fight over legislation that would make it easier for unions to organize under the Employee Free Choice Act currently stalled in Congress. The companies said they opposed ending secret-ballot elections for unionizing a workplace, replacing these with a public card check, and requiring binding arbitration for initial contracts. ‘We saw this thing as a train wreck,’ Sinegal said of the bill. ‘We think card check is wrong. It’s not fair to employers and workers and the arbitration requirement is crazy. But it’s pretty tough to get both sides shooting at you, you either have to be a duck or inept’ (Blumenthal, 2009). Despite a very favorable reputation in labor practices, some labor analysts say Costco, Starbucks, and Whole Foods could be among the first facing unionization if the Employee Free Choice Act, or EFCA, became law. Secondary Stakeholder #2: The Media. Regarding the media as a stakeholder, Costco puts a wide array of information on its website for investor relations, such as Securities and Exchange Commission filings, audio recordings of CFO Richard Galanti’s discussion of earnings reports, results of legal settlements, its Code of Ethics, and its Sustainability Report. Costco publishes its four-color The Costco Connection on glossy paper that is distributed to those who are Business or Executive Members. The monthly publication

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started as a piece for small business owners, but now it has changed to more of a lifestyle magazine (Roeglin, personal communication, 2011). With a current circulation of more than 8.5 million, The Costco Connection reaches in excess of 1.6 million more readers each month than the worldwide circulation of National Geographic (National Geographic, 2011). Although officers of Costco are quick to point out that their public relations efforts are limited to store openings (Costco, 2010a), with The Costco Connection, and with its ecommerce presence on www.costco.com, it can be said that Costco actually owns two worldwide media outlets. Secondary Stakeholder #3: Competitors. Regarding competitors as stakeholders, Costco lists Wal-Mart, Sam’s Club, and BJs Wholesale Club as presenting 800 competing warehouse stores in every major metropolitan area (Costco, 2010a). Among general merchandise retail competitors, Costco lists Wal-Mart, Target, Kohl’s, and Amazon.com. Costco also competes against ‘category killers,’ focused on one or a narrow range of merchandise, including Lowe’s, Home Depot, Office Depot, PetSmart, Staples, Trader Joe’s, Best Buy, and Barnes and Noble. Sinegal uses such competitors and their merchandising and innovations to challenge his own troops, saying, ‘We need constant reminders to keep us on our game’ (Helyar, 2003). As the previous discussion about Costco’s collaboration with Whole Foods and Starbucks on labor reform suggests, Costco is willing to join forces with competitors on certain occasions. Among leaders of retailing companies, there is evidence of respectful rapport at times, as the companies have to learn from the others’ successes and failures to keep up in the industry. One humorous episode illustrating retailers’ respect for worthy competitors predates the founding of Costco in 1983. When Price Club opened in the 1970s, Sam Walton, founder of Wal-Mart, came out to investigate (Helyar, 2003). Price commented on Walton’s visit, saying: He came out to look at a Price Club and he was very complimentary. He spent all his time telling me how impressed he’d been with Fed-Mart and how he’d never have all these Wal-marts and be worth $700 million without that model. ‘I owe it all to you,’ he said. I told him, ‘Then don’t you think I’m entitled to a finder’s fee?’ (Helyar, 2003, p. 164)

Secondary Stakeholders #4: NGOs. Costco encounters a wide array of NGO stakeholders. At the local level, employees give back to their communities not only through ongoing

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financial contributions through the United Way, but also through countless hours volunteered to local non-profit agencies (Costco, 2009). Costco fosters a volunteer spirit among its employees by providing organizational help through the Costco Volunteer Center (CVC). The CVC serves as a clearinghouse for identifying local needs and then promoting and tracking volunteer opportunities (Volunteer Screening Blog, 2011). Each month, local charities can present their programs to the group, which finds ways to help. In addition to boosting the volunteer efforts of its employees, Costco assists Children’s Hospitals across North America with financial aid and personal support through the Children’s Miracle Network. In 2006, Costco began a collaborative relationship with the World Wildlife Fund, the world’s largest private conservation organization, to identify sustainable fisheries for species designated as being at risk (Costco, 2011c. Costco also works with the Marine Stewardship Council (www. msc.org), the world’s leading certification and eco-labeling program for sustainable seafood to identify which species of seafood should be discontinued for sales at Costco as a result of overfishing of the species. Despite these efforts, the environmental activist organization Greenpeace targeted Costco in 2010 as one of seven food retailers in an effort to make their seafood purchasing and selling practices more sustainable (Lynch, 2010). Greenpeace’s ‘Oh No Costco!’ campaign highlighted Costco’s practice of selling 15 out of Greenpeace’s 22 red-listed species (destructively farmed seafood) (Schwartz, 2010). Members of Greenpeace picketed the company headquarters in Issaquah, Washington, the day before the appearance of a green blimp that carried the message, ‘Costco: wholesale ocean destruction’ (Lynch, 2010). Representatives of Costco met with the activists and agreed to take their considerations under review. However, the two groups remained at odds over the definition of ‘sustainability’ and whether Costco had taken enough steps to address overfishing of the oceans. Later, Costco stopped sales of some of the species on Greenpeace’s list. The ‘Oh No Costco!’ website then became the ‘Oh Costco!’ website with the following explanation headlined by ‘No Longer Wholesale Ocean Destruction’: In a stunning win for the oceans, Costco has agreed to remove over half of its red list seafood items, pursue better practices in aquaculture and assume more of a leadership role in the ongoing global effort to develop a more sustainable tuna industry. Over the past eight months, Costco

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heard from environmental activists around the country – as well as from thousands of its own customers – on how the wholesale giant can and must do better to protect our precious ocean resources. (Greenpeace, 2011, para. 1)

In response to Greenpeace’s concerns, Costco took action and actively worked to help protect the environment. Costco CFO Richard Galanti said: Greenpeace gave us a list of species of fish being overharvested. We reviewed the list, and said ‘OK, we agree’ with these species on the list. So we stopped sales of these species. We are ready to admit it when we don’t get it right, and we do it. But unless you are in 100% compliance with their demands, you are the enemy to such groups. You are never going to make the extreme ones happy. (Personal communication, 2011)

Secondary Stakeholder #5: Future Generations. Regarding future generations as a stakeholder, Costco deploys sustainability and energy programs and supports education (Costco, 2010a). Because Costco’s business model has always emphasized no-frills stores with low overhead costs, Costco did many things in a sustainable way before sustainability was widely pursued by businesses (more will be presented about Costco’s green initiatives in later chapters). Costco Director of Corporate Sustainability Karen Raines explained that Costco’s business approach has always sought to eliminate needless expenses in operating the warehouses: Overhead skylights, reusing boxes at check-out (instead of using plastic bags) were done from the very beginning. Now we are reducing our wastes, such as food waste (after donations to local food banks), by using composting, worm farms, and animal feed farms. A lot of our lighting is on timers and sun sensors. We have solar panels being deployed in pilot programs to reduce our energy consumption and expense. (Raines, 2011)

Started in 1993, the Costco Backpack Program is a nationwide program (Volunteer Screening Blog, 2011). Each Costco warehouse identifies a local school to ‘adopt.’ Employees then distribute new backpacks filled with supplies to each student in a chosen grade. Since 2005, more than 225,000 backpacks have been given away in the USA each year by Costco. The Backpack Program is done concurrently with a company-wide Volunteer Reading Program that was launched in 1998. Interested staff members are trained to tutor children who need extra help developing better reading skills.

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They meet weekly with their students, who range from grade school to high school (Volunteer Screening Blog, 2011).

Lessons from Costco and its stakeholder orientation

Costco serves as a valuable example of a major corporation that manifests characteristics of a stakeholder orientation in many aspects of its operations. Costco offers a valuable case to consider how a large-scale, successful, international enterprise manifests important aspects of a stakeholder orientation. Although not perfect, Costco is importantly a learning organization. ‘Jim (Sinegal) says that 90% of every manager’s job is to teach!’ Roeglin (personal communication, 2011) said. ‘Everyone is in constant learning or teaching. We’re not allowing complacency to settle in.’ Although Roeglin asserts that Costco is not a marketing company, it may be more correct that Costco is not a twentieth-century marketing company (relying on promotion or information asymmetries with customers). Instead, Costco takes a wide-angle view on the marketplace, embraces the ‘biggest M,’ and strives to align the interests of its stakeholders on the way to creating value for customers, as well as other stakeholders in Costco’s network of stakeholders. Membership, in itself, brings accountability to Costco as every customer that walks into a Costco warehouse has a Costco card (and must update the information every year, actually paying to do so). ‘Members have a sense of entitlement like a shareholder would,’ Roeglin said (personal communication, 2011). ‘It’s as if they were part owners.’ In these ways, Costco offers a valuable view of what more of marketing in the twenty-first century might become – networked value creation among stakeholders.

IMPLICATIONS FOR THE ACADEMY A number of indexes related to sustainability are now available. Corporate Knights, based in Canada, annually ranks the most sustainable corporations in the world in its Global 100 list (Corporate Knights, 2019). Such a listing highlights the important insight that performing well on sustainability issues correlates positively with firm performance (Scott, 2019). In an age of increased transparency due to the internet and the networked world, stakeholders are pressuring firms to address environmental, social, and governance issues related to the triple bottom line. Major investors and their analysts regard the

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pursuit of sustainability increasingly as reducing risk due to unexpected conflicts with stakeholders and unforeseen intervention by government regulators. The increased transparency of firms pursuing sustainability allows investors to assess the efficiency of operations, too. In sum, firms pursing sustainability are likely to be regarded as wellrun businesses. Corporate Knights also has ranked MBA programs in its Better World MBA Ranking (Corporate Knights, 2018). All business schools accredited by the Association of MBAs, AACSB International, and EQUIS, as well as all current champions in the United Nations’ Principles for Responsible Management Education initiative, were invited to participate. The schools received grades on five indicators: (1) institutes and centers, (2) curriculum, (3) faculty research, (4) female diversity, and (5) racial diversity. Corporate Knights staffers collected data for these indicators from publicly available sources. The staffers also contacted the schools for verification and confirmation of their numbers prior to completing the ranking. The final ranking presented the top 40 Better World MBA programs and was topped by the UK’s Warwick Business School. Times Higher Education (THE) now publishes University Impact Rankings which gauges universities’ performance on the United Nations Sustainable Development Goals (Times Higher Education, 2019). The first edition included more than 450 universities from 76 countries. There is even an academic journal, the International Journal of Sustainability in Higher Education (Emerald, 2019). All of these developments in indexes of businesses and universities regarding sustainability suggest that interest in sustainability is increasing. While this is true, much more can be done. Painter-Morland et  al. (2016) note that while deans acknowledge the importance of sustainability, the majority of faculty members perceive the status of ethical, social, governance, and environmental (ESGE) issues as peripheral in management education. Another study of business school administrators disclosed less enthusiasm for sustainability courses in the curriculum. Nicholls et  al. (2016) surveyed deans and marketing department chairs from AACSB International accredited schools in the USA about their perspectives on the importance of including ethics, corporate social responsibility (CSR), and sustainability in the curriculum. These respondents expressed limited support for expanding the curriculum to include these topics and viewed more traditional topics as being of more importance. In cluster analysis, it

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appeared that the sample was bifurcated with two groups being defined by their belief or non-belief in the value to students of ethics, CSR, and sustainability’s value to students. Such an insight is likely reflective of firms and their marketing departments today. There are sustainability-oriented firms (typified by those in the Corporate Knights list) and then there are others ranging from the early majority (leaning or moving steadily more toward sustainable business practices) to the laggard firms who resist adopting sustainable business practices. Further research on the topic of which sustainability topics have been adopted by firms and which ones are least adopted would help researchers and firm leaders better understand what would be priorities in the future regarding sustainability for firms (McDonagh and Prothero, 2014; Landrum and Ohsowski, 2017). Hult et al. (2018) conducted research about the effects of firms’ sustainability efforts on firm performance. In a 10-country study (the USA and nine South American countries) involving 4,051 firms, these researchers examined (1) macro–micro (country–company) dynamics, (2) company costs, (3) customer costs, and (4) price sensitivities on the effects of sustainability on the performances of firms. The results suggest that positive effects on firm performance can be achieved (1) from the firms’ sustainability efforts in all 10 countries studied, (2) even if the costs and/or prices increased by 27–72% (depending on the dynamic and scenario), and (3) by companies implementing sustainability efforts that are 5–30% above the efforts of the country. Increased sustainability effects can also be gained from lowering customer and firms’ costs, but no such effects were found when lowering product prices for firms. In sum, studies such as this one are beginning to strengthen the case that sustainable business practices can boost firm performance. In the past, a naive assertion by skeptics of sustainable business practices was that such practices reduced profits. However, in many cases the gross margins of sustainability-oriented firms are less than the industry average (due to things such as higher-priced ingredients and higher wages for employees), but the net margins (profit) are actually higher than the industry average due to lower operating costs (less energy used, less advertising employed) (Peterson, 2013, p. 498). In 2017, Amazon bought John Mackey’s sustainability-oriented grocery-retailing firm Whole Foods Market for $13.7 billion in cash (Green, 2019). This represents a hefty profit for a firm focused on sustainable business practices. Amazon paid a 27% premium to Whole Foods’ closing stock price the day before the deal was announced (Purdy, 2017). At a Whole Foods

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Market shareholder meeting in Austin, Texas, on August 23, shareholders approved the buyout. With such an event, those viewing sustainable business practices as unprofitable find themselves on increasingly shaky ground. Hoffman (2018) proposes that business sustainability is ending a first phase termed ‘Enterprise Integration’ (in which practices are developed and adopted by firms to reduce unsustainability) and entering the next phase termed ‘Market Transformation’ (in which firms are pursuing sustainability to shift markets by creating sustainability-related initiatives which give them advantage in these markets transformed by sustainability). Those in business schools need to envision such markets of the future and help business leaders, students, and scholars better understand the concepts and theoretical explanations needed to excel in markets of the future – rather than markets of the past.

CONCLUSION Consideration of others – particularly the stakeholders categorized as future generations and the natural environment – is endemic to sustainable business practices. Macromarketing (and its two contending schools of thought represented by critical marketing scholars and developmental marketing scholars) offers a valuable perspective to scholars in considering the ethicality of sustainability in marketing. The critical school offers criticism, but few recommendations, about moving forward. The developmental school sees firms as being agents of change that can effectively address current externalities of marketing systems (such as pollution of the natural environment, and climate change). Costco, Inc., a major retailing corporation (ranked 15th in the Fortune 500 list of major corporations (Fortune, 2019) showcases how some important sustainability concepts can be employed by a major corporation. This is important because skeptics of sustainability in marketing in the past have pointed to the enormity and the impossibility of the task for developing any meaningful sustainable business practices in marketing, at all. Published protocols for implementing and evaluating sustainable business practices contributing to the UN’s Sustainable Development Goals (SDGs), such as ISO 26000 (ISO, 2019), are now available to firms. Since 1999, Dow Jones has listed the best firms on the environmental, social, and governmental (ESG) dimensions (Dow Jones, 2019). In 2019, Bloomberg teamed with the Sustainability Accounting Standards Board (SASB)

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to offer financial analysts firm-performance results weighted by a ‘responsibility factor’ (R-factor) which likely will provide a boost to the performance metrics of firms integrating sustainability into their marketing (Bloomberg, 2019). Researchers would do well to note such developments for firms to develop their own sustainable business practices and to receive rewards for doing so by financial rating services of the stock and bonds issued by firms. Research is needed on micro-level phenomena. Some of these include (1) factors influencing firms’ pursuit (lack of pursuit) of sustainability, (2) decision-maker thinking related to how firms prioritize among the stakeholders of the firm (and at what times in the firm’s development), and (3) which elements of the marketing mix for firms (pricing, product, place, and promotion) take precedence in a process of the firm transitioning to sustainability. Additionally, research on macro-level phenomena of societal sustainability is in order, such as (1) event analysis of the Business Roundtable’s 2019 acknowledgement of a firm having more responsibilities than just responsibilities to shareholders, and (2) how the introduction and tracking of new sustainability metrics for firms affect the sustainability of communities, regions, and nations. Likewise, unintended consequences resulting from the pursuit of sustainable business practices (such as job loss in fossil-fuel-dependent industries) and best policy prescriptions for addressing these externalities need to be developed. In this way, researchers will be better able to include the context within which an action takes place in a more complete way – an important aspect of ethical analysis (Jennings, 2015).

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Mittelstaedt, J. D., Shultz, C. J., Kilbourne, W. E., and Peterson, M. (2014). Sustainability as megatrend: Two schools of macromarketing thought. Journal of Macromarketing, 34(3), 253–264. Motley Fool. (2019). What is the S&P 500? The Motley Fool. Accessed at https://www.fool.com/ knowledge-center/what-is-the-sp-500.aspx National Geographic. (2011). Advertising opportunities. Retrieved from http://ngm.nationalgeographic.com/ngm/advertising.html Nicholls, J., Ragland, C., Schimmel, K., and Hair, J. F. Jr. (2016). The relevance of ethics, CSR, and sustainability topics in the business school and marketing curricula: Dean and department head opinions. Journal of Business Ethics Education, 13, 169–184. Painter-Morland, M., Sabet, E., Molthan-Hill, P., Goworek, H., and de Leeuw, S. (2016). Beyond the curriculum: Integrating sustainability into business schools. Journal of Business Ethics, 139(4), 737–754. Peterson, M. (2013). Sustainable enterprise: A macromarketing approach. Thousand Oaks, CA: Sage. Peterson, M. (2016). ‘Think macro!’ Journal of Macromarketing, 36(2), 124–125. Prothero, A., and Fitchett, J. A. (2000). Greening capitalism: Opportunities for a green community. Journal of Macromarketing, 20(1), 46–55. Prothero, A., McDonagh, P., and Dobscha, S. (2010). Is green the new black? Reflections on a green commodity discourse. Journal of Macromarketing, 30(2), 147–159. Purdy, C. (2017). Who wins and who loses in Amazon’s blockbuster deal to buy Whole Foods. Quartz, June 16. Accessed at https://qz.com/1008164/amazonamzn-and-whole-foods-market-wfm-winners-andlosers-in-the-13-7-billion-deal/ Raines, K. (2011, May 6). Author’s interview with Karen Raines, Costco’s Director of Corporate Sustainability at Costco headquarters in Issaquah, WA. RetailingWorks (2011). Why sell to Wal-Mart and Sam’s Club? Retrieved from http://www.retailingworks.com/why.htm. Scott, M. (2019). Global 100 progress report. Corporate Knights. January 22. Accessed at

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Part IV

Issues in Consumer Ethics

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15 Circular Economy and Sustainable Consumption: Suggestions for Ethical Marketing Johan Jansson

INTRODUCTION During the last few years there has been an ongoing scramble towards a circular economy (CE). Governments, large parts of the academic community, green NGOs, think-tanks, companies and consumer groups are all advocating more circular thinking, meaning that we should leave the linear take–make–use–lose model of consumption and replace it with a reuse–repair–recycle circular model (Ellen MacArthur Foundation, 2013; Korhonen et  al., 2018a; Stahel, 2016; Zink and Geyer, 2017). CE is being heralded as one of the main, if not the only, solution to the current pressing sustainability problems of climate change, biodiversity loss and nutrient waste. As such, many times a critical perspective on the promises that CE makes is lacking and very seldom are the consumer and marketing perspectives brought into the discussion. Several reviews have shown that research on CE has mostly approached it from production and technical perspectives focusing on, for example, life cycle analysis of goods and the problems and efficiencies of recycling different materials etc. (Camacho-Otero et al., 2018; Geissdoerfer et al., 2017; Kirchherr et  al., 2017). As such Korhonen et al. (2018b) defined the concept as an essentially

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contested concept still in its infancy research-wise and also added that there is a lack of research from a consumer or consumption perspective, writing that ‘If the current consumption culture will not change, CE will remain as a technical tool that does not change the course of the current unsustainable economic paradigm’ (Korhonen et al., 2018a: 43). This call is echoed by several others pointing to the importance of considering consumption and consumers that will affect or be affected by CE (Camacho-Otero et  al., 2018; Kirchherr et  al., 2017). This lack of focus is problematic given both the importance of consumers in influencing the production–consumption system (in positive and negative ways) and the purported great potential of CE for sustainability. For example, from policy and business perspectives there seems to be wide agreement that if production and consumption systems can be shifted from the linear model to a circular one, the large negative environmental effects of the current system can be decreased at a large scale. Although the current production and consumption system is linear to more than 91%, there is great hope for a more circular future in many circles (De Wit et  al., 2018; 2019; Stahel, 2016). The challenge is thus enormous and as the reports show, the development is still in the wrong direction, meaning that consumption overall is

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growing (together with population growth) and stock depletion of important resources is accelerating (Balatsky et al., 2015; Bongaarts and O’Neill, 2018; Geyer et al., 2016; Lei and Zhou, 2012). As such there is a problematic inherent assumption in most of the promotion of CE that producing and selling goods from, for example, recycled materials can retain the current levels of consumption; that is, by greening consumption in this way, the production–consumption cycle can continue much as before (business as usual) without considering the level and predicted growth of world consumption. Most conceptualizations of CE are rather silent on the fact that also green or circular consumption is still consumption (which is predicted to grow) and that consumption in a CE model also needs energy, transportation and virgin materials to function. From a marketing or consumer perspective it is also becoming apparent currently that the focus on CE as a way to achieve sustainability for companies is being adopted in their marketing of goods and services. Consumers today face a plethora of greenish-sounding marketing claims such as circular, zero waste, eco safe, carbon neutral, recycled, refurbished, remanufactured, etc., in spite of the vast majority of all consumption still being conducted in the linear model. As several commentators have argued, there is a risk that the individual consumer will get a moral licence from purchasing greenish products and then offset possible positive effects of this by consuming less sustainable products elsewhere (a type of rebound), making it a zero-sum game at best and, even worse, a possible sustainability loss (Probst and Taherzadeh, 2019; Zink and Geyer, 2017). As long as the consumption and energy use in total is increasing, it will be harder to achieve any long-term sustainability where humans live within the planetary boundaries (Sachs et  al., 2019; Steffen et  al., 2015). On the other hand, companies that are embracing circular business models genuinely (i.e. not only to seem green, socalled greenwashing) have to be allowed to market and communicate their products so that these can (at least theoretically and hopefully also in practice) replace the less green products on the market. In a similar vein, consumers that have the genuine wish to decrease their ecological footprint from their consumption have the right to relevant and truthful information so that they can act upon their wishes (in an otherwise rather unsustainable system). Thus understanding how more sustainable products, in line with CE claims, can be marketed ethically is imperative in order to reduce environmental pressures, but also policies for fostering less consumption. The purpose of this chapter is to examine critically the problems and possibilities of CE and

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discuss how it is related to (un)ethical marketing and what is necessary if CE is to contribute to solving the pressing sustainability problems. Firstly, CE is presented together with some problems inherent in its conceptualization, and then related to consumption and sustainability. Then some suggestions are offered as to how sustainable consumption in CE can be achieved given the necessity of reducing consumption, changing regulations and handling rebound effects.

CIRCULAR ECONOMY PROMISES AND PROBLEMS According to Kirchherr et al. (2017), the CE concept is of great interest to scholars and practitioners alike since it is viewed as an operationalization for businesses to implement the more vague concept of sustainable development. As such not only businesses but also governments and international organizations are producing reports and promotions concerning CE as a way to achieve sustainability and the triple bottom line of people, planet and profit. As a developing concept discussed by many stakeholders, there is an abundance of definitions and discussions of these. After reviewing 114 definitions Kirchherr et al. arrive at one of the most comprehensive ones: A circular economy describes an economic system that is based on business models which replace the ‘end-of-life’ concept with reducing, alternatively reusing, recycling and recovering materials in production/distribution and consumption processes, thus operating at the micro level (products, companies, consumers), meso level (eco-industrial parks) and macro level (city, region, nation and beyond), with the aim to accomplish sustainable development, which implies creating environmental quality, economic prosperity and social equity, to the benefit of current and future generations. (2017: 224)

According to Korhonen and others (cf. Korhonen et al., 2018a; 2018b; Raworth, 2017), the promise of CE is supported by displeasure with the dominant and traditional linear take–make–use–lose material and energy flow model of the modern business as usual economic system which is problematic in terms of economic, social and environmental sustainability. Accordingly, CE is, by its many proponents, expected to provide the incentive for an economic system with an alternative model, one that is cyclical and regenerative. Although the idea of material cycles has been around since the

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early days of industrialization, it has been given power by the current discussions on climate change mitigation and sustainable development (Kirchherr et al., 2017; Korhonen et al., 2018a). Unlike traditional recycling, the practical policy and businessorientated CE approach emphasizes product, component and material reuse, remanufacturing, refurbishment, repair and upgrading, as well as the use of sustainable energy sources such as solar, wind, biomass and waste-derived energy utilization throughout the product value chain using a cradleto-cradle life cycle approach (De Wit et al., 2019; Ellen MacArthur Foundation, 2013; Korhonen et  al., 2018a). Consequently, CE once completely developed will promote high-value material cycles instead of recycling only for low-value raw materials as in traditional recycling (Ghisellini et  al., 2016). The CE notion as such not only is about production but also aims to develop sustainable consumption, for example by promoting and applying the sharing economy approach where fewer products can be produced and sold if more consumers can share their utility (Camacho-Otero et  al., 2018; Naustdalslid, 2014). In the sharing economy, as part of CE groups of consumers are supposed to share the function and the service provided by the physical goods for replacing current individual ownership-based consumption. In such an economy, more value is extracted from the physical resources within the economy. Both CE and the more narrowly defined sharing economy require fundamentally different consumer behaviours in order to replace the traditional linear and ownerbased models. However, the CE approach has almost exclusively been developed and led by practitioners such as policy makers and business consultants, business associations, and other similar organizations which, according to several researchers, have led to a lack of critical perspectives and research on questions of whether CE actually can lead to sustainable development as promised (Allwood, 2014; de Man and Friege, 2016). Recently, however, according to Zink and Geyer (2017) CE has faced some criticism. For example, Allwood (2014) discussed the limits of CE and questioned the attractiveness of CE in a reality with ever-growing (consumer) demand. Allwood stated that trying to meet human needs while minimizing environmental impact would be a better goal than material circularity (Allwood, 2014). According to Zink and Greyer (2017), the central principle behind the environmental advantages of CE is whether secondary production activities actually reduce, or displace, primary production. If so, the intuitive promise of CE is achieved, but if not, we are left with the impacts of increased secondary production in addition to the impacts of primary production (Zink and Geyer, 2017).

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Furthermore, without this actual displacement, landfilling of materials, for example, is merely delayed rather than reduced and resource extraction is unaffected or even increased (Zink and Geyer, 2017). Being even more critical, de Man and Friege (2016) conclude that the assumption that circular solutions necessarily lead to sustainable outcomes is questionable, as such an outcome cannot be guaranteed. They base this conclusion on three fundamental problems of CE: all production processes lead to downgrading materials (in the form of waste, mixed materials, etc.), and to create value from downgraded materials, energy is always needed; the assumption that natural nutrients can be fed into the ecosphere without any problems is wrong; and the production of beneficial consumer products almost always results in the generation of industrial wastes and used products or materials that turn out to be hazardous, necessitating treatment and disposal of unexpected and hazardous waste. Given these problems (and others), and the possible solutions to them, according to Korhonen et al. (2018a) perhaps the most important question for CE in terms of long-term sustainable development is how the saved resources and money generated by the CE ideal can be directed to sustainable consumption practices. If the current consumption culture does not change, CE will remain as a technical tool that does not change the course of the current unsustainable economic paradigm. It is important to note that CE presents a new vision for the consumption culture with the sharing economy as an important part, but as such it is at best a long way into the future due to, among other barriers, consumer scepticism and hesitation towards its advantages (Belk, 2017; Cherry and Pidgeon, 2018; Martin, 2016; Rizos et al., 2016). Through product reuse and the sharing economy CE offers fruitful ideals, but their implementation in practice remains an open question (Korhonen et al., 2018a). As such, from a consumer perspective it needs to be linked to ideas of sustainable consumption in order to minimize possible negative consequences.

SUSTAINABLE CONSUMPTION According to Camacho-Otero et al. (2018), since CE should aim at achieving sustainable development as suggested by Kirchherr et  al. (2017), consumption in the (future) context of CE can be considered a form of sustainable consumption. Currently, products are designed with short lifespans and are quickly consumed and discarded. It is often more

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expensive to repair products than to buy new ones and as such CE and its further application in the sharing economy are by most definitions still a future promise rather than a current and concrete reality, and research shows that consumer interest in it seems low (Hazen et al., 2017; Rizos et al., 2016). For example, car-sharing business models have been around for decades but have had a hard time actually replacing car ownership (Hahn et al., 2020). Only recently have developments in information and communication technologies with smartphones and apps started to attract more users. Since the beginning of industrialization, and especially in the twentieth century, the throwaway mentality has become part of Western society (Camacho-Otero et al., 2018; Cooper, 2005). It is an essential part of the linear model of production that is based on continuous influx of unlimited virgin resources, and is fuelled by continually increasing consumption (Gullstrand Edbring et al., 2016). Sustainable consumption as a field of research investigates the relationship between consumption and sustainable development, and the roles that consumers and other stakeholders play in that relationship (Camacho-Otero et  al., 2018). It emanated from a political concern about the environmental impacts of consumption patterns in affluent societies, as discussed by for example Jackson (2005). This interest was then carried over into a set of questions that are at the core of the field, including what the consequences of consumption activities on the environment are, what the drivers of such forms of consumption are, what actions could reduce such impacts, and how to drive change (McDonald et al., 2006; Mont and Plepys, 2008). Researchers in this field have investigated the many environmental impacts of consumption, the drivers of this type of consumption have also tried to conceptualize what makes consumption sustainable, as well as offering insights about what can drive change, such as nudging, eco-labelling and practice-oriented interventions (Akenji, 2014; Banerjee and Solomon, 2003; Gullstrand Edbring et al., 2016; Lehner et al., 2016; Stål and Jansson, 2017). In general the field of sustainable, green, ethical and pro-environmental consumption is more critical of the view that only greening consumption will lead to any significant progress towards sustainability than the field of CE (Akenji, 2014; Heiskanen et al., 2013; Hüttel et al., 2018; Kilbourne et al., 1997; Varey, 2010).

ETHICAL MARKETING OF CIRCULAR AND SUSTAINABLE SOLUTIONS Given the problems of unsustainable production and consumption and the continuous growth in

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material and energy use, the current economic system as a whole needs a critical discussion. A large part of this system concerns how marketing is shaping and reshaping consumer culture and consumption. As the sustainability problems become evermore apparent, different types of solutions are being developed. Today there is an abundance of products and services marketed that purport to be green, ethical, zero-waste, circular, climate friendly, etc. From a consumer perspective it is close to impossible to evaluate the truthfulness of these claims and make informed consumer decisions. This, coupled with sometimes limited interest in these questions at the point of purchase, make it important that there is a genuine will actually to change the system from a linear one to a circular one at all levels if this is to happen. Yet, the news media continually report on unethical and questionable marketing tactics that take advantage of the budding consumer interest in doing the right thing. Greenwashing, that is the unethical practice of portraying an offering as more green or sustainable than it actually is, is so common today that lists of greenwashing claims are continually published by consumer and industry watchdogs (Aurand et al., 2018; Gatti et al., 2019). In many ways, how CE today is portrayed can be viewed as a case of greenwashing an entire (future) economic system. By perceiving the transition to CE as just needing a few more recycled and shared products and services (as opposed to less consumption or radically different types of consumption, culture and norms) there is a high risk that the transition to an actual CE will be delayed. It is against this background that consumer culture and behaviours become important (e.g. Korhonen et al., 2018a) in order to understand not only how consumers can adopt CE and its goods, services and business models, but also how this can be done without increasing the level of current unsustainable consumption patterns. It is not a question of either or, or the former before the latter, but of transforming to a CE and decreasing consumption levels at the same time in order to align better with the principles of sustainable development and planetary boundaries. Essentially, it can thus be conceived as unethical to promote the idea of CE if not also at the same time pointing to the fact that less consumption among the globally rich is the more sustainable option. As such, ethical marketing needs not only to concern itself with promoting, pricing, placing and producing products that are a bit greener, but also to communicate in a way so that the impact of consumption overall is taken into account, which in turn can generate an understanding for the necessity to reduce overconsumption. Essentially, this is what ethical marketing will

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be about when more and more products and services are sold using green, circular and sustainable claims. It is also apparent that it is impossible for any one stakeholder group (individual consumers, companies, local authorities, governments, international bodies, NGOs, etc.) to take all the responsibility for more ethical marketing in a circular or less consumption-oriented economy. On the other hand this does not preclude any one group from responsibility either. Society is a system of interdependencies and social influence between individuals, groups and interests that is more likely to change the more different parties are engaged.

REGULATING THE USE OF CIRCULAR TERMINOLOGY IN PROMOTION Although all stakeholders share responsibility, a large part of it falls on governments and authorities to regulate, or help organizations and companies self-regulate industries and markets. Given the plethora of products and solutions marketed today as green, zero-waste, circular, carbon neutral, etc., as a first step stricter regulation of how these terms can be used should be investigated. As Jones (2019) shows in his review, ever since the start of unethical greenwashing around 1990, regulators have had a hard time regulating green claims beyond just naming and shaming. As the promotion of CE is intensifying it becomes even more important that regulators concern themselves not only with greenwashing and advertising but also with how other types of claims are communicated. For example, it is not uncommon that it is written on packaging and labels that these are produced with recycled paper and vegetable ink, but the contents of the sold product itself is more seldom presented (cf. Hood, 2016). Given most consumers’ lack of time, interest in these issues at the point of purchase and the number of consumer decisions made when buying clothes and groceries, for example, it is highly likely that the information about the label becomes a signal that the product also is more green, sustainable or circular than is the actual case. Whether this is the intention behind the information on the label, or a genuine wish to decrease some (albeit a very small) part of the product’s environmental impact, is of course not easy to know. In any case, developing clearer instructions for what can be said and what symbols can be used to portray sustainability in general and circularity in particular should be a key priority. In certain consumption domains, such as food, there are clearer instructions, for example on how

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much a foodstuff must be certified as organic in order for the packing to bear the (mandatory) EU or USDA organic certified labels (Grunert et  al., 2014; Hughner et al., 2007). Perhaps with clearer guidelines, marketing terms such as clean coal (General Electric) and clean diesel (Volkswagen, VW) would never have reached consumers. In the case of Volkswagen, where it is estimated that the emission fraud together with the greenwashing claims of clean diesel cost 45,000 disabilityadjusted life years in Europe and the USA alone (Oldenkamp et al., 2016), it might have protected not only the company’s reputation but also the reputation of the entire German car industry. As terminologies are developed, not just by savvy marketers, regulations need to be time independent in that they focus not only on current terms but also on future ones. For a long time most car manufacturers used the word ‘recyclable’ (and a related percentage) about their cars as a way to make them seem a bit greener. In public debates and among people it was not uncommon to encounter the belief that a specific car was actually made of recycled materials (which was not the case). Thus the word ‘recyclable’ was taken to mean recycled and would thus signify a lesser impact than the actual one. It was not until 2006 when a new EU end-of-life directive was enforced (Mark and Jo, 2008) that this questionable marketing started to be examined and become less common, although it can still be found today. A more ethical approach would be to state how much of a product comes from recycled or reused materials and how much can circulate back into the system. This is of course not an easy task given that many complex products contain a vast amount of different plastics, metals, minerals, textiles, etc. However, achieving sustainability is not an easy task. Once such regulations are in place, proper information and communication policies also need to be implemented so that buyers (organizations and individuals) can make better informed decisions and sort out the more circular-oriented value propositions from the more conventional ones. In relation to the cases about coal and diesel as accounted for above, it could perhaps even be argued that marketing entire product ranges (with or without green claims) should be banned. For example, as the car fleet becomes electrified and as electric cars have fewer moving parts, and as these cars can more easily be recycled and reused, the question could be raised about whether fossil fuel cars with internal combustion engines should be banned from being marketed at all. Such a ban would likely help both electric car manufacturers and other forms of transportation such as public transport or car sharing and car pool companies.

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Finally, it is important also to discuss issues of responsibility and the importance of proof and not just ambitions in marketing. Today the producers’ responsibility is being stretched to include what happens after a product is discarded in several markets, but the norm is still that the consumer has the main responsibility for discarding a product in such a way that it ends up in a recycling system instead of in a landfill or being incinerated. As such, many more product domains could probably gain from money-back deposit systems that have been the norm in many countries for glass bottles and aluminium cans and that is now also spreading into textiles (Stål and Jansson, 2017). Although much more work is necessary in terms of regulating the promotion of greenish products it is also necessary to relate this to questioning the increasing consumption overall.

PROMOTING LESS CONSUMPTION AS PART OF THE CIRCULAR ECONOMY As discussed previously, reaching CE with less exploitation of virgin resources and fossil energy is hard, if not impossible, given the continually growing population and consumption levels worldwide. Therefore, a part of any serious effort to promote CE should also be a discussion of how much consumption is necessary at all levels in society. It is of course easier to target excessive and luxury consumption among the wealthy and high-income earners, but much harder to discuss levels in general in a society geared towards continuous economic growth and the problems inherent in this (Hobson, 2013; Jackson, 2009). Similarly, it is not just the responsibility of any one stakeholder, but a concerted effort needs to be mounted where new business models promoting other values than purely materialistic one come to the fore. There are examples of firms that are trying to change societal norms around consumption, and the general public debate lately in awakening to climate change problems shows some signs of openness for this debate. As an example, the outdoor wear company Patagonia ran a widely discussed campaign for Black Friday in 2011 in the New York Times with a picture of a jacket and a text saying ‘Don’t buy this jacket’. In the explanation on its blog Patagonia (2011) stated: ‘The most challenging, and important, element of the Common Threads Initiative is this: to lighten our environmental footprint, everyone needs to consume less. Businesses need to make fewer things but of higher quality. Customers need to think twice before they buy.’ The debate that followed

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concerned not only the boldness of this move but also whether it was in fact just another marketing gimmick to sell more. Given Patagonia’s longterm engagement with sustainability issues, and also more recent circular initiatives such as Wornwear, which is Patagonia’s online store selling used clothing, it seemed most commentators were of the opinion that more companies should dare to question the consumption lifestyle evident around certain holidays and a fashion industry with everfaster collection turnovers. Thus, not only regulators but also firms, and of course consumers, can engage in questioning ever-increasing consumption levels in all areas and this can be to the benefit of the planet and people at the same time. As such, there are plenty of opportunities for companies and individuals to develop business models that are in line with both circular principles and less consumption (or more sustainable consumption). As these are developed and found successful other firms will have to follow. A telling example from Sweden concerns the fashion company Nudie Jeans that not only uses organic cotton, but also championed the take-back and selling of used garments in its stores, promotion of less washing, and free repairs of broken or worn items (so-called repair shops) in the early 2000s (Egels-Zandén and Hansson, 2016; Stål and Jansson, 2017). Over the last few years much larger multinational clothing chains such as H&M have started to adopt these practices as well, introducing rental, clothing repair and clothing care advice in their stores (Circular Online, 2019). When examples are showcased and when these become successful it will create a necessary awareness and make recycled goods more attractive but also more common to care for products, repairing them to a higher degree and in turn creating a market for used products that can sustain itself without subsidies, although it might be necessary at the outset. Overall, changing norms and attitudes towards products and consumption will gain from a more open discussion on both fronts (circular and consumption reduction) together, which can create less finger-pointing and instead more focus on possible solutions and allow that these can vary as much as products in the current system. It is also important, on a societal level, to discuss and promote the most effective consumption systems as a way to minimize not only material use but also energy use and waste. In the transportation sector, for example, it is obvious that individuals transporting themselves individually in 2 tonne SUVs when other options in cities exist, such as public transportation, is not an efficient use of available energy resources (de Haan et al., 2006; 2007; Jansson and Rezvani, 2019). In relation to the discussion above on ethical marketing, it

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could also be questioned whether promoting individual transportation (especially based on fossil, non-renewable fuels) should be allowed at all in a society claiming to move in a sustainable, circular direction. Furthermore, as more modes of transport are electrified this might mean that less environmental impactful mobility will increase, but at the same time overall mobility will also increase; this puts the focus on the risk of rebound effects if overall consumption levels are not problematized together with CE.

HANDLING REBOUND EFFECTS There is a high risk that consumers purchasing products with genuine or fake green, circular or sustainable credentials will view these, consciously or unconsciously, as signals that consumption reduction is not necessary or hard given the continuous increase in greener options. In the energy efficiency literature, the rebound effect usually describes the phenomenon where increased efficiency makes the consumption of some good (e.g. energy or transportation) relatively cheaper and, as a result, people consume more of it. This increased use decreases the environmental benefit of the efficiency increase, and can even backfire, where the increase in use is comparably larger than the efficiency increase, leading to higher net impacts (Greening et  al., 2000; Zink and Geyer, 2017). There is a large body of literature on the rebound effect. Originally rebound referred to production-side efficiency improvements that lowered production costs and therefore prices, but it has been expanded to include efficiency upgrades by the end-use consumer as well. It has been argued that investing in efficient products makes consumers wealthier by lowering the amount they must spend on energy and this can have direct and indirect effects. Direct effects may cause the consumer to use more of the product in question (leave lights on, drive more, etc.). They also may cause the consumer to spend some of the savings on other goods, which is then often called indirect rebound (Geyer et al., 2016; Greening et  al., 2000; Zink and Geyer, 2017). Potential rebound effects can be handled on several levels but, although hard both to assess and control, there seems to be a general consensus that they need to be handled at the societal level, rather than on the firm or local level. According to Font Vivanco et al. (2016) there are mainly three strategies to handle rebound: (1) increases in environmental efficiency across consumption sectors; (2) shifts to greener consumption patterns; and

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(3) downsizing consumption. In simpler terms, these can be referred to as consuming more efficiently, consuming differently (i.e. green and circular consumption) and consuming less (Font Vivanco et al., 2016). As such the role of marketing and communication is obvious for two of these general strategies. Consumption information, identity signalling (norms), standardization, and autonomous voluntary frugal behaviour (sufficiency) are detailed concerning the third downsizing consumption strategy (Font Vivanco et al., 2016). In the marketing toolbox there are many tools that can be utilized in an ethical manner to make the risk of rebound effects clear to consumers and this can of course be done by several stakeholders such as governments and companies. Finally, sufficiency can be achieved by voluntarily reducing a person’s purchasing power, for example by means of working or earning less. Although an effective way to mitigate the rebound effect, one of the main barriers to the adoption of sufficiency-based strategies is its social acceptance, mainly because of the consumption lock-in phenomenon and various consumption habits that are difficult to overcome in the short term (Font Vivanco et al., 2016; Sanne, 2002). According to Sanne (2002: 276) lock-in are ‘structural forces driving consumption’, while Unruh (2002: 317) defines it as ‘self-reinforcing barriers to change’ fundamentally pointing at both physical structures (such as urban transport systems necessitating a car) and habitual and mental lock-ins such as often repeated behaviours (like driving every day in spite of available public transport) or personal and social norms of consumption (to show success in certain social circles a specific type of car is needed). In order to break up this lock-in of unsustainable consumption increase in spite of more and more ‘sustainable’ products, changing personal and social norms around consumption is one of the most important levers (Burchell et  al., 2013; Griskevicius et  al., 2008; Jansson and Dorrepaal, 2015). In order to achieve social acceptance by society of collectively agreed objectives, priorities and procedures that are institutionalized through government action are necessary. Additionally, these strategies are not immune to new rebound effects, as the decrease in demand for some products can lower their price and thereby induce extra demand (Alcott, 2010; Font Vivanco et al., 2016). In any case, information strategies to make possible rebound effects known, handle the consequences and steer towards a more sufficiencyoriented mindset are necessary as part of a push for more CE. In addition, the general policy toolkit of, for example, taxing carbon-intense products and services (such as flying and driving fossil-fuelled

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cars individually) in order to shift consumption will become even more important. Likewise, severely restricting, banning or making certain types of consumption very expensive through taxes might be necessary using policies such as congestion charging (Mannberg et  al., 2014) or forced replacement such as the EU phasing out incandescent light bulbs for general lighting in favour of more energy-efficient lighting alternatives in the early 2010s. Although these policies are probably necessary in order to decrease consumption and related possible rebound effects, they will be more effective when coupled with informational efforts so that increasing consumption in general can be discussed and questioned since policies cannot reach all consumption domains effectively. It is also likely that a wider debate on the problems of consumption increases will lead to higher levels of acceptance and support of environmental policies in general (Jansson and Rezvani, 2019).

CONCLUSION Currently, there is an ongoing push from many directions for more CE to move us away from the take–make–use–lose model of consumption and replace it with a reuse–repair–recycle circular one. Promises are made that can be interpreted to mean that not much else needs to change in the entire production–consumption system. However, as several authors and researchers point out, CE is not only extremely hard to achieve given the current level of consumption and growth, but also problematic if it means that necessary changes in consumer culture are not implemented (Korhonen et  al., 2018a; Zink and Geyer, 2017). With the terms of circular and sharing economy becoming popular together with purportedly greenish and sustainable products and services, there is a risk that consumers will view these developments as licences to continue consuming at the same (unsustainable) level as before. In order to counteract this risk it is necessary to define what is truly sustainable consumption at a societal level as well as recognizing and handling unethical marketing practices. In general, policies need to be put in place that limit the way greenwash terms can be used in marketing to sell circular, green or more sustainable products. In addition, a new set of business models and marketing tools need to be developed that are able not only to promote less environmentally harmful consumption, and sharing solution, but also to promote less consumption. Policies regulating the terms in which this can be done are needed together with bans for

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certain marketing and products as well as positive examples of voluntary reductions. In order to arrive at true CE with not only circularity at the core but also less material throughput, it is also essential to be aware of and develop strategies at a societal level for handling rebound effects. Given that it is possible to transform the linear economic model to a circular one and at the same time reduce overall consumption levels, CE might be a worthy goal to strive for.

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consumers? A compilation and review of why people purchase organic food. Journal of Consumer Behaviour 6, 94–110. https://doi.org/ 10.1002/cb.210 Hüttel, A., Ziesemer, F., Peyer, M., Balderjahn, I., 2018. To purchase or not? Why consumers make economically (non-)sustainable consumption choices. Journal of Cleaner Production 174, 827– 836. https://doi.org/10.1016/j.jclepro.2017.11.019 Jackson, T., 2005. Live better by consuming less? Is there a ‘double dividend’ in sustainable consumption? Journal of Industrial Ecology 9, 19–36. https://doi.org/10.1162/1088198054084734 Jackson, T., 2009. Prosperity without Growth: Economics for a finite planet. Earthscan, London. Jansson, J., Dorrepaal, E., 2015. Personal norms for dealing with climate change: Results from a survey using moral foundations theory. Sustainable Development 23, 381–395. https://doi. org/10.1002/sd.1598 Jansson, J., Rezvani, Z., 2019. Public responses to an environmental transport policy in Sweden: Differentiating between acceptance and support for conventional and alternative fuel vehicles. Energy Research & Social Science 48, 13–21. https://doi. org/10.1016/j.erss.2018.09.009 Jones, E., 2019. Rethinking greenwashing: Corporate discourse, unethical practice, and the unmet potential of ethical consumerism. Sociological Perspectives 62, 728–754. https://doi.org/10.1177/ 0731121419849095 Kilbourne, W., McDonagh, P., Prothero, A., 1997. Sustainable consumption and the quality of life: A macromarketing challenge to the dominant social paradigm. Journal of Macromarketing 17, 4–24. https://doi.org/10.1177/027614679701700103 Kirchherr, J., Reike, D., Hekkert, M., 2017. Conceptualizing the circular economy: An analysis of 114 definitions. Resources, Conservation and Recycling 127, 221–232. https://doi.org/10.1016/j.resconrec.2017. 09.005 Korhonen, J., Honkasalo, A., Seppälä, J., 2018a. Circular economy: The concept and its limitations. Ecological Economics 143, 37–46. https://doi. org/10.1016/j.ecolecon.2017.06.041 Korhonen, J., Nuur, C., Feldmann, A., Birkie, S. E., 2018b. Circular economy as an essentially contested concept. Journal of Cleaner Production 175, 544–552. https://doi.org/10.1016/j.jclepro. 2017.12.111 Lehner, M., Mont, O., Heiskanen, E., 2016. Nudging – A promising tool for sustainable consumption behaviour? Journal of Cleaner Production, Special Volume: Transitions to Sustainable Consumption and Production in Cities 134, 166–177. https://doi. org/10.1016/j.jclepro.2015.11.086 Lei, K., Zhou, S., 2012. Per capita resource consumption and resource carrying capacity: A comparison

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of the sustainability of 17 mainstream countries. Energy Policy 42, 603–612. https://doi.org/ 10.1016/j.enpol.2011.12.030 Mannberg, A., Jansson, J., Pettersson, T., Brännlund, R., Lindgren, U., 2014. Do tax incentives affect households’ adoption of ‘green’ cars? A panel study of the Stockholm congestion tax. Energy Policy 74, 286–299. https://doi.org/10.1016/j. enpol.2014.08.029 Mark, S., Jo, C., 2008. Environmental regulation and innovation driving ecological design in the UK automotive industry. Business Strategy and the Environment 17, 341–349. Martin, C. J., 2016. The sharing economy: A pathway to sustainability or a nightmarish form of neoliberal capitalism? Ecological Economics 121, 149–159. https://doi.org/10.1016/j.ecolecon. 2015.11.027 McDonald, S., Oates, C. J., Young, C. W., Hwang, K. 2006. Toward sustainable consumption: Researching voluntary simplifiers. Psychology and Marketing 23, 515–534. Mont, O., Plepys, A., 2008. Sustainable consumption progress: Should we be proud or alarmed? Journal of Cleaner Production 16, 531–537. https://doi. org/10.1016/j.jclepro.2007.01.009 Naustdalslid, J. 2014. Circular economy in China – The environmental dimension of the harmonious society. International Journal of Sustainable Development & World Ecology 21, 303–313. https:// doi.org/10.1080/13504509.2014.914599 Oldenkamp, R., van Zelm, R., Huijbregts, M. A. J., 2016. Valuing the human health damage caused by the fraud of Volkswagen. Environmental Pollution 212, 121–127. https://doi.org/10.1016/j. envpol.2016.01.053 Patagonia, 2011. Don’t Buy This Jacket, Black Friday and the New York Times. The Cleanest Line. https://www.patagonia.com/blog/2011/11/dontbuy-this-jacket-black-friday-and-the-new-yorktimes/ (accessed 12 January 2020). Probst, B., Taherzadeh, O., 2019. Five reasons ‘green growth’ won’t save the planet. The Conversation. http://theconversation.com/five-reasons-greengrowth-wont-save-the-planet-116037 (accessed 13 January 2020). Raworth, K., 2017. Doughnut Economics: Seven ways to think like a 21st-century economist. Chelsea Green, White River Junction, VT. Rizos, V., Behrens, A., Van der Gaast, W., Hofman, E., Ioannou, A., Kafyeke, T., Flamos, A., Rinaldi, R., Papadelis, S., Hirschnitz-Garbers, M., Topi, C., 2016. Implementation of circular economy business models by small and medium-sized enterprises (SMEs): Barriers and enablers. Sustainability 8, 1212. https://doi.org/10.3390/su8111212 Sachs, J. D., Schmidt-Traub, G., Mazzucato, M., Messner, D., Nakicenovic, N., Rockström, J., 2019.

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16 Sustainability Marketing: Products, Fairtrade, and Greenwashing Caroline J. Oates

INTRODUCTION Ethics is fundamentally about what is right and wrong, in essence the morality of marketing and all its associated activities. Sustainability is included as an ethical issue in marketing because of the impact that marketing has on both people and the planet. Whether one adopts a deontological view of ethics (i.e. the intention to do no harm), or a teleological view (i.e. a focus on the consequences of any activity), sustainability raises many ethical issues for marketers, from sourcing natural ingredients to communicating their offerings to customers (Gbadamosi, 2019). Marketing is defined by the Chartered Institute of Marketing (CIM), a global body for practitioners, as ‘the management process responsible for identifying, anticipating and satisfying customer requirements profitably’ (CIM, 2015: 3). Marketing is seen as a process of exchange, in which marketers sell products and services to customers so the latter can meet their particular needs by purchasing such offerings. For marketers to do this successfully, they divide markets into segments, where groups of customers can be researched and targeted with specific products/ services which are positioned to be attractive compared with the competition, and to offer a unique

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selling proposition. In this definition of marketing, there is no mention of green, ethical, social or environmental considerations – the emphasis is on identifying and satisfying needs in a profitable way. So how can this understanding of marketing link to what has been termed ‘green’ or ‘sustainability’ marketing? An early definition places the ‘green’ elements into the traditional meaning of marketing, to become ‘a holistic process that anticipates, identifies and satisfies the requirements of customers and society in an ecologically sustainable manner’ (Hanson et  al., 1999: 325). The added content of ‘holistic’ and ‘ecologically sustainable’ shifts the focus from purely satisfying customer requirements to an appreciation of the whole process of how a product or service is sourced, made, delivered and consumed. All this must be achieved with careful consideration of how it impacts the environment, both now and for future generations. Thus, green marketing might be said to be like conventional marketing, as defined at the start of this chapter, but with added concern for the environment. We can understand how green marketing came into being by examining its roots in more detail, and then look at how green marketing has evolved into sustainability marketing in current academic research. The chapter will address what it means to call a product sustainable, examine the

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case of Fairtrade to illustrate the complexities of this market, including the use of greenwashing, and look at how consumers and businesses engage with sustainability matters. The chapter concludes with implications and thoughts for the future.

FROM ECOLOGICAL TO GREEN TO SUSTAINABILITY MARKETING The term ‘green’ has commonly been used to denote environmental issues, and green has been employed widely in the marketing literature for many years, and is still used (e.g. Schmuck et al., 2018; Braga et  al., 2019). It is worth examining this word in more detail, first in terms of its perceived meaning and then when it is paired with ‘consumer’. Addressing the connotations of green first, Belz and Peattie (2012) explain how green marketing covered a wider range of issues compared with ecological marketing, which had emerged previously in the 1970s. Ecological marketing saw the producer as key to developing environmentally superior methods of production and products, primarily focused on reducing the depletion of non-renewable resources. Green marketing, more focused on consumer demand, broadened ecological marketing to consider loss of habitat, extinction of species, and environmental issues generally. Green marketing also looked at not only production but also products themselves and their packaging, and across many industries. In addition to sectors like oil and gas production, green marketing took into account consumer goods and service industries like financial services and tourism. Thus, green marketing was ready, in the 1990s, to capitalise on the increasing interest in green and ethical matters among consumers. However, the expected demand for green products and services proved to be somewhat optimistic (Peattie and Crane, 2005). Some surveys predicted consumers’ willingness to pay a premium for green products, but also that consumers were not prepared to sacrifice product quality or features for more socially acceptable products (Auger et al., 2003). Other studies reported mixed findings in terms of generalising this willingness across different groups of consumers (De Pelsmacker et al., 2005). Many studies debated a so-called attitude–behaviour gap between positive attitudes towards ethical products and actual purchase behaviour (Ungar, 1994). Also, there was a cynicism on behalf of consumers towards industry, with accusations of companies jumping onto the ‘green bandwagon’ (Wagner, 1997: 3). Thus,

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green marketing assumptions about responding to consumer demand for green products overestimated the demand at that time. Secondly, the pairing of ‘green’ with ‘consumer’, which again has been commonly used in the marketing literature in the past, suggests a person who consciously tries to change or reduce their consumption, but still within the bounds of what ‘consumer’ traditionally means, that is to use up, to consume. Thus, the two words together are inherently problematic in that they accept that one can still be a consumer and simply swap to purchasing more environmentally-friendly alternatives. There is no questioning of the underlying economic system (the dominant social paradigm, usually referred to as DSP (Kilbourne et al., 1997)) in which consumption takes place and is encouraged. Also, consumption implies a focus on the actual purchase of a product, excluding considerations of how the product is used and its disposal. Consumption itself is a contested term, with different nuances and traditions across disciplines in the social sciences, often removed from its sociological roots. Evans (2019) makes the point that an understanding of the sociology of consumption would provide research on sustainable consumption with a grounding in the theoretical resources derived from Bourdieu, such as accounts of stratification and inequality. Further, a variety of terms are used in different literatures, for example in the sustainable development field it is usual to refer to ethical consumers, indicating those who are concerned with minimising environmental damage as well as supporting social justice (Harrison et al., 2005). There are also additional terms such as patriotic, socially conscious and mindful consumers, all of which have slightly different or overlapping motives to account for varying consumption practices under the broad umbrella of ethical behaviour (Dahl and Waehning-Orga, 2015). In the practitioner and marketing literature such consumers might be referred to in general as green consumers. Some academic researchers in marketing are moving towards alternative language to present a more considered position on consumption and marketing by employing terms such as people or citizens rather than consumers (Nelson, 2016), and sustainability rather than green or ethical or environmental, all of which are now widely used (Horne et al., 2016). This terminology is not without its own baggage, as sustainability itself is a contested term, and no unified definition exists in the current marketing literature (Lunde, 2018), but such developments in language move the debate forward in an attempt to reframe the problem that marketing has with turning towards ‘green’, however that might be defined. Kemper and

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Ballantine sum it up as: ‘While green marketing is still used in terminology, many scholars view sustainability marketing as encompassing a greater holistic construct’ (2019: 284). Sustainability marketing is founded on sustainable development and demands a change from all stakeholders, including producers, individuals, policy makers and regulators, broadening the focus from mainly environmental problems, as covered by green marketing, to encompass social and economic issues. Sustainability marketing might therefore be defined as ‘building and maintaining sustainable relationships with customers, the social environment and the natural environment’ (Belz and Peattie, 2012: 29). Following Kemper and Ballantine’s (2019) observation that the term ‘green’ continues to be used, aligned with a more sophisticated understanding of the field by marketers who use the terms ‘sustainability’ or ‘sustainable’, this chapter will use sustainability to indicate a broad concept including green and social issues, and where relevant use the term ‘green’ to mean a narrower focus on mainly environmental concerns. Given that there is now an alternative to the traditional meaning of marketing, to one that encompasses sustainable concerns, what does this mean for the products that we buy? How can a product be defined as ‘sustainable’ and what does this entail? In the next section the idea of a sustainable product will be examined.

SUSTAINABLE PRODUCTS What makes a product sustainable is complex. A common perception is to look at just one single attribute of a product, for example can it be recycled, is it made of recyclable material, is it organic, does it biodegrade, is it made in fair working conditions, and so on? However, there is more to sustainability than an individual criterion. Belz and Peattie define sustainable products and services as ‘offerings that satisfy customer needs and significantly improve the social and environmental performance along the whole lifecycle in comparison to conventional or competing offers’ (2012: 175–176). They go on to explain that this definition has six specific characteristics upon which a product might be judged to be sustainable, including: customer satisfaction; a focus on both ecological and social aspects (so not solely environmental matters); consideration of the whole life cycle of the product, from sourcing of raw materials to product disposal; provision of significant improvements to the particular ecological

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and/or social issue the product addresses; continuous improvement as the world changes and new technologies or environmental problems surface; and the product’s ability to maintain its position against competitors’ offerings. Of course, customers for such products may also look at more basic criteria, like price, availability and performance. All these product attributes compete for the purchaser’s attention in the retail environment. What kinds of products or services could be identified as sustainable? There is a wide range of sectors which offer sustainable products, including tourism (Schütte and Gregory-Smith, 2015), electric cars (Moons and De Pelsmacker, 2015), green housing (Horne, 2016) sustainable fashion (Henninger et  al., 2016) and more everyday items like recycled paper towels (Barbarossa and De Pelsmacker, 2016). Fashion is an interesting example, as on the one hand the fashion industry is said to be one of the largest industrial polluters in the world, second only to oil (Conca, 2015), yet on the other it has a growing sustainability angle with major high street retailers like H&M having a ‘conscious’ or organic line of clothing (Henninger et  al., 2016) or more exclusive brands positioning themselves as sustainable, such as Stella McCartney. The difficulty with having specific sustainable lines is that, as Peattie (2001) points out, brands which target their most concerned consumer base with a sustainable product continue to offer more conventional products, which is not too convincing for the consumer, and not so good for the environment. In addition, the market for ethical clothing is one area which has not developed as much as other markets. The Co-operative/Ethical Consumer Report (2019) highlights that in the UK ethical clothing represents an annual spend of just £49.9 million, compared with £12 billion for ethical food and drink. However, many people buy vintage and second-hand clothing which is reflected in charity shop sales that have increased from £133 million in 1999 to £732 million in 2019. Fashion is examined in detail in Chapter 23 of this Handbook. How shoppers recognise that a product or brand is sustainable is an area of research that continues to show mixed results. The use of labelling can be key to identifying a sustainable product, as it provides information that customers cannot readily discern for themselves. For example, wooden items which carry the FSC mark (Forest Stewardship Council) have been sourced and manufactured in accordance with maintaining forests’ biodiversity, productivity and ecology (Belz and Peattie, 2012). Without that label, consumers would remain unaware of the benefits of choosing FSC furniture over conventional furniture.

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However, to appreciate the significance of FSC, consumers have firstly to notice the label, and secondly to understand what it means. This is true for labels across all product ranges. Thus, labelling has the potential to be vital in providing credibility, reassurance and information to consumers (Van Loo et al., 2015), enabling them to make an informed (non-)purchase decision. However, sustainability labels do not always play a significant role in people’s purchasing decisions, and labelling is not a panacea to encourage sustainable consumption. Grunert et  al.’s (2014) online survey research with over 4,000 respondents across France, Germany, Poland, Spain, Sweden and the UK found differences in people’s use of labels on food, according to their motivation and understanding of sustainability issues, yet overall there was a low level of label use among respondents. Grunert et  al. (2014) concluded that sustainability labels generally do not play a major role in the food choice of consumers. Alevizou et  al. (2015) examined label understanding and use on FMCGs (Fast-Moving Consumer Goods) in two countries, Greece and the UK. They pointed out how many labels exist in this field, from mandatory labelling schemes, to voluntary labelling initiatives, to endorsements. The picture was further complicated by the development from green claims in the 1990s, which focused primarily on environmental issues, to a range of issues now common on FMCGs, including, inter alia, social, cause-related, eco, sustainable, organic, food miles and animal welfare. In an effort to map the range of claims, the International Organization for Standardization (ISO) categorises labels into three types: Type I eco labels (e.g. EU flower label), Type II self-declared claims (e.g. CFC free) and Type III quantified environmental data declarations (e.g. energy ratings). However, these categories have been critiqued for not encompassing the whole labelling landscape and for not being clear about which labelling programmes match with the three ISO types (Stø et al., 2005). A further aspect of labelling is that a company which promotes certain product lines with some form of label might use this to enhance its overall social reputation with consumers, but that reputation of being a socially responsible company would come from a small proportion of the whole product range (Mohan, 2010). Unsurprisingly, Alevizou et  al. (2015) concluded that consumers are uncertain about labels on FMCGs and were confused by such labels, with only the Fairtrade certification engendering recognition, understanding and confidence among most of the 96 participants in their qualitative study. The fair trade concept in general tends to come out in surveys

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as one of the most recognised labels in the field of sustainability (De Pelsmacker et  al., 2006) as discussed below. Products certified as Fairtrade are good examples of all that is expected for a sustainable product and in the next section the Fairtrade market will be examined in terms of what Fairtrade means, how it shifted from the margins into mainstream marketing, and its current position in which it is now facing difficulties and increasing challenges from own-label certifications.

FAIRTRADE1 The fair trade market has its origins in the years following the Second World War and was started by charities such as Oxfam who, in an effort to help the economic recovery of Eastern Europe, began importing goods such as handicrafts from local producers (Nicholls and Opal, 2005). This was followed by alternative trading organisations (ATOs) such as Traidcraft which allowed producers to trade in a global market in a direct way, squeezing out the need for intermediaries. Exposure to a wider consumer audience came with the involvement of retailers such as the Co-operative Group in the UK, which has its roots in nineteenth-century community societies, and so was sympathetic to the principles of fair trade. The first product to be labelled with the Fairtrade mark was coffee in 1989 (Van Loo et al., 2015). In more recent years, along with the rise of sustainability marketing and ethical consumption, Fairtrade has become more mainstream and has moved into different markets, such as flowers, wine and gold (Fairtrade Foundation, 2018a). Fairtrade represents an alternative way to do business which is about ‘better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world’ (Fairtrade Foundation, n.d.). In following these guidelines, Fairtrade aims to empower producers in developing countries to build up their own business and community, and to reach audiences, via the development of international trade, without being exploited. To ensure this happens, Fairtrade adheres to key criteria or practices which embody the notion of equality between all involved stakeholders. For example, commodities and products have an agreed minimum price plus a social premium paid to suppliers, which allows producers collectively to develop larger projects for the benefit of the community or to invest in organic methods. Sustainability and ethics are crucial to Fairtrade, which aims to ensure all workers

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are treated with respect and are free from abusive practices (Fairtrade International, 2018). Early research on Fairtrade, for example amongst Belgian consumers, found mixed results in terms of how well the label was recognised and understood, and whether the product it endorsed was purchased (De Pelsmacker et  al., 2006; De Pelsmacker and Janssens, 2007). More recent research also finds some uncertainty around Fairtrade, for example a study by Lyon et  al. (2014) with university students in the USA highlighted that survey participants, while familiar with the concept, lacked comprehensive understanding. In the UK, consumers are also familiar with the label, as 93% of people are aware of Fairtrade, while 83% of people trust the Fairtrade mark (Fairtrade Foundation, 2018b). So although Lyon et al. (2014) acknowledged that, globally, the Fairtrade label is the most recognised of all ethical labels, this recognition does not automatically imply understanding or indeed purchase behaviour. While consumers are increasingly espousing the values of ethical consumption, a change in buying behaviour is less apparent. The attitude– behaviour gap has been extensively researched in the literature, with many studies attempting to explain why consumers’ stated ethical intentions do not translate into action at the retailer’s checkout (Carrington et  al., 2010; 2014). Academics have considered the problem for almost two decades, since Carrigan and Attalla (2001) brought it to the attention of scholars in the early 2000s. While it continues to exercise marketing researchers (Carrigan, 2017), most of whom would agree that there is a discrepancy between what people say they currently do or will do in the future, compared with what they actually do, there are criticisms of how the gap is defined, approached and studied (McDonald et al., 2016). Studies which examine how prepared customers are to buy products endorsed with an ethical label like Fairtrade often take a hypothetical approach. For example, one study design is to ask people their future purchase intentions or how much extra they would be willing to pay for an ethical product compared with an unlabelled product (Worcester and Dawkins, 2005). A good example is the US study by Hertel et al. (2009) who asked over 500 respondents in a telephone survey if they would be willing to pay more for ethically produced goods. With respect to willingness to pay for fair trade coffee, their results suggested that more than three-quarters of coffee buyers would be willing to pay at least 50 cents (around 15%) more per pound for fair trade, while more than half would pay a premium of one dollar or more. Hertel et  al. (2009) acknowledged the limitations of their study design, recognising a criticism that is

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commonly raised about such methods, in that the answers could be seen simply as ‘cheap talk’ that is easy to give, without having to follow through with any action. In defence of their study design, Hertel et  al. pointed to evidence of an emerging potential market, showing an increasing interest in ethical products. Other criticisms of ‘hypothetical’ (future intentions/behaviours) studies include the possible existence of social desirability bias, as respondents seek to give the ‘correct’ answer to the researcher, or the way that questions are framed (Oates and McDonald, 2014). Less common are studies which have looked at actual behaviour, such as observing shoppers in a retail environment. Hainmueller et al. (2014) carried out a field experiment in 26 stores of a US grocery chain, in which they manipulated the price of a premium and a basic coffee product, each of which featured a Fairtrade label, and a generic placebo label for control. They found that the Fairtrade label had a positive and significant effect on sales, which rose by almost 10% when compared with the coffee with the placebo label. Additionally, consumers buying the more expensive brand of coffee were less price-sensitive when the product was labelled Fairtrade, paying a premium of 8%. This is less than the percentage found in the willingness-to-pay study discussed above. However, both kinds of study find a positive result, thus it would seem that Fairtrade can command a price premium, demonstrating that value is attached to a product that is ethically sourced and produced. The success of Fairtrade has encouraged many companies to move into the ethical market, for example the chocolate brand Cadbury acquired Green & Black’s organic Fairtrade chocolate brand (Carrigan and De Pelsmacker, 2009). However, Cadbury, subsequently purchased by US food group Mondelez International, withdrew from the Fairtrade scheme in 2016, and created its own sustainability programme, Cocoa Life. Cadbury’s products such as Dairy Milk carry a Cocoa Life label, but also say they partner with the Fairtrade Foundation to improve the lives of cocoa farmers and their communities. Green & Black’s too has been part of Cocoa Life since 2017. Other companies have dropped Fairtrade in favour of their own schemes, for example the UK retailer Sainsbury’s launched its own Fairly Traded label for tea, and global brand Nestlé has an in-house sustainability programme called Cocoa Plan (Crouch, 2019). The departure of major brands from Fairtrade has been a recent phenomenon, which is symptomatic of a global shift away from independent certifications. In addition to those mentioned above, Starbucks has its own CAFÉ Practices, McDonald’s has McCafé Sustainability Improvement Platform,

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the chocolate brand Barry Callebaut has Cocoa Horizons, and the Cargill Corporation in the USA has Cocoa Promise (Subramanian, 2019). Brands believe they can do their own labels, designed with a more bespoke feel to their own standards and purposes. The Fairtrade Foundation itself acknowledges that the environment is changing: our research and experience shows us much more needs to be done. This is why we are open to different ways of working with business to complement traditional certification. As well as sourcing Fairtrade, companies can take greater action and work with us on bespoke programmes that go further to redress inequality in trade. (2018a: 3)

Fairtrade has not been abandoned completely by major brands and retailers; the companies cited above may retain some product lines independently certified by Fairtrade, such as bananas, coffee, sugar and flowers for Sainsbury’s, but Subramanian (2019) suggests the ratio is diminishing in favour of these bespoke schemes. What this means for the farmers and producers in terms of income and protection is uncertain. What this means for the shopper is an increasing array of labels and logos which they might not recognise or understand in an already crowded landscape. The original Fairtrade mark is a highly recognised label which is monitored and controlled by Fairtrade International. Because it is clearly defined and identifiable, the opportunities for misuse of the label are minimised (although there are accusations that Fairtrade producers are not consistently adhering to the principles of Fairtrade (Crouch, 2019)). However, the relative lack of opportunity to misuse the label is not true for many claims to be sustainable which marketers might use in their marketing communications and on their packaging, and which have the potential to be misleading or confusing. In the next section, we look at greenwashing and the effect this has on business and consumers.

GREENWASHING The previous sections have illustrated that companies have a key role to play in sustainability marketing, and the communications they provide to inform customers about products and services can serve to emphasise the sustainability credentials of both a company and its offerings. As we have seen in this chapter, communications such as labelling are potential channels to use for such messages, and to create a positive image regarding

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environmentally-friendly practices. Businesses wish to capitalise on customers’ increasing desire for sustainable products by providing such goods, and consequently need to communicate to their audience any sustainable features and benefits. This can work well if the claims are genuine, but there can be a negative effect if the claims are not backed up by facts or actual behaviour. As Gbadamosi puts it, ‘some businesses that would like to benefit from these growing needs are not really addressing environmental issues as expected but would like to take the credit for doing so’ (2019: 202). This is the practice of greenwashing (a conflation of greening and whitewash), of making something appear more environmentally friendly than it is in reality, with the aim of misleading or deceiving customers. Greenwashing emerged together with the identification of a new green marketing segment in the 1980s, which led companies to position their products and services as ‘environmentally friendly’, often without any substance to such statements (Banerjee, 1999). Greenwashing claims appear in the arena of marketing communications, especially packaging and advertising, and can take various forms. Belz and Peattie (2012) summarise the most common kinds of greenwashing found on consumer products in North America: Hidden trade-off, for example where a product may be labelled as energy efficient but includes hazardous chemicals. No proof, such as products which cannot back up their claims. Vagueness in the claim, using words such as natural or environmentally friendly. Irrelevance of claims, like a product proclaiming to be CFC-free, even though CFCs have been banned for many years. Fibbing or lying, for example by stating false claims of certification. Lesser of two evils, such as advertising ‘environmentally-friendly’ pesticides. Worshipping false labels, which includes products that suggest a third-party endorsement of sustainability credentials via images or words. Certain sectors find it difficult to proclaim in a convincing way that they are sustainable (or more sustainable than their competitors) by the very nature of their business. For instance, airlines are carbon-intensive so there is limited scope for claims to be sustainable. When airlines have attempted to promote themselves in the past on sustainable credentials this has backfired, for example EasyJet was reprimanded by the UK Advertising Standards Authority (ASA) for making misleading claims over its carbon

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emissions (Marrs, 2008). The ASA is the UK’s independent regulator of advertising across all media. It ensures that advertisements across UK media comply with advertising codes, written by the Committee of Advertising Practice (CAP). EasyJet has since announced it is offsetting all jet fuel emissions to operate net-zero carbon flights (Topham, 2019). Offsetting in this context means that EasyJet has signed up to a three-year contract for wholesale offsetting, involving 17 different projects including planting trees, costing the airline around £25 million per year. Offsetting in general has been criticised for a lack of clarity around carbon accounting and for giving airlines a licence to continue polluting. Critics suggest that offsetting should be seen as a last resort, not the solution to carbon emissions. Indeed, EasyJet’s announcement has been branded as a ‘jumbo-size greenwash’ by Greenpeace UK (Ambrose, 2019). Electricity and gas companies need to be very careful about claiming to provide the greenest energy, and renewable electricity provider Outfox the Market was censured by the ASA for stating that it offered the cheapest green deals in all the UK. The ASA ruled against the company, adjudicating that because the ASA had not seen sufficient evidence showing that Outfox the Market consistently and regularly offered the cheapest energy and green energy tariff to all consumers in the UK, its advertisements were misleading (ASA, 2019). The oil industry too has to be aware of exaggerating its sustainable credentials, although this did not stop Shell, one of the biggest global oil and gas companies, from implying that a significant amount of its emissions was recycled. Shell was censured by the ASA over a press advertisement that showed refinery chimneys emitting flowers. The ASA ruled that: In the absence of qualification, most readers were likely to interpret the claim, ‘We use our waste CO2 to grow flowers’ … to mean that Shell used all, or at least the majority, of their waste CO2 to grow flowers, whereas the actual amount was a very small proportion, when compared to the global activities of Shell. (Tryhorn, 2007)

One of the most notorious cases of greenwashing in recent years refers to when the car manufacturer Volkswagen admitted to manipulating exhaust emission values in laboratory conditions, but its diesel engine cars were in fact emitting up to 40 times more nitrogen oxides in real-life driving. Its cars were promoted under the tagline ‘clean diesel’, making the case a clear example of greenwashing. Volkswagen was penalised with a $14.7 billion fine and lost 40% of its share value

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(Topal et al., 2019). Further cases of greenwashing include oil and gas companies like BP which are using social media such as Facebook to proclaim their commitment to a sustainable, lowcarbon future while simultaneously fighting tighter regulations on fossil fuel extraction in the USA (Laville and Pegg, 2019). Why is it so important for companies to avoid falling into the practice of greenwashing? Marketing communications work on trust and credibility and instances of greenwashing can erode both these important elements on behalf of consumers. Companies that use weak or vague or misleading sustainable claims in their marketing are at risk of increasing consumer scepticism towards their brands’ claims to be sustainable. Many claims cannot be verified by consumers themselves, who rely on other cues to decode and understand such messages, such as labelling (discussed earlier in this chapter).

Regulation and Greenwashing Companies which use sustainable claims in their marketing communications are subject to regulation to guard against the possibility of misleading customers with greenwashing. For example, the European Union has introduced a law that forces asset managers, insurers and pension funds to disclose environmental risks in their investments. The law is specifically intended to encourage sustainable investment and to curb greenwashing, and means that financial managers have to disclose, for instance, investments in assets that could pollute water or damage bio-diversity (Reuters, 2019). As part of this regulation, EU states are also seeking to establish a unified EU classification system of sustainable economic activities which would identify the criteria for labelling investments as ‘green’. In the UK, the government’s Department for Environment, Food and Rural Affairs (Defra, 2016) offers guidance to firms wishing to use sustainable claims in their marketing communications by suggesting that all claims need to be relevant to anyone buying or using the product, be clearly and accurately stated, and be justifiable. The number of greenwashing complaints and adjudications in the UK began to decline in 2009 compared with the previous year, as 158 advertisements referencing the environment attracted complaints in 2009, compared with 264 for 2008 (Charles, 2009). However, some studies suggest that greenwashing remains prevalent in advertising (Schmuck et  al., 2018), and recent studies (Braga et  al., 2019) propose that its use is actually increasing, driven by the growing demand for

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sustainable products, and exacerbated by some regulatory agencies’ slowness in setting standards to control this practice. As noted in the section on Fairtrade above, the proliferation of own labels in preference to the Fairtrade certification might lead to more greenwashing. For companies, continuing to use greenwashing is an inadvisable strategy. Apart from the ethical dimension, Braga et  al. (2019) show that deceptively identifying a product as sustainable can damage its image and lower sales volume, market share and financial results. Based on their large study in Brazil, they also suggest that, in extreme cases, this decline will continue until the product is withdrawn from the market. In the next section, we will look at how consumers and businesses engage with sustainability matters and how our understanding of marketing’s role has changed since the introduction of green marketing.

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being green or not. The attitude–behaviour gap discussed earlier in this chapter also points to complexity in terms of understanding why people behave in certain ways, or act differently to their stated attitudes or intentions. Some scholars suggest that the focus should move away from the consumer, and look instead at each purchase situation as the unit of analysis (Peattie, 2001). This suggestion is backed up by McDonald et  al.’s (2009) research on technology-based household products which showed that there was more similarity between the purchases made by different people in the same product category than there was between the different purchases made by the same individual. Contemporary studies in marketing have questioned the foundations upon which much marketing research is based, arguing that a micro perspective at the level of the consumer, with an emphasis on rational choice, is insufficient to drive the required social changes to move towards sustainability (McDonald et al., 2016).

ENGAGEMENT OF CONSUMERS AND BUSINESS Consumers There is an extensive literature in marketing and other related disciplines on the topic of consumers and sustainability. In the 1970s, as green marketing began to develop, academics and practitioners attempted to identify the so-called ‘green consumer’ as opposed to a non-green or ‘grey’ consumer (Wagner, 1997). This search was fraught with difficulty to the extent that Peattie (2001) wrote a paper entitled ‘Golden goose or wild goose? The hunt for the green consumer’, critiquing the way that marketing was attempting to understand green consumption and green marketing by viewing it simply as a variation on traditional marketing (see earlier sections in this chapter). For example, a key approach used was to segment green from non-green consumers using demographics such as age, education and gender, but such studies found inconsistent and contradictory results which failed to provide clear evidence for marketers in their quest to target particular groups (McDonald et al., 2012). Other attempts to define the green consumer looked at typologies (e.g. Dermody, 1999), behaviours (e.g. Gilg et al., 2005), attitudinal constructs (e.g. Rowlands et al., 2003) or a combination of those elements (e.g. Ottman, 1993). Thus, despite several decades of searching for the green consumer, by both academics and practitioners in this field, it is probably reasonable to conclude that there is no such thing, and that the picture is more complex than

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Business McDonagh and Prothero (2014) noted that sustainability has been recognised by bodies such as the EU as well as nationally by governments, with an increasing number of rules and laws around sustainable practices (see section on greenwashing). They also highlight the role of industry, such as the Sustainable Apparel Coalition, in tackling issues around sustainability. Within these spheres, companies themselves are committing to reaching sustainable goals, with marketers playing a key role. Marketing, right at the centre of identifying and satisfying customer needs, has the opportunity to make a huge difference to our practices and habits; indeed, Cherrier et  al. (2012: 414) once called marketers ‘the builders of norms’. However, marketing is also embedded in the DSP, and as such its traditional concern is with economic returns rather than ecological or social benefits. Thus, academics are calling for more research on how marketing ‘sits’ within these competing paradigms (Thomas, 2018). In practice, some companies are fully embracing sustainability, such as the outdoor brand Patagonia, whereas others have partially moved towards sustainability by offering particular products or services, without completely committing to a sustainable transformation. Other firms have pledged to make sustainability a reality in the future, for example P&G’s declaration to move to 100% recyclable or reusable packaging and reduce by half their global use of virgin petroleum plastic in packaging by

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2030 (P&G, 2019). However, research has identified many barriers to firms implementing sustainable development, the most frequent being lack of resources, high initial capital outlay and lack of expertise in the case of small and medium enterprises (Jaramillo et al., 2019). Companies which embrace sustainable practices see the benefits, not only in the assurance that they are trying to do the right thing and helping their customers to do the same, but also in terms of financial performance. Leonidou et  al. (2013) found that ‘green’ product and distribution programmes positively affected firms’ performance in the marketplace, Mukonza and Swarts (2019) recommended firms that wish to sustain competitive advantage, particularly in the retail sector, should adopt ‘green’ marketing strategies, and Carrigan and De Pelsmacker (2009) proposed that using an ethical lens to examine all aspects of a firm’s operations can lead to competitive advantage. Sustainability cannot be ignored by businesses, and the increasing demand not only for sustainable products (such that prompted the beginning of green marketing in the 1970s) but also for company accountability in a holistic way towards the environment, means that business cannot regard it as simply an add-on, an extra to its ‘normal’ activities. Business engagement with sustainability is now expected and demanded, and over a decade ago academics and practitioners were convinced that businesses must demonstrate their social responsibility (Adams and Zutshi, 2005) and marketers remain at the centre of that transformation. As Belz and Peattie commented in 2012, and which remains relevant today, a new approach to economics, business and marketing for the future is required, and that approach needs to be more sustainable. This requires us to reframe marketing principles, practice and education from the perspective of sustainability, however uncomfortable that feels to marketers and consumers who have grown up with an absolute belief in the power and legitimacy of the consumer economy. (2012: 315)

IMPLICATIONS FOR RESEARCH AND PRACTICE The preceding discussion has highlighted the challenges for sustainability marketing, both for academics who are attempting to move the field forward theoretically and for practitioners who are struggling with real-life marketing dilemmas. As Jones et  al. (2008) pointed out, marketing and

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sustainability were commonly seen as irreconcilable because marketing was all about selling more, while sustainability is about consuming less. In the last decade, that view has shifted somewhat as marketers now recognise the centrality of sustainability to all organisational and marketing activities (Kemper and Ballantine, 2019). However, both academics and practitioners have to explore new ways of marketing to make sustainability marketing genuinely transformational – as Thomas suggests, ‘we need to take a whole systems approach, and understand that both human agency and a wide range of marketing system structures and importantly their interactions, need to be critically considered’ (2018: 1538). New insights from academics such as Lunde’s (2018) GREEN framework, based on five sustainability principles of a globalised marketplace of value exchange, responsible environmental behaviour for current and future generations, equitable sustainable business practices, ethical sustainable consumption, and necessary quality of life and well-being, attempt to provide a platform for future research endeavours, and echo Thomas’s (2018) call for a more holistic approach to sustainability marketing. With an appreciation of marketing’s core underpinning as the exchange relationship between consumers and firms, Lunde (2018) extends that theory to propose that sustainable marketing can be the complex exchange between consumers, firms and society that reduces harm to the environment.

CONCLUSION This chapter has provided an overview of sustainability marketing, looking at key aspects such as Fairtrade, greenwashing and labelling, contextualised by the shift from ‘green’ to ‘sustainability’ marketing in the academic literature. Sustainability marketing can provide a holistic understanding of where marketing should be in the twenty-first century, yet it is still located on the relative margins of marketing, both in practice and in theory. Worldwide grassroots movements concerned with sustainability such as Global Youth Climate Strikes (Stanglin et al., 2019) indicate a growing and urgent interest in how marketing can be an agent for change in encouraging sustainable behaviours across the globe. Sustainability marketing has to step up to the challenge of sustainability and become mainstream. As marketing scholars McDonagh and Prothero proposed, ‘there is no reason why our raison d’être cannot become one of creating customer value with sustainability as its focal point’ (2014: 1206).

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Note 1

Fairtrade refers to the certification organised by Fairtrade International, whereas fair trade indicates a general initiative without reference to a particular certification (Dragusanu et al., 2014).

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McDonald, S., Oates, C.J., Alevizou, P.J., Young, C.W. and Hwang, K. (2012). Individual strategies for sustainable consumption. Journal of Marketing Management, 28 (3–4), 445–468. McDonald, S., Oates, C.J., Thyne, M., Alevizou, P.J. and McMorland, L.-A. (2009). Sustainable consumption patterns in different product sectors. International Journal of Consumer Studies, 33 (2), 137–145. Mohan, S. (2010). Fair Trade Without the Froth. London: Institute of Economic Affairs. Moons, I. and De Pelsmacker, P. (2015). An extended decomposed theory of planned behaviour to predict the usage intention of the electric car: A multi-group comparison. Sustainability, 7 (5), 6212–6245. Mukonza, C. and Swarts, I. (2019). The influence of green marketing strategies on business performance and corporate image in the retail sector. Business Strategy and the Environment, 28 (6). https://doi.org/10.1002/bse.2401 Nelson, A. (2016). The praxis of sustainability citizenship. In R. Horne, J. Fien, B.B. Beza and A. Nelson (Eds) Sustainability Citizenship in Cities: Theory and Practice. London: Routledge/Earthscan, 15–28. Nicholls, A. and Opal, C. (2005). Fair Trade: Marketdriven ethical consumption. London: Sage. Oates, C.J. and McDonald, S. (2014). The researcher role in the attitude-behaviour gap. Annals of Tourism Research, 46, 168–170. Ottman, J.A. (1993). Green Marketing: Challenges and opportunities for the new marketing age. Lincolnwood, IL: NTC Business Books. P&G (2019). P&G announces new global commitment to reduce plastic. Available from: https:// us.pg.com/blogs/Plastic50by2030/ (accessed 7 October 2019). Peattie, K. (2001). Golden goose or wild goose? The hunt for the green consumer. Business Strategy and the Environment, 10, 187–199. Peattie, K. and Crane, A. (2005). Green marketing: Legend, myth, farce or prophesy? Qualitative Market Research: An International Journal, 8 (4), 357–370. Reuters (2019). EU agrees on new rules to counter investment ‘greenwashing’. Available from: https://uk.reuters.com/article/us-eu-finance-regulation/eu-agrees-on-new-rules-to-counter-investment-greenwashing-idUKKCN1QO0RU (accessed 27 September 2019). Rowlands, I.H., Scott, D. and Parker, P. (2003). Consumers and green electricity: Profiling potential purchasers. Business Strategy and the Environment, 12, 36–48. Schmuck, D., Matthes, G. and Naderer, B. (2018). Misleading consumers with green advertising? An affect–reason–involvement account of greenwashing

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effects in environmental advertising. Journal of Advertising, 47 (2), 127–145. Schütte, L. and Gregory-Smith, D. (2015). Neutralisation and mental accounting in ethical consumption: The case of sustainable holidays. Sustainability, 7 (6), 7959–7972. Stanglin, D., Hauck, G. and Wilson, J. (2019). ‘Our house is on fire’: Global Climate Strike draws out hundreds of thousands of protesters in New York, DC. Available from: https://eu.usatoday.com/story/ news/nation/2019/09/20/global-climate-strike-students-school-walkout-new-york-chicago-san-francisco/2373323001/ (accessed 30 September 2019). Stø, E., Strandbakken, P., Scheer, D. and Rubik, F. (2005). Background: Theoretical contributions, eco-labels and environmental policy. In F. Rubik and P. Frankl (Eds) The Future of Eco-labelling: Making environmental product information systems effective. Sheffield: Greenleaf, 16–45. Subramanian, S. (2019). Is fair trade finished? Available from: https://www.theguardian.com/ business/2019/jul/23/fairtrade-ethical-certificationsupermarkets-sainsburys (accessed 14 October 2019). Thomas, N.J.R. (2018). Sustainability marketing: The need for a realistic whole systems approach. Journal of Marketing Management, 34 (17–18), 1530–1556. Topal, I., Nart, S., Akar, C. and Erkollar, A. (2019). The effect of greenwashing on online consumer engagement: A comparative study in France, Germany, Turkey, and the United Kingdom. Business Strategy and the Environment, https://doi. org/10.1002/bse.2380 Topham, G. (2019). EasyJet pledges net-zero carbon on all flights. Guardian, 20 November, 41. Tryhorn, C. (2007). No bouquets for Shell press ad. Available from: https://www.theguardian.com/ media/2007/nov/07/asa.advertising (accessed 27 September 2019). Ungar, S. (1994). Apples and oranges: Probing the attitude-behaviour relationship for the environment. Canadian Review of Sociology, 31 (3), 288–304. Van Loo, E.J., Caputo, V., Nayga Jr, R.M., Seo, H.-S., Zhang, B. and Verbeke, W. (2015). Sustainability labels on coffee: Consumer preferences, willingness-to-pay and visual attention to attributes. Ecological Economics, 118, 215–225. Wagner, S.A. (1997). Understanding Green Consumer Behaviour.: A qualitative cognitive approach. London: Routledge. Worcester, R. and Dawkins, J. (2005). Surveying ethical and environmental attitudes. In R. Harrison, T. Newholm and D. Shaw (Eds) The Ethical Consumer. London: Sage, 189–203.

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17 Business-to-Business (Industrial) Marketing Ethics Ross Brennan

INTRODUCTION This chapter is concerned with ethical decision making in circumstances where both the buyer and the seller are businesses. The fact that the customer is an organization rather than a consumer changes things considerably. When businesses make purchases, they are interested in achieving their business goals, and the reason they buy goods and services is to enable them to deliver their own products and services to customers. This situation is known as ‘derived demand’, since the demand of a business customer is derived from the demand of that customer’s own customers (Brennan, Canning, & McDowell, 2017). Often both the marketing organization (seller) and the purchasing organization (buyer) are represented by groups of managers who deploy their professional skills (such as financial analysis, engineering and quality management) during the buying and selling process. This chapter begins by exploring how professionals engaged in business-to-business buying and selling interact with each other, and what this means in terms of the development of mutual trust within business relationships. The typical ethical issues associated with business-to-business marketing relationships are explored, and a number of examples, serving

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as cautionary tales, are provided of what can go wrong. The chapter also considers the issue of environmental sustainability as an issue in business-to-business marketing ethics, and finally examines the question of ethical relativism in the context of the culturally specific informal social networks that are found in many cultures around the world. Business-to-business marketing comprises seller-initiated activities undertaken to facilitate mutually beneficial exchanges between organizations (Brennan, 2014). In abstract terms these activities are largely the same as activities that consumer marketers undertake to facilitate exchanges with their customers. That is to say, marketing to businesses employs market research, market segmentation and marketing communications in a wide variety of types including advertising, promotions and personal selling. Just as consumer marketing has increasingly adopted new technologies such as web-based marketing and social media marketing, so has business marketing (Salo, 2017; Siamagka, Christodoulides, Michaelidou, & Valvi, 2015; Swani, Milne, Brown, Assaf, & Donthu, 2017). However, while in the abstract marketing to businesses may resemble marketing to consumers, in practical terms business-to-business marketing often differs considerably from consumer marketing. The reasons

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for differences in the practice of marketing can be found in the typical structure of business markets, the characteristics of buying behaviour that follow from these differences, and hence the differences in marketing strategy that arise.

UNDERSTANDING BUSINESS-TOBUSINESS MARKETS In contrast to consumer markets, in which demand is usually widely dispersed among a large number of buyers, it is often the case in business markets that demand is highly concentrated in the hands of a few buying organizations. For example, there are very few large-scale manufacturers of automobiles, and even fewer large-scale manufacturers of commercial airliners; the demand for automotive and aircraft components is concentrated in the hands of a few very powerful buying organizations such as Toyota and Boeing. Of course, in such organizations major buying decisions are handled by teams of highly skilled people, including finance professionals, engineering professionals, senior managers and purchasing professionals. Major buying decisions for such organizations are also major strategic decisions, since they cannot easily be reversed (switching suppliers may be a long and difficult process) and have long-term implications for the business. Looking at this from the marketing side, these conditions suggest that sales and marketing processes will also be lengthy, involving multi-skilled teams of professionals, and will involve much greater relational content than a typical consumer transaction. A useful starting point to understand the functioning of business markets, and thus to understand the characteristic issues of marketing ethics that arise in business markets, is Day’s (2000) concept of the relationship spectrum. Day (2000) argues that in order to develop an appropriate marketing strategy it is first necessary to understand the nature of the marketing relationship one is seeking to establish. The relationship spectrum extends from anonymous transactions, through value-adding exchange, to collaborative exchange. Anonymous transactions involve simple exchange processes, the most obvious of which is a simple sale of a product by a seller to a buyer, under circumstances where neither party desires or expects further business to follow. The emphasis of marketing is on identifying prospective customers, providing persuasive messages, and closing sales. Value-adding exchange arises where there is a likelihood of repeated transactions, so that the exchange process begins to have

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relational content. Under these circumstances the emphasis of marketing is on retaining existing customers as well as winning new ones, so that tailored marketing and product development activities designed to retain customers’ business become important. Consequently, marketers need to give explicit consideration to relational variables, asking questions about such issues as the degree of trust and the balance of power within the buyer–seller relationship. At the far end of the relationship spectrum from anonymous exchange lies collaborative exchange, where the exchange process involves complex entanglement between the parties. This is a uniquely business-to-business form of exchange, and is typified by, for example, the kind of exchange relationship found between multinational businesses and the suppliers of their global communication systems. Creating this kind of exchange relationship takes time, involves a lot of people from both businesses, and involves extensive amounts of information sharing and joint problem solving. Under these circumstances the buying and selling firms cannot easily dissolve their business relationship and may become mutually dependent. Marketing organizations often adopt a key account management strategy, developing a strategic marketing plan for the individual customer account, and seeking to align the strategic interests of the two businesses (Abratt & Kelly, 2002; Ivens, Leischnig, Pardo, & Niersbach, 2018; Ojasalo, 2001).

RELATIONSHIPS, NETWORKS AND TRUST It follows that, rather than thinking of business-tobusiness markets as impersonal and anonymous, a more apt characterization is of a tangled mass of buyer–seller relationships embedded in an interconnected network of further relationships. Indeed, the metaphor of a rainforest has been used to characterize business markets, because ‘a basic feature of the business landscape is the intricate interdependencies between the companies that populate it’ (Håkansson, Ford, Gadde, Snehota, & Waluszewski, 2009, p. 1). Certainly, it is often the case that exchange in business markets takes place between relatively few buying and selling organizations, and that buyer–seller relationships can persist for lengthy periods and involve complex inter-organizational and interpersonal interactions (Håkansson & Snehota, 1989; Snehota & Håkansson, 1995). These exchanges often involve the same people meeting repeatedly and engaging in both business and social interactions, and they also often concern business deals that may endure

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for years and involve large sums of money. For example, Etihad Airways has a passenger aircraft fleet comprising 54 Airbus planes (30 Airbus A320s; 14 Airbus A330s; 10 Airbus A380s) and 48 Boeing planes (29 Boeing 787s; 19 Boeing 777s) (Etihad, 2019). Each of these aircraft has a useful life of well over a decade and costs an enormous amount of money (e.g. Boeing has a price list at www.boeing.com/company/about-bca/#/ prices, which shows the price of a Boeing 777 at over $300 million). Airlines generally negotiate the purchase of several aircraft at the same time, so that it is easy to see how the monetary value of a passenger aircraft deal can rapidly rise to billions of dollars. A deal to purchase passenger aircraft brings in its wake a swathe of additional business-to-business deals to supply all of the necessary products and services that will be fitted to the new planes. For example, the Boeing 777 may be powered by engines from GE Aviation (the GE90 turbofan) or Rolls-Royce (the Trent 800). So, as Airbus and Boeing compete to supply passenger aircraft to Etihad and other airlines, so GE Aviation and Rolls-Royce compete to supply engines to be fitted to the new aircraft. Globally, the transactions involved are worth huge sums of money each year, but they involve only a handful of airline companies, and generally only two aircraft manufacturers (Boeing, Airbus) and two aero-engine manufacturers (Rolls-Royce, GE Aviation). This characteristic example illustrates how demand in business-to-business markets can be highly concentrated in the hands of a few buyers, and how a single business deal can be of crucial importance to a marketing organization. A single customer, and perhaps even a single deal, can make the difference between success and failure, even between survival and disaster, for a supplier in such markets. In the kind of situation described, the key players from both sides of the exchange relationship – such as senior executives involved with marketing and sales (selling side), and procurement and supply chain management (buying side) – are likely to meet each other frequently and under a variety of circumstances. It is often the case that, in addition to formal business meetings, people in these roles will meet, sometimes more formally and sometimes informally, at industry events. Notably, there are trade fairs for every industry, which are specifically designed for businesses to promote their products and services, and to offer delegates the opportunity to network with actual or prospective business partners. For example, the German trade fair directory (auma.de) lists numerous trade fairs for the aerospace industry, including the Beijing Aviation & Airport Equipment Expo (China) and the Salon International de l’Aéronautique et de

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l’Espace (Paris, France). As a result of interacting frequently both formally and informally, trust is created between the people involved with longterm buyer–seller relationships. Trust develops out of the many interactions that take place within the business relationship, and comprises both calculative and emotional components (Huang & Wilkinson, 2013; 2014; Young, 2006). That is to say, trust involves both a calculative appreciation of the likelihood that your business partner will act in your best interests and an emotion or feeling that your business partner will behave fairly towards you. Trust within the business relationship is forever changing as more and more interactions take place. Often, one of the goals of the marketing executive will be to increase trust within the relationship. However, given the complexity of many business-to-business buyer–seller relationships, it is not possible to control all of the factors that influence the evolution of trust (Huang & Wilkinson, 2013).

ETHICAL ISSUES IN BUSINESS-TOBUSINESS MARKETS From the perspectives of the regulation of competition and marketing ethics, the prevalence of long-term interactive relationships involving close personal ties between individuals and the evolution of calculative and emotional trust is problematic. As far as the business-to-business marketing or sales executive is concerned (and their counterparts, the purchasing and supply chain managers), those are merely the conditions under which business is often, and quite normally, transacted. However, as far as the competition regulator is concerned, those sound like the kind of circumstances in which businesspeople may collude to their own advantage, and to the disadvantage of others. Competition policy, which regulates what is deemed to be legal and illegal competition, tends to emphasize the benefits of having many competitors and seeking to eliminate ‘market imperfections’. Furthermore, from a marketing ethics standpoint, business conditions under which the same people interact frequently together over an extended period of time, get to know, trust and perhaps even like each other, and control enormous purchasing budgets, seem also to create the possibility of unethical behaviour. Where there is trust, there is always the risk of opportunistic behaviour exploiting that trust (Williamson, 1993). Where high-value business deals may dictate both personal career success and corporate success,

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business gifts are not uncommon (Fisher, 2007). Gifts can be excessively generous and may either implicitly, or explicitly, become corrupt payments. Allegations of corrupt payments or bribery in business-to-business markets are not uncommon. For example: • Innospec Ltd (the UK subsidiary of Innospec, Inc), a manufacturer of specialty chemicals, pleaded guilty to bribing state officials in Indonesia and Iraq and was fined $12.7 million (£10.2 million) following an investigation by the UK Serious Fraud Office (SFO, 2016). In addition, several individuals received prison sentences for their involvement in ‘conspiracy to corrupt’. • Smith and Ouzman Ltd, a company specialising in printing security documents, was convicted of corruptly agreeing to make payments to influence the award of business contracts in Kenya and Mauritania. A fine of £2.2 million ($2.75 million) was imposed (SFO, 2018). The chairman of Smith and Ouzman Ltd received an 18-month prison sentence, and the sales and marketing director a three-year prison sentence, for their involvement in this case. • Following an investigation by the US Securities and Exchange Commission (SEC) the Connecticutbased firm United Technologies Corporation agreed to pay $13.9 million (£11.1 million) to resolve charges that it violated the US Foreign Corrupt Practices Act by making illicit payments in its elevator and aircraft engine businesses. The SEC alleged that a number of unlawful payments had been made, such as payments to Azerbaijani officials in connection with the sale of elevator equipment, and payments to a Chinese sales agent with the aim of obtaining confidential information. The SEC also claimed that United Technologies improperly provided trips and gifts to foreign officials in a number of countries. United Technologies agreed to the payment to resolve the charges without admitting or denying the findings of the SEC investigation (SEC, 2018). A recent case that brought unwanted global attention to the highly esteemed British engineering company Rolls-Royce involved what the presiding judge (the Right Honourable Sir Brian Leveson) called ‘the most serious breaches of the criminal law in the areas of bribery and corruption’ (Serious Fraud Office v. Rolls-Royce plc/ Rolls-Royce Energy Systems, INC., 2017). RollsRoyce, which is perhaps best known for its aerospace engines (the Rolls-Royce brand of automobile is now in the hands of BMW of Germany), is a widely admired company that was ranked first in the aerospace and defence sector of the UK’s most admired companies 2018 (a survey

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run by business magazine Management Today). Yet, Rolls-Royce had admitted to multiple illegal acts associated with bribery and corrupt payments spanning a period from 1989 to 2013. This included offences related to the bribery of foreign public officials, which seemed to have been the subject of careful planning and involved senior Rolls-Royce employees. The conduct was in connection with large-value contracts associated with the sale of aero engines, energy systems and related services that earned the company more than £250 million ($312 million) of gross profit. Because Rolls-Royce has been through this relatively recent and no doubt traumatic experience, the Rolls-Royce approach to business-to-business ethics is now an exemplar of good practice. The latest version of the Rolls-Royce Global Code of Conduct can easily be found through the firm’s website (https://www.rolls-royce.com/sustainability/ethics-and-compliance.aspx#section-globalcode-of-conduct, accessed 18 February 2019). It can be regarded as a model of this type of document, having emerged from the trauma of the legal investigation, and under the guidance of the leading UK expert on corporate governance and ethics, Lord David Gold. It incorporates the RollsRoyce ‘TRUST’ model for ethical dilemmas: Think about the dilemma, Read the relevant policy or procedure, Understand the implication of your decision, Speak to others for guidance, Take action to solve the dilemma. Long-term interactive relationships between buying and selling firms are common in businessto-business markets (Ford & Håkansson, 2006; Håkansson et  al., 2009). However, it would be mistaken to imagine that a ‘relationship’ only involves positive interactions. Over the years many researchers have found that business-tobusiness relationships involve negative as well as positive aspects, and the generic term that is used to describe such phenomena is the ‘dark-side’ of business relationships (Abosag, Yen, & Barnes, 2016). Abosag et  al. (2016) argue that relationships are not inherently good, or bad, but can produce dark-side and bright effects simultaneously. Dark-side effects exist on a spectrum which can be conveniently divided into the ‘tolerable darkside’ and the ‘intolerable & irritating dark-side’. For example, some degree of conflict is almost inevitable in a complex inter-firm relationship and a normal degree of conflict falls within the ‘tolerable dark-side’. However, severe conflict that leads to the breakdown of trust between the partners increases the likelihood of opportunistic behaviour, and this falls under the heading of ‘intolerable and irritating dark-side’ (Abosag et al., 2016). Both theoreticians who study business-to-business marketing and business executives involved

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in managing inter-firm relationships are interested in opportunism. Williamson (1975) defined opportunism as self-interest seeking with guile. In the plain language of the twenty-first century we can think of opportunism as ‘taking advantage’, while Hawkins, Pohlen and Prybutok (2013) mention terms such as cheating, cutting corners, cover-ups and making false threats as examples of opportunism. For example, opportunism can arise where a supplier of component parts to a large manufacturing firm has invested heavily in specialist new equipment specifically to serve the needs of that customer, and the equipment is much less valuable for any other purpose (perhaps it can only be sold at a fraction of what it cost to buy). In this situation we see specific investments (the specialist equipment) that lead to dependence (the supplier is dependent on the customer to buy the components) and create the possibility of opportunism. The customer can take advantage of the supplier by renegotiating the price of the components downwards. It seems that opportunistic behaviour is fairly common in business, even though it leads to various negative outcomes such as increased transaction costs, conflict and reduced trust (Hawkins, Wittmann, & Beyerlein, 2008; Morgan & Hunt, 1994). Given that the nature of business-to-business marketing often involves complex and lengthy negotiations, the question of what is ethical and unethical in business negotiation arises. On the one hand it has been argued that business negotiation inevitably involves a degree of deception and that businesspeople involved in negotiations should not be held to the same moral standards as are expected in everyday life (Carr, 1968). On the other hand it is argued that most negotiations proceed in a straightforward and truthful manner, and negotiating tactics such as deception, lying and bluffing are not widely practised, so that to suggest that a norm of ‘anything goes’ applies to business negotiation is incorrect (Provis, 2000). Fulmer, Barry and Long (2009) carried out two empirical studies into attitudes towards deception in business negotiation. They pointed out that the incentive to act deceptively may arise from a motive of opportunism or of desperation; the motive of opportunism follows from a desire for additional gain from the negotiation, whereas the motive of desperation follows from a desire to avoid loss. Deceptive tactics in negotiations may involve the misrepresentation of information (the cognitive aspect), or the misrepresentation of feelings (the affective aspect) (Fulmer et  al., 2009). Misrepresenting information is perhaps the better understood aspect, involving such behaviours as lying and making false promises (Robinson, Lewicki, & Donahue, 2000). Misrepresenting

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feelings involves giving the other party a false impression of how one feels about a particular aspect of the negotiation, such as expressing sympathy for their position when one does not really feel sympathetic, or appearing to be angry about something when not really feeling anger (Fulmer et al., 2009). Empirical results show that businesspeople are more approving of emotional deceptive tactics than informational deceptive tactics, and that tolerance of deceptive tactics is positively associated with the expected gains from the negotiation (Fulmer et al., 2009). Trust, deception and opportunism are interrelated components of business-to-business marketing relationships. They can also be seen as representing the ‘light-side’ (trust) and ‘darkside’ (deception, opportunism) of relationships. Early studies of these phenomena tended to adopt a cognitive approach, while more recent studies have focused attention on the affective (feelings) aspect. It is important to avoid thinking of the cognitive and affective approaches as competing or alternative theories. Those who have argued for the inclusion of the affective aspect, such as Young (2006) for trust and Fulmer et  al. (2009) for deception, clearly acknowledge that ‘business is business’, and that there is always a cognitive, rational aspect to business decision making. However, the addition of the affective aspect to our models of trust, deception and opportunism has enhanced our understanding of business-tobusiness marketing relationships generally, and ethical behaviour within those relationships specifically. In addition, it is important to grasp the point made by Young and others that the relative importance of the cognitive and affective aspects is not constant, but changes through time, and is influenced by what goes on within the relationship (Huang & Wilkinson, 2013; 2014). In simple terms, feelings as well as rational calculation play a part in business-to-business marketing. Feelings are involved in factors such as trust that establish the context within which ethical decisions arise and are directly involved when ethical decisions are made. Sometimes feelings will play a secondary role and decision making will be predominantly rational, while on other occasions feelings will be more salient. Consequently, while intuition might suggest that marketing ethics in a business-to-business context will lean heavily in the direction of the more rational and calculative approaches to ethical decision making such as rule-based systems and quasi-utilitarian evaluations of costs and benefits (Hunt & Vitell, 1986; 2006), emotive approaches to ethics may also be relevant (Dawson & Bartholomew, 2003). Furthermore, the relevance of different approaches to ethics is likely to vary dependent upon the

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stage of evolution that the buyer–seller relationship has reached (Ford, 1980; Jap & Anderson, 2007). While it is acknowledged that ‘there are no nice neat stages in the ways in which relationships evolve and develop’ (Turnbull, Ford, & Cunningham, 1996, p. 58), nevertheless relationships do develop and change, become deeper and shallower, attract greater and lesser levels of trust and commitment (Morgan & Hunt, 1994). Ethical decision making within relationships will be influenced by these changes, although further research is required to investigate how. For example, as a relationship develops through time, with increasing levels of interaction, information sharing, transactions, commitment and trust, it would be reasonable to hypothesise that ethical decision making would become progressively less rational and calculative.

MARKETING AND PURCHASING: GIVING AND RECEIVING GIFTS A specific ethical issue that arises in business-tobusiness marketing is the giving and receiving of gifts of various kinds, including unnecessarily lavish hospitality. The American Institute for Supply Management addresses this issue in its Principles and Standards of Ethical Supply Management Conduct: Supply management professionals must not use their positions to induce another person to provide inappropriate benefits to themselves or others. Every person in a position to influence a supply decision must avoid all activity that may diminish, or even appear to diminish, the objectivity of the decision-making process … Influence is a factor in almost all business decisions. Use care to evaluate the intent and perception of influence on supply management decisions. (ISM, 2016)

Particular sources of influence mentioned include gifts, gratuities or entertainment, business meals and product samples. Of course, it is common practice for business-to-business marketers to provide hospitality and give gifts and benefits to representatives of actual and potential customer businesses; such items include ‘diaries, pens, key rings, coffee mugs and items of clothing through to bottles of wine or spirits, meals, entertainment, tickets to sporting or cultural events, discounts, services, trips and money’ (Fisher, 2007, p. 99). However, as Fisher succinctly notes: ‘Just because something is industry practice … does not make it right’ (2007, p. 100).

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The exchange of gifts, or the common practice of suppliers (marketers) giving gifts of one kind or another to actual or prospective clients/ customers, raises the issue of conflict of interest. Simply put, a potential conflict of interest arises where the gift is considered to be an inducement for the employee of a firm to place their own interests ahead of the interests of their employing organization. If an employee (such as a purchasing executive), after receiving a gift from one potential supplier, recommends that supplier ahead of others that seem to have better products, then conflict of interest may be suspected. Of course, in the real world of business-to-business marketing and purchasing, where competing product offerings represent complex combinations of characteristics, it may be far from clear which supplier has the ‘best’ product. Nevertheless, in principle, if a gift induces an employee to provide something other than their best professional opinion, then there are reasonable grounds to suspect conflict of interest. Consequently, Fisher argues that: ‘When accepting the gift or benefit could be seen by an objective third party to compromise the decision making of the buyer, it is wrong to accept it’ (2007, p. 104). Under these circumstances a conflict of interest situation is created. Fisher (2007) then argues that the corollary of this argument is that it is unethical for suppliers, often represented by salespeople or account managers, to offer gifts to customer representatives where they believe that those gifts might compromise the decision-making process. In practice, many companies now forbid the giving and receiving of gifts, while another common practice is to permit gifts of nominal value. The Chartered Institute of Purchasing and Supply Code of Conduct contains the following guidance: ‘As a member of The Chartered Institute of Procurement & Supply, I will: Enhance and protect the standing of the profession, by … not accepting inducements or gifts (other than any declared gifts of nominal value which have been sanctioned by my employer)’ (CIPS, 2013, emboldened in original). Similar restrictions on gifts can be found in codes of conduct for marketing professionals. For example, the Prescription Medicines Code of Practice Authority provides the following guidance on the promotion of medicines to health professionals: ‘No gift, pecuniary advantage or benefit may be supplied, offered or promised to members of the health professions or to other relevant decision makers in connection with the promotion of medicines or as an inducement to prescribe, supply, administer, recommend, buy or sell any medicine.’ Certain minor exceptions apply to this policy, such as ‘inexpensive notebooks, pens and pencils’ handed out at and for use at scientific conferences. Elsewhere in this

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chapter the Rolls-Royce Global Code of Conduct was presented as an example of good practice, and so it is interesting to see what Rolls-Royce has to say about gifts and hospitality. The guidance Rolls-Royce provides is detailed and comprehensive and cannot readily be summarised here, so the interested reader is urged to examine the original Rolls-Royce document (Rolls-Royce, 2018). Rolls-Royce acknowledges that gifts and hospitality may be an appropriate business practice, but must ‘be given as a legitimate, justified business courtesy and never in exchange for obtaining an inappropriate advantage or benefit’ (Rolls-Royce, 2018).

ENVIRONMENTAL SUSTAINABILITY Of considerable relevance to business-to-business marketers are the important changes in business thinking that have taken place in recent years which place growing emphasis on the responsibilities of enterprises towards wider society and the natural environment. More and more business organizations believe it to be necessary to take account of the wider social considerations and environmental effects arising from their activities. The context for sustainability as a managerial issue is the obvious degradation suffered already by the natural environment as a result of human actions, and the emerging scientific consensus that the average global temperature is rising (global warming), that this will have long-term damaging effects on the natural environment with adverse consequences for human beings and many other species, and that human actions are responsible for much of the global temperature increase. Consequently, Raman (2009) argued that sustainability is now a corporate imperative, without which a company is likely to be shut out of many important markets. Whereas, in the past, companies tended to launch ‘green’ products in rich countries, Raman says that they will now have to ‘launch eco-friendly products all around the world at the same time’(2009, p. 137). Something that is more or less ubiquitous on the websites of major business-to-business organizations these days is a statement about their commitment to environmental sustainability. This is often supported by an annual sustainability report explaining the company’s sustainability objectives, strategy and achievements. An excellent example is provided by the leading chemical company BASF Group (www.basf.com) which says that: ‘BASF assumes responsibility for environmental protection along the

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value chain’ (https://www.basf.com/gb/en/whowe-are/sustainability/sustainability-home.html, accessed 14 October 2019). This can be compared with the insistence by the major office furniture supplier Flokk (www.flokk.com) that its suppliers must demonstrate a credible commitment to environmental sustainability. Many major companies pursue similar policies, not only considering their own direct impact on the environment but also taking into account the wider environmental impact associated with their upstream and downstream business activities. Business-to-business marketers who have an ambition to win contracts from companies like this must be able to convince them that their business practices are environmentally sustainable. This often means that achieving a formal environmental certification for the company is essential not only as something that is intrinsically worthwhile, but as something that is instrumentally valuable in the achievement of business-tobusiness marketing objectives. Put simply, there are many occasions when suppliers (marketers) who do not have environmental certification will be frozen out of potential business deals. The carbon footprint of a supplier, and the raw material used, is now frequently considered as one of the decision-making criteria for businessto-business purchasing decisions. As an example, take a closer look at Flokk. It sells around 1.8 million office chairs every year, with a sales revenue of around 2,723 million Norwegian krone (£240 million) and it is growing very fast, based on a strategy that places sustainability at the heart of the business. Flokk itself has achieved environmental certifications, including ISO 9001 (quality management), ISO 14001 (environmental management) and ISO 50001 (energy management). A life cycle approach is adopted to environmental management that considers every phase of a product’s life, from the initial design criteria all the way through to end-of-life procedures such as recycling and the recovery of raw materials for reuse. This means that suppliers are extensively involved in this process. Suppliers must be accredited to ISO 14001, and Flokk also wants evidence that they are working for continuous improvement in environmental standards. For example, can recycled or renewable raw materials replace virgin or fossil-based materials in manufacturing processes? Can an equally high-quality office chair be made that is lighter and uses fewer components? According to Flokk CEO Lars I. Røiri: ‘We place strict environmental requirements on all our suppliers, who also have to commit themselves to our ethical guidelines, which deal with human rights, working conditions and corruption’ (Flokk, 2018). Given the ever-increasing sensitivity to issues of sustainability and corporate social

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responsibility, it will become increasingly important for business marketers to provide evidence that sustainability and ethical behaviour are central to their business practices.

ETHICAL RELATIVISM AND INFORMAL SOCIAL NETWORKS Much of the research in the field of business-tobusiness marketing has been conducted in North America and Europe, with relatively little in-depth research conducted in geographically and culturally distinct regions such as China, the Middle East, Africa and Latin America. Consequently, most of the insights into business-to-business marketing ethics provided so far in this chapter are based on North American and European research. A question that naturally arises is whether these insights have wide applicability, or are in some sense culturally bounded, reflecting the particular cultural conditions of the Global West. Implicitly, in the chapter to this point it has been assumed that a good approach to addressing ethical dilemmas in business-to-business markets is through the application of rules (known as a deontological approach). For example, the new Rolls-Royce Code of Conduct was suggested as a possible exemplar of corporate good practice, and the American Institute for Supply Management’s Principles and Standards of Ethical Supply Management Conduct were mentioned as a prominent example of the systematic approach to ethical standards adopted by many professional bodies. Such statements of codes, principles and standards tend to be implicitly absolutist in their perspective on ethics. They aim to make it clear to the employee, manager or professional body member that a certain behaviour is ethical or unethical; for example, often codes make it clear that gifts of very small value (say up to $20) may be accepted, but gifts of greater value must be declined. Ethical relativism is an alternative perspective to ethical absolutism and suggests that what counts as ethical behaviour cannot be decided in absolute terms, for all businesspeople in all circumstances. The most relevant form of ethical relativism in business-to-business marketing is cultural relativism, where moral decisions are considered to be embedded within specific cultural conditions. An old expression that summarises this way of thinking is: ‘When in Rome, do as the Romans do’. Certainly, there are many circumstances where business-to-business marketers and salespeople are well advised to follow this

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advice. For example, when doing business deals in some countries it is considered polite to meet your hosts socially and consume alcohol (possibly in large quantities), while in other countries business may not be mixed with social activity and the consumption of alcohol is considered undesirable and may be illegal. There are circumstances where a business-to-business professional needs to adapt their behaviour to cultural conditions. To be clear, however, if you are a businessperson operating under the terms of a corporate or professional code of conduct, then regardless of the cultural circumstances, that code of conduct continues to apply and the only sensible course of action is to follow it. Before leaving this topic, it is important to note the specific issues that arise in business-tobusiness marketing because of the highly relationship-based nature of much of the sales, marketing and purchasing activity in such markets. Since marketing and sales strategies often emphasize the need to build relationships with counterparts, there is an inevitable overlap with the informal social networks and norms that are found in different cultures around the world. Such informal networks are found in many cultures and are often used as mechanisms for achieving advancement in fields such as politics and business. Prominent examples are the ‘old school tie’ or ‘old boy’ network in the UK, guanxi in Chinese communities, wasta in the Arab world, compadrazgo and jeitinho in Latin America, and blat in Russia (Lovett, Simmons, & Kali, 1999; Michailova & Worm, 2003; Smith, Huang, Harb, & Torres, 2012; VelezCalle, Robledo-Ardila, & Rodriguez-Rios, 2015). Experienced business-to-business marketers operating in these markets will be familiar with the norms and expectations of the relevant informal social networks and may well seek to use those networks in order to make useful contacts and gain trust with a business partner. However, where the norms and expectations of informal social networks run the risk of contradicting the corporate or professional code of conduct, or even more seriously risks violating a law such as the US Foreign Corrupt Practices Act, it is the law and the code of conduct that take precedence.

CONCLUSION The specific characteristics of business-to-business markets and the ways in which these bring about inter-firm and interpersonal relationships and networks make the ethical circumstances facing business-to-business marketing and sales

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professionals rather different from those commonly faced by consumer marketers. The most commonly encountered ethical dilemmas revolve around issues of conflict of interest, opportunism, the giving and receiving of gifts particularly where this edges in the direction of bribery and corruption, and particular problems associated with close business relationships embedded in wider social networks. It is very common for business-to-business negotiations to take place in cross-cultural and multicultural contexts. What is known about ethical behaviour in business-tobusiness marketing and purchasing is derived overwhelmingly from studies undertaken in the North American and European regions. The pillars upon which ethical behaviour stand are typically corporate and professional codes of conduct, which often provide concrete guidance on ethical behaviour using deontological principles, and broader guidance on ethical thinking from a virtue-based perspective. The interface between culture and ethics represents an under-researched aspect of business-to-business marketing ethics. More narrowly, the extent to which business-tobusiness marketers and salespeople from different cultures accept the Western model of ethical governance, or hold different and possibly ethically relativist or culturally contingent views, represents an interesting area for further research.

REFERENCES Abosag, I., Yen, D. A., & Barnes, B. R. (2016). What is dark about the dark-side of business relationships? Industrial Marketing Management, 55, 5–9. doi:https://doi.org/10.1016/j.indmarman.2016. 02.008 Abratt, R., & Kelly, P. M. (2002). Customer–supplier partnerships: Perceptions of a successful key account management program. Industrial Marketing Management, 31(5), 467–476. Brennan, R. (2014). Business-to-business marketing. In R. Alhajj & J. Rokne (Eds), Encyclopedia of Social Network Analysis and Mining (pp. 83–86). New York: Springer. Brennan, R., Canning, L., & McDowell, R. (2017). Business to Business Marketing (4th edn). London: Sage. Carr, A. (1968). Is business bluffing ethical? Harvard Business Review, 46(1), (January/February), 143–153. CIPS. (2013). CIPS Code of Conduct. Retrieved from https://www.cips.org/Documents/About%20 CIPS/2/CIPS_Code_of_conductv2_10_9_2013.pdf Dawson, D., & Bartholomew, C. (2003). Virtues, managers and business people: Finding a place for

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MacIntyre in a business context. Journal of Business Ethics, 48(2), 127–138. Day, G. S. (2000). Managing market relationships. Journal of the Academy of Marketing Science, 28(1), 24–30. Etihad. (2019). About Us. Retrieved from https:// www.etihad.com/en-us/about-us/corporate-profile/our-fleet/ Fisher, J. (2007). Business marketing and the ethics of gift giving. Industrial Marketing Management, 36(1), 99–108. doi:https://doi.org/10.1016/j. indmarman.2005.03.013 Flokk. (2018). Annual Report. Retrieved from www. flokk.com Ford, D. (1980). The development of buyer-seller relationships in industrial markets. European Journal of Marketing, 14(5/6), 339–354. Ford, D., & Håkansson, H. (2006). IMP – Some things achieved: much more to do. European Journal of Marketing, 40(3/4), 248–258. Fulmer, I. S., Barry, B., & Long, D. A. (2009). Lying and smiling: Informational and emotional deception in negotiation. Journal of Business Ethics, 88(4), 691–709. Håkansson, H., Ford, D., Gadde, L.-E., Snehota, I., & Waluszewski, A. (2009). Business in Networks. Chichester: Wiley. Håkansson, H., & Snehota, I. (1989). No business is an island: The network concept of business strategy. Scandinavian Journal of Management, 4(3), 187–200. Hawkins, T. G., Pohlen, T. L., & Prybutok, V. R. (2013). Buyer opportunism in business-to-business exchange. Industrial Marketing Management, 42(8), 1266–1278. doi:https://doi.org/10.1016/j. indmarman.2013.05.022 Hawkins, T. G., Wittmann, C. M., & Beyerlein, M. M. (2008). Antecedents and consequences of opportunism in buyer–supplier relations: Research synthesis and new frontiers. Industrial Marketing Management, 37(8), 895–909. Huang, Y., & Wilkinson, I. F. (2013). The dynamics and evolution of trust in business relationships. Industrial Marketing Management, 42(3), 455–465. Huang, Y., & Wilkinson, I. F. (2014). A case study of the development of trust in a business relation: Implications for a dynamic theory of trust. Journal of Business Market Management, 7(1), 254–279. Hunt, S. D., & Vitell, S. (1986). A general theory of marketing ethics. Journal of Macromarketing, 6(1), 5–16. doi:10.1177/027614678600600103 Hunt, S. D., & Vitell, S. (2006). The general theory of marketing ethics: A revision and three questions. Journal of Macromarketing, 26(2), 143–153. doi:10.1177/0276146706290923 ISM. (2016). Principles and Standards of Ethical Supply Management Conduct. Retrieved from

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https://www.instituteforsupplymanagement.org/ files/SR/PrinciplesandStandardsGuidelines.pdf Ivens, B. S., Leischnig, A., Pardo, C., & Niersbach, B. (2018). Key account management as a firm capability. Industrial Marketing Management, 74, 39–49. Jap, S. D., & Anderson, E. (2007). Testing a life-cycle theory of cooperative interorganizational relationships: Movement across stages and performance. Management Science, 53(2), 260–275. Lovett, S., Simmons, L. C., & Kali, R. (1999). Guanxi versus the market: Ethics and efficiency. Journal of International Business Studies, 30(2), 231–247. Michailova, S., & Worm, V. (2003). Personal networking in Russia and China: Blat and guanxi. European Management Journal, 21(4), 509–519. Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20–38. Ojasalo, J. (2001). Key account management at company and individual levels in business-to-business relationships. Journal of Business & Industrial Marketing, 16(3), 199–220. Provis, C. (2000). Honesty in negotiation. Business Ethics: A European Review, 9(1), 3–12. doi:10.1111/ 1467-8608.00164 Raman, A. P. (2009). The new frontiers. Harvard Business Review, 87(7–8), 130–137. Robinson, R. J., Lewicki, R. J., & Donahue, E. M. (2000). Extending and testing a five factor model of ethical and unethical bargaining tactics: Introducing the SINS scale. Journal of Organizational Behavior, 21(6), 649–664. doi:10.1002/10991379(200009)21:63.0.co;2-# Rolls-Royce. (2018). Our Group Policies: Enabling us to be at our best. Retrieved from https://www. rolls-royce.com/∼/media/Files/R/Rolls-Royce/ documents/sustainability/group-policies-manual. pdf#page=26 Salo, J. (2017). Social media research in the industrial marketing field: Review of literature and future research directions. Industrial Marketing Management, 66, 115–129. doi:https://doi.org/10.1016/j. indmarman.2017.07.013 SEC. (2018). United Technologies charged with violating FCPA [Press release]. Retrieved from https:// www.sec.gov/news/press-release/2018-188

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Serious Fraud Office v. Rolls-Royce plc/Rolls-Royce Energy Systems, INC., No. U20170036 (Crown Court (Southwark) 2017). SFO. (2016). Innospec Ltd. Retrieved from https:// www.sfo.gov.uk/cases/innospec-ltd/ SFO. (2018). Smith and Ouzman Ltd. Retrieved from https://www.sfo.gov.uk/cases/smith-ouzman-ltd/ Siamagka, N.-T., Christodoulides, G., Michaelidou, N., & Valvi, A. (2015). Determinants of social media adoption by B2B organizations. Industrial Marketing Management, 51, 89–99. doi:https:// doi.org/10.1016/j.indmarman.2015.05.005 Smith, P. B., Huang, H. J., Harb, C., & Torres, C. (2012). How distinctive are indigenous ways of achieving influence? A comparative study of guanxi, wasta, jeitinho, and ‘pulling strings’. Journal of Cross-Cultural Psychology, 43(1), 135–150. Snehota, I., & Håkansson, H. (1995). Developing Relationships in Business Networks. London: Routledge. Swani, K., Milne, G. R., Brown, B. P., Assaf, A. G., & Donthu, N. (2017). What messages to post? Evaluating the popularity of social media communications in business versus consumer markets. Industrial Marketing Management, 62, 77–87. doi:https://doi.org/10.1016/j.indmarman.2016. 07.006 Turnbull, P. W., Ford, D., & Cunningham, M. T. (1996). Interaction, relationships and networks in business markets: An evolving perspective. Journal of Business & Industrial Marketing, 11(3/4), 44–62. Velez-Calle, A., Robledo-Ardila, C., & Rodriguez-Rios, J. D. (2015). On the influence of interpersonal relations on business practices in Latin America: A comparison with the Chinese guanxi and the Arab Wasta. Thunderbird International Business Review, 57(4), 281–293. Williamson, O. E. (1975). Markets and Hierarchies: Analysis and Antitrust Implications. New York: The Free Press. Williamson, O. E. (1993). Opportunism and its critics. Managerial and Decision Economics, 14(2), 97–107. Young, L. (2006). Trust: looking forward and back. Journal of Business & Industrial Marketing, 21(7), 439–445.

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18 The Ethics of Social Marketing and Non-Profit/Charity Marketing Krzysztof Kubacki and Natalia Szablewska

INTRODUCTION In their 1969 Journal of Marketing article, Kotler and Levy observed that well-established commercial marketing principles were being applied to market organizations, persons and ideas. Initially, their observation provoked a lively debate among marketing academics, some of whom were not convinced by the idea of broadening the concept of marketing (e.g. Luck, 1969; for a more recent overview of the development of non-profit marketing, see Sargeant & Wymer, 2007). However, by the end of the 1970s, the idea of using commercial marketing tools and techniques to achieve objectives other than just profit was no longer considered controversial, and the foundations were laid for what was over time to become nonprofit marketing. As the idea gathered momentum in both academia and practice, subfields of nonprofit marketing began to emerge, focusing on specific contexts, such as healthcare, social problems, the arts, charities, education and politics. At the same time, some authors observed that the complex nature of non-profit marketing, with its emphasis on a wide range of non-financial objectives that stem from their social mission, presented non-profit marketers with a unique new set of ethical challenges and dilemmas. For example,

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the predominant focus of commercial marketing on individual consumers and their wants was, for some, in direct opposition to the non-profit sector’s emphasis on much broader needs and the well-being of society (Sheth, 1993), including activities relating to charitable, religious, benevolent, philanthropic or patriotic purposes. Hence, the argument goes that the non-profit sector’s organizational objectives, which were much wider and less tangible than just financial profits, made it much harder for non-profit marketers to embrace fully some of the philosophical foundations of commercial marketing, for example customer orientation, especially when there was a potential conflict between consumer satisfaction and a non-profit organization’s social objectives and/or the well-being of the individual and society (Vasquez, Alvarez & Santos, 2002). These differences between commercial and non-profit marketing warranted further ethical debates. In this chapter, we will explore some of the ethical challenges and dilemmas emerging from both theory and practice in non-profit marketing and social marketing. We will also focus on three specific non-profit and social marketing techniques, namely fundraising, cause-related marketing and corporate social marketing, creating a distinct set of ethical challenges. In each section, we will provide a brief overview of relevant research, its

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historical development and key contemporary debates. It is beyond the scope of this chapter to offer an exhaustive examination of ethics in nonprofit and social marketing, but it points out to readers some of the key debates and resources that can inform further research and practice.

NON-PROFIT/CHARITY MARKETING Non-profit organizations (including charities), often described as a third sector or civil society, play an important role in many countries, as well as internationally, along with commercial organizations (for-profits) and the government. They are formed by citizens to provide goods and services that improve the well-being of society at large. We may describe them as organizations preoccupied with delivering the social good. They often operate like for-profit organizations and mirror their organizational structures, yet their primary focus is on a wide range of socially desirable objectives, rather than financial profits or shareholder value. While some non-profit organizations may engage in business-like fee-for-products exchanges (see e.g. McKeever (2015), who indicated that nearly half of the revenue for public charities in the USA came from tuition payments, ticket sales and hospital patient revenues), for most non-profit organizations traditional business–customer relationships are replaced by tri-partisan relationships involving those who provide resources (e.g. donors), the non-profit organization (including volunteers, employees and the board) and those who use the products and services provided by the non-profit organization (e.g. beneficiaries). Non-profits have a crucial social role to play in society, as they fill the niche where commercial organizations are unable to satisfy existing needs profitably and where the government does not have the resources, will or ability to do it efficiently (Nisbet, 1971). They also create opportunities for individuals to engage in civic efforts and actively participate in a process of creating and delivering the social good. Non-profit organizations usually respond to the needs of specific social groups (e.g. arts lovers, senior citizens or people with Alzheimer’s disease) and occupy a middle ground between commercial organizations, which satisfy our individual needs, and the government, which acts on behalf of all citizens (Clohesy, 2003). Therefore, the non-profit sector is extremely diverse and includes organizations across different contexts (e.g. health, education, religion, arts and culture) and social issues (e.g. poverty, consumer or environmental protection,

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youth development and support for senior citizens), both nationally and internationally. This diverse character of the non-profit sector and its ever-expanding list of potential organizational objectives mean that a one-size-fits-all marketing approach will not work for all non-profit organizations. They will also use marketing tools and techniques to different extents. While some might be comfortable developing new products and services or even large portfolios of products, others will prioritize simple communication efforts to inform the wider public about their missions. What this means in practice is that there is also a great diversity of ethical challenges and dilemmas that will be encountered by non-profit organizations and their employees, volunteers, donors, fundraisers (both in-house and outsourced) and, last but not least, boards. The social role of non-profits, the significance of the social issues they work to address, and the vulnerable nature of their beneficiaries, often make them objects of intense public scrutiny. Their ability to deliver a social impact depends on public trust and the goodwill of members of society; therefore, all ethically problematic or outright unethical actions attract significant attention from the media and the wider public. In their recent book, Handy and Russell (2018) provide multiple examples of scandals that served to undermine public trust in non-profit organizations. One example involved the president of United Way of America, a US-based non-profit organization, which was accused of mismanaging over $600,000 of the organization’s funding to finance his excessive lifestyle and was later sentenced to seven years in prison. Another concerned the American Red Cross being questioned about the way the organization handled hundreds of millions of US dollars in donations after the September 11 attacks, Hurricane Katrina in 2005 and the 2010 earthquake in Haiti. These and other examples show that non-profit organizations, despite their focus on delivering the social good, are not immune to ethical dilemmas and challenges. They are exposed to immense pressure from their donors, their beneficiaries, the media and the general public, who expect them to deliver a positive social impact with resources that often do not stretch far enough to support all those in need. Public expectations towards nonprofit organizations often mean that they are held to much higher ethical standards than commercial organizations or even the government. They support vulnerable populations, so any unethical behaviours affect those who need most help. Unlike for-profits, non-profits may have multiple objectives that may not be achievable at the same time, and difficult decisions often need to be made

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to allocate available resources in a way that may not please all stakeholders. Last but not least, nonprofit marketers are human beings who are not always able to anticipate all of the (often unintended) consequences of their actions (Handy & Russell, 2018). Non-profits rely on several sources of revenue, including grants from other for-profit and nonprofit organizations and the government, fees for their services paid by the individuals accessing the services or the government, commercial revenues, and fundraising (Clohesy, 2003). In practice, non-profit marketing consists of three distinct types of marketing activities. The first is the marketing of the organization’s products and services to its current and potential beneficiaries, focused on increasing the number of people who will benefit from the organization’s work. For example, Sargeant, Lee and Jay (2009) reported that the top 500 charities in England and Wales invest nearly 80% of their income in activities that directly benefit their beneficiaries. However, other studies have shown that people, including both donors and non-donors, believed that only about half of non-profit organizations’ income translates into products and services delivered to beneficiaries (see e.g. Bennett, 2018). That perception, although inaccurate, might itself be an important ethical challenge for charities and other non-profit organizations, as long term it may limit their ability to raise funds and deliver convincing messages to the wider public. The second type of marketing activities is the marketing of the social issue(s) at the centre of the organization’s existence, raising general awareness and the profile of the issue in society and attracting potential volunteers. Bennett and Savani’s (2003) study showed that people questioned the ethicality of extensive spending on marketing by charities, yet at the same time individuals made more realistic assessments of marketing spending when they were well informed about the non-profit sector and received substantial information about the charities they supported. Therefore, Bennett and Savani’s findings present non-profit organizations with an ethical dilemma: increase the investment in marketing to keep people well informed and their expectations realistic, or redirect the funding towards products and services directly benefiting the beneficiaries and risk inaccurate perceptions that could potentially damage their long-term reputation and ability to raise additional funds. The third type of marketing activities undertaken by non-profit organizations is fundraising, that is, securing the resources required by the organization to deliver its products and services, as we discuss in more detail later in this chapter.

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SOCIAL MARKETING Social marketing has developed as a subfield within non-profit marketing. While non-profit marketing focuses broadly on the use of marketing to achieve the goals of non-profit organizations, social marketing has been used predominantly to address social issue behaviours (Rothschild, 1999). Nearly 70 years ago, Wiebe (1951–1952) asked one of the defining questions for social marketing: ‘Why can’t you sell brotherhood and rational thinking like you can sell soap?’ The question is commonly recognized in the social marketing literature as the first attempt to articulate what was already happening in practice: that is, marketing tools and techniques were increasingly being used by governments and international organizations to achieve social goals. Less than 20 years later, Kotler and Levy (1969) proposed to broaden the concept of marketing to include the marketing of persons, organizations and ideas. The recommendation was furthered by Kotler and Zaltman (1971), who coined the term ‘social marketing’ to describe the use of marketing tools and techniques to achieve social goals and planned social change. Following the formative years, social marketing was widely adopted to change behaviours across a wide range of health and social issues, from family planning to reducing tobacco consumption. Some, however, questioned the ethicality of employing marketing philosophy to manage social issues (Buchanan, Reddy & Hossain, 1994), and even Kotler and Zaltman (1971) acknowledged that social marketing might be perceived as manipulative, contributing to already significant promotional noise and increasing the costs of promoting social issues. Hence, while social marketing has always heavily relied on its older commercial relative, from the initial question posed by Wiebe (1951–1952), it is clear that selling ideas like brotherhood is far more ethically complex and controversial than most commercial marketing (see e.g. Bloom & Novelli, 1981; Laczniak, Lusch & Murphy, 1979; Murphy, Laczniak & Lusch, 1978; and more recently Szablewska & Kubacki, 2019a). The need for high ethical standards is not new to social marketers. A survey of ethics professors, social psychology academics, subscribers to the Journal of Economic History and marketing practitioners conducted by Laczniak and colleagues in 1979 revealed that marketing practitioners were more positive about social marketing than the other three groups of participants, leaving the social marketing field much room for improvement. Andreasen (2001) maintains that we should expect higher moral standards from social marketers than from commercial marketers for a number

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of important reasons. Firstly, social marketing strives to achieve the social good, and unethical conduct is unlikely to bring us closer to it. Social marketing practitioners need to be altruists, and acting in their self-interest may indeed discredit their actions and the discipline. Secondly, social marketing is a form of positive social engineering (Szablewska & Kubacki, 2019b) that relies on public trust, and any unethical actions may disrupt that trust; it would be hypocritical, we might even say Machiavellian, to promote ‘good’ behaviours while at the same time behaving ‘badly’ (Kirby & Andreasen, 2001). Thirdly, social marketers who recognize and acknowledge their ethical dilemmas open up communication channels with a wider group of stakeholders, reducing the risk of any unintended consequences. Fourthly, social marketers who ignore ethics may deliver programmes harmful to some people (see e.g. a discussion of ethical concerns related to fear appeals in social marketing in Hastings, Stead & Webb, 2004). Therefore, as long as social marketers aim to improve society, social marketing will have an intrinsically ethical dimension (Brenkert, 2002), and social marketers must strive to maintain the highest possible ethical standards. Despite some initial interest in the ethics of social marketing (Laczniak et  al., 1979; Murphy et al., 1978), it has not attracted sufficient attention among academics and practitioners in the second half of the twentieth century. The early definitions of social marketing focused on the adaptation of commercial marketing tools and techniques to influence the behaviour of target audiences in an attempt to increase their well-being (Andreasen, 1994; Kotler & Zaltman, 1971). With a clear emphasis on the technical aspects of social marketing and the voluntary character of behavioural change, the primary focus seemed to be on whether social marketing could be used to promote social issues, rather than whether it should be used to influence society and, in what circumstances, it is right to use it. Further, preoccupation with the adaptation of commercial marketing tools and techniques to achieve social objectives focused the ethical lens on challenges that were common to both social and commercial marketing, such as manipulation (Kotler & Zaltman, 1971; Laczniak et al., 1979) and offensive advertising (Bloom & Novelli, 1981). One of the first significant contributions to the ethical debate in social marketing was Andreasen’s collection of essays published in 2001, entitled Ethics in Social Marketing. The collection included contributions from some of the leading social marketing thinkers of the late twentieth century, focusing on issues such as the ethicality of social marketing vis-à-vis other behaviour

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change approaches (Rothschild, 2001), the use of social marketing in international development (Brenkert, 2001), the use of social marketing by for-profit organizations (Davidson & Novelli, 2001), alliances and partnerships (Andreasen & Drumwright, 2001) and teaching ethics in social marketing (Basil, 2001). Although the publication identified several practical and theoretical areas of social marketing with significant ethical dimensions that required further attention, progress in the last 20 years has been piecemeal. Criticisms such as those expressed initially by Kotler and Zaltman (1971) have been echoed in more recent social marketing literature. Some have argued that social marketing is essentially manipulative, expensive and unethical (Andreasen, 2002; Brenkert, 2002; Pang & Kubacki, 2015), paternalistic (Donovan & Henley, 2010) or a form of social control (Cherrier & Gurrieri, 2014) that leads to negative consequences such as stigmatization and social exclusion (Gurrieri, Previte & Brace-Govan, 2013), thereby infringing on the rights and freedoms of individuals (Holden & Cox, 2013) or else being used in developing countries in a way that resembles the language and practices of the colonial era (Grier & Bryant, 2005). The need for more explicit consideration of ethics in social marketing has been instigated by the fact that while in the past social marketing has often focused on public health issues that have presented relatively minor ethical challenges (e.g. facilitating tobacco-free environments or minimizing harm from alcohol consumption), social marketing tools and techniques are now being employed to address complex social issues and ‘wicked’ problems (Kennedy, Kapitan, Bajaj, Bakonji & Sands, 2017), such as climate change, gender inequality and radicalization. Therefore, in an attempt to address some of the criticisms and ethical challenges of social marketing, the International Social Marketing Association (ISMA), the European Social Marketing Association (ESMA) and the Australian Association of Social Marketing (AASM) adopted a consensus definition of social marketing, stating that ‘social marketing seeks to develop and integrate marketing concepts with other approaches to influence behaviours that benefit individuals and communities for the greater social good’ (AASM, ESMA and ISMA, 2013, para. 1). Beyond focusing social marketing efforts on the greater social good, this definition prescribes that social marketing practice is ‘guided by ethical principles’ in an attempt to bring about ‘social change programmes that are effective, efficient, equitable and sustainable’ (AASM, ESMA and ISMA, 2013, para. 2). Despite the above consensus definition of social marketing, so far there has been very

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limited discussion of the meaning of the social good in social marketing and no indication as to what the ethical principles might be. The array of systematic reviews published in the last two decades shows that social marketing can be effective in creating behavioural change (see e.g. Gordon, McDermott, Stead & Angus, 2006; Kubacki, Rundle-Thiele, Pang & Buyucek, 2015). However, future work in social marketing will need to engage more explicitly and continuously with two key ethical challenges: what is the meaning of the social good in social marketing; and how do we translate that meaning into social marketing practice, for example in the form of ethical principles or codes of ethics? Indeed, more recently, Szablewska and Kubacki (2019a) proposed adapting human rights process principles in their attempt to define the social good in social marketing and increase the legitimacy of social marketing programmes. The principles provide a framework to identify social problems while protecting the interests of the most marginalized groups in society and recognizing and acknowledging the existing biases and underlying motives for (in)action. The principles of participation and inclusion focus on the mechanisms for involving all individuals and groups in the decision-making processes that affect, or may potentially affect, their well-being. The principles of equality and non-discrimination dictate that all people have an equal right to protection and respect, and particular attention must be paid to vulnerable individuals and groups with limited economic, social and political resources. The principles of transparency and accountability address the need for transparent processes in the determination of social problems and for all decision makers to be accountable for their decision making. The principles provide social marketers with a framework and an opportunity for self-reflection and assessment of the extent to which their actions satisfy the standards set by the principles. There is, therefore, a need for further conceptual and practical research to better understand which ethical principles apply and how they can be implemented in social marketing. From a profession-wide perspective, it might require establishing a social marketing code of ethics (Carter, Mayes, Eagle, & Dahl, 2017). Although a code would not eliminate ethical dilemmas, it would serve multiple purposes, helping to address many of the ethical challenges identified earlier in this chapter. For example, a social marketing code of ethics might guide practitioners when social marketing tools and techniques are applied in a new context, define public expectations against which the ethicality of social marketing and social marketers could be assessed, provide a common ground for addressing disputes,

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boost the reputation of the discipline and profession, identify unethical behaviours and help to protect the profession from unethical requests (see e.g. Frankel, 1989). In the next section, we will focus on three specific non-profit and social marketing techniques, namely fundraising, cause-related marketing and corporate social marketing.

SOCIAL AND NON-PROFIT/CHARITY MARKETING TECHNIQUES Fundraising Fundraising is the use of marketing tools and techniques, such as personal selling, advertising, events, online marketing and crowdfunding, to solicit donations to a non-profit organization. It involves requesting voluntary donations from members of the public and other governmental, non-profit and private organizations. Although some non-profit organizations rely only on government, corporate or philanthropic financial support, the overwhelming majority of them have to solicit funding independently. Hence, a substantial part of their efforts is devoted to marketing activities aiming to raise the funds needed to deliver their products and services to beneficiaries. Contemporary non-profit organizations operate in a highly competitive environment: the amount of money most people and organizations have available for donations is always limited, and most donors have to make a decision to distribute their money in the most efficient way, supporting a limited number of causes that are important to them. Non-profit organizations are therefore forced to operate in a competitive environment that is very similar to most commercial organizations, trying to attract new donors and to maintain good relationships with their existing donors. The fundraising activities that attract the most criticism for their unethical character are those targeting individuals rather than organizations. For example, Tempel and Nathan (2010) identified multiple activities associated with fundraising that can be sources of ethical dilemmas and challenges, including the remuneration of fundraisers in a form of commission dependent on the amount of money raised, the sharing of donor information between organizations, developing personal relationships with donors to solicit donations, the marketing costs of fundraising, and accepting money that comes from criminal activity or has conditions attached that may not be congruent with the organization’s mission, such as attempts to raise

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funds from corporations manufacturing processed foods containing high levels of sugar and salt to fight obesity. Emotions have been identified as one of the key factors in donors’ decision making (Tindall & Waters, 2010). After all, most charities and other non-profit organizations engage in addressing important social issues that affect vulnerable populations; it is not difficult to imagine that even a simple mention of these issues may stir strong emotions in a lot of people. On the one hand, a study by Bennett (2015) found that emotional fundraising advertisements generated mixed emotions in the general public, often leading to unpredictable, both negative and positive, emotional reactions. On the other hand, a substantial body of evidence suggests that the use of emotional appeals by non-profits and other charities may be an effective strategy to solicit donations (for a recent overview see e.g. Dean & Wood, 2017). In Dean and Wood’s (2017) study, the authors attempted to explore the ethical dilemma between effectiveness and emotions when charities employed emotions such as hope, guilt, pity, anger, empathy, shock, inspiration and fear to deliver their messages and secure donations. At the individual level, the fundraisers interviewed by Dean and Wood felt unease about the discrepancies they often encountered between their personal values and the professional choices they had to make, making them unwilling to engage with campaigns relying on emotions such as guilt. This internal conflict presents non-profit organizations with an ethical dilemma when using strong emotions as part of their fundraisers’ emotional labour, causing stress to achieve the social good. At the organization level, the fundraisers talked about the continuous pressure they experienced within their organizations to increase the efficiency of their fundraising activities. They were caught in a crossfire between being expected to deliver results in the most efficient way and being blamed for trivializing and stereotyping the social issues they were raising funding for. At the same time, they felt alienated and left to make ethical choices, knowing that whatever decisions they made would attract criticism. At the voluntary sector level, Dean and Wood’s interviewees observed that the increasingly competitive environment fuelled a more transactional focus (e.g. soliciting one-off donations) among fundraisers and led to tension between fundraisers and the general public. Potential donors were sceptical of the marketing techniques used to raise donations, referring, for example, to street fundraisers as ‘chuggers’: a portmanteau of ‘charity’ and ‘muggers’. The outsourcing of fundraising activities may also lead to the use of ‘invasive’ tactics (e.g. cold-calling)

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and strong negative emotions, damaging the longterm reputation of the fundraising sector and its workers. What the Dean and Wood study clearly showed was that the ethical dilemmas associated with the use of emotions to increase the effectiveness of fundraising appeals strongly affected those working in the sector, not just those who received the requests for donations. Finally, the analysis of direct mail fundraising shows that such fundraising is more likely to utilize emotional rather than rational appeals, frequently providing no evidence to support the claims made to solicit donations (Ritzenhein, 1998). Another study shows that the use of stereotypical images to increase emotional responses may lead to the misrepresentation of social problems (Breeze & Dean, 2012). Unsurprisingly then, attaining a balance between effectiveness and ethics remains a dilemma for the non-profit sector and its fundraisers. In an attempt to support the individuals and organizations working in the fundraising sector in dealing with the many ethical challenges and dilemmas in their daily work, several guidelines and codes of ethics have been developed. For example, the international standards are articulated in the International Statement of Ethical Principles in Fundraising, ratified by fundraising representatives from 24 countries in July 2018 (Institute of Fundraising, 2018). The document identified five shared principles for fundraising: honesty, respect, integrity, transparency and responsibility. In North America, the Association of Fundraising Professionals (AFP) adopted a Code of Ethical Standards (AFP, n.d.a). The code is used by the AFP’s members to guide them in their decision making and everyday fundraising practices. It is a normative document establishing what member organizations shall and shall not do in relation to issues such as public trust, conflicts of interest, the solicitation of funds, compensation, bonuses and fees, among others. Recognizing the role and importance of donors in the fundraising sector, the AFP has also introduced The Donor Bill of Rights (AFP, n.d.b) and The eDonor Bill of Rights (AFP, n.d.c), which attempt to facilitate the establishment of fundraiser–donor relationships that are based on informed decision making, openness and transparency and to reassure donors that their funds and information about their donations will be handled according to their wishes. In the UK, the Fundraising Regulator’s (2016) Code of Fundraising Practice has been used in different forms since 1983 (MacQuillin & Sargeant, 2018) and covers the activities of charitable fundraising organizations. The code specifies that fundraising work must be legal, open, honest and respectful. It also provides an extensive set of principles for

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working with volunteers, children, third parties, major donors and corporate partners; describes how personal information must be handled; explains the rules for fundraising methods such as mail, telephone, digital media, raffles, lotteries, events and public collections; and specifies the remuneration of fundraisers and the due process for handling collections. Last but not least, in Australia, the Fundraising Institute Australia’s code (FIA, 2018) is a voluntary set of rules that aspires to raise the ethical standards of conduct in the fundraising sector. The code focuses on members’ behaviours towards donors, beneficiaries and suppliers.

Cause-Related Marketing A unique hybrid between commercial and nonprofit marketing is cause-related marketing, when non-profit organizations form strategic alliances with commercial organizations to raise funds for social causes. Cause-related marketing focuses on addressing social causes to achieve commercial objectives. In a typical cause-related marketing campaign, a for-profit organization will make a donation to a social cause (financial or in kind) each time consumers purchase designated products or services. The marketing literature refers to the American Express initiative to provide financial support for the restoration of the Statue of Liberty as the first example of cause-related marketing. As part of the initiative, one cent was donated to the Statue of Liberty/Ellis Island Foundation each time an American Express card was used and one dollar each time a new card was issued for a period of three months in 1983 (Smith & Higgins, 2000). The inclusion of social causes through alliances between for-profit and nonprofit organizations (Varadarajan & Menon, 1988) may justify approaching cause-related marketing as a distant relative of more traditional non-profit marketing or, as discussed later in this chapter, corporate social marketing. However, it is important to remember that although non-profit marketing, social marketing and corporate social marketing aim to bring us closer to resolving social issues, cause-related marketing’s ultimate objective is to improve for-profit organizations’ brand images through helping to achieve social objectives. Since the early days of cause-related marketing, questions have been asked regarding whether it should be seen as a form of corporate philanthropy (focusing on social objectives) or as a self-serving business strategy (focusing on commercial objectives). Regardless of which approach we take, cause-related marketing undermines the altruistic

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value of non-profit marketing and the philanthropic value of corporate social marketing by introducing conditional market exchanges, where good causes are supported only when commercial objectives are being achieved, substituting a moral rationale with a marketing rationale (Brenkert, 2002). Smith and Higgins (2000), for example, went on to claim that cause-related marketing ‘mediates out moral engagement by absorbing charitable giving within preexisting acts of exchange’ (p. 305), dangerously conflating the notions of citizenship with consumerism. As we argued earlier, in social marketing, the notion of the social good is primarily defined through the prism of the wellbeing of individuals and society (Brenkert, 2002); however, in cause-related marketing, the causes worthy of corporate support are first determined by their ability to stimulate sales and a positive brand image for the for-profit organization, running the risk of hard-to-solve (e.g. ‘wicked’) and unattractive problems being deemed unworthy of corporate support. In addition, as many social issues do not have quick solutions, cause-related marketing might create an illusion of commitment (Smith & Higgins, 2000) where in fact long-term and systemic transformation may be required. As such, we should acknowledge that causerelated marketing can be an important source of support for social causes but that its commercially driven character can indeed create ethical dilemmas and challenges for non-profit marketers. For instance, Polonsky and Wood (2001) listed several examples of the potential negative impacts of cause-related marketing on a social issue and society at large, including the loss of support from other sources (e.g. the government and individual donors), the loss of credibility, the repositioning of social issues to attract more attention from forprofits, the prioritization of for-profits’ satisfaction and an over-reliance on for-profit partners. Although positive outcomes from cause-related marketing have been reported by non-profit organizations (Runté, Basil & Deshpande, 2009), Polonsky and Wood’s (2001) concerns found further partial support in Bennett’s (2002) survey of companies in the UK, which reported employing commercial criteria when selecting cause-related marketing projects, prioritizing well-known charities and shying away from potentially controversial causes.

Corporate Social Marketing The involvement of for-profit organizations in social marketing, often referred to as ‘corporate social marketing’ or ‘commercial social marketing’, presents a significant ethical challenge for

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social marketers (Anker & Kappel, 2011). As we showed earlier, social marketing programmes, like all other behaviour change approaches, are rarely ethically neutral, as they attempt to change people’s values and behaviours. As much as we can claim that any negative and/or unintended consequences of social marketing programmes are outcomes of poorly designed and executed programmes, or simply issues that were impossible to envisage before the programmes commenced, the marriage of social and commercial marketing incorporates very important dimensions into corporate social marketing: namely, financial profit and corporate image improvement as marketing objectives. It is not hard to imagine a situation where a decision must be made as to whether to prioritize social impact or financial profit. For example, Kubacki, Szablewska and Siemieniako (2020) argue that power asymmetry in social marketing systems is a source of ethical tension, showing that stakeholders, including social marketers and for-profits, use power to achieve their individual, commercial and social objectives. For-profits that engage in social marketing programmes often have significant power (which may manifest through the financial resources invested in the programme, market knowledge or access to the target market) to influence the decision making and prioritization of objectives. Bloom, Hussein and Szykman (1995) posed a two-question test to gauge whether the involvement in social marketing of for-profit partners with commercial objectives can be justified: 1 Is society better off because of the programme? 2 Has corporate involvement allowed the programme to perform better than it would have if it had been managed only by a non-profit or a government agency? Although their simple test may provide some initial answers as to whether a partnership with a for-profit organization should be pursued by social marketers, there are several ethical macromarketing issues that must be considered before making the final decision. Firstly, the foremost responsibility of corporations is to provide financial profits for their shareholders and increase the value of their organizations. This in itself can be a worthy cause, as it leads to the generation of employment and wealth. Further, many for-profits achieve their financial objectives by providing socially desirable products and services, such as healthy foods, sporting equipment and opportunities to be physically active. However, if the bottom line is their primary concern, and financial profits are necessary for their long-term survival in the

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market, it is reasonable to assume that many forprofits become involved in social marketing programmes to improve their brand images and financial profits, indirectly benefiting from the social issues they attempt to address by working alongside social marketers. Questions should be asked as to whether it is ethical to benefit from social issues such as obesity, domestic violence or climate change, even if the corporate support helps to deliver programmes that benefit society and are stronger with that support than without it. Consider a recent example of Apple and its popular iPhones. Apple’s 2018 Environmental Responsibility Report showcases the company’s progress in reducing its environmental footprint by focusing, for example, on renewable energy, creating materials that are safer for the environment and recycling components from old handsets (Apple, 2018). At the same time, another company report indicates that the corporation could potentially benefit from climate change disasters, which could raise demand for its products and increase its financial profits by as much as US$920 million (Cuthbertson, 2019). There is no doubt that mobile phones as part of the telecommunication infrastructure are life-saving devices that benefit individuals and communities in need when natural disasters happen. Yet, Apple’s estimated significant financial gains from catastrophic events may be a source of ethical dilemmas. Mobile phone manufacturers’ efforts to minimize their negative impacts on the environment are offset by their contributions to the culture of (over)consumption and planned obsolescence (Haynes, 2016), creating a complex web of ethical dilemmas and challenges for both consumers and corporations. Secondly, corporate involvement in social issues comes with another ethical dilemma, often referred to as ‘cherry-picking’ or going after ‘the lowest hanging fruit’. In a quest to improve their corporate brand identities, for-profit organizations become affiliated with causes that are popular and likely to lead to positive responses from their target markets, rather than causes that may require long-term systemic social transformation. For example, the recent rise in corporate genderequality campaigns and corporate feminism has been seen by some authors as an attempt to present gender inequality as a social issue that can be addressed through individual efforts, rather than focusing on the larger issue of structural inequality and its root causes (Livingston, 2016). From an ethical point of view, directing our attention to a social issue may lead to some positive changes, but simply framing it as an individual’s problem may create a form of corporate ‘slacktivism’ (a portmanteau of ‘slacker’ and ‘activism’), making superficial engagements via social media easy for

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the individuals yet distracting from more meaningful engagement that could lead to changes in the social structures underpinning the social issue.

CONCLUSION In this chapter, we have considered the historical developments and current ethical challenges in non-profit and social marketing, and discussed three specific non-profit and social marketing techniques, namely fundraising, cause-related marketing and corporate social marketing. Nonprofit and social marketing organizations and marketers rely on public trust as a form of licence to achieve the social good. It would therefore be naive to believe that marketers can change behaviours or raise funds in support of social causes without considering the ethical dimensions of their actions.

REFERENCES AASM, ESMA and ISMA (Australian Association of Social Marketing, European Social Marketing Association and International Social Marketing Association (2013). Consensus definition of social marketing. Retrieved from www.i-socialmarketing. org/assets/social_marketing_definition.pdf AFP (n.d.a). Code of ethical standards. Retrieved from https://afpglobal.org/ethics/code-ethics AFP (n.d.b). The donor bill of rights. Retrieved from https://afpglobal.org/donor-bill-rights AFP (n.d.c). The eDonor bill of rights. Retrieved from https://afpglobal.org/principles-edonor-bill-rights Andreasen, A. (1994). Social marketing: Its definition and domain, Journal of Public Policy and Marketing, 13(Spring), 108–114. Andreasen, A. (2001). Ethics in social marketing. Washington, DC: Georgetown University Press. Andreasen, A. (2002). Marketing social marketing in the social change marketplace, Journal of Public Policy & Marketing, 21(1), 3–13. Andreasen, A. & Drumwright, M. E. (2001). Alliances and ethics in social marketing. In: A. Andreasen (Ed.), Ethics in social marketing (pp. 95–124). Washington, DC: Georgetown University Press. Anker, T. B. & Kappel, K. (2011). Ethical challenges in commercial social marketing. In: G. Hastings, K. Angus & C. Bryant (Eds), The SAGE handbook of social marketing (pp. 284–297). London: Sage. Apple (2018). Environmental responsibility report. Retrieved from https://www.apple.com/au/

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Szablewska, N. & Kubacki, K. (2019a). A human rights-based approach to the social good in social marketing, Journal of Business Ethics, 155(3), 871–888. Szablewska, N. & Kubacki, K. (2019b). Social engineering. In: A. M. Kennedy (Ed.), Macro-social marketing. Abingdon: Routledge. Tempel, E. R. & Nathan, S. K. (2010). Ethical fundraising. In: A. Sargeant & J. Shang (Eds), Fundraising principles and practice (pp. 44–60). San Francisco: John Wiley & Sons. Tindall, N. T. & Waters, R. D. (2010). The relationship between fundraising practice and job satisfaction at historically black colleges and universities, International Journal of Educational Advancement, 10(3), 198–215. Varadarajan, P. R. & Menon, A. (1988). Cause-related marketing: A co-alignment of marketing strategy and corporate philanthropy, Journal of Marketing, 52(3), 58–74. Vasquez, R., Alvarez, L. I. & Santos, M. L. (2002). Market orientation and social services in private nonprofit organizations, European Journal of Marketing, 36(9/10), 1022–1046. Wiebe, G. D. (1951–1952). Merchandising commodities and citizenship on television, Public Opinion Quarterly, 15, 679–691.

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19 Ethical Issues in Tourism Ta z i m J a m a l a n d S e u n g h o o n L e e

INTRODUCTION We live in a world of mobilities. Goods, finance, and trade are negotiated across states and regions, news or social media instantaneously flash events from around the world, and world music, international films, ethnic foods, and festivals are accessible at home and abroad with the help of globalized culture industries. The world has become a smaller place in so many ways, and the Internet continues to play a significant role in creating intricate networks across spaces and places. Social media is booming. Selfies and iconic images represent travel experiences virtually via Instagram or Facebook, connecting ‘friends’ and strangers, while Twitter chatters seamlessly on topics arising around the globe. Geographer David Harvey described this effect well in terms of time-space compression (Harvey, 1990), but consider, too, the challenges that arise in terms of governing the development and marketing of goods and services in these globalized and ‘virtual’ spaces. People are on the move too! Aside from increasingly mobile labor and flows of human migrations worldwide, tourism is booming. It is a multibillion-dollar industry, generating 10.4% of global GDP and supporting 313 million jobs (including indirect and induced impacts) in

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2017, i.e., about 1 in 10 jobs globally (https:// www.wttc.org/mission/. Accessed May 27, 2019). International tourist arrivals grew by 6% in 2018 to 1.4 billion according to the latest World Tourism Barometer, and by 4% in 2019 to reach 1.5 billion visitors (UNWTO (World Tourism Organization), 2019, 2020). This raises additional problems. Mass tourism and overtourism are adversely affecting many destinations, aided by neoliberal globalization and an entrenched discourse of economic growth. Tourism’s impacts are often disproportionately distributed, with poorer countries experiencing more of the disbenefits of tourism, socially, culturally, environmentally, and economically (see Britton, 1982; Mowforth & Munt, 2016; Sharpley & Telfer, 2014). Yet travel can also offer marvelous experiences and benefits, with opportunities for recreation and leisure, learning, cultural exchange, peace, tolerance, existential meaning, and contributing to socio-economic benefits (jobs, income, etc.). Fair trade, social enterprise, and community-driven activities open possibilities for a living wage and social-ecological well-being. But careful attention is needed to the conservation and use of the places being shared by visitors and residents. Not surprisingly, tourism is difficult to plan and ‘manage.’ It plays out in a complex,

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social–ecological system that is interrelated with other systems (ecological, political, technological, etc.) and can be affected by local to global events such as extreme weather, climate change, disease outbreaks, terrorism, and political upheavals. Control of the local commons (environmental and social) and precious resources like water and ecosystem services, for instance, may cross multiple jurisdictions and is affected by the interests and values of numerous stakeholders in the public, private and not-for-profit sectors. Farrell and Twining-Ward (2004) describe it as a ‘Complex Adaptive Tourism System.’ It is a phenomenon that offers a powerful lens into society and everyday life; how it is developed, managed, and marketed offers valuable insights to societal issues, sustainability, and well-being (of human and nonhuman others!). Marketing as the bridge between the production and consumption of tourism plays an important role in representing places and diverse cultures, influencing destination development and planning, service provision and industry practices, as well as visitor demand and tourist behavior. What is marketed, how, by whom and to what end, constitute some of the critical questions to investigate along the journey toward ethical or good tourism. It means understanding tourism from a relational perspective, where we are situated in relations with others and with things within complex social-ecological systems as described above. Additionally, it requires understanding the ‘good’ of tourism, toward which ethical tourism marketing (ETM) is oriented. One perspective of good tourism, for instance, is the following: ‘Good tourism’ is tourism that is guided by principle of justice, responsibility, sustainability, and an ethic of care, among other principles. Development and governance for good tourism strives to be ‘just,’ democratic, and contribute actively to the conservation and sustainability of planet Earth, and to the well-being of its human and nonhuman inhabitants. (Jamal, 2019, p. 19)

This chapter addresses ethical issues in tourism and relates this to the role of marketing. Various ethical approaches to tourism and tourism marketing are identified, as well as some significant issues and challenges that face tourism in the twenty-first century. Relevant examples from the published research literature are provided, along with a short case example of the island destination of Bermuda. Finally, a preliminary integrated, equitable, and relational approach for ETM is discussed that is grounded in justice and care. The chapter concludes with a brief reflection on such a guiding framework for ETM.

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EVOLUTION OF ETHICS IN TOURISM AND TOURISM MARKETING The study of ethics in the field of tourism studies is young and emerging. Awareness of adverse environmental and social impacts of mass tourism in the 1970s (dependency on external expertise and financing, high leakage of revenues with little local benefit, sex tourism, etc.) drove calls for alternative, more responsible tourism. Responsibility was a recurrent theme. In The Holiday Makers, a seminal work containing a trenchant critique of mass tourism, Krippendorf (1987, p. 19) called on tourism service providers ‘to acknowledge their responsibility towards travelers, the host population and the tourist environment, to state clearly what contributions they are prepared to make to a more human tourism and what regulations they are willing to observe.’ The first conference on Responsible Tourism in Destinations held in Johannesburg, South Africa, in 2002 was cognizant of the disparities in power relations between large (often foreign) service providers and local communities. The Cape Town Declaration that emerged from this conference strove to identify some key principles of responsible tourism to empower and benefit residents and communities, aided by local South African knowledge and experience. It included involving local people in decisions that affected their lives, conserving natural and cultural heritage, enhancing local economic benefits and well-being, facilitating culturally sensitive practices, respect between hosts and guests, and more meaningful connection between them (ICRT (International Conference on Responsible Tourism in Destinations), 2002). Tourism service providers have also been called upon to ‘act in a manner that reflects ethicality’ to ensure ‘just tourism’ (Hultsman, 1995, p. 561). Studies on the representation of people and the place in destination marketing, touristic brochures, and promotional campaigns quickly identified a range of issues such as lack of marketing and product development for diverse cultural groups, exclusion of residents and minorities in advertising and promotional materials, stereotyping and gender bias (e.g., Echtner & Prasad, 2003; Sirakaya & Sonmez, 2000). It was becoming increasingly evident that destination marketing and tourism promotion occurred at the discretion of a wide array of actors. Furthermore, representations of the destination’s people and places were diffused across space and time through media as diverse as travel writings and blogs, Internet and television shows ranging from culinary travels to National Geographic and other ‘edutainment,’ film, music, and novels (i.e., by the culture industries). This is

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in addition to the tourist brochures, advertisements and destination images produced and promoted by destination marketing organizations (DMOs) and other tourism stakeholders like airlines, accommodation providers, tour operators, and even credit card issuers and banks building loyalty through diversified networks and offerings (e.g., frequent flyer programs, car rentals, etc.). Picking up on these themes, a growing concern is the challenge of controlling the use of cultural and place images, for example, by destination marketers for promoting destination image, or by visitors taking and posting photos of local residents with little attempt at reciprocity or respect (see, e.g., Rojek & Urry, 1997; Selwyn, 1996). Could sustainable tourism marketing (STM) address this troubling problem of fair and equitable marketing of destinations? A marketing perspective on sustainable tourism has ‘an overall management orientation reflecting corporate attitudes that … must balance the interests of shareholders/owners with the long-run environmental interests of a destination and at the same time meet the demands and expectations of customers’ (Middleton and Hawkins, 1998, p.8). Their work follows the global discourse on sustainable development that emerged with the Brundtland Commission’s report, Our Common Future (UNWCED, 1987), and the notion of sustainable tourism that was launched by the United Nations World Tourism Organization (UNWTO): Sustainable tourism development meets the needs of present tourists and host regions while protecting and enhancing opportunity for the future. It is envisaged as leading to management of all resources in such a way that economic, social, and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, biological diversity, and life support systems. (1995, p. 30)

Critiques of the environmentally driven focus of sustainability in the UN discourses resulted in proposed revisions and greater focus and incorporation of social and cultural dimensions in sustainable tourism and in STM (e.g., Hardy, Beeton, & Pearson, 2002; Jamal, Camargo, Sandlin, & Segrado, 2010). Middleton and Hawkins’ book Sustainable Tourism: A Marketing Perspective (1998) incorporated some social considerations and community involvement in their multi-stakeholder approach to STM. Organizations practicing corporate social responsibility (CSR) also began to adopt a long-term focus on environmental sustainability. Influenced by discourses of sustainable tourism and sustainable development, STM has holistically

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been described as: ‘marketing that incorporates social, economic and environmental perspectives in a given region’ (Gilmore, Carson, & Ascenção, 2007, p. 255). For Kotler and Armstrong (2018), similarly, sustainable marketing requires both socially and environmentally responsible actions that meet the present needs of consumers and business as well as the needs of future generations. Chhabra (2010) forwards six success factors for sustainable marketing of heritage and cultural sites that he feels need to be present for sustainability: local community involvement and benefits, partnership and collaboration, authenticity and conservation, visitor mindfulness, interpretation, and economic viability (see also Carballo & León, 2018). Themes of responsible consumption (e.g., marketing green hotels to eco-conscious visitors) gradually populated the tourism literature. Font and McCabe (2017) edited a special issue on marketing for sustainable tourism, where they discussed two approaches: • Market development approach: communication and sustainable products targeting responsible consumers; social marketing to influence behavior change and pro-environmental choices (e.g., save water). • Product development approach: (co-)create responsible/sustainable products; onus on tour operators and service providers, DMOs, to market destination responsibly (limit carbon footprint of airline traffic etc.). While sustainability is a dominant theme subsequent to UNWCED’s sustainable development initiative and UNWTO’s sustainable tourism efforts, Table 19.1 shows that some societal initiatives, like social marketing for encouraging learning and behavior change towards sustainability, have received surprisingly little attention in the tourism domain (Dinan & Sargeant, 2000). A number of operators and tourism scholars felt the holiday space was sacrosanct and reserved for untroubled leisure and recreation (rather than be seen as pedagogic spaces for learning and awareness raising in addition to recreation and leisure); the tourist had worked hard for this privilege, after all (Krippendorf, 1987)! Ecologically responsible operators and providers have fortunately arisen, offering nature-based and ecotourism experiences, ecolodges and other small-scale sustainable accommodation and learning, using codes of ethics to guide visitor behavior in natural area destinations, and attending to local economic as well as social benefits, aided by resident participation in conservation of the commons (see Stronza, 2009). Sustainable tourism has also been actively promoted and studied, influenced in good part by

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Table 19.1 Scopus search results of research related to sustainable/responsible/ethical tourism (marketing) Terms used in Scopus search

Article titles containing Column 1 terms

Abstracts containing Column 1 terms

Column 1 terms present in keywords

‘Ethical marketing’ ‘Marketing AND ethics’ ‘Sustainable marketing’ ‘Sustainable tourism’ ‘Sustainable tourism marketing’ ‘Social marketing’ ‘Societal marketing’ ‘Social marketing’ AND ‘Tourism’ ‘Societal marketing’ AND ‘Tourism’

19 257 40 1,136 5 1,093 25 12 2

52 872 98 2,172 12 1,782 58 33 4

28 878 61 1,496 2 1,744 32 19 2

‘Responsible tourism’ ‘Responsible tourism marketing’ ‘Ethical tourism’ ‘Ethical tourism marketing’ ‘Tourism destination marketing’ ‘Ecotourism’ ‘Justice’ AND ‘Tourism’

86 1 11 0 19 1,626 26

158 0 27 0 41 2,898 223

108 0 14 0 0 4,424 85

the Brundtland Commission’s report (UNWCED, 1987) and subsequently the discourse of sustainable tourism adopted by UNWTO and other organizations. A review of the research database Scopus (well used in tourism studies) in April 2019 shows the abundance of research articles on sustainable tourism and ecotourism (see Table 19.1). The selection criteria used for the Scopus search included the presence of key terms shown in Column 1, Table 19.1, within article titles, abstracts, and abstract keywords; time period (all years); subject area (Business, Management and Accounting, Economics, Econometrics and Finance, Arts and Humanities, Social Sciences, Agricultural and Biological Sciences, and Environmental Sciences); and wide geographic span (North and South America, Europe, AsiaPacific Region, and Africa). The last few decades have also seen increasing exploration of societal issues related to justice and fairness, for example, seeking fair distribution of costs and benefits, local control over development, redress against exploitation, discrimination, and racism in Third World tourism, and also seeking responsible ‘tourists with a conscience’ (D’sa, 1999). Volunteer tourism arose, along with indepth critique of good practices as well as adverse impacts stemming, from profit-driven motives of volunteer tourism operators, egoistic visitor behaviors, etc. (see McGehee, 2014). Research oriented towards justice, solidarity, and responsible

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action by tourists and tourism providers toward tourism destinations begins to gather strength as Figure  19.1 illustrates. Scheyvens (2002) introduced justice tourism as an ethical and equitable approach encompassing social change through political activism by organizations and by tourists. Rights-based discourses garnered greater attention too. In a comprehensive discussion of ethics in tourism, Fennell (2006) explored various environmental, social, and ethical perspectives, including rights-based discourses like The Universal Declaration of Human Rights. Jamal et al. (2010, p. 277) called for a more critical and justice-oriented approach to tourism marketing, noting that: Ethical responsibility with respect to how destinations are developed and marketed, and with respect to what is being offered as a ‘product’ and as tourist experiences, thus requires going beyond ‘visitor satisfaction’ to consider what or who is being included or excluded, whose interests are being advanced, what inequities and forms of discrimination and injustices are occurring, at what level, and so on.

Critical perspectives and gendered approaches have indeed arisen, with concerns raised about price and profit-driven product development and marketing, to the exclusion of equity, social justice, effective policy and regulation (e.g., Forsyth, 2016; Seraphin, Sheeran, & Pilato, 2018).

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UNWCED (1987) 1960

1965

1970

1975 1980

1985

1990

1995

2000

2005

2010

2015

2020

Ethical marketing Social marketing Societal marketing Sustainable marketing Ecotourism Responsible tourism Sustainable tourism Sustainable tourism marketing/ Tourism destination marketing Justice and tourism Social/Societal marketing in tourism Responsible tourism marketing

Figure 19.1

Evolution of research on ethics in tourism

Cole (2017) took a gendered political ecology approach to examine water inequity, ethnicity, neoliberal tourism development, and women’s empowerment in Indonesian destinations (see also Cole & Ferguson, 2015, for a gendered political economy study of water and tourism in Costa Rica). Wardana (2019) has taken a critical look at the politics of development, power relations, and local resistance in Bali. His extensive spatial, legal and institutional analysis of this popular tourism destination lends support to the critique of tourism as a form of neocolonialism. It is particularly pernicious when tourism development is based on institutional structures and processes stemming from colonialism, which were established to facilitate cultural imperialism, domination, and exploitation of subjected groups and ethnic minorities, alongside appropriation of land and resources (see Young, 2011). In the context of tourism marketing, it may manifest in a range of social and cultural injustices and discriminatory practices, like the invisibility of minority cultural groups in touristic brochures and advertising, or the lack of product development to facilitate leisure travel for historically oppressed groups. See, for example, Dillette et al. (2019) on the occurrence of (historically engrained) racism, as well as marginalization, subordination, and resistance in the black travel movement. Figure 19.1 shows that research on a wide range of sustainability approaches and forms has arisen

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over the last 50 years, with growing awareness of the impacts of tourism (particularly mass tourism in the 1970s). A closer look at the literature reveals a number of ethical issues and priorities for just and equitable tourism, and for ETM in the twenty-first century, which is discussed in the next section.

ETHICAL ISSUES AND CONSIDERATIONS FOR TOURISM MARKETING Destinations are complex planning and policy domains. There are multiple stakeholders with varying degrees of influence over decision making. Key service providers (e.g., airlines) may be headquartered elsewhere, and places may have to deal with impacts locally that stem from actions and pressures exerted from more than one source in the local-global tourism system. No one stakeholder can fully control development and planning under conditions of spatial and temporal fragmentation where effects may be cumulative over time, and extend from the local to the regional and transnationally to the global. And in such a mobile landscape as present today, extensive de-territorialization and re-territorialization is occurring, and the interests of capital, investors, day visitors, and other mobile stakeholders in a globalized

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landscape are difficult to engage with through traditional planning and policy processes (Dredge & Jamal, 2015). Destination managers and DMOs face similar burdens in effectively and ‘sustainably’ managing the globally mobile flows of capital, labor, and other resources associated with travel and tourism, using tools that once worked within bounded nation-states. Furthermore, DMOs (even publicly funded, membership-based ones) are not generally accustomed to involving destination residents for input, voice or control in decision making on their marketing plans and campaigns, and a spatially fragmented localglobal tourism domain makes governance and collaboration among stakeholders even harder to achieve (Ford & Peeper, 2009; Harrill, 2009). When state boundaries are so porous: the concentration of soft power in global corporations and transnational networks participating in the DMO and operating outside formal governance frameworks further weakens the power of the state to undertake any form of integrated or holistic destination management. (Dredge & Jamal, 2013, p. 13)

The various ethical approaches described in the previous section that have arisen over the past 50 years are evolving as new learnings and realizations are arising, along with new technologies and new forms of resistance to the dominant influences that have shaped destination development and marketing. This section outlines some of these trends and related ethical issues.

GOVERNANCE AND REGULATION Recognition of the international scope and scale of tourism and its impacts led to the development of the Global Code of Ethics for Tourism by the UNWTO. It offers ethical guidelines for businesses, destinations, and visitors, addressing various aspects including human rights and tourist rights (UNWTO, 1999). However, while it is en route to being enshrined as a UN Convention, stakeholders like the Roundtable Human Rights in Tourism have argued that the process lacks participatory input and review of the content of the Code of Ethics and a strong commitment to human rights guidelines such as the UN Guiding Principles on Business and Human Rights (‘Roundtable Human Rights in Tourism,’ 2019). The larger concern here is neoliberal globalization and the lack of regulatory force of institutions like the UNWTO to govern a highly complex local– global tourism system (Smith & Duffy, 2003).

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Compounding the challenge is the proclivity toward self-regulation by tourism businesses; consider the numerous destinations and tourism operations where codes of ethics and certifications (e.g., of ecotourism) are undertaken on a voluntary basis. Are codes of conduct and pledges of corporate social responsibility solutions, temporary respite, or perhaps attempts to disguise neoliberal agendas in a poorly regulated transnational tourism system (Smith, 2009)? Neoliberal globalization and poor regulatory mechanism extend to the virtual spaces, and raise human rights issues and other ethical concerns even in the digital world of the sharing/collaborative/gig economy (Dredge & Gyimóthy, 2017). Hopeful directions are arising, however, through the democratization of knowledge via the Internet; social media and new technologies are encouraging responsiveness and responsibility by service providers, especially with increasing involvement of consumers (travelers) in co-creating and accessing tourism-related products (see, e.g., Gössling, Haglund, Kallgren, Revahl, & Hultman, 2009; Martin-Fuentes, Mateu, & Fernandez, 2018). There are also growing initiatives to market destinations as ‘carbon neutral’ or ‘carbon zero’ and promoting culturally and ecologically responsible experiences and green certifications (see, e.g., the Hawaiian Tourism Authority’s promotion of diverse experiences that are attentive to sustainability and the important cultural value of malama aina, respecting and caring for land: https://www.gohawaii.com/experiences/eco-tourism. Accessed May 20, 2019). However, the question still arises: How to regulate the complex, fragmented, local-global spatial domain of tourism? Who regulates the ‘virtual’ space? Who provides oversight and monitoring of the ‘intangible’ impacts of tourism (e.g., cultural change through commodification and sale) and the leakage of tourism revenues and lack of local benefit as large cruise operators liaise with external operators to structure the visitor’s onshore time and experiences? How to regulate the neoliberal (and neocolonial) development and marketing of tourism, and representation of destination places, people, and culture? A study of the Palenquera women of Colombia illustrates the challenge of responsible tourism marketing, ensuring respect for the people of tourist destinations, and responsibility by visitors in a globalized ‘virtual’ world (Camargo & Lawo-Sukam, 2015; see also Case 3.1 by B. Camargo in Jamal, 2019). Part of an ethnic minority whose ancestors were brought and traded in Cartagena during the Atlantic slave trade, their cultural manifestations and images have been commodified in exoticized forms for tourists and tourism promotion, sold in souvenir

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shops (e.g., as stereotyped dolls), in national tourism campaigns, websites and blogs, while the women receive a pittance from the sale of fruit, sweets, photos taken by tourists, for their iconic role, as Camargo describes: They receive no economic compensation from the use of highly essentialized, stereotypic images of them or their culture in various touristic media; several Palenqueras mentioned during informal on-site conversations how often people tell them they saw pictures of them in brochures, magazines, posters and other media, pictures they did not consent to be used or distributed for any purpose. (2019, p. 73)

Lack of Diverse Knowledges, Inclusiveness, and Ways of Being (Well-being) A new landscape of local-global tourism has been emerging that calls for clear ethical principles to guide development, decision making, and marketing from the local to the global level. Diverse groups and voices are arising to resist the dominant paradigm of late modern capitalism and Eurocentric values that have influenced tourism development in the modern period, from the local to the global level. This paradigm has been one of scientific knowledge, managerial and sciencebased decision making, where progress is measured in quantitative terms and seen in terms of economic growth, scientific and technological advances, based on dualistic Enlightenment thinking (mind-body, human-nature, ecologicalcultural, etc.) and highly anthropocentric perspectives–predominantly structured toward human benefits and western ‘quality of life’ indicators. The logic of late capitalism is based on capital market expansion, expert knowledge reliant on quantification and measurement, and liberal individual self-interest, but the globalization of these Eurocentric values as the dominant ‘monoverse’ has been ‘at the expense of relational and nondualist worlds worldwide’ – a rich, diverse ‘pluriverse’ of worlds where we are in communal relations within a deeply sentient world indivisible from our being and relations to all things human and non-human (Escobar, 2018, p. 69). Postdualist, relational perspectives in research and practice speak to richly diverse ontological and epistemological perspectives and ways of being and doing. Such a relational ethic opens understanding of alternative ways of provisioning, relating to land and nature, considering nature’s rights, exercising an ethic of care, taking a long-term view on

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sustainability, and being inclusive of socially and culturally diverse voices and knowledges, including minority ethnic, indigenous, gendered, and local voices (Tuck & McKenzie, 2015; Whyte, 2010). What can market research and efforts like relational marketing learn from this post-dualist/ non-dualist, relational approach to the pluriverse? One problem here is that Western methodologies and researchers have also tended to be steeped in Enlightenment and liberal values that dovetail with discourses of growth and expansion of capital markets, that is, a predominantly neocolonial and modernist paradigm. From a research perspective, diverse decolonizing methodologies are needed to understand relationality with place, inclusive of other perspectives and knowledges, valuing other ways of knowing and being, as Tuck and McKenzie (2015), Karst (2017), and Grimwood (2015) discuss. For instance, applying a political ecology perspective and an ecohumanities methodology, Kato (2019) examines the intersectionality of gender and (ocean) sustainability by studying traditional women divers in Japan and their particular relationship with the ocean. The study situates the power of women’s knowledge in principles of inclusiveness, connectivity, reciprocity, and intuitive way of knowing. It challenges hierarchical systems of knowledge and valuing connectivity and pluralistic ways of knowing, in this case, women’s traditional ecological knowledges, Kato (2019) argues. How well does ‘sustainable marketing’ heed the effects of tourism, product development, marketing, and promotion on human-environmental relationships, especially at a time when our relationships to the land and its non-human inhabitants are so fragmented and threatened? It is, after all, the age of the Anthropocene.

Sustainability and Climate Change Challenges Lack of control over the fragmented planning and policy domain outlined earlier raises significant challenges for ‘sustainable’ destination development, marketing and management. Habitat fragmentation, biodiversity loss, numerous sources of pollution (including plastics!), and climate change are among serious environmental challenges facing travel and tourism (see, e.g., Scott, Hall, & Gössling, 2019). Tourism growth and overtourism will continue to challenge destination planners and marketers. An important priority is to close the ‘marketing–planning gap’ through collaboration between marketers, planners, and developers

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for more responsible, sustainable ‘product-market match’ that serves the needs of the destination, its residents and visitors, and conservation of its ecological and cultural environments (attending to the well-being of human and non-human others). While new product development is being aimed at greening tourism products, transportation, and visitor experiences (e.g., targeting ecoconscious tourists to stay at green certified hotels), the current period of the Anthropocene requires closer attention and new considerations to ecological as well as social-cultural and human rights issues. The complexity of tourism, its interrelatedness with other systems (ecological, social, political, economic) and inequitable distribution of tourism’s costs and benefits are even greater today with the challenges of sustainability and climate change, and numerous ethical issues arise. The recent UN report released on May 6, 2019, stated that up to a million species face extinction, many within decades, and numerous UN Sustainable Development Goals are being undermined due to negative impacts on nature and consequences for human beings (https://www.un.org/sustainabledevelopment/blog/2019/05/nature-declineunprecedented-report/. Accessed May 7, 2019). Tourism’s role in global warming is therefore not insignificant. The UN report noted there was a 1 degree Celsius average global temperature difference in 2017 compared to pre-industrial levels, rising 0.2 degrees Celsius per decade. Moreover, the carbon footprint of tourism has risen by 40% from 2009 to 2013 (to 4.5 Gt of CO2) and 8% of all emissions are from transport and food consumption related to tourism. Climate justice is a significant issue and international tourism places a disproportionate burden on poorer destinations. Environmental costs are generally externalized and the wealthiest 10% of the global population produces roughly half of all greenhouse gas (GHG) emissions, while the poorest half produces only10% and yet faces immense challenges ranging from sea-level rise to water shortage, drought, and increasing food insecurity as ecological and agricultural systems are disrupted (see also Lenzen et al., 2018). While climate refugees and migrations are on the rise, the liberal rights to travel across borders are far from equitably distributed (Bianchi & Stephenson, 2014). Globalization and free trade have favored neoliberal agendas, enabling capital expansion through exploitation of cheap labor (generally the poor, unprotected participants in the sharing economy etc.), market growth, and mass consumption. These strategies are simply no longer viable – it is a very different world that faces current and future generations. An ethical imperative lies in challenging growth and market-driven

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paradigms, and facilitating action toward sustainability and well-being within a global agenda for mitigating climate change. The twenty-first century calls for re-envisioning tourism development, management, and marketing in the Anthropocene, along with mechanisms for good governance, policy, and regulation of the ‘virtual’ and physical spaces of travel and tourism, along with de-marketing and de-growth as needed. Strategic priorities include fair representation and incorporating diverse knowledges, other ways of provisioning, conserving and relating with land, environment and cultural heritage, attention to human rights and climate justice, as well as dialogic learning and experiences that foster responsible actions and informed ‘cosmopolitan’ visitors (Jamal, 2019). The case example of Bermuda below draws on published sources as well as personal author experience. It reflects some of the challenges related to representing destinations, and sharing and conserving diverse heritage. Issues of destination image and representations in tourist brochures and other marketing media have also been identified in other studies of postcolonial destinations. For instance, by using postcolonial theory to examine brochures representing different Third World countries, Echtner and Prasad (2003) found distinct patterns of marketing images occurring across them, where the representations replicated colonial forms of discourse and myths. DavilaRodriguez (2011) and Davila-Rodriguez and Gretzel (2015) examined destination-marketing and promotional materials employed by the Puerto Rico Tourism Company to promote Puerto Rico, and how residents interpreted the visual rhetoric employed. Their study indicated that the marketing materials reflect the DMO’s corporate ideologies for attracting particular high-income groups for recreational activities, resulting in culture and heritage being portrayed as a complement to the predominantly beach, golf and luxury destinations portrayed. While residents interviewed were generally positive, they felt that the portrayal was incomplete and did not reflect modern Puerto Rican life. Places were sometimes portrayed in stereotypical ways, and past promotional campaigns failed to portray their culture and the people well. The authors felt that including local residents can help tourism marketers determine how to represent local culture more fairly. In the case of Bermuda, it could be similarly argued that a collaborative, inclusive and participatory approach to destination marketing could help address the neocolonial and exclusionist ideologies that can influence destination marketing and representations of place to visitors in marketing campaigns and promotional materials (see below and also Fortenberry, 2016).

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CASE EXAMPLE: REPRESENTATIONS OF BERMUDA TO VISITORS ON THE ISLAND Bermuda is the oldest British Overseas Territory in the North Atlantic Ocean, and has its own constitution and government. It has one of the highest GDPs per capita in the world (ranked fourth according to the World Bank) due to advanced insurance, re-insurance, and banking industries on the island, as well as tourism. Bermuda’s mild weather (tropical rainforest climate) first attracted tourists wishing to avoid cold winters in their homeland; however, the majority of visitors today arrive in the summer season to enjoy ocean activities in a beautiful coastal scene, play golf and relax in one of numerous resorts. In 2018, 770,683 tourists visited Bermuda (2018 Visitor Arrivals Report), with most arriving on cruise ships in the summer or by air in winter. Cruise ships do dock at the island in winter two to four times a month, but summer is the height of the cruising season, with over 22 dockings each month over the summer. Bermuda offers beautiful island landscapes, warm weather, and resorts. Visitors can sail on the turquoise and azure Atlantic Ocean, kayak around spectacular coastal cliffs, ride a jet ski, take a sunset cruise, go parasailing, and go scuba diving in colorful coral reefs. Furthermore, there are many natural wonders on the island, such as pink sand beaches, caves, grottos, forests, and preserves. Bermuda also has a rich history and cultural heritage. People permanently settled on the island in 1609 after a Spanish explorer discovered the island in 1505. From then, Bermuda experienced a series of historical events, such as settlement by England, the Civil War, maritime trades, the American War, and the Anglo-Boer War. A number of buildings and sites represent its rich and varied history, such as The Town Hall at St. George (Figure 19.2a), which is designated by UNESCO as a world heritage site, Royal Naval Dockyard, Scaur Hill Fort, and several historical houses including the Commissioner’s House (see: https://nmb.bm/about-us/themuseum-grounds/). Bermuda was also a gateway to America for trading slaves. There is African diaspora heritage all over the island as enslaved Africans arrived in the early seventeenth century. See, for example, Figure 19.2b which shows a Gombey folk dance that is part of Bermuda’s rich, diverse folk culture and represents a unique blend of AfroCaribbean, Native American, and European dance and musical influences. Present-day Bermuda reflects this diverse heritage: 52% of Bermudians are black, 31% are white, 9% are mixed, 4% are Asian, and 4% are other, as noted in the 2016 census (https://www.gov.bm/2016-census-infographics. Accessed June 9, 2019). Despite its rich historical heritage, Bermuda to date has primarily been represented as a beautiful island for enjoying its natural beauty. Among the brochures in the island’s visitor center and sightseeing spots, only a few of them have promoted its historical heritage and these tend to be typically found at the actual historical spot (if you get there). Furthermore, many online news articles that promote Bermuda tourism have hardly referred to the rich historical heritage of the island.1 In other words, visitor information on Bermuda’s rich and diverse cultural heritage has not

Figure 19.2a Town Hall on St. George Island

Figure 19.2b Gombey folk dance

Photo credit: Seunghoon Lee

Photo credit: Seunghoon Lee

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been easily available on the island. The island’s destination image appears to be primarily based on its natural and coastal amenities, comfortable accommodations (golf resorts, hotels), as its official travel resource shows: https://www.gotobermuda.com/ (accessed May 29, 2019). Archaeological and case study research by Fortenberry (2016, p. 601) on Bermuda’s heritage tourism landscape and the island’s tourism plan reveals an ‘institutionally imposed colonialist narrative that neglects to explore the contributions of the island’s under-represented communities.’ His analysis of the under-representation of Bermuda’s long, deeply embedded African heritage (enslaved Africans first arrived in Bermuda in 1616), and the challenges of engaging with Afro-Bermudian heritage, showed that ‘not ignorance but rather neglect has resulted in the exclusion of these spaces and material culture from the heritage tourism narrative’ (Fortenberry, 2016, p. 603). As the author discusses, heritage stakeholders and practitioners are aiming to change this landscape toward inclusiveness of its diverse cultural heritage, for example, by the founding of the National Museum of Bermuda, which open avenues to re-craft and re-envision under-represented narratives and invite the island’s local and international stakeholders to embark on a more critical engagement with Bermuda’s rich and varied heritage.

SOURCES 2018 Visitor Arrivals Report (pp. 1–35, Rep.). (n.d.). GoToBermuda.com. Retrieved May 10, 2019, from https://www.gotobermuda.com/sites/default/files/2018_year_end_report_final.pdf Department of Marine and Ports Services. (2019). 2019 Cruise Ship Schedule [Brochure]. Author. Retrieved May 10, 2019, from file:///C:/Users/xwind/Desktop/YR 2019 Cruise Ship Schedule pdf. pdf Fortenberry, B. (2016). Life among ruins, Bermuda and Britain’s colonial heritage. International Journal of Historical Archaeology, 20(3), 601–613. https://doi.org/10.1007/s10761-016-0365-2 Government of Bermuda. (2018, October 15). 2016 Census infographics. Retrieved June 10, 2019, from https://www.gov.bm/2016-census-infographics GDP per capita (current US$). (n.d.). Retrieved May 10, 2019, from https://data.worldbank.org/ indicator/NY.GDP.PCAP.CD?locations=BM&most_recent_value_desc=true The Museum Grounds. (n.d.). Retrieved June 10, 2019, from https://nmb.bm/about-us/the-museumgrounds/

TOWARD ETHICAL TOURISM MARKETING Much needs to be done to advance tourism marketing toward ethically grounded ‘good tourism’ that contests and resists the hegemony of late modern capitalism and relentless expansion of capital markets built on mass consumption and economic growth agendas. In this section, we summarize some of the emerging insights above to help identify guiding principles for ethical tourism development, marketing and management. We need new designs for the pluriverse, said Escobar (2018). Likewise, we need new designs for the marketing pluriverse. What would the 4Ps of marketing (product, place, promotion, and price) look like if it was oriented toward an integrated relational, responsible paradigm for ETM?

Integrated, Equitable Destination Marketing Holistic systems thinking and an integrated approach to tourism, understanding tourism as

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interrelated with ecological, social, economic and political systems, are needed to close the proverbial ‘marketing-planning’ gap in a complex tourism domain extending from the local to the global, and containing multiple stakeholders with diverse, often divergent interests. Fragmentation and lack of coordination are exacerbated by DMOs and other marketing entities’ interests that are concerned primarily with advertising and promotion to attract visitors, but are not collaboratively involved with other key destination stakeholders engaged in resource use, allocation, and planning to ensure societal, communal, and ecological sustainability and well-being (see Fyall & Leask, 2006). In the industry-driven view, success is counted by measures like revenues and profits, numbers of visitors (and a ‘satisfactory’ tourist experience) plus jobs generated, rather than tourism’s contribution to quality of life and well-being, fair and equitable distribution of tourism’s revenues towards capacity building, living wages, environmental and cultural conservation, sustainability and resilience, animal welfare, etc. By contrast, an integrated, equitable approach:

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brings in the destination’s human-social communities as equitable and integrated members of planning-marketing and goal setting … integrates economic viability, social equity and environmental responsibilities towards achieving quality of life within living systems. Based on an ecosystem network model, a sustainable planning-marketing orientation does not just satisfy the needs and wants of individuals – it strives to sustain ecosystems … The benefits are not just profits, but civic energy and social equity. Competition is replaced by dynamic interactions that aim at environmental, social and economic equity within the local-global network of living [things] and physical (including built) structures. (Jamal & Jamrozy, 2004, p. 168)

As the above authors indicate, the four traditional Ps of marketing look very different when oriented toward long-term sustainability values rather than a short-term profit horizon, and fair distribution of the costs and benefits of tourism. Product development is a co-creation, a relational endeavor with local participation in planning and marketing. It seeks a place-based, resident-responsive tourism through diverse resident involvement that helps ensure ethical representation and promotion of people, places, and pasts. Relational marketing and storytelling involve local residents as well as tourists as customers, helping toward building loyalty to the destination, fair pricing, and respect for the place, its inhabitants, and visitors. Price also includes full-cost accounting and internalizing rather than externalizing costs such as that of air pollution, carbon emissions, etc. Such a holistic, integrated approach acknowledges social equity and diversity, mutual respect, and community involvement in the governance of tourism development, planning, and marketing in the complex local-global tourism system.

Collaborative Governance and Sustainability New governance mechanisms and much greater responsibility by governments, businesses, tourists, and residents for just transitions to sustainability, climate justice, and the flourishing of human and non-human others are clearly needed. But how does ‘just’ marketing occur in a complex tourism system that is interrelated with other systems (ecological, social, political, etc.) and extends from the local to the international with little accountability, oversight, and regulation of tourism impacts, visitor numbers, resources? Collaborative processes enabling democratic participation and integrated planning and policy making are needed (e.g., Dredge & Jenkins, 2007;

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2016). Regulatory mechanisms are also needed from the global to the regional and local level that can ensure accountability by key stakeholders, including airlines and other transportation sectors, tour operators, events and hospitality service providers (restaurants, accommodation, etc.) as well as other necessary services like banks, medical clinics, etc. In a neoliberal landscape locally and globally, social movements, civil society organizations, and civic society are being called on to play an increasingly important role toward responsible governance for sustainability, resilience, and flourishing social–ecological systems. Take, for instance, non-profit organizations like the Biosphere Institute of the Bow Valley whose initiatives range from sustainability and conservation to awareness raising and civic engagement. Located in the scenic mountain community of Canmore, Canada, it plays a vital role in destination governance through social marketing and other community-based initiatives that inform and educate local residents, schoolchildren, and visitors (see its mission statement on: https://biosphereinstitute.org/about/). A gateway to Banff National Park, Canmore’s desirable location and diverse recreational opportunities and amenities have created growth management challenges over the years, driven by population growth, second home buyers, increasing visitation, etc. (Figure 19.3a). An extensive social marketing campaign was undertaken by the Biosphere Institute to engage local residents, businesses and schools to tackle climate change and environmental sustainability, and nurture an informed, engaged citizenry (see Jamal & Watt, 2011). Among the innovative sustainability efforts it embarked on in the first decade of the twenty-first century, the institute initiated an extensive community-wide, collaborative campaign to reduce greenhouse gas emissions (GHGs). Its 2008/2009 Bow Valley Mountain Air Program activities included anti-idle programs, anti-idle signs and license plates, a speakers’ series, a walk to school program, carpool linkages and efficient driving education, plus youth involvement in developing environmental films and videos. To show both tourists and residents that the municipalities were behind the idle-free initiatives, both the Town of Banff and the Town of Canmore engaged in a multi-faceted public communication program, as Jamal and Watt (2011) describe. The Town of Banff puts up 6 feet (1.8 m) tall IDLE FREE banners along the main street at the entrance to the town. Canmore put a large sign under the big Welcome to Canmore sign at the town entrance that said ‘Canmore is an Idle Free Community’, and local businesses and schools also placed idle-free signs at locations

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throughout the community. Part of the program included working with taxi services, heavily used by tourists in Banff and Canmore (e.g., presentations and discussions with taxi operators on biodiesel fuels and ways to decrease GHGs). Over the years, the Town of Canmore put many ‘Turn off engine’ signs by railway crossings and other highidle places (Figure 19.3b), and both municipalities put IDLE FREE plates on all fleet vehicles. Canmore put huge Idle Free signs on its garbage trucks (Figure 19.3c).

A Relational, Pluralistic Ethic of Care ETM involves ‘just marketing’ plus an ethic of care and responsibility toward place, people, and non-human others! It is a pluralistic marketing ethic, grounded in recognition of diversity and difference, equitable distribution of costs and benefits of development and marketing, fair representation and use of the destination’s goods and commons (ecological and social), and inclusive participation of the destination’s residents and cultural groups. It celebrates diversity, valuing different ways of ethnic and indigenous being and relating, facilitating self-determination, reciprocity, and autonomous design for the pluriverse of alternative

Figure 19.3a An increasing popular mountain destination: Main Street, Canmore, Alberta (Canada)

economies, relational ontologies, and ‘other’ epistemologies (Escobar, 2018; Tuck & McKenzie, 2015). It means fairness and equity in incorporating traditional knowledge and local knowledge, rather than privileging managerial and scientific knowledge for sustainability, conservation of commons, adaptation, disaster planning and recovery, etc. For this, collaborative mechanism and policy networks are needed as well as participatory practices that are inclusive of diversity and respectful of ‘difference.’ The discussion above indicates then that neoliberal ST and corporate, managerial STM discourse may be usefully informed by ETM principles that allow for equity, diversity, difference, inclusivity, and voice (democratic control over how one’s cultural heritage, home, and environment are marketed and promoted), as well as responsibly, sustainability, and care for human and non-human others. Human rights, recognition of difference, and respect run throughout such a justice-oriented framework. It is sensitive to context, where it incorporates particular principles related to sustainability, diverse knowledges, and a situated ethics of place. The approach here is postdualist (non-dualist), ‘incorporating increasing influence of Indigenous and decolonizing methodologies, spatial theories and new materialism’ and ‘relational to land, social context and to future generations’ (Tuck & McKenzie, 2015, pp. 17, 19). For instance, in the indigenous context that Tuck and McKenzie (2015), describe, ETM would include principles that foster self-determination and local control, reciprocity, visitor experiences and learning through storytelling and other placebased practices that nurture caring for land, people, and planet. Designing ‘good’ (ethical) experiences is an integral endeavor for tourism marketers oriented toward ‘good tourism.’ Information, awareness, and education of visitors are critical so that they can engage in responsible practices and choices to select tourism providers whose services and products are environmentally ethical as well as socially and culturally just, internalizing environmental costs and participating in diverse circular economies toward destination resilience and planetary sustainability: Good tourism is tourism that is based on justice plus an ethic of care and responsibility for a flourishing planet and the well-being of human and nonhuman others. An important consideration here is enabling ‘good’ experiences (for both visitors and hosts!). The local-global scale and scope of tourism makes it a powerful pedagogic medium for facilitating local and global citizenship, thoughtful (sustainable!) consumption, and social-political action through learning and enjoyment, gaining ecological and cultural literacy. (Jamal, 2019, p. 247)

Photo credit: Tazim Jamal

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Figure 19.3b Anti-idle sign at railway crossing Photo credit: Biosphere Institute of the Bow Valley

CONCLUDING THOUGHTS This chapter describes the evolution of ethics in tourism studies and identifies some issues and challenges that have concerned researchers in relation to the sustainability and well-being of the place and people of tourism destinations. As described above, what is needed is an integrated, equitable and relational approach to tourism marketing that is guided by ethical principles grounded in justice, responsibility and care. Ethical Tourism Marketing (ETM) is oriented to the good of the destination, which includes equity and fairness in distribution of costs and benefits, recognition of diverse inhabitants and cultural groups, equal respect and equal dignity of human beings (Nussbaum, 2011), responsibility and care, sustainability and good governance (including democracy, inclusiveness in planning and decision making on destination development and marketing, and regulation of local-global tourism). Such ethically responsible marketing strives toward good tourism through ‘just’ transitions in development, management and marketing, implementing strategies for de-growth and de-marketing as needed. It is grounded in justice and an ethic of care for others as well as care about place and environment (see Gilligan, 1982; Jamal, 2019; Noddings, 1999). Addressing the urgency of climate change in the Anthropocene and the digital economy in a world of mobilities (migrations, diseases, transnational corporations, workers, and tourists, etc.) will require new governance mechanisms and much greater responsibility by governments, businesses, tourists, and residents for just transitions to sustainability, climate justice, and flourishing with ‘good tourism.’ It will also require decolonizing

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Figure 19.3c Anti-idle garbage truck sign Photo credit: Biosphere Institute of the Bow Valley

methodologies, critical research, and praxis to facilitate a pluralistic, relational and culturally situated ethic, thoughtful to place and people, caring for human and non-human others. To address the scale, scope and complexity of tourism, such a framework for ETM should offer general guiding principles across the local–global tourism system and also be responsive to the particular context of the destination space, place, and situation.

Note 1

See, for instance, the following websites (accessed June 10, 2019): https://www.travelandleisure.com/trip-ideas/ island-vacations/best-time-to-visit-bermuda https://www.coastalliving.com/travel/othercoasts/bermuda-travel-guide https://www.usatoday.com/story/travel/ cruises/2019/06/07/cheap-cruises-and-besttimes-go-7-popular-destinations/1379732001/ https://www.travelandleisure.com/trip-ideas/ island-vacations/why-go-to-bermuda https://www.brit.co/bermuda-travel-guide/

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Camargo, B. (2019). Case 3.1: Palenqueras in Colombia: A Case of Cultural Injustice in Tourism. Case example. In Jamal, T. (2019). Justice and Ethics in Tourism (pp. 72–77). London: Routledge. Camargo, B. A., & Lawo-Sukam, A. (2015). San Basilio de Palenque (re)visited: African heritage, tourism, and development in Colombia. AfroHispanic Review, 34(1), 25–45. Carballo, R. R., & León, C. J. (2018). The influence of artistically recreated nature on the image of tourist destinations: Lanzarote’s art, cultural and tourism visitor centres and their links to sustainable tourism marketing. Journal of Sustainable Tourism, 26(2), 192–204. https://doi.org/10.1080/09669582. 2017.1338292 Chhabra, D. (2010). Sustainable Marketing of Cultural and Heritage Tourism. Abingdon: Routledge. Cole, S. (2017). Water worries: An intersectional feminist political ecology of tourism and water in Labuan Bajo, Indonesia. Annals of Tourism Research, 67, 14–24. https://doi.org/10.1016/j. annals.2017.07.018 Cole, S., & Ferguson, L. (2015). Towards a gendered political economy of water and tourism. Tourism Geographies, 17(4), 511–528. https://doi.org/10.1 080/14616688.2015.1065509 D’sa, E. (1999). Wanted: Tourists with a social conscience. International Journal of Contemporary Hospitality Management, 11(2–3), 64–68. Dávila-Rodríguez, M. A. (2011). Visual Representations of Puerto Rico in Destination Marketing Materials (Master’s Thesis). College Station: Texas A&M University. Dávila-Rodríguez, M. A., & Gretzel, U. (2015). Puerto Rican residents’ attitudes toward tourism development and destination marketing. In MOVE 2015 American Chapter – 4th International Conference on Sub-National Measurement and Economic Analysis of Tourism: Towards a Set of UNWTO Guidelines, November 18–19, 2015, San Juan, Puerto Rico. Dillette, A, Benjamin, S., & Carpenter, C. (2019). Tweeting the Black Travel Experience: Social Media Counternarrative Stories as Innovative Insight on #TravelingWhileBlack. Journal of Travel Research, 58(8), 1357–1372. Dinan, C., & Sargeant, A. (2000). Social marketing and sustainable tourism: Is there a match? International Journal of Tourism Research, 2, 1–14. Dredge, D., & Gyimóthy, S. (Eds.). (2017). Collaborative Economy and Tourism: Perspectives, Politics, Policies and Prospects. Cham: Springer. Dredge, D., & Jamal, T. (2013). Mobilities on the Gold Coast, Australia: Implications for destination governance and sustainable tourism. Journal of Sustainable Tourism, 21(4), 557–579. Dredge, D., & Jamal, T. (2015). Progress in tourism planning and policy: A post-structural perspective

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20 Social Causes, Consumer Activism and Human Rights N a t a l i a S z a b l e w s k a , Ta n j a K a m i n a n d Krzysztof Kubacki

INTRODUCTION Defining social causes, and differentiating them from other types of causes, have created lengthy, heated debates and led to numerous arguments in the public health and medical literature (see e.g. Greenland, 2005; Susser & Schwartz, 2005). Moreover, the very definition of what amounts to a ‘social cause’ in marketing theory and practice has been fraught with difficulty (see e.g. Kotler, 1971). Beyond the academic debate over the taxonomy of social causes, in practice there are ethical dilemmas regarding prioritizing and giving (in)sufficient consideration to certain social causes above others. Is identifying and prioritizing social causes simply a decision for the government or its agencies to make? Should commercial and nonprofit organizations be applauded for focusing their attention on certain social causes, even if those decisions are made to increase their profits, market visibility and brand awareness or are simply part of their brand differentiation strategies? These questions pose important ethical dilemmas for marketers, and they cannot be answered without placing the debate within the wider context of interactions between consumers and marketing activities, including the shifting power relations in the marketplace and the position of consumers within the marketing system.

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Notwithstanding these ethical dilemmas and definitional challenges, there is no denying that commercial organizations’ engagement with social causes is not only well received but also often expected by consumers (see e.g. FleishmanHillard, 2017). No longer simply passive receivers of marketing offerings in the marketplace, consumers in the Global North have become a powerful market force in their own right, aware of their ability to influence, shape and often co-create marketing activities. Driven by a pro-ethical stance, consumers can become influencers and form lobby groups through collaborations and dialogues with organizations and their stakeholders, or they can even become shareholders through direct financial investment. Thus, their influence on commercial and nonprofit organizations goes beyond their purchasing power, such as the notions of ‘voting with your wallet’, buycotts or boycotts. In that sense, as we show later in this chapter, even though consumer activism is not a new phenomenon, we might argue that we are living in an era of heightened awareness, among both consumers and marketers, of consumer power. With that consumer power comes the responsibility to act in an ethically conscious fashion, supporting the social good, such as human rights. However, and despite the initial high hopes for ethical (conscious, social

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or political) consumerism, recent studies have shown that this still remains a niche trend, in the sense that consumers profess to be more socially conscious, yet their social consciousness does not translate into more ethically driven consumer behaviour en masse (see e.g. Devinney, Auger & Eckhardt, 2010). In other words, although there is evidence that increased awareness of a wide range of social causes encourages different forms of consumer activism, the relationship between this awareness and the actual purchasing behaviour of the majority of consumers continues to remain tentative at best. Despite the fact that the idea of ‘personal responsibility’ (i.e. people being responsible for their own actions, or the principle of ‘caveat emptor’ in marketing ethics) underpins many contemporary government policies and commercial marketing strategies, individuals often have a limited capacity to address social causes that stem from bigger, systemic social problems. Thus, consumer activism needs to go hand in hand with social or political activism, including lobbying for legislative and regulatory change in market governance by, for example, banning certain products (e.g. plastic bags or straws) or requiring certain minimum standards (e.g. in employment practices). Utilizing citizen/consumer power, and thus crossing the line between ‘consumer’ and ‘citizen’ participation, might be necessary to drive real and sustainable change and to address many of the social causes at the centre of wider systemic social problems. For instance, using the example of the human rights movement, a fragmented but global phenomenon, we discuss later in this chapter how human rights causes have been used (and often appropriated) in marketing strategies but, at the same time, have also become an integral part of global social collaboration, including consumer activism. In this chapter, we begin by highlighting the main issues in relation to what social causes are and how they are defined in different fields. This is then followed by an overview of consumer activism, its historical roots and current trends; finally, we focus our discussion on the example of human rights. Human rights, as we posit, are part of a global movement that has had a tremendous impact on national and international (political, legal and social) affairs. The main assumption behind this chapter, therefore, is that the discourses surrounding social causes, consumer activism, the importance of the human rights movement and shifting power relations between different actors in the marketplace need to be acknowledged and considered in and through marketing ethics.

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SOCIAL CAUSES Contemporary social sciences remain preoccupied with an endlessly diverse list of social problems, ranging from unhealthy eating and physical inactivity, through domestic violence and human trafficking, to climate change (see e.g. Giddens, 2009). Although identifying, understanding and solving social problems have been the predominant focus of social sciences over the last 200 years, there is no simple way of establishing which social problems are worthier of our attention than others are, or identifying what constitutes a definite list of social causes contributing to a complex web of social problems, as they are often systemic. Consequently, the meanings of and relationships between social ‘causes’, ‘effects’ and ‘problems’ can be immensely complicated. Before the concept of social problems can be examined, we need to acknowledge the longstanding debate in sociology and distinguish between (personal) troubles and (public) issues. In his seminal work, Charles Wright Mills (1959/2000) identified ‘troubles’ as having an intimately personal character, giving an example of an unemployed individual in a large city, whose individual character, skills and relations with others need to be examined to identify the underlying causes of their misfortune, diagnose the problem and propose solutions. However, shifting the focus from a micro to a macro perspective, a large number of unemployed people in the same location may be a manifestation of a public ‘issue’, requiring an examination of the social, cultural, historical, political, legal and economic structures within the society (Mills, 1959/2000). Although personal troubles and public issues are intricately connected, and traditionally definitions allege that for a social issue to be recognized as a social problem it needs to affect a large number of people in a society, Alessio (2011) argued that there is no logical reason why a single individual may not be affected by a public issue. He proposed a definition whereby ‘a social problem is a condition that involves harm to one or more individuals and/or one or more social entities, has at least one social cause and/or at least one social effect, and consequently has at least one or more social remedies’ (p. 3). Alessio’s definition helps us to locate social causes within a larger framework of social problems, effects and remedies, shifting the focus away from a controversial attempt to quantify the number of individuals affected by a social problem. It is reasonable to assume that while the scale of social problems may need to be measured using the number of affected individuals, their complex

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effects and potential remedies need to be understood through a combination of micro (i.e. individual) and macro (i.e. societal) perspectives. As no meaningful answer has ever been offered to the question of how many people should be affected for something to become a ‘social problem’, Alessio argued that we must recognize that a social problem may involve one person only, as the reasons for such a problem may be a combination of both personal troubles and social (public) issues. Traditionally, however, it is a social problem, rather than social causes or effects, that has been considered the focal issue, with social causes contributing to the creation of the problem and its effects being the outcome of that problem. However, as some argue – further problematizing the simplistic, linear relationships among causes, problems and effects – social problems are interlocked in a complex web of causes and effects; as such, social causes may also become synonymous with social problems (see also Alessio, 2011). For example, unemployment may lead to depression, making it much harder for an individual to return to employment. As a result, social problems, such as unemployment, may have multiple causes and effects, with depression simultaneously being a cause, problem and effect. Therefore, more recently in marketing and, in particular, in social marketing, an attempt has been made to conceptualize social problems without a clear cause or solution, where social causes may also be social problems, and hence they are seen as ‘wicked’ problems. Originally proposed by Rittel and Weber (1973), wicked problems cannot be defined as a simple chain of causes and effects, and their complex nature often determines that they are defined differently by different stakeholders, who may perceive different causes or effects as the main problem (see e.g. Kennedy, Kapitan, Bajaj, Bakonyi & Sands, 2017). Attempts to solve a wicked problem are likely to affect the relationship between, and the nature of, causes and effects, leading to unintended consequences for society; yet, they are unlikely to deliver the ultimate remedy. As such, seeing social problems as wicked problems blurs the boundaries (often too simplistic to reflect the complex reality) between social problems, causes, effects and remedies. That being said, conceptualizing these complex problems as ‘wicked’ provides a lens through which it becomes possible to see social causes as they often are: a complex web of issues that need to be studied holistically to comprehend their structures and relationships. It requires stakeholders to focus on introducing incremental improvements, rather than identifying reductionist and often illusive remedies that, at most, will only change the nature of the wicked

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problems, leading to positive but also unintended and often unpredictable consequences (Brychkov & Domegan, 2017; Kennedy et al., 2017).

SOCIAL CAUSES AND MARKETING Although a traditional social science view of social causes places them as origins of social problems, in the marketing literature the concept of a social cause has often been understood as a principle and an objective of a social action addressing a social problem. That being said, these two meanings of the term ‘social causes’ are closely related, as causes-as-remedies would not be worth pursuing unless they had causes-as-origins, contributing to wider social problems. For example, an issue such as domestic violence can be considered as a root of many social problems and, at the same time, as a cause that requires remedies that can be implemented through marketing programmes. The application of marketing tools and techniques to the promotion of social causes was originally proposed almost 50 years ago by Kotler and Zaltman (1971), and the relationship between marketing theory and the practice of addressing social causes has remained ethically complicated and, at times, difficult ever since. In his analysis of social problems, social change and social action, Kotler (1971) proposed an understanding of social causes as ‘solutions’, defining a cause as ‘a social objective or undertaking that change agents believe will provide some answer to a social problem’ (p. 694). Kotler distinguished between three main types of causes-as-solutions: ‘helping causes’ are often employed by charities and non-profit organizations to support the victims of a social problem (e.g. non-profit, charity and social marketing; see Chapter 18 in this Handbook); ‘protest causes’ are often employed by consumer groups (e.g. product/brand boycotts and consumer activism) in an attempt to remedy social problems by targeting the institutions causing them; and ‘revolutionary causes’ are more extreme versions of protest causes attempting to eliminate the institutions creating a social problem from the market, for example by lobbying governments to introduce tougher legislation and control over commercial organizations (see e.g. upstream social marketing). Although originally conceptualized as social marketing (Fox & Kotler, 1980), social cause marketing has evolved into several distinct types of marketing activities employed to provide support and solutions to social causes, including

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corporate or commercial social marketing, causerelated marketing (again, see Chapter 18), corporate social responsibility (see Chapter 21) and corporate sponsorship of social causes. Further, social causes are now being extensively and successfully used by commercial brands to distinguish themselves from their competition in the market (Alcañiz, Cáceres & Perez, 2010). The competitive nature of most consumer markets means that it is increasingly difficult to differentiate a brand using traditional points of difference such as price, product attributes or quality. Therefore, in this hypercompetitive environment, brands integrate social causes into their marketing programmes to foster distinct brand identities and develop positive associations in consumers’ minds through connections to social issues that are considered important and relevant by their target consumers. Increasingly, the expectations of contemporary consumers stretch beyond value for money and include following ethical standards and making positive contributions to society (Freestone & McGoldrick, 2008). Consequently, contributing to solving social causes allows brands to increase their consumer-based brand equity. This kind of brand activism (i.e. an attempt by businesses to contribute to solving society’s social problems, stretching beyond traditional corporatedriven cause-related marketing or corporate social responsibility) is a relatively new phenomenon, as, historically, the corporate world preferred to shy away from social or political issues that could increase the risk of reputational damage (Sarkar & Kotler, 2018; Vredenburg, Spry, Kemper & Kapitan, 2018). However, more recently, brands have begun to engage in social or political causes to align their corporate values with broader society’s ethical values and, consequently, have become powerful and influential change agents (sometimes addressed as ‘corporate citizens’). One such example is in relation to human trafficking and slavery. As a demand for cheap labour is considered a major ‘pull’ factor for human trafficking and modern slavery,1 many companies are joining global efforts in combating modern slavery and slaverylike practices by avoiding the use of exploitative labour in their own supply chains.2 For instance, a US clothing company, Badger Sportswear, cancelled its contract with a Chinese manufacturer due to the placement of its factory inside a so-called ‘re-education camp’, where it has been alleged that Chinese Muslim ethnic minority Uighurs, Kazakhs and others have been mistreated and coerced to work for little pay and often no pay at all. The allegations of using forced labour were deemed not to be compliant with Badger’s sourcing policy (Baynes, 2019). Despite the Chinese government

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denying the allegations (Griffiths, 2019), the company’s response of cutting all ties with the Chinese manufacturer could be seen as an attempt to take an ethical stand on a social issue by addressing exploitative labour practices in the fashion industry (see also Chapter 23). Another major social cause of modern times is that of climate change; as with human trafficking, human-induced climate change is both a social cause and a consequence of other social problems, including overconsumption and global inequality. Unsurprisingly, then, climate change has become part of the marketing agendas of many big brands. One such initiative, launched in 2017 by C40 Cities3 with L’Oréal as a founding partner, is the Women4Climate project.4 This programme seeks to provide mentoring, support and guidance to female leaders on projects that can help to fight climate change while at the same time tackling gender inequality. Such private–public partnerships can lead to positive social changes through brands (re)investing in communities when such initiatives align with the corporation’s pledge causes (see Palt, L’Oréal’s chief sustainability officer, cited in Rojas, 2017) and provide social initiatives with much needed funding. Notwithstanding the positive outcomes of such corporate brand activism, the line between ‘authentic’ brand activism and the (ab)use of social causes as a marketing communication tool is often thin. In many respects, brands taking a stand on social, economic, political or environmental issues is being increasingly expected by ethically, socially and politically conscious consumers. However, contemporary brands’ actions and motives are closely scrutinized and often challenged by consumers who expect authentic engagement with the targeted social causes. As pointed out by Holt (2002), when brands engage in corporate social activism, they tend to be confronted with countercultural movements in that ‘the branding efforts of global consumer goods companies have spawned a societally destructive consumer culture’ (p. 70). Thus, when brands’ social or political messages are not seen as genuine or authentic, it might lead to a public backlash in the form of anti-brand activism, which must be carefully considered by brands (see e.g. Awasthi, Shama & Gulati, 2012). In the following section, we focus our discussion on consumer activism as a complex phenomenon, providing a brief historical overview of its development and various types, strategies and tactics. Recent expansions in consumer activism have led to the redefinition of ‘consumption’ as a political and, most importantly, ethical action.

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CONSUMER ACTIVISM Consumer activism presupposes that a sphere of consumption is a sphere where voices can be raised, heard and acknowledged. These voices can relate to particular products and services or might aim at addressing wider ethical, social and environmental issues relating to production and consumption practices. In the latter case, consumption is seen as a lever of social and political change. In the wider sense, consumer activism refers to processes in which individual or organized consumers (i.e. activists) aim to influence the production and distribution chain and the consumption of goods and services. Under certain circumstances, consumer activism can be considered a type of social movement that is ‘organized around goals that resist particular industrial or marketing practices, such as selling unsafe vehicles or publishing deceptive advertising’ (Kozinets & Handelman, 2004, p. 691). Consumers can act on their own by, for example, expressing their dissatisfaction with a product or service to protect other potential consumers from inadequate or even harmful market offers. Such consumer activism, sometimes referred to as ‘consumer advocacy’ (Jayasimha & Billore, 2016), is one of the first and most basic forms of consumer activism. Exercised through word of mouth, this type of activism deals with consumption experience and can, especially in the times of global internet communication, gain massive support and even initiate a (more formal) movement. On the one hand, its purpose is to warn other consumers against buying particular products, services or brands; on the other hand, it forces a company to improve a product or service or to decrease prices. Consumers who create groups and form movements might get considerate negotiating power for initiating changes of different kinds. However, consciousness of the negotiating abilities of consumers through mobilization of their buying power is not a new phenomenon. It dates back to the late 1700s (Glickman, 2001) and became prominent at the beginning of the twentieth century (Gabriel & Lang, 2015). During the Great Depression, following the stock market crash in 1929, the movement ‘Don’t buy where you can’t work’ protested against discriminatory hiring practices, drawing support from major civil rights organizations and, eventually, leading to several social changes (Glickman, 2001). Some see it as a tipping point leading to consumer transformation, as Stanley High pointed out in an article from 1939: ‘[u]ntil about 1927, the American consumer – male and female – was isolated, anonymous,

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and generally peaceable. Today he is an army with banners. Already more than eighty organizations are instructing, warning, and mobilizing him’ (cited in Glickman, 2001, p. 100). From this point on, consumer activism developed in two directions. One entails movements and consumer organizations that stress expertise and are mostly concerned with the quality of the individualized consumer experience with products and services. This type consists of activism on behalf of consumers for consumer protection (e.g. consumer research and watchdog organizations). The other type involves movements that focus on collective action regarding the social aspects of production processes and could be seen as an extralegal way to influence labour and environmental practices, like the working conditions in factories (e.g. the campaign against Nike and the working conditions in its sweatshops)5 or environmental degradation (e.g. the activism against Kit Kat and its ties to a company that was producing palm oil, causing the devastation of orangutans’ habitats).6 It is this second type of consumer activism that has opened a space for the development of ethical consumerism, on the one hand, and the politicization of marketing (like corporate social responsibility, cause-related marketing and socially responsible advertising), on the other hand. The strategies and tactics that consumer activists use range from boycotts, buycotts, protests, petitioning governments to change legislation, campaigns, legal suits, education, individual and collective acts, and whistle-blowing to media advocacy. Historically, different types of consumer activism have prevailed in different periods, each with its own characteristics. According to Gabriel and Lang (2015), consumer activism could be observed in four waves: (1) the cooperative movement, which started in 1840 and argued for consumers taking control of production; (2) the value-for-money movement, which started in the 1900s and pushed for the scientific testing of products to provide comparative information on best value; (3) Naderism, which started in the 1960s and advocated that consumer activists must fight against corporate greed; and (4) alternative or political activism, which started in the 1970s and sought to reconstruct and redefine consumption on more ethical and ecological grounds. These types of activism often co-exist in the same initiatives (Gabriel & Lang, 2015); however, there could be tensions between them, especially when activism is directed at changing the consumption culture itself. Anti-consumption movements, such as freeganism (Pentina & Amos, 2011), or initiatives like ‘Buy Nothing Day’ or ‘Digital Detox Week’, promote less consumption or even abstinence from consumption (Kozinets &

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Handelman, 2004). The last two waves of consumer activism became considerably politicized, whereby the market is seen as analogous with a democratic election system in which consumers (associated with citizens) through their purchase decisions (associated with political votes) can support good or punish bad business practices and, as such, influence changes in society and regulate market processes. Once consumption is perceived and done through the framework of citizenship, it becomes political. Michele Micheletti (2003) saw consumerism as a new market-based form of politics, which is becoming more relevant in times of globalized economies. She labelled the mobilization of citizen/consumer power and consumer authority as ‘political consumerism’. The cores of political consumerism, ethical consumerism and some forms of consumer activism all describe the same phenomenon: an attempt to change institutional or market practices that one finds ethically or politically objectionable through exercising consumption choices between producers and products in the market (Micheletti, Follesdal & Stolle, 2003/2017). When the consumption sphere is conceptualized as a political sphere, the roles and identities of actors in this sphere are reshaped too. Thus, consumer activists can be seen as (global) citizens who can contribute to transnational efforts to improve, for example, environmental degradation, like deforestation, or the working conditions in different industries. They can initiate a cause-related consumer movement and promote corporate responsibility by using personal mediaoriented strategies, like writing emails, making phone calls, setting up personal websites, using face-to-face communication, or collaborating through and broadcasting their voices via social media. An interesting case in point is that of Jonah Peretti, who in 2001 started an email conversation with Nike’s customer service over a pair of shoes. He had ordered a pair of customized shoes with the word ‘sweatshop’ embroidered on them, as a reference to Nike’s much criticized labour practices. Nike’s cancellation of his order led to an exchange of emails between Peretti and Nike’s customer service representatives, which Peretti first shared online and was later reported on in public media, such as the Guardian (Left, 2001). The case gained considerable coverage and contributed to culture jamming, one of the tactics of consumer activism, involving hijacking hegemonic consumer culture through the doors of emotions by using subvertisements, doppelgänger brand images7 and similar. The power of culture jammers to mobilize the political actions of consumers in a way that can shift the hegemonic socio-economic system has been vigorously questioned (see e.g. Sandlin &

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Callahan, 2009) and should be acknowledged as considerably different from conventional modes of political participation. One other form of consumer activism practice that has been widely critiqued is ‘slacktivism’, which refers to practices where people express support for a political or social cause via social media posts and likes or through online petitions. Such practices usually lack effort, engagement and commitment and are often just symbolic, making people ‘feel good’, ethical and socially responsible. They also hardly ever lead to considerable changes in production processes and consumer habits on a wider scale. However, we should not underestimate the power of consumers in influencing gradual adjustments of industries according to new environmental and social norms. It is not uncommon that a fringe consumer action becomes the mainstream. Ideas like ‘fair trade’ or ‘animal rights’ were marginal actions in the 1990s but have become accepted as part of the mainstream agenda (Gabriel & Lang, 2015). Increasing numbers of everyday consumption choices have become considered as actions by which consumers can make ethical value claims. This trend assumes that each purchasing decision is, at least partly, political because it relates not only to goods or products but also to the processes by which they are produced, delivered and promoted. It stresses the moral dimensions of consumer choice against different criteria and is related to different consumers’ motives, ranging from political, religious, spiritual and environmental to social. These motives might often be contradictory, but their common denominator is a concern with the effects that consumers’ purchasing choices have not only on themselves (their health, budget, well-being, etc.) but also on the world around them (Harrison, Newholm & Shaw, 2005). Ethical consumption, therefore, is not easy, as it demands an engaged and well-informed consumer. Multiple research has indicated that awareness of the negative social consequences of purchasing behaviour influences consumers’ feelings of responsibility in the consumption context and their personal obligations to make socially responsible purchases (see e.g. Golob, Podnar, Koklič & Zabkar, 2019). Associations that research and monitor the social and environmental records of companies to provide consumers with the information needed to make informed consumption choices have gained an important role in this process. Ethical Consumer8 is one such organization; it provides consumers with information and inspiration for ‘revolutionizing’ the way they spend, save and live across whole product (or industry) areas. In the fashion industry, for example, Ethical Consumer has provided basic guidelines for what to buy and

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what to avoid when buying clothing, and it provides consumers with a list of alternative clothing shops, which allows consumers to modify their consumption practices and become more ethically conscious consumers. While such productor company-oriented ethical purchasing, called ‘positive buying’ (Harrison et al., 2005), might be a progressive step towards more sustainable and socially acceptable practices, it takes time before it can have any significant impact on business practices and instigate social change. There are, however, other practices that seek to mobilize a larger number of people and put pressure on business entities to achieve more immediate change. One of the most visible activist/ political consumer strategies, and one with a long history, is that of consumer boycotts or buycotts. This form of consumer activism usually has three key components: a goal, a self-representation and an adversary (Kozinets & Handelman, 2004), and it is described as one of the types of consumer movements that can put most pressure on corporations. Marketplace-oriented boycotts, for example, might put financial pressure on companies if a lot of people start to refrain from purchasing selected products/services/brands or visiting tourist destinations, shopping venues, etc., and mediaoriented boycotts might damage the reputations of brands and corporations via negative publicity, which can gradually lead to commercial organizations’ loss of profits and market shares (Friedman, 2003/2017). Consumer boycotts, however, are not a solution to all the issues tackled by consumer activism, including overturning established mechanisms and solving dishonest or unethical practices in the market. Several factors condition their success, including the strength of the organizations or individuals who are mobilizing consumers towards the boycott and the product category. For example, in some product categories, like fresh produce, it is almost impossible to achieve a consumer boycott on a wider scale (Friedman, 2003/2017). Another typical element of consumer boycotts is that they are usually initiated by organizations. Ethical Consumer is one such organization providing an active list of companies and brands that ethical consumers are supposed to boycott to protest corporations’ tax avoidance or disregard for human rights. Ethical Consumer also provides a list of boycotts that were successful in achieving these goals. This gives consumers hope that their actions through consumption, boycotts and buycotts matter and might lead to positive social changes. The list of social causes that can trigger consumer boycotts is long, and the focus of these boycotts varies. For example, a 2017 study (YouGov, 2017) revealed that over a fifth of

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consumers have boycotted a brand following a scandal or negative press. Tax avoidance and evasion were identified as the first reason for boycotting a brand (cited by 55% of those who had stopped using a brand). Four in ten (40%) had stopped using a brand because of allegations of staff being treated unfairly (e.g. unfair working hours), and over a third (36%) had been prompted by workers in the supply chain being treated badly. However, the level of participation in this form of consumer activism varies across countries. Eurobarometer shows that the percentage of consumers who had boycotted certain products in the 12 months previous to the survey varied from 5.3% (in Poland) to 46.6% (in Iceland) (European Social Survey, 2016). Thus, brands need to consider carefully whether at all and then how to engage in political or social issues, as today’s consumers more readily base their purchase decisions on brands’ positions on various social causes, and some of these causes tend to trigger more (re)actions than others. In the final section, therefore, we focus our discussion on human rights as a form of ‘social cause’ that has prompted social activism worldwide and, consequently, has infused interest from and engagement by – though to different degrees of success – commercial organizations.

HUMAN RIGHTS The philosophical and ideological basis of human rights – that is, placing morality on the notion of justice – can be located in many different cultures throughout history (see Robinson, 1998). Human rights, as legal concepts, emerged in the wake of the American and French Revolutions, leading to declarations of rights. However, social activism in relation to (human) rights issues formed much earlier, in particular in the seventeenth century in England in relation to religious freedoms and then in the context of slavery abolitionism before the American Civil War (Neier, 2012). The modern form of the human rights movement emerged in response to the atrocities of the Second World War, leading to the establishment of the United Nations (UN) placed under an obligation to ‘reaffirm faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women’ (Charter of the United Nations, 1945, Preamble), which was followed by passing the Universal Declaration of Human Rights (UDHR, 1948). Since then, these global commitments have been translated into legally binding obligations at the international level,9 as well as

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through regional10 and domestic human rights protection systems. Human rights, as legal claims, have emerged as a means of addressing abuses of state and state-like entities and hence facilitating a transition from repressive to more democratic forms of governance. Thus, the legal protection of human rights is a relatively new phenomenon but has acquired global reach. That being said, the human rights movement is much wider, and older, than its legal manifestation. The human rights movement has evolved over time (see also Clapham, 2007). In its long history, it has been invoked in the context of anti-colonialism, anti-apartheid, and, more recently, women’s, indigenous peoples’ and LGBTQ rights,11 with the more recent focus being on social, economic and cultural rights, thus reaching beyond the civil and political rights agenda. What initially were mostly single-issue and locally focused movements, along with technological advancements facilitating information and resource sharing, have become more multi-faceted and global in participation and focus. Since the 1970s, accelerated by the fact that ‘[a] confluence of unrelated events in different parts of the world that took on added significance because of the Cold War helped to inspire many people to commit themselves to organized efforts to advance the cause’ (Neier, 2012, p. 3), the contemporary international human rights movement has become an enduring force in world affairs. Human rights are both law and policy, and they ‘provide an accepted international currency for moral and political debate’ (Almond, 1991, p. 259), notwithstanding the criticism, even rejection, that they often invoke (see e.g. MacIntyre, 1981; Bentham, cited in Waldron, 1987, pp. 46–69). Nowadays, human rights are as much about the legal entitlements of individuals, and often groups,12 as they are about political and social ideals. Even though human rights have emerged to address governments’ intrusions into the rights of citizens, nonstate actors (such as multinational corporations), which often hold more power and influence than many nation-states, have become a necessary ally in the fight for human rights worldwide. Accordingly, adhering to corporate social responsibility (see Chapter 21 for a detailed discussion) has become a key feature of the marketing strategies of many commercial organizations worldwide.

HUMAN RIGHTS AND MARKETING Similar to when commercial organizations take a stand on social causes in general, engaging in a public display of support for human rights has

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become an appealing marketing strategy for corporations. Joining the fight for human rights, even if not always clearly defined, has been used by commercial organizations for some time now with the purpose of reaching out and appealing to a wider consumer base. One such example is the 1971 Coca-Cola advertisement ‘I’d Like to Buy the World a Coke’. It not only is reported to be the most expensive advertisement of its time, but has also become iconic of the very essence of humanity: that is, uniting in peace, friendship and camaraderie, with a Coke creating a common connection between people worldwide. Bill Baker, the then creative director of the CocaCola account for the McCann Erickson advertising agency, remarked that the basic idea behind this advertisement was to ‘see Coke not as it was originally designed to be – a liquid refresher – but as a tiny bit of commonality between all peoples, a universally liked formula that would help to keep them company for a few minutes’ (cited in Ryan, 2012). It is a good analogy, as the human rights movement very much appeals to ‘universality’ and is perceived as intensifying a ‘sense of solidarity’, where ‘connectedness is critical to understanding the changing world of human rights’ (Clapham, 2007, pp. 19–20). Given the context within which the Coca-Cola advertisement emerged (i.e. the ‘flower power’ movement13 and the US involvement in the Vietnam War), this advertisement, even if not directly anti-war, was widely perceived as an anthem of hope. Beyond the commercial aspects of the advertisement’s success, Coca-Cola donated the first $80,000 in royalties from the advertisement song to UNICEF (the UN Children’s Fund) (Ryan, 2012). More recently, but with overwhelmingly lesser success, Coca-Cola’s main rival, Pepsi, attempted to capitalize on the most recent social justice movements with an advertisement featuring Kendall Jenner.14 The advertisement depicted people of different racial and religious backgrounds supposedly united with the help of a carbonated drink in what seemed to be a form of resistance against a non-particularly defined social problem; however, immediate parallels were drawn with the ‘Black Lives Matter’ movement combating police brutality. However, despite the company’s claim that the campaign intended to ‘project a global message of unity, peace and understanding’ (The Sydney Morning Herald, 2017), it met with a strong public backlash and accusations of the appropriation of social justice causes for commercial gain, forcing the company to apologise and pull the advertisement within 24 hours of its release (for an overview of what has been termed ‘possibly the worst commercial of all time’, see

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Hooton, 2017). It could be debated why such seemingly similar campaigns met with such different public responses. It might be that the public today is more aware of and so more critical of and sensitive to marketing strategies, hence requiring brands to be much more nuanced and honest in their engagement with social causes, in particular those that are contested and controversial. As found in a FleishmanHillard (2017) report, nearly two-thirds of consumers expect companies to ‘actively work to solve societal issues’ (p. 13); at the same time, there are calls for companies to adopt ‘a more authentic narrative’ around their social and corporate responsibility (p. 9). Thus, today’s consumers require brands to display genuine commitment to the values the brands purport to represent. It is not that buying into human rights causes should be avoided in and through marketing but rather that the engagement needs to be more authentic and ethical than just at the surface level. In addition, engaging with human rights is not an easy task, not only for businesses but also for the very human rights movement. Despite offering a ‘common moral language’ (Beitz, 2009, p. 1), the human rights movement has been criticized for this language to be ‘vague’ language (Normand & Zaidi, 2008, p. 5) and often ‘misused, distorted, or co-opted’ (Kennedy, 2002, p. 103). This leads to certain views and perspectives being sidelined or even erased from the mainstream discourse. Thus, as is the case with consumer activism, it is not necessarily the voices of the most powerless but rather the loudest, and often best organized, that get the most leverage. There is no denying that the global movement for the advancement of human rights has inspired and spawned various social movements at the domestic and international levels (Tsutsui & Wotipka, 2004). The experience of individuals uniting to rise against the hegemonic powers (mostly governments and their apparatuses), mobilizing resources and looking for (social and political) allies and opportunities to instigate political and social changes, has also provided an important arena in which today’s consumer activism has flourished. Moreover, beyond being instrumental in activating citizen participation and social collaboration worldwide, human rights and their principles are of key relevance for marketing with social goals (see also Kubacki, Szablewska & Siemieniako, in press; Szablewska & Kubacki, 2019). Tackling societal problems and multifaceted social issues carries a significant responsibility, which requires increased legitimacy (Truss, Marshall & Blair-Stevens, 2010); hence, adhering to human rights standards can support those endeavours.

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CONCLUSION In this chapter, we have considered the complexity of social causes in marketing and wider social science, as well as the ethical challenges associated with contemporary consumer activism and the use of human rights causes in marketing. Even though not new, consumer/citizen activism is a growing force that has affected how governments and commercial organizations perceive social causes and by what means they engage with and address social problems, including those created by consumer culture. The human rights movement encapsulates the relative power of social movements, which since its inception has taken over most, if not all, aspects of our life. Thus, translating some of the practices and lessons learnt from the human rights movement, consumer activism – even if not yet fully matured – will continue to grow in relevance and scope. This, in turn, will continue to impact marketing ethics, its theory and its application.

Notes 1

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Under the United Nations Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, Supplementing the Convention Against Transnational Organised Crime (2000), which is the main international instrument regulating anti-trafficking efforts worldwide, state parties are called upon to reduce the demand for trafficked labour forces (Article 9). This has also been in response to a number of governments introducing (compulsory or voluntary) monitoring mechanisms requiring certain types of businesses to report on their supply chain practices: in the UK, this is the Modern Slavery Act (2015); in Australia, this is the Modern Slavery Act (2018) (Cth) and the Modern Slavery Act (2018) (NSW); and in California (USA), this is the Transparency in Supply Chains Act (2010). This is a global network of the world’s 90 biggest cities united in an effort to address climate change; for more information, see https://www. c40.org For more information, see https://www.loreal. com/sustainability/women-and-climate/women4climate For more information, see https://www.businesshumanrights.org/en/nike-is-facing-a-new-waveof-anti-sweatshop-protests For more information, see https://www.theguardian.com/sustainable-business/nestle-indonesianpalm-oil

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Subvertisements, sometimes referred to as ‘uncommercials’ or ‘spoof ads’, are a type of culture jam that produces a critical parody of corporate and/or political messages and advertisements. They use (hijack) well-known symbols and imagery of brands and advertisements and present them with a new message that aims to provoke critical thinking about brands and consumption culture, raise consumer consciousness, and improve critical awareness. Closely related to subvertisements is the concept of the doppelgänger brand image, which involves modifying a company’s logo, usually in a derogatory manner. One of the most active organizations in the production of subvertisements is the Vancouverbased anti-consumption activist organization The Media Foundation (Adbusters). For cases of subvertisements, look at https://www.adbusters.org/ spoof-ads 8 For more information, see https://www.ethicalconsumer.org 9 There are currently nine core international human rights instruments (treaties): Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (1984); International Convention on the Elimination of All Forms of Racial Discrimination (1965); International Covenant on Civil and Political Rights (1966); the International Covenant on Economic, Social and Cultural Rights (1966); Convention on the Elimination of All Forms of Discrimination Against Women (1979); Convention on the Rights of the Child (1989); International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families (1990); Convention on the Rights of Persons with Disabilities (2006); and the International Convention for the Protection of All Persons from Enforced Disappearance (2007). 10 These relate to the human rights systems in Europe, based on the European Convention on Human Rights (formally the Convention for the Protection of Human Rights and Fundamental Freedoms); in the Americas, with the American Convention on Human Rights (also known as the Pact of San José); in Africa, based on the African Charter on Human and Peoples’ Rights (also known as the Banjul Charter); and, more recently, though without being legally binding, in Asia under the ASEAN Human Rights Declaration. 11 To be fully inclusive, it is becoming more common to refer to ‘LGBTQQIA’ (lesbian, gay, bisexual, transgender, queer, questioning, intersex and asexual), though not all of these categories have gained equal protection under the existing (domestic or international) laws. 12 The so-called third generation of human rights or fraternity rights, such as the right to

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self-determination, are considered group rights, in that they can only be enjoyed, and hence invoked, by a group. 13 In the 1960s and 1970s, the slogan ‘flower power’ was used in relation to the non-violent opposition movement to the Vietnam War (1955–1975). 14 Available with a commentary at: https://www. youtube.com/watch?v=bTivpgMkGKA

REFERENCES Alcañiz, E. B., Cáceres, R. C. & Perez, R. C. (2010). Alliances between brands and social causes: The influence of company credibility on social responsibility image. Journal of Business Ethics, 96, 169–186. Alessio, J. C. (2011). Social Problems and Inequality: Social Responsibility Through Progressive Sociology. Farnham: Ashgate. Almond, B. (1991). Rights. In P. Singer (Ed.), A Companion to Ethics. Cambridge, MA: Blackwell, 259–269. Awasthi, B., Shama, R. & Gulati, U. (2012). Antibranding: Analyzing its long-term impact. IUP Journal of Brand Management, 9(4), 48–65. Baynes, C. (2019). US clothing company cuts ties with Chinese factory in Muslim internment camp. Independent (10 January). Retrieved from https:// www.independent.co.uk/news/world/americas/ china-uighur-muslim-camp-badger-sportswearfactory-forced-labour-xinjiang-a8720831.html Beitz, C. R. (2009). The Idea of Human Rights. Oxford: Oxford University Press. Brychkov, D. & Domegan, C. (2017). Social marketing and systems science: Past, present and future. Journal of Social Marketing, 7(1), 74–93. Charter of the United Nations (1945). U.N. 1 UNTS XVI. Clapham, A. (2007). Human Rights: A Very Short Introduction. Oxford: Oxford University Press. Devinney, T. M., Auger, P. & Eckhardt, G. M. (2010). The Myth of the Ethical Consumer. Cambridge: Cambridge University Press. European Social Survey (2016). ESS8-2016 Data Download (1 December 2018). Retrieved from: https://www.europeansocialsurvey.org/data/ download.html?r=8 FleishmanHillard (2017). Authenticity in an uncertain world: How to build trust and bridge the gap between what people expect and what they experience. Retrieved from https://fleishmanhillard. com/wp-content/uploads/meta/resource-file/2017/ authenticity-gap-2017-global-executive-summary1505147721.pdf

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Fox, K. F. A. & Kotler, P. (1980). The marketing of social causes: The first 10 years. Journal of Marketing, 44(4), 24–33. Freestone, O. & McGoldrick, P. (2008). Motivations of the ethical consumer. Journal of Business Ethics, 79(4), 445–467. Friedman, M. (2003/2017). Using consumer boycotts to stimulate corporate policy changes: Marketplace, media, and moral considerations. In M. Micheletti, A. Follesdal & D. Stolle (Eds), Politics, Products, and Markets: Exploring Political Consumerism. London: Routledge, 45–62. Gabriel, Y. & Lang, T. (2015). The Unmanageable Consumer. London: Sage. Giddens, A. (2009). Sociology. 6th edn. Cambridge: Polity Press. Glickman, L. B. (2001). The strike in the temple of consumption: Consumer activism and twentiethcentury American political culture. Journal of American History, 88(1), 99–128. Golob, U., Podnar, K., Koklič, M. K. & Zabkar, V. (2019). The importance of corporate social responsibility for responsible consumption: Exploring moral motivations of consumers. Corporate Social Responsibility and Environmental Management, 26(2), 416–423. Greenland, S. (2005). Epidemiologic measures and policy formulation: Lessons from potential outcomes. Emerging Themes in Epidemiology, 2(5), https://doi.org/10.1186/1742-7622-2-5 Griffiths, J. (2019). US clothing company drops Chinese supplier over Xinjiang labor camp fears. CNN (11 January). Retrieved from https://edition.cnn. com/2019/01/11/asia/us-xinjiang-badger-sportsintl/index.html Harrison, R., Newholm, T. & Shaw, D. (Eds) (2005). The Ethical Consumer. London: Sage. Holt, D. (2002). Why do brands cause trouble? A dialectical theory of consumer culture and branding. Journal of Consumer Research, 29(1), 70–90. Hooton, C. (2017). Pepsi ad review: A scene-byscene dissection of possibly the worst commercial of all time. Independent (5 April). Retrieved from https://www.independent.co.uk/artsentertainment/tv/reviews/pepsi-ad-advertcommercial-kendall-jenner-police-protest-blacklives-matter-review-a7667486.html Jayasimha, K. R. & Billore, A. (2016). I complain for your good? Re-examining consumer advocacy. Journal of Strategic Marketing, 24(5), 360–376. Kennedy, A. M., Kapitan, S., Bajaj, N., Bakonyi, A. & Sands, S. (2017). Uncovering wicked problem’s system structure: Seeing the forest for the trees. Journal of Social Marketing, 7(1), 51–73. Kennedy, D. (2002). Human rights movement: Part of the problem? Harvard Human Rights Journal, 15, 101–125.

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Kotler, P. (1971). The elements of social action. American Behavioral Scientist, 14(5), 691–717. Kotler, P. & Zaltman, G. (1971). Social marketing: An approach to planned social change. Journal of Marketing, 35(3), 3–12. Kozinets, R. V. & Handelman, J. M. (2004). Adversaries of consumption: Consumer movements, activism, and ideology. Journal of Consumer Research, 31(3), 691–704. Kubacki, K., Szablewska, N. & Siemieniako, D. (in press). Ethical tension in working with stakeholders. In K. Knox, K. Kubacki & S. Rundle-Thiele (Eds), Stakeholder Involvement in Social Marketing. London: Routledge. Left, S. (2001). Nike. Guardian (23 February). Retrieved from https://www.theguardian.com/ news/2001/feb/23/netnotes.sarahleft MacIntyre, A. (1981). After Virtue. London: Duckworth. Micheletti, M. (2003). Political Virtue and Shopping. Individuals, Consumerism, and Collective Action. New York: Palgrave. Micheletti, M., Follesdal, A. & Stolle, D. (2003/2017). Politics, products, and markets: Exploring political consumerism past and present. In M. Micheletti, A. Follesdal & D. Stolle (Eds), Politics, Products, and Markets: Exploring Political Consumerism. London: Routledge, ix–xxvi. Mills, C. W. (1959/2000). The Sociological Imagination. 4th edn. Oxford: Oxford University Press. Neier, A. (2012). The International Human Rights Movement: A History. Princeton, NJ: Princeton University Press. Normand, R. & Zaidi, S. (2008). Human Rights at the UN: The Political History of Universal Justice. Indianapolis, IN: Indiana University Press. Pentina, I. & Amos, C. (2011). The freegan phenomenon: Anti-consumption or consumer resistance?, European Journal of Marketing, 45(11/12), 1768–1778. Rittel, H. W. J. & Webber, M. W. (1973). Dillemas in general theory of planning, Policy Sciences, 4(2), 155–169. Robinson, M. (1998). Opening address on the occasion of the 50th anniversary of the Universal Declaration of Human Rights at the Symposium on Human Rights in the Asia-Pacific Region (27 January). Retrieved from http://archive.unu.edu/unupress/Mrobin son.html Rojas, D. (2017). The French cosmetics company pledges to help 10 cities mobilise women to lead the fight on climate change at Women4Climate conference in New York. Ethical Corporation (17 March). Retrieved from http://www.ethicalcorp. com/loreal-first-company-partner-c40-citiesempowering-women Ryan, T. (2012). The making of ‘I’d Like to Buy the World a Coke’. Coca-Cola Journey. Retrieved from

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https://www.coca-colacompany.com/stories/ coke-lore-hilltop-story Sandlin, J. A. & Callahan, J. L. (2009). Deviance, dissonance, and détournement: Culture jammers’ use of emotion in consumer resistance. Journal of Consumer Culture, 9(1), 79–115. Sarkar, C. & Kotler, P. (2018). Brand Activism: From Purpose to Action. Idea Bite Press. Susser, E. & Schwartz, S. (2005). Are social causes so different from all other causes? A comment on Sander Greenland. Emerging Themes in Epidemiology, 2(4), https://doi.org/10.1186/1742-7622-2-4. Szablewska, N. & Kubacki, K. (2019). A human rights-based approach to the social good in social marketing. Journal of Business Ethics, 155(3), 871–888. The Sydney Morning Herald (2017). Pepsi pulls Kendall Jenner protest advertisement after mockery and backlash (6 April). Retrieved from https:// www.smh.com.au/lifestyle/pepsi-pulls-kendalljenner-protest-advertisement-after-mockery-andbacklash-20170406-gvenhi.html Truss, A., Marshall, R. & Blair-Stevens, C. (2010). A history of social marketing. In J. French, C. BlairStevens, D. McVey & R. Merritt (Eds), Social

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Marketing and Public Health: Theory and Practice. Oxford: Oxford University Press, 19–28. Tsutsui, K. & Wotipka, C. M. (2004). Global civil society and the international human rights movement: Citizen participation in human rights international nongovernmental organizations. Social Forces, 83(2), 587–620. UDHR (Universal Declaration of Human Rights) (1948). U.N. G.A. Res. 217A (III). U.N. Doc A/810. Vredenburg, J., Spry, A., Kemper, J. & Kapitan, S. (2018). Woke washing: What happens when marketing communications don’t match corporate practice. The Conversation (5 December). Retrieved from: https://theconversation.com/woke-washingwhat-happens-when-marketing-communicationsdont-match-corporate-practice-108035 Waldron, J. (Ed.) (1987). Nonsense Upon Stilts: Bentham, Burke and Marx on the Rights of Man. London: Methuen. YouGov (2017). One in five consumers have boycotted a brand (7 April). Retrieved from https:// yougov.co.uk/topics/politics/articles-reports/ 2017/04/07/one-five-consumers-haveboycotted-brand

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Part V

Ethical Issues in Specific Sectors

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21 Ethics and Corporate Social Responsibility Karla K. Gower

INTRODUCTION In the aftermath of World War II, business boomed, especially in the USA. Peace brought prosperity as the pent-up desire for consumer goods translated into profits. Executives were in too good of a mood to concern themselves with a concept like corporate social responsibility (Epstein, 1998). But the question ‘to whom is the corporation and its leadership responsible?’ had been raised at least as early as 1932 with the publication of Berle and Means’ book, The Modern Corporation and Private Property. The authors noted that the rise of the professionally managed large corporation meant that ownership and control were now separate. The individual or small-group owner had been replaced by ever-growing numbers of shareholders as the stock market became increasingly democratized. These new owners were completely hands-off, with no direct connection to the business. As such, they were totally dependent on its managers to control the company’s operations. While true, the impact of that change had yet to be felt. The question of corporate responsibility came up again in the late 1940s. A Harvard Business School conference was devoted to ‘The Responsibility of Business Leadership.’ The published conference proceedings included a foreword by Merrill

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who argued that although there was a time when business owners were principally responsible to themselves and perhaps a small group of others associated with the business, those days had long vanished: ‘The new concept is, of course, that the businessman’s responsibilities extend far beyond himself and his immediate associates; that the chief ones, in fact, are to others, to the many groups on which his decisions and actions have some sort of affect’ (Merrill, 1949, p. vi). Bowen, who is considered by some to be the father of corporate social responsibility (CSR), was more specific in his 1953 book, Social Responsibilities of the Businessman. For Bowen, the question was not ‘Do businesses have social responsibilities?’ because it was obvious, they did. Companies were obligated to consider the social consequences of their decisions because of their power and influence. Business leaders had a responsibility ‘to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society’ (p. 6). It took an increasingly better-informed citizenry that was more socially and politically aware to force businesses to take their social responsibilities seriously, however. Social movements involving civil rights, women’s issues, and conservationism (now called environmentalism) emerged in

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the 1960s, pushing for policy changes that altered the business landscape dramatically. Suddenly, public expectations about corporate behavior were heightened (Epstein, 1998). Business leaders were being asked questions about their obligations to ‘the environment, consumers, groups that had experienced discrimination or were otherwise disadvantaged, employee and community health and safety, urban blight, public education, and the overall betterment of society’ (Epstein, 1998, p. 4). In 1969, 58% of Americans surveyed agreed that business achieved ‘a good balance between profits and service.’ A year later support for that statement dropped to 29%. The percentage agreeing that ‘big business is dangerous to our way of life’ rose to 46 in 1970, an increase of 18% in just five years (Nelson, 1972, p. 669). As one CEO lamented, ‘I don’t understand it. I’m doing the very same things now that I did in the early 1960s. Yet, then I was applauded as an enlightened and progressive business statesman; now I’m vilified as a stubborn defender of the status quo’ (Nolan, 1975, p. 140).

THE FRIEDMAN PERSPECTIVE Not everyone embraced the move toward greater CSR, certainly not, most notably, economist Milton Friedman. In a September 13, 1970 New York Times Magazine article, Friedman chastised executives for being the ‘unwitting puppets’ of forces ‘undermining the basis of a free society these past decades.’ The idea that business had a ‘social conscience’ or had responsibilities for ‘providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers’ was nothing but ‘pure and unadulterated socialism.’ For Friedman, a corporation was an artificial entity created by law; therefore, it could not have responsibilities in the sense we typically think of them. Only people could have such responsibilities. A corporation’s managers are responsible to the corporate owners to ‘conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom,’ he wrote (Friedman, 1970). Managers are agents of the owners and can only do what those owners want them to do. Corporate executives, Friedman argued, cannot make expenditures to, for example, reduce pollution beyond what is required by law simply

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to help clean up the environment because they would be spending someone else’s money for ‘a general social interest.’ Even if they could, how much cost would they be justified in spending on reducing pollution? Are they required to go to the verge of bankruptcy? These questions illustrated for Friedman the difficulty social responsibility presented for corporate leaders (Friedman, 1970). Essentially, Friedman’s position was that solutions to social issues were political and, therefore, within the purview of government, not private enterprise. If the majority in a democratic society decided the environment needed protecting, then laws would be passed to require everyone, including businesses, to help protect that social interest. The free market, on the other hand, operated on the basis of voluntary cooperation among individuals. There could be no such thing as ‘social’ responsibilities; there could only be shared values and responsibilities among groups of individuals. Wallich and McGowan (1970) attempted to reconcile conceptually Bowen’s social position with Friedman’s economic one into a paradigm of enlightened self-interest. While they agreed with Friedman that corporations should not engage in CSR simply for the sake of helping society, they also noted that stockholders had changed. Investors’ portfolios were more diversified, which reduced their risk and decreased their need to maximize profit from any individual company. Wallich and McGowan suggested that it was in the long-term interest of both businesses and stockholders for corporations to be socially responsible. As Davis (1973) argued, a business is obligated to ‘evaluate in its decision-making process the effects of its decision on the external social system in a manner that will accomplish social benefits along with the traditional economic gains which the firm seeks’ (pp. 312–313). Companies should still focus on their economic self-interest, he said, but also realize the benefits they might accrue long term by considering the welfare of the communities around them. Social issues were added to a firm’s responsibilities under enlightened selfinterest, but they did not displace its primary goal of maximizing profits.

TENSIONS CONTINUED By the 1980s, the enlightened self-interest model had given way in the literature to Carroll’s corporate social performance approach, which combined the economic and social corporate interests into one three-dimensional model. For Carroll (1979), the social responsibility of business

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encompassed economic, legal, ethical, and discretionary dimensions that varied over time with changing societal expectations. While he sought to make his model practical, it lacked a means for measurement and empirical testing. In terms of ethics, it also fell short because ethics was just one of the dimensions, making it appear that firms did not have to take ethical considerations into account in the economic, legal, and discretionary categories. Thus, Carroll’s corporate social performance model never really caught on. Werner (1992) argued that the growth of CSR since the 1970s gave rise to a new organizational model, the self-moralizing corporation, which stressed individual moral behavior within the organization and the development of a moral culture. The new model emerged from a rejection of the premise that business and ethics were rival concepts and that government regulation was the answer to forcing organizational morality. For Werner, a self-moralizing corporation put moral behavior as a prerequisite for the attainment of corporate goals, whether those be survival, profit maximization, or social responsibility. Also, the self-moralizing corporation viewed morality as an organizational asset that came from within. Control mechanisms imposed from the outside are inferior means to ensure morality because they are typically inefficient, and they tend to become excessive and impinge on corporate freedom. Still, critics fought back against the idea that corporations had a responsibility to society, returning again to Friedman’s profit-maximization model. Mander (1992) argued that a corporation was not just the sum of the people who work for it, as Werner (1992) suggested, but rather a separate legal entity that is amoral. Corporations, he argued, must operate within certain laws and rules regardless of the people inside it. A manager cannot place community welfare above the corporation’s interests because to do so would open management up to lawsuits from shareholders. From that perspective, spending corporate profits to benefit society is unethical in itself because those profits belong to the shareholders, not to the corporation or its managers. The financial success of businesses in the last half of the 1990s challenged Friedman’s and Mander’s position and created extravagant expectations on the part of the public. Firms were considered the most powerful institutions in the world, eclipsing governments in many countries. Although most of the early literature on CSR was about the USA, even as early as 1978, it was ‘increasingly clear that managers around the world are being faced with new problems resulting from societal changes’ (McNulty & Cheeks, 1978, pp. 4–5). The result was that the public turned to

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businesses to solve societal issues that were once the responsibility of states. It is no coincidence that the term ‘corporate statesmanship’ took hold in this decade. Also taking hold was the strategic management stakeholder model, which solved the problem of measurement that Carroll had because stakeholder analysis allowed for the identification of actors and defined their relations and positions to one another. But the most important contribution of the stakeholder approach for CSR is that it looked at corporate purpose from a different perspective. As Min-Dong put it, ‘Within the stakeholder framework, the difference between the social and economic goals of a corporation is no longer relevant, because the central issue is the survival of the corporation’ (2008, p. 61). Survival in the twenty-first century means CSR is a requirement for marketing, not an addon. ‘There is no other option’ (Costa, 2019). Millennials and Generation Z expect companies to engage in social causes. Their demands as consumers and employees have forced businesses to commit to serving all stakeholders, not just shareholders (Sims, 2020).

CSR DEFINITIONS Today, CSR is an established if unclear concept in the business literature. One valid criticism of CSR is that it lacks a cohesive, uniform definition, and, without one, there can be no standards and benchmarks for measuring, auditing, and verifying the activities. Settling on a definition that works globally is no easy task in part because CSR is inherently subjective and culturally specific (Matten & Moon, 2008). For example, CSR differs according to the market economy of countries. In liberal market economies, such as the USA, managers are sensitive to the demands of shareholders, despite talk of CSR, which keeps the focus on profits. That is no doubt why the argument for enlightened selfinterest is widely used in the USA. Good business and good ethics are seen as going hand in hand. In coordinated market economies, like Germany and Japan, on the other hand, business leaders focus on a wider range of stakeholders because more groups can affect the success of the firm. In countries with state-led market economies, such as France, the government is the most powerful stakeholder because of its control over the financial system (Frynas & Yamahaki, 2019). Similarly, there are differences across industries and between large and small firms (Frynas & Yamahaki, 2019). For example, large multinational companies

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engage in CSR more than smaller businesses do (Mullerat, 2009). These differences make a uniform definition and standards difficult. The other concern is that the CSR goalposts move with the times as new issues arise, and people demand more solutions for societal problems. The result is that what CSR means today is very different from where it started. Early conceptions of what would become CSR focused on property ownership. Bowen (1953) wrote that ‘those who own property have the duty of using and administering it, not exclusively for their own purpose, but in ways that serve the needs of the whole society’ (p. 53). That position was not exactly new, even in the 1950s when Bowen was writing. In the early 1900s in the USA, some business leaders such as Andrew Carnegie and Henry Ford believed that ‘business had a responsibility to society that went beyond or worked in parallel with their efforts to make profits’ (Wulfson, 2001, p. 136). Ford is supposed to have declared, ‘A business that makes nothing but money is a poor kind of business’ (Wulfson, 2001, p. 136). Carnegie went even further, arguing that businesses and wealthy individuals did not really own their property; they simply held it in trust for the benefit of society as a whole (Wulfson, 2001). These early precursors to CSR tended to focus on the responsibility of individual business leaders, not on the business itself. More recent definitions go beyond property concerns and individual business leaders. Some suggest CSR starts where the law leaves off. Thus, CSR consists of activities to advance a social cause over and above compliance (Kolk, 2016). Others take a broader view. For example, Davis and Blomstrom (1975) suggest that CSR requires business leaders to ‘take action which protects and improves the welfare of society as a whole along with their own interests’ (p. 6). Leaders are not just obligated to do so but are ‘to be held accountable for any … actions that affect people, their communities, and their environment’ (Post et al., 1986, p. 37). The European Union’s first Green Paper on CSR in 2001 defined CSR as ‘a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis’ (European Commission, 2001, p. 7). More recently, the EU defined the term as ‘the responsibility of enterprises for their impacts on society’ (European Commission, 2011, p. 6); that is, companies have a responsibility to mitigate their impact on the countries in which they operate. Husted and Allen (2006) consider businesses’ responsibilities to be even broader, describing them as ‘the obligation to respond to the externalities created by

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market action’ (p. 12), or in other words, helping mitigate the negative consequences of market capitalism in general (Frynas & Yamahaki, 2019). Yet another definition describes CSR as ‘the management of stakeholder concern for responsible and irresponsible acts related to environmental, ethical, and social phenomena in a way that creates corporate benefit’ (Vaaland, Heide & Gronhaug, 2008, p. 931). Unlike the others, this definition suggests that businesses engage in CSR activities for self-interest; that is, corporations develop CSR initiatives because it is in their best interest to do so. Prasad and Holzinger (2013), on the other hand, put the rationale for CSR squarely in the realm of ethics, arguing that CSR means ‘those actions that appear to further some social good, beyond the interests of the firm and that which is required by law’ (p. 1918). Despite the variations, a review of 37 CSR definitions did reveal five commonalities (Dahlsrud, 2008). Firstly, the definitions speak to the need to recognize all stakeholders in decision making. It is not enough to address only the concerns of employees and customers. Secondly, they talk about taking into account economic, environmental, and social issues/concerns. And finally, they stress that CSR is a voluntary undertaking on the part of businesses (Dahlsrud, 2008), suggesting that CSR is not simply compliance, but something over and above it. When it comes to CSR and marketing specifically, Murphy et  al. define CSR as: ‘Balancing the legitimate demands of stakeholders (namely customers, employees, environment, suppliers/ dealers, local community, and shareholders); accepting accountability for marketing decisions; and integrating moral and societal obligations into the firm’s marketing activities’ (2013, p. 92). CSR is clearly a normative concept since it describes certain voluntary societal responsibilities of a firm beyond economic and fiduciary duties. When combined with marketing, it applies to the impact of a firm’s marketing practices on society.

ETHICAL JUSTIFICATION FOR CSR IN MARKETING The literature on CSR has been traditionally separate from that of marketing ethics, although the two streams are merging especially in the area of marketing practices and societal impacts. Marketing ethics has been defined as ‘the systematic study of how moral standards are applied to marketing decisions, behaviors and institutions’ (Laczniak & Murphy, 1993, p. 2), while Murphy et  al. define

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ethical marketing as ‘practices that emphasize transparent, trustworthy, and responsible personal and/or organizational marketing policies and actions that exhibit integrity as well as fairness to consumers and stakeholders’ (2005, p. xviii).

Stakeholder Theory The uniting feature of CSR and marketing ethics is stakeholder theory, in which stakeholders are defined as ‘any group or individual who can affect or be affected by the achievement of an organization’s objectives’ (Freeman, 1984, p. 46). The theory postulates that organizations enjoying strong relationships with external parties will be better positioned to achieve their corporate objectives. A steel plant, for example, will face fewer local laws regulating its production facility if the community considers it a good corporate citizen. While CSR is an acknowledgement that businesses have an obligation to society at large, stakeholder theory assumes firms are only responsible to those with whom they interact, which helps limit the potential breadth of corporate responsibility to something more manageable. At its heart, CSR is about the role of corporations in society, and because it involves activities not legally required, it invokes ethical responsibilities. Arguments in favor of corporate managers having an ethical responsibility to society draw from several theories, including social contract, human rights, and human capabilities.

Social Contract Theory Under social contract theory, society consists of explicit and implicit contracts between individuals, organizations, and institutions. In return for producing goods and services that society needs, firms are granted certain rights of property ownership and the ability to conduct their business with limited oversight so long as they respect the rights of others and act responsibly. Acting responsibly includes things such as not polluting, paying workers a livable wage, and selling quality products at a fair price. Thus, businesses are evaluated not just on their financial success, but also on social dimensions such as job creation, the absence of consumer and worker exploitation, and the payment of a fair share of taxes (Arnold & Valentin, 2013). Companies not behaving responsibly in these areas run the risk of losing their social license to operate. One difficulty with the application of social contract theory to CSR is that businesses tend to respond to the needs of their

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consumers and disregard other stakeholders (Bauer, 2014).

Human Rights Theory While the idea of CSR is that corporations should use their considerable power to prevent harm and protect the rights of their stakeholders, the reality is that they often do not, especially if there is little incentive for them to. The result has been the emergence of a business and human rights movement at the global level, which has shifted the focus from stakeholder ‘needs’ to their ‘rights.’ Human rights theory is grounded in the idea that individual autonomy is worthy of respect and that all individuals should be respected by those persons or organizations with whom they have relationships (Arnold, 2010). Firms that act in a manner consistent with international human rights norms gain moral legitimacy (Arnold & Valentin, 2013). In 2011, the UN Human Rights Council called for business enterprises to respect the rights of all persons and endorsed a set of global guiding principles for business under the title, ‘Protect, Respect and Remedy’ (Ruggie, 2008). The principles are an extension of the UN Global Compact, a multi-year, strategic initiative to drive business awareness and action in support of sustainable development goals (UN Global Compact). Companies signing on to the Global Compact agree to operate in a way that meets fundamental responsibilities in the areas of human rights, labor, the environment, and anti-corruption. The human rights theory is especially important when it comes to marketing products and services to the moderately and extremely poor, those who survive on less than $2.00 per day. Some products, such as affordable clean energy sources, may improve the health and living standards of the poor. But others, such as sugary soft drinks and tobacco products, may harm health and divert income from more basic needs. Multinational companies selling products to the poor that do not empower and make their lives better should exhibit self-restraint to avoid violating or undermining basic human rights (Arnold & Valentin, 2013).

Human Capabilities Approach While the focus of human rights is on values such as freedom, dignity, and respect, a second, but related approach known as human capabilities highlights the importance of substantive freedoms and opportunities for individuals (Vizard, FikudaParr & Elson, 2011). Human capabilities focuses

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on ‘the real freedoms that people enjoy’ (Sen, 1999, p. 3), emphasizing the capabilities of individuals to lead the kind of lives they value (Enderle & Murphy, 2009). The approach emphasizes functional capabilities, such as the ability to live to an old age, engage in economic transactions, or participate in political activities. One of the strengths of this approach is its ability to be measured. The UN’s Human Development Index, which is a composite index of life expectancy, education, and per capita income, is based on factors that influence human capabilities. The impact of the human rights and human capabilities approaches can be seen in the expansion of CSR to include human rights considerations abroad. Frankental argued in 2001 that human rights were state concerns and therefore did not come within CSR because private enterprises are not signatories to UN human rights protocols. That meant that a British oil company with operations in Burma could claim in its annual report that it was politically neutral and a guest of the Burmese government, implying it was absolved of any responsibility to the Burmese people for their exploitation. But the UN’s position on human rights and the duty of businesses to uphold those rights means companies will no longer be able to turn a blind eye and pretend they are not responsible for human rights abuses. The change in position points out one of the difficulties in defining CSR. CSRs change over time as issues arise, and the public becomes more knowledgeable about them.

Ethical Obligations and Moral Development In attempting to find an ethical framework for marketing and CSR that would be capable of working globally, Enderle and Murphy (2009) argue that behavior is not simply ethical or unethical. Instead, there are levels of ethical obligation. Minimal ethical requirements are those that must be met under all circumstances. For example, companies should do what they can to avoid harming the environment. At the second level are positive obligations that determine good practices. Businesses have a certain amount of discretion in determining how to fulfill the obligation of protecting the environment. Perhaps they choose to reduce their use of plastic and move to recyclable packaging. The third and final level is aspirational. One aspires to ethical excellence. At this stage, businesses might work to incorporate environmental sustainability across all operations and functions. For example, General Motors is transforming how it approaches every aspect of its business in an effort to aspire to ‘a

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world with zero crashes, zero emissions, and zero congestion’ (General Motors, 2019). Some have argued that the increased concern for CSR on the part of corporations is a sign of the maturation of organizational moral reasoning (Mason & Simmons, 2011; Reidenbach & Robin, 1991). Although Kohlberg’s theory of moral development in individuals is not a perfect fit, its emphasis on stages of development and progression has been adapted to businesses. In these studies, the integration of CSR into the firm’s policies and practices is seen as evolutionary with companies going through three cultural phases: reluctance, grasp, embedment. In the reluctance phase, the organization clings to Friedman’s profit-maximization model, attempting to ignore external pressures to comply with CSR. In the second phase, that of grasp, CSR is employed but as a ‘value protector and risk minimizer,’ which fits with the enlightened selfinterest model (Mason & Simmons, 2011, p. 165). The third and final phase, embedment, represents organizational moral maturity akin to Kohlberg’s post-conventional stage in which moral reasoning is based on enduring ethical principles such that actions are assessed in relation to their impact on the well-being of others. At this level, organizations embed CSR ‘developmentally as a value creator and innovation stimulus’ (p. 165). The level of an organization’s moral development can be seen in the kind of marketing relationship the organization embraces. Companies still defining marketing in terms of an exchange relationship with customers are operating at the reluctance level of morality. Those that have embraced the stakeholder relationship definition have reached the level of grasp. The highest level of embedment requires companies to move beyond even relationship marketing to well-being marketing. Well-being marketing requires the organization to accept that it owes an ethical duty of care for stakeholders. It ‘combines a holistic view of the need to achieve customer satisfaction across the product/consumption life cycle with an acceptance that marketing activities should also contribute to social and environmental goals’ (Mason & Simmons, 2011, p. 167). Well-being marketing is premised on the idea that consumers are increasingly seeking greater morality in consumption. The adoption of wellbeing marketing and CSR is, then, a reflection of the maturity of a firm’s moral development.

CURRENT CSR LITERATURE Despite the inclusion of stakeholders in the definition of marketing and the prominence of the literature on ethics, much of the CSR research remains

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positive and instrumental in nature. That is, the studies explore how consumers respond to CSR activities, rather than looking at the practice of CSR through an ethical lens. The marketing research into CSR tends to be performance driven, even as corporate leaders have come to realize that ‘profitability measures, in isolation, fail to capture the essence of an organization’s overall performance, both as a profit-seeking entity and as a member of society’ (Joyner & Payne, 2002, p. 297).

CSR as a Variable In a review of articles from 1995 to 2005, Vaaland et  al. (2008) found that the marketing literature treated CSR as either a marketing tool or a barrier to the effectiveness of other marketing tools. CSR was used as a variable to assess its impact on consumers in terms of their attitudes toward the brand and purchase intention. Companies known for their CSR efforts tend to be rewarded financially, although critics of CSR claim the evidence is not overwhelming. Aguinis and Glavas (2012) argue, however, that the inconclusive results in terms of financial performance are the result of sampling error, unaccounted for mediators, and the use of different metrics. In 2009, Peloza (2009) found that 39 different measures had been used to assess financial performance. Regardless of the reason for the mixed findings, it is clear that ‘consumers reward companies that engage in CSR activities through positive evaluations’ (Karaosmanoglu, Altinigne, & Iskisal, 2016, p. 4162) of products and services as well as higher purchase intention (e.g., Branco & Rodrigues, 2006; Brown & Dacin, 1997; Dutta & Singh, 2013; Swaen & Chumpitaz, 2008; Tian, Wang, & Yang, 2011). Consumers do think more highly of firms that practice CSR, but the moral foundations and ethical ideologies of the consumers affect their perceptions of the company and its products. For example, Palihawadana, Oghazi, and Liu (2016) found that Vietnamese consumers with a high level of idealism, in the sense that they are concerned about the welfare of others, think positively about CSR and tend to be more aware of CSR as an important business activity. As a result, they evaluate the products of companies that are doing good deeds in society via CSR positively. Those consumers who have a high level of egoism, which means they prioritize their own self-interest over the community’s well-being, are not as influenced by CSR in their evaluation of the products.

Impact of CSR Domain Other scholars have explored whether the kind or domain of CSR activity affects consumer

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responses (Baskentli et al., 2019). Do consumers react differently, for example, if the firm is focused on the environment versus human rights? Drawing on research in psychology and marketing, one study explored whether the location of consumers on two moral dimensions – individualizing and binding – would impact their reactions to CSR activity. The individualizing foundation focuses on the rights and welfare of individuals and involves the ethic of autonomy, while the binding foundation emphasizes community and loyalty to the in-group and is the ethic of community and divinity. The study found that consumers with high individualizing moral foundations had higher identification with a brand engaged in individual-oriented CSR than with one engaged in group-oriented CSR. Similarly, consumers with high binding moral foundations had higher identification with a brand engaged in group-oriented CSR than with one engaged in individual-oriented CSR. But the participants in this study all viewed ethical lapses as equal violations of moral expectations regardless of where the person was located on the morality dimension and the domain of the activity. In other words, ethical lapses were seen as an indictment of the morality of the company regardless of the consumer’s ethical foundation (Baskentli et al., 2019). That finding supports the argument of Hafenbradli and Waeger (2019) that if a firm makes a moral case for its CSR efforts (it’s the right thing to do) as opposed to a business case (it’s good for business), it runs the risk of challenges and criticism of hypocrisy. Consumers may see corporate decisions not to invest more in CSR as not living up to the moral identity of the company.

Corporate Hypocrisy and Social Irresponsibility Such backlash surrounding CSR efforts led to the study of the effects of corporate hypocrisy and social irresponsibility (see Andersen & Hovring, 2019; Glozer & Morsing, 2019; Hafenbradli & Waeger, 2019; Kougiannou & Wallis, 2019). Some argue that hypocrisy, defined in this sense as the discrepancy between CSR talk and action, is the main reason consumers do not trust corporate social initiatives (Andersen & Hovring, 2019). One proposal to address the trust issue is communicative ethics. Communicative ethics calls for transparency and authenticity in communication. Treating stakeholders with respect and openly and honestly communicating with them regarding a firm’s CSR program will help

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avoid issues of hypocrisy (Andersen & Hovring, 2019). But especially on the global stage, dialogue with stakeholders can be difficult even when one has good intentions (Khojastehpour & Riad Shams, 2019). While it is recommended that all stakeholders be consulted before embarking on a CSR program, that recommendation ignores the potential conflicts and tensions that will result.

Rationale for CSR A 2012 meta-analysis of the literature on CSR published revealed that firms engage in CSR at the institutional level because of external pressure from stakeholders (Aguinis & Glavas, 2012). While the marketing literature focuses primarily on consumers, general business studies view stakeholders from a variety of perspectives. Stakeholders can be shareholders, consumers, the media, the local community, and interest groups, and belong to more than one group at a time. Their main motives for pressuring firms to engage in CSR are instrumental (i.e., self-interest driven), relational, and moral (Aguilera et al., 2007), and they apply pressure by impacting potential revenues, via customer reviews and purchasing behavior (Sen & Bhattacharya, 2001), and corporate reputation, via public statements from interest groups (Greening & Gray, 1994). At the organization level, firms engage in CSR primarily for instrumental reasons; they believe that CSR is good for business, for example. They may also be motivated by normative reasons reflected in their values, such as doing the right thing. Although, as mentioned, the connection between CSR and financial performance may be inconclusive, CSR has been shown to result in non-financial outcomes such as ‘improved management practices, product quality, operational efficiencies, attractiveness to investors, and enhanced demographic diversity’ (Aguinis & Glavas, 2012, p. 943). Finally, Aguinis and Glavas (2012) found that only 4% of the articles in the 17 journals included in their meta-analysis focused on the individual level of analysis. Those articles revealed that supervisor commitment to CSR is a predictor of employee engagement. Several normative motives influence CSR engagement, such as alignment to personal values and individual concern with issues. Regarding outcomes, involvement in CSR activities positively influences employee performance, behaviors, and attitudes. It also increases employee engagement, identification with the firm, retention, and commitment.

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CRITICISM OF CSR Although CSR is generally accepted as a business necessity today, it has its critics. Generally, the criticism can be divided into three categories: the lack of a clear definition and standards for CSR; reliance on corporate voluntarism; and distrust of corporate motives.

Lack of Definition and Standards Currently, CSR is left to the organization itself to define, which leaves it useless as an analytical tool and as a guide for decision makers (Blowfield & Frynas, 2005). Business managers are allowed to pick and choose the activities that best suit the corporation at any given time. Often environmental concerns are the first to be addressed because they can be incorporated into the corporation’s operations relatively easily. The reduction of packaging, for example, makes environmentally conscious consumers happy, thus improving the brand’s image, but it may also create efficiencies and help the bottom line. CSR in this case is simply something convenient for the company and not really grounded in a set of principles about what it means to be a responsible business (Bauer, 2014). This discretionary approach to CSR opens up companies to risk, ‘as evident in the numerous corporate lawsuits, protests, and strong international criticism directed at companies that do not pay adequate attention to all human rights’ (Bauer, 2014). The threat of lawsuits arises in part because, without a working definition of CSR and set standards that can be applied, corporations are open to being held accountable to a range of stakeholders. The 1998 Hampel Commission in the UK rejected the idea of multiple accountabilities on the basis that ‘accountability to many is accountability to none’ (Committee on Corporate Governance, 1998; Frankental, 2001). To do otherwise, critics argue, requires that ‘firms walk a fine line between reaping increased sales, goodwill, and positive publicity and incurring negative publicity and charges of exploitation of causes, especially in times of downsizing, layoffs and relocations’ (Varadarajan & Menon, 1988, p. 69).

Reliance on Voluntarism Most definitions suggest that CSR is, at a minimum, over and above mere compliance to laws and regulations. It is an initiative that

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corporations opt voluntarily to engage in for a variety of reasons. Frankental (2001) argues, however, that the voluntary nature of CSR will not work because the market does not reward ethical companies; therefore, firms have no incentive to be ethical. For market forces to change, and for CSR to work, companies would need to be audited according to not just financial performance, but also environmental and social factors, which would require a different legal framework than what currently is in place to regulate the market. Reich, in his 2008 book Supercapitalism, also called for more government regulation of CSRs. He argues that because consumers want inexpensive products, which are often made with cheap labor in ways that potentially harm the environment, they are too conflicted to serve as the ‘social responsibility’ watchdogs over business. The power of consumers and other stakeholders has certainly grown with the advent of social media, but it has not yet reached the point of providing adequate oversight of business. Nor are the most influential stakeholders always aware of the needs and rights of others being affected by business decisions. As Bauer (2014) put it, ‘society alone is not capable of articulating the full range of protections its members need.’

Distrust of Motives Ideally, a corporation should contribute to a cause because it is the right thing to do. What makes a decision or an action morally correct or worthwhile is not the effect it has or the consequences it produces, but rather the moral appropriateness of the intent, according to Wulfson (2001). She argues that businesses engage in ethical behavior for one of two reasons: one ethical in nature and one more ‘Machiavellian’ (Wulfson, 2001). The ethical motivation is a desire to do the right thing without external pressure or government constraint. The Machiavellian motivation has its roots in a desire to convince the stakeholder that the firm is doing the right thing. The firm’s goal is either to avoid legal consequences for its actions or to convince stakeholders the firm does have their best interests at heart. For example, beer companies advertising responsible consumption of beer make it look like they really care, when cynics would argue they are just attempting to avoid potential regulations by self-regulating. Using a social concern such as binge drinking as a means to sell more beer or avoid regulations adds to the mistrust and skepticism stakeholders have toward companies.

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Some critics believe corporations deliberately use CSR as a deflection to draw attention away from their socially irresponsible practices (Bauer, 2014). For example, research has shown that companies engaging in unethical or even illegal activities such as earnings manipulations, or who have poor product safety performances and poor environmental records, are more likely to engage in CSR than other firms (Prior, Surroca & Tribo, 2008). Those who question corporate motives for CSR also see it as merely discourse. It is a public relations tool meant to appease stakeholders at its best or a diversion at its worst. Viewing CSR this way suggests it is simply a fad that will ultimately pass. To critics who distrust corporations, ‘“doing well by doing good” is an illusory goal that is noble in spirit but unachievable in practice’ (Devinney, 2009, p. 45).

CONCLUSION: THE FUTURE Aguinis and Glavas, in their 2012 meta-analysis of CSR articles, identified gaps in our understanding of CSR. Firstly, existing studies come at CSR from one of three levels of analysis: institutional, organizational, and individual. In each case, different theoretical lenses are used. There is a need, then, for multi-level research that would integrate all three levels within an ethical framework. Secondly, little is known about CSR at the individual level. What are the predictors that influence individuals to carry out CSR activities? What are the psychological foundations of CSR? How does an individual marketing manager’s moral development play into their level of engagement with CSR? While stakeholder theory has been an important addition to the CSR and marketing ethics literature, theory needs further refinement to include social responsibility. Laczniak and Murphy (2012) argue that a socially inspired model of stakeholder theory would conceive ‘of the purpose of a responsible marketing firm as earning a competitive return on investment (ROI) for shareholders while always acting in an accountable and socially sustainable manner without causing damage to the physical environment or social exploitation of stakeholders’ (2015, p. 6). Similarly, the normative ethical frameworks need greater development. Rather than applying traditional ethical approaches such as utilitarianism and deontology to CSR and marketing, Laczniak and Murphy (2015) suggest looking to newer approaches such as Rawls’ theory of justice as fairness, Sen’s

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capability approach, and the dialogic communitarianism of Habermas. Encouraging more critical marketing studies that explore issues in CSR and marketing would be helpful in addressing some of the potential problematic outcomes of CSR. For example, to what extent is CSR being used to ‘maintain and reify the hegemonic authority of large corporations,’ especially globally (Prasad & Holzinger, 2013, p. 1915)? Questions such as these need to be addressed for CSR to become a truly ethical practice, and marketing must accept CSR as a crucial component inherent in the practice or be left behind. At the 2020 World Economic Forum, discussion centered on a new era of stakeholder-focused capitalism that is being led by a younger generation of employees and customers (Sims, 2020). It turns out that the debate over stakeholder value versus shareholder value is no longer a debate. Now the question becomes how to move from knowing about what is being called ‘conscious capitalism’ to doing it.

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22 Ethics in Financial Products Marketing Michelle Cull, Suzan Burton and Regan Lam

INTRODUCTION Ethics is essential in financial products marketing in order to build trust and loyalty with consumers. This chapter highlights the importance of ethics in financial products marketing through examining the consequences of unethical marketing practices as demonstrated by a string of recent international scandals involving financial products. The chapter also provides a model by which to examine these marketing practices. The first section of this chapter defines financial products and provides some context for studying the ethics of marketing financial products. This is followed by a discussion of the various theoretical approaches to marketing of financial products and the significance of the marketing of financial products where the consequences of unethical marketing can be particularly severe. The next part of the chapter examines a number of unethical marketing practices involving financial products, including recent reports of market rigging, misrepresentation, mis-selling and predatory sales practices. The interplay between regulation and ethics is then discussed and a model of ethical marketing is presented, and applied to the marketing of a range of financial products to help businesses ensure that their moral obligations

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to customers and to staff are appropriately considered in their marketing practices. The chapter argues that application of ethical marketing practices can drive strategic marketing actions and marketing campaigns for financial product providers that will engage and educate consumers, and which will provide better long-term outcomes for all stakeholders and for society as a whole.

CONTEXT Financial products can be defined as ‘a facility through which, or through the acquisition of which, a person makes a financial investment; manages financial risk or makes non-cash payments’ (Commonwealth of Australia, 2001b). While few businesses would admit that they would engage in unethical marketing of financial products, it is likely to be tempting for many businesses because it can certainly result in short-term financial gains. Some unethical schemes, like the one run by Bernie Madoff, who for 45 years ran what was ultimately found to be a $64.8 billion Ponzi scheme, can even result in long-term financial gains (Arvedlund, 2018). But in 2008, when what Madoff called ‘investment returns’ were

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shown to be financed by payments from other investors, Madoff’s investment company collapsed. Madoff was later convicted and sent to prison for life, and, a decade later, lawyers overseeing the firm’s liquidation were still chasing lost investments (Garcia-Navarro, 2018). Madoff’s scheme is of course extreme, but there are countless other examples where companies have been accused of unethical practices. For example, in August 2019, Harry Markopolos, the man who alerted regulators to his concerns about Madoff, accused General Electric (GE), one of the world’s biggest companies, of being ‘a bigger fraud than Enron’,1 because (he said) GE was understating its costs and liabilities and misleading investors in its financial statements (Marte, 2019). GE denied the charges, and counter-claimed that Markopolos was working with hedge funds that are ‘financially motivated to generate short selling in a company’s stock to create unnecessary volatility’ (Marte, 2019). However, GE’s share price fell 11% to $8.01, compared to around $12 a year earlier, and $30 at the start of the decade (Marte, 2019). Scandals are of course not limited to marketing financial products: many readers will have heard of Theranos, which became one of the most highprofile start-ups of its generation, with claims to have developed ground-breaking technology that promised to make blood tests more affordable, by avoiding costly blood draws by syringe (Keogh, 2019). However, the technology did not work, sales were overstated, investors lost US$700 million, and at the time of writing, Elizabeth Holmes, the company’s founder, is awaiting trial on criminal conspiracy and fraud charges, facing up to 20 years in prison (Fortson, 2019). But the consequences of unethical marketing are particularly severe in the area of financial products, where customer trust is usually essential for a business to survive. The next section presents a model of ethical marketing that can be applied to financial products to help businesses consider their moral obligations to customers and other stakeholders in their marketing practices.

THEORETICAL APPROACHES Chapter 1 has discussed the principles of ethical marketing, so this section will review that area only briefly, with particular emphasis on how ethical marketing relates to the legal requirements of an organisation, and its corporate social responsibility (CSR) principles.

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In most countries there will be some government legislation on what organisations can and cannot do in marketing. For example, in Australia, Australian Consumer Law (or the relevant legislation, the Competition and Consumer Act (2010)) restricts what businesses are able to do when dealing with customers. It is difficult to summarise those provisions succinctly (and how the legislation relates to business-to-business transactions), but the Australian regulations can be summarised as follows (Australian Consumer Law, 2019): • banning misleading, deceptive or unconscionable conduct in trade or commerce; • banning false or misleading representations, the supply of unsolicited goods or services, participating in pyramid schemes, and certain practices involving the display of prices, referral selling, harassment or coercion; • making unfair contract terms in consumer contracts void; • guaranteed consumer rights for buyers of goods or services, and national rules governing unsolicited sales transactions; • information standards about the information required to be provided by suppliers of consumer goods and of services; and • standards governing the safety of consumer goods and product-related services. As implied by the provisions of Australian Consumer Law summarised above, government regulations will often be very specific about what businesses can and cannot do in order to avoid financial harm to consumers. For example, before November 2019, Australian businesses could sell (or give away) gift cards with an expiry date as short as six months, with the result that many consumers forgot about them, and then some businesses would refuse to honour the cards. However, there was increased attention paid to gift cards after some high-profile business failures, including Toys ‘R’ Us Australia, which left customers with gift cards that were useless (since gift card holders become unsecured creditors in any ensuing bankruptcy) (Ibbett, 2018a). The Toys ‘R’ Us failure and similar problems of useless gift cards for businesses no longer trading led to increased attention to the problem of the limited validity of gift cards, where the business (even if still solvent) could refuse to honour an expired card. So 2019 amendments to Australian Consumer Law now require gift cards to have a minimum expiry date of three years – so what might have been considered an ethical responsibility of a business (to provide a reasonable time for use of its gift cards) is now a legal requirement. A longer time period doesn’t, of course, solve the problem of

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consumers finding that they have gift cards that can’t be used if a business goes bankrupt, and may arguably make it worse, since the longer time period removes the urgency to use the card (Ibbett, 2018b). So the lesson for consumers is that if you get a gift card, if you have any concern about the business’s viability, use it fast! In response to the importance of financial products, additional regulations apply to the marketing of financial products in most countries. In Australia, those regulations are outlined in the Australian Securities and Investments Commission Act 2001 (ASIC Act) (Commonwealth of Australia, 2001a) and, for example, ban pyramid selling of financial products, provision of unsolicited credit or debit cards and other misleading conduct in selling financial products. While regulations will vary in different countries, marketers need to understand what the relevant legal regulations are in each country in which they operate, to ensure that they are not inadvertently violating legislation that may be legal in one country (such as sending an unsolicited credit card to a customer) but not in another. Beyond the relevant government legislation, most professional marketing groups have a code of conduct or some other guide to ethical marketing. For example, the UK’s Market Research Society (MRS) has a code of conduct that includes 12 principles for MRS members (see https://www. mrs.org.uk/pdf/MRS-Code-of-Conduct-2019.pdf) as shown in Figure 22.1. The MRS code provides an excellent summary of ethical marketing practice, especially in the area of marketing research – the primary concern

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of MRS. However, ethical behaviour also needs to be considered in the context of what an organisation must do – its legal responsibilities – and what it should do – its ethical and CSR principles, as well as its responsibilities to its shareholders – its economic responsibilities. That balance is often depicted in a widely cited ‘Pyramid model’ of CSR (Carroll, 1991; 2016), as shown in Figure 22.2. The pyramid of CSR proposed by Carroll shows that a firm’s ethical responsibilities – including ethical marketing – go beyond what is required by law. In turn, the pyramid shows that an organisation should not use economic responsibility as an excuse to engage in illegal or unethical behaviour. The organisation has to do both, as well as consider its responsibilities as a good corporate citizen. Different organisations may reasonably have different answers to what is required to be a good corporate citizen, but most would agree that good citizenship includes respect for the environment, and respect for staff and customers, whatever their race, sexuality and religion (or lack of religion). In the following sections, we discuss the significance of ethical behaviour, and areas where ethical behaviour is particularly relevant to marketing financial products.

SIGNIFICANCE The issue of ethics in financial product marketing is not new. As early as the eighteenth century,

The principles of the MRS Code of Conduct: MRS Members shall: 1 2 3 4 5 6 7 8 9 10

Ensure that their professional activities can be understood in a transparent manner. Be straightforward and honest in all professional and business relationships. Be transparent as to the subject and purpose of data collection. Ensure that their professional activities are not used to unduly influence views and opinions of participants. Respect the confidentiality of information collected in their professional activities. Respect the rights and well-being of all individuals. Ensure that individuals are not harmed or adversely affected by their marketing activities. Balance the needs of individuals, clients, and their professional activities. Exercise independent professional judgement in the design, conduct and reporting of their professional activities. Ensure that professional activities are conducted by persons with appropriate training, qualifications and experience. 11 Protect the reputation and integrity of the profession. 12 Take responsibility for promoting and reinforcing the principles and rules of the MRS Code of Conduct.

Figure 22.1 The Market Research Society (MRS) code of conduct principles Source: Market Research Society (MRS, 2019), Copyright MRS, reproduced with permission

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Be a good corporate citizen Expected by society

Obey laws and regulations

Be profitable

Figure 22.2

Philanthropic responsibilities Ethical responsibilities

Legal responsibilities

Economic responsibilities

Desired by society Expected by society

Required by society

Required by society

Pyramid model of CSR

Source: Redrawn from Carroll (2016, p. 5)

Scottish financier John Law marketed shares for the Mississippi Company by exaggerating the wealth of the company, which led to economic collapse and what has been called the ‘Mississippi Bubble’ (Velde, 2009). Nearly three centuries later, some individuals, fuelled by greed, and typically assisted by the naivety of others, continue to choose to behave unethically. Particularly when others are unwilling to speak out against that behaviour, unethical behaviour can result in the types of high-profile scandals that have been widely publicised in the media. The importance of ethics in financial product marketing to prevent such behaviour (and its adverse results for consumers and society) is now more significant than ever due to the rapid increase in use of a wide range of financial products (e.g. shares, insurance, managed funds, retirement schemes, cash deposits, mortgages, personal loans, credit cards, consumer short-term loans, commercial loans and bonds). Further, with the market capitalisation of Standard and Poor’s (S&P) Index for the top 500 companies in the financial product and services sector valued at almost US$3.5 trillion (S&P Dow Jones Indices, 2019), unethical marketing of financial products that form part of this index can have widespread financial ramifications. Those ramifications can even be on a global scale, as shown by what has been variously called the 2007–2008 financial crisis, or the ‘Global Financial Crisis’ – a period of extreme stress in global financial markets where millions of people lost their jobs and the major advanced economies experienced their deepest recessions since the

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Great Depression in the 1930s (Reserve Bank of Australia, 2019). Recent examples of unethical practices in financial products marketing across a range of countries demonstrate the extent of damage caused by such practices. For example, since 2008, there have been over 29,000 complaints regarding the misselling of ‘Minibonds’ in Hong Kong, with inexperienced investors suffering losses in excess of HK$20 billion (Godwin, 2009). In the UK, more than 1 million complaints were lodged with the Financial Ombudsman in regards to the mis-selling of Payment Protection Insurance (PPI) which has resulted in banks announcing provisions of almost £49 billion to compensate customers (Makortoff and Collewe, 2019). In Australia, the 2019 final report of the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry estimated a ‘fee for no service’ scandal (where customers were charged for investment advice that they did not receive) would cost wealth managers and the major banks AU$850 million in compensation (Commonwealth of Australia, 2019). Other reports have estimated that total bank compensation costs in Australia will reach AU$10 billion (Eyers, 2019). While the financial consequences of unethical marketing of financial products are considerable, the non-financial repercussions are far more damaging, with reports of vulnerable consumers losing their family home and suffering significant mental health issues. At their worst, unethical marketing practices have led some consumers to attempt to take their own lives (Mitchell, 2018).

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Some of the ethical problems of the marketing of financial products spring from ongoing innovation in the industry, which, while offering valuable new products, can also lead to consumers buying or investing in financial products that they do not understand and which are unsuitable for their circumstances. For example, financial innovation has allowed some financial product engineers to exploit regulatory inconsistencies and create complex new financial products that are even difficult for the regulatory authorities to categorise (Knoll, 2008). The risks of these new financial products are often not understood by investors, highlighting the need for careful marketing of such products (Adams & Clunie, 2006). No one can say for sure how often businesses intentionally engage in unethical marketing, and it is likely that the vast majority of people working in marketing financial products attempt to practise ethical marketing. However, for whatever reason, unethical marketing of financial products, like the examples discussed above, has in some cases caused serious financial damage and the resultant well-publicised scandals have been responded to with government-led investigations, with some governments introducing regulatory reform as an attempt to mitigate unethical practices. However, despite the intervention of governments and regulatory authorities, unethical practices continue to occur. A discussion of these unethical practices follows in the next section of this chapter, followed by a discussion of the implications for businesses marketing financial products.

UNETHICAL PRACTICES Since legislation varies in different countries, as discussed above, practices that are illegal in one country may be accepted as normal practice in another. For example, marketing specifically targeting children is illegal in some countries, said to be unethical in others, and widely accepted in others. Another example is bribery, or what are sometimes called ‘Facilitation payments’. Many companies say that it is impossible to do business in certain countries without using bribery because the practice is common, even if illegal. In order to counter such arguments and limit US firms using bribery, under the Foreign Corrupt Practices Act, US companies and individuals are barred from paying bribes ‘or anything of value’, both within the USA and outside, and can be subject to criminal sanctions if they do so, or if they have knowledge of such actions and do not act (US Department of Justice and US Securities and Exchange

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Commission, 2012). There are exceptions under US law for ‘Facilitation payment’ – that is, payments made to speed routine government action, unless the country concerned (like the UK) bans such payments. Drawing a distinction between what is illegal and what is unethical is therefore sometimes difficult, so in the following section we discuss different types of business behaviour that are always unethical, and generally illegal.

MISLEADING OR DECEPTIVE ADVERTISING Although the precise definition will vary in different countries, most developed economies have regulations designed to protect consumers from behaviour, including advertising, which is misleading and/or deceptive. For example, the Bank of America agreed to repay US$727 million to customers in 2014, as well as paying a US$20 million penalty, after what was said to be ‘deceptive marketing’ of credit card products. The bank was also prohibited from marketing any payment protection or privacy protection products until it submitted a compliance plan to the Consumer Financial Protection Bureau (Truth In Advertising, 2014). In Australia, misleading and deceptive conduct relating to financial products is regulated by the Australian Securities and Investment Commission (ASIC) as part of the Corporations Act 2001 (Cwlth). ASIC has issued good practice guidance to help marketers comply with these legal obligations, including specific guidance for the use of different types of media (e.g. audio, film and video, internet, mass media and outdoor advertising) in promoting financial products, and more general guidance relating to returns, features, benefits and risks; disclaimers, qualifications and fine print; and fees and costs (Australian Securities and Investment Commission, 2017). Such guidance aims to prevent common forms of misleading and deceptive conduct in the marketing of financial products such as bait advertising, comparative advertising, and problems with fine-print qualifications that have occurred in the past. Over the years, ASIC has undertaken surveillance activity, issued warnings, and where appropriate had the courts penalise companies that have been found guilty of misleading and deceptive conduct in marketing financial products. For example, in 2005, ASIC monitored mainstream media advertising and direct marketing for superannuation (a complex form of retirement savings in Australia) to ensure that advertising was not misleading consumers.

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That investigation resulted in findings of misleading ‘comparative advertising’ and an enforceable undertaking for one organisation, Industry Funds Services, in relation to its ‘Compare the pair’ television advertising campaigns which made comparisons of industry superannuation funds using projections of retirement pay-outs which were not properly qualified (Australian Securities and Investment Commission, 2006). In another case in 2012, Australian Securities and Investments Commission v. Camelot Derivatives Pty Limited (in Liq) (2012), ASIC claimed that Camelot’s representations constituted misleading and deceptive conduct in breach of section 1014H of the Corporations Act because Camelot induced clients to engage in options trading based on misleading or deceptive statements about profits earned. Where advertisements require warnings, disclaimers and/or qualifications, ASIC provides that they should not be inconsistent with other content, including any headline claims, and should not be in fine print where a claim is less likely to be noticed and understood, as this may be misleading. For example, the executive general manager of the Commonwealth Bank of Australia (CBA) admitted before ASIC that the bank’s advertisements for life and trauma insurance were misleading, because they discussed how customers would be covered for a heart attack, but only revealed in the policies’ fine print that pay-outs were restricted to heart attacks of a specified severity (Thomson, 2018). In the 1990s, consumers were enticed by cash rewards and other incentives to use automated teller machine (ATM) withdrawals while details of excessive fees for these withdrawals were contained in pages of fine print which were not clearly communicated to consumers (Burgess, Shank & Borgia, 2001). Consumers were also being misled by offers from financial institutions to extend overdrafts which had excessive fees and high interest rates that were only disclosed in the fine print. Although many of these charges were avoidable, the abuse of consumers on such a large scale prompted the US Congress to develop consumer financial protection policies in response to misleading fine-print disclosures. This has led to the Consumer Financial Protection Bureau (CFPB) studying disclosure to ‘better inform policy makers about whether and how best to use disclosures to achieve policy goals’ (Johnson & Leary, 2017). Further, in 2019, the CFPB released a ‘trial disclosure sandbox’ to provide financial institutions with an opportunity to safely test disclosures that improve upon existing disclosures, while sharing data with the CFPB (Consumer Financial Protection Bureau, 2020). Kozup et al. (2012) found that sound disclosure results when policy

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is influenced by disclosure testing. Such testing may result in the disclosure being withdrawn from the marketplace or alternatively including additional educative material to make the disclosure more effective (Kozup et al., 2012). In some cases, advertisements are misleading because they promote features or benefits of financial products that are not available, available only for a limited time or only available to consumers who meet certain conditions, and the restrictions are not disclosed to the consumer at the time of the advertisement. An example of this type of misleading conduct, also known as ‘bait advertising’, is advertising a credit card as having a ‘low ongoing rate’ of 9.99% per year, and then, two months later, introducing a higher interest rate (of 13.99% per year) for cash advances associated with the same card, such as Aussie MasterCard’s advertisements on television and online (The Sydney Morning Herald, 2006). Concerns have been raised about misleading or deceptive conduct in the marketing and selling of digital or virtual tokens (e.g. bitcoin) via initial coin offerings (ICOs) (Australian Securities and Investment Commission, 2018a). Such offers have often contained significant risks for investors that were not disclosed or well understood (Australian Securities and Investment Commission, 2018b). As a result of the complex regulatory issues involved with this type of fintech innovation, ASIC issued an information sheet to explain the legal status of an ICO and the types of sanctions that may apply for misleading conduct (Australian Securities and Investment Commission, 2018c) and took action against an ICO offeror to protect investors where potentially misleading statements were found in the White Paper (Australian Securities and Investment Commission, 2018b). Although many countries attempt to restrict misleading and deceptive conduct through various legislation, financial product marketing should not only meet the legislative minimum requirement of not being misleading or deceptive, but also assist consumers to make appropriate decisions for their circumstances. That assistance may include how to seek further information about the product and its suitability to their needs. Professional marketing associations may also assist in this regard. While the Australian Association of National Advertisers (AANA) Code of Ethics, consistent with ASIC requirements, provides that advertising must not be misleading or deceptive (or likely to mislead or deceive) (Australian Association of National Advertisers, 2012), the code could go a step further by including a clause that goes beyond the standard regulatory requirement to encourage advertisers to consider how they might better assist consumers to make more informed decisions about financial products.

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Market Rigging Market rigging involves the unfair or illegal manipulation of prices in order to obtain a market advantage. This sometimes occurs through a practice known as collusion – where competitors knowingly cooperate in behaviour that is illegal in order to obtain mutual advantage. One of the most famous recent examples of market rigging is the LIBOR scandal, where major banks provided misleading reports of their cost of capital to profit from trades, and/or to give the impression that they were more creditworthy than they actually were (USA Today, July 2012).2 LIBOR estimates were manipulated by foreign exchange dealers (who discussed their plans in an online chatroom brazenly named ‘the Cartel’) to set rates that cheated customers, while adding to their own profits. The practice led to fines of close to US$6 billion for rigging foreign exchange rates, and the firing of the Chief Executive of Barclays Bank (which received the largest fine) and prosecutions of multiple other individuals (ABC News, 2015; Armstrong, 2018; Singapore Press Holdings Ltd, 2018). The LIBOR scandal shows widespread criminal conduct by multiple individuals at different banks, but one of the more surprising aspects of the scandal is how widely known the practice of giving false interest estimates was, and how many foreign exchange dealers became involved, leaving records of their illegal conversations on the chat section of their Bloomberg terminals (Roche Kelly & Ring, 2015). Rigging interest rates was apparently seen as normal within some banks, so traders and their bosses participated relatively openly in a practice that, when publicly revealed, left individuals open to criminal prosecution, and exposed their organisations to massive financial penalties. Organisations marketing financial products must therefore ensure that employees are not only aware that they should not engage in such practices, but also encouraged to do so by an organisational culture that might suggest such practices are normal (or even encouraged). That is easily said, but the lesson of LIBOR is also to ensure that there are adequate processes to prevent such practices – such as independent oversight and ongoing reinforcement to employees of the dangers of such activities.

Misrepresentation Misrepresentation of financial products can take many forms, from something as simple as the naming of the financial product, to complexities associated with the structure of the financial product and the disclosure of risk relative to returns.

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Examples of misrepresentation have been rife in the last decade, with one of the highest profile examples being a financial product manufactured by Lehman Brothers Asia Limited and marketed in Hong Kong under the name ‘Minibonds’. These Minibonds were misrepresented as a low-risk alternative to deposits and the risks and complexity of the product were not properly explained to purchasers. Many people who bought Minibonds apparently believed them to be ‘safe’, thinking Minibonds were similar to a term deposit offered by their bank. Many did not realise that the Minibonds were actually a Lehman Brothers product (which might have suggested that they were more complex than a normal bank product). In addition, the marketing of Minibonds involved a marketing leaflet and promotional gifts, including supermarket coupons, cashback, televisions, digital video recorders and cameras for certain levels of subscription (Yaping, 2009). According to the Hong Kong Monetary Authority (HKMA), such promotions appeared to be specifically designed to attract retail investors and encourage higher levels of subscription to attain the gift. Arguably, ‘these offers [served] as a distraction from the key facts and from the seriousness of the investment decision being made’ (Hong Kong Monetary Authority, 2009). When Lehman Brothers collapsed and investors found out they would not be getting any of their money back, there were huge daily protests (Young, Li & Chu, 2010) with reports of protests escalating into a security incident (Yaping, 2009). Up to 48,000 investors were affected, with many losing all of their life savings. In response, the Hong Kong Securities and Futures Commission (SFC) stipulated that issuers of retail financial products must ensure that marketing materials contain clear upfront explanations of the product and its risks (Securities and Futures Commission Hong Kong, 2008). In another case with parallels to Minibonds, in New Zealand, an investigation by the Commerce Committee of New Zealand’s Parliament found that deliberate misrepresentation of risks associated with high-risk investment products by New Zealand finance companies was partly responsible for the collapse of New Zealand finance companies between 2006 and 2012. Those collapses resulted in deposit holders losing in excess of NZ$3 billion (New Zealand Parliament – Commerce Committee, 2011). As with the Lehman Brothers scandal, the investors were unaware of the risks of investing in these financial products as they had been represented as ‘safe’. The collapse of the companies that issued the high-risk financial products ‘devastated many investors, and have had far-reaching consequences for their families.

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In wiping out people’s savings, the failures have harmed not only their livelihoods but, as we heard from many submitters, their health as well’ (New Zealand Parliament – Commerce Committee, 2011, p. 7). In both the Hong Kong and New Zealand examples of misrepresentation, it was the marketing of the financial products that led to a large number of unsophisticated investors (also known as retail investors, or consumers) purchasing a product that they otherwise would not have considered. While the disclosure requirements may have been met in the issue of the prospectus, it can be argued that it was unrealistic to expect that the average retail consumer would read and understand the details in these statements describing such complex financial products (Godwin, 2009). Instead, most investors seem to have relied on the information provided in the marketing materials. So even if the supply of disclosure documents meant the law was not breached, the marketing of complex financial products to retail investors would be viewed as unethical by many. Another example of misrepresentation that does not breach the law but could be viewed as unethical is some products marketed as ‘ethical’ fund investments when they may contain a proportion of investments that some consumers would not see as ethical. Ethical investing has grown in market size to around AU$1 trillion in Australia (Fernyhough, 2019), and ethical funds are marketed as investing in companies and products that are socially and environmentally responsible. To the general public, this presumably means that the fund does not invest in ‘unethical’ investments such as tobacco, armaments, gambling, alcohol, polluting businesses, etc. However, on closer examination of some of these funds, some contain a ‘hidden’ proportion of what would be seen as unethical investments (Kirby, 2006). Similarly, it is not always possible to determine where investment funds branded and marketed as ‘sustainable’ invest their funds because some do not fully disclose the companies in which they invest (Collett, 2019). While misrepresentation of financial products is an unethical practice that can take many forms, it is often, although not always, linked to misselling of financial products, which is discussed in the next section.

Mis-selling Mis-selling of financial products is often seen as the most unethical of practices in the financial services industry. It exploits consumers by deliberately

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selling them a product that is unsuitable for their requirements. Industry practitioners themselves even rated mis-selling as the most unethical and least necessary marketing practice (Chartered Accountants Australia and New Zealand, 2016). However, mis-selling of financial products has continued to plague consumers. The most publicised mis-selling scandals include the examples discussed above of misselling of ‘Minibonds’ in Hong Kong and Payment Protection Insurance (PPI) in the UK. A more recent example is that of the Commonwealth Bank, Australia’s largest bank, which at the time of writing is facing 87 criminal charges and large fines for allegedly breaching ‘anti-hawking’ laws (which aim to stop companies forcing useless, costly or inappropriate insurance or other financial products onto consumers) (Butler, 2019). Another insurer, ClearView, has admitted breaking anti-hawking laws more than 300,000 times (Danckert, 2018). The frequency of such illegal behaviour, which continued for years before being investigated by a major government enquiry – the ‘Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry’ – suggests that even after the lessons of the LIBOR scandal discussed above, large financial institutions are continuing to allow (and in some cases incentivise) staff to behave in illegal and/or unethical conduct. There have also been recent complaints in the UK of mis-sold loans to small businesses in the areas of travel insurance (Financial Ombudsman Service, 2019). There are also concerns about the potential for mis-selling customer data which will be used to ‘create new, more personalised types of financial products at lower costs’ (Megaw, 2019). Although there are currently no laws against the kind of mis-selling that might occur through the use of artificial intelligence technology to market financial products, this does not make the behaviour any less unethical.

Predatory Sales Predatory sales practices involve targeted sales campaigns that pressure consumers to buy products and which may encourage vulnerable consumers, often those subject to financial exclusion, to purchase financial products that are not entirely suitable for them. Predatory sales practices almost always put the consumer at a financial disadvantage. One example is what is sometimes called ‘payday lending’ – making short-term loans to consumers, nearly always at high interest rates, to allow them to cover urgent financial costs (or to

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get them through to ‘payday’). As explained by McLean in The Atlantic: Payday lending works like this: In exchange for a small loan – the average amount borrowed is about $350 – a customer agrees to pay a single flat fee, typically in the vicinity of $15 per $100 borrowed. For a two-week loan, that can equate to an annualized rate of almost 400 percent. The entire amount – the fee plus the sum that was borrowed – is generally due all at once, at the end of the term. (Borrowers give the lender access to their bank account when they take out the loan.) But because many borrowers can’t pay it all back at once, they roll the loan into a new one, and end up in what the industry’s many critics call a debt trap, with gargantuan fees piling up. (McLean, 2016, n.p.)

While not illegal in most countries, such loans are often said to be unethical because their high interest rates can push people in financial distress into even worse financial circumstances, since the fees for a payday loan can amount to as much as 990% of the amount of the loan amount (Kollmorgen, 2019). So an ethical organisation will not sell such products, especially since public disclosure of the payment terms, and of the financial distress that those terms can cause for customers, can result in enormous harm to the organisation’s reputation. However, should the organisation choose to include sound disclosure of the payment terms for such products, experimental evidence suggests that such disclosure may improve consumer comprehension and result in positive decision making, leading to less borrowing (Bertrand & Morse, 2011; Kozup et  al., 2012). Further research can help develop disclosures that consumers can identify with and understand for their decision making instead of disclosures that are technically compliant with the law but not understood by the consumer audience (Garrison et  al., 2012). This is further supported by empirical evidence from Nicholson, Skelton and Tarr (2019) showing that while legislated disclosure can improve decision accuracy, this type of disclosure is not often used by borrowers in decision making, with lender motivation also impacting on its use. Predatory sales practices have also been rampant in the life insurance industry. For example, in Australia, a number of complaints have been made to the regulatory authorities about funeral insurance sold to inappropriate clients, such as those under 20 years old. There have also been cases of financial advisors and/or insurance salespeople encouraging customers to switch their life insurance to a new company, which would then pay a commission to the person who recommended the new company. Some of those changes resulted in customers

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being inappropriately ‘sold’ new policies to replace their existing ones, with some claims for serious health incidents later rejected since the new policy did not cover medical conditions that had transpired between the time of taking out the original policy and switching to the new policy (but would have been covered had the customer remained with the original policy) (ABC, 2014). Predatory loans and other unsuitable financial products have also been sold to Aboriginal and Torres Strait Islander customers from remote communities in Australia through high-pressure selling tactics that preyed on the fact that such customers were excluded from accessing a wide range of financial products due to their remote locations and lack of internet access (Janda, 2018). Yet another example of predatory sales is Wells Fargo employees who opened unauthorised accounts for their customers in order to hit sales targets and receive bonuses (Kasperkevic, 2016). As predatory sales practices profit from targeting the vulnerable in the community, such practices are generally seen as unethical, but in some jurisdictions are now also illegal. The next section discusses the difference between regulation and ethics.

REGULATION AND ETHICS As Carroll’s (1979) pyramid of CSR suggests, businesses have four main responsibilities – economic, legal, ethical and discretionary (or philanthropic) (Carroll, 2016). Notable here is the distinction between legal and ethical responsibilities: in some cases, over time, the distinction between legal and ethical responsibilities has become blurred as legislation and regulatory codes become more prescriptive and seem to incorporate what would otherwise be classified as ethical responsibilities. However, while financial products are highly regulated, ethical behaviour is still required: if an organisation wants to maintain a good reputation, regulation is only a minimum standard of behaviour, as discussed in the next section. It is possible for marketing of financial products to meet the minimum legal requirements but still be unethical. For example, in Australia, legislation requires a product disclosure statement (PDS) to be issued to the consumer at or before the time that a financial product is offered for sale (Commonwealth of Australia, 2001c, s1012C). The PDS must include information such as the contact details of the issuer, costs, benefits and risks associated with the product as well as other fees, significant features, and tax implications or obligations associated with holding the product

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(Corporations Act, 2001d, s1013D). Although issuing a compliant PDS may meet legal requirements associated with the selling of a financial product, in reality many consumers do not read through the lengthy pages of a PDS before making a decision about a financial product. Instead, they are more likely to rely on marketing material that delivers a powerful emotional message as to why they should purchase the product. While some of this comes down to consumer financial literacy (New Zealand Parliament – Commerce Committee, 2011; Ricaldi, Finke & Huston, 2013; West et  al., 2013), financial product providers have an ethical responsibility to ensure that they are not taking advantage of vulnerable consumers. As stated by one consumer, ‘[customers] don’t want 20 pages of a PDS – they want honesty and care’ (Cull & Sloan, 2016, p. 24). This is where a distinction between regulation and ethics can be made: the regulation is the minimum standard that is met by issuing a PDS to the consumer, but the ethical standard involves actions that sit above the minimum standards, such as explaining the features, risks and benefits of a financial product in a way the consumer understands and can apply to their own individual circumstances. In response to many of the scandals over a range of financial products in the banking industry, the Australian Banking Association (ABA) has begun to make significant changes to the Banking Code of Conduct (commencing July 2019) in an attempt to add a ‘stronger commitment to ethical behaviours’ (Letts, 2018). As part of this new code, the ABA included a commitment to market fee-free bank accounts more positively, particularly to the vulnerable in the community, and to scale back on the marketing of consumer credit insurance for credit cards and personal loans. The new Banking Code of Conduct is the first industry code to be approved by ASIC, and is being used as a benchmark code across the banking industry for the Australian Financial Complaints Authority (AFCA) (Australian Banking Association, 2019). A number of professional marketing organisations whose members are involved with marketing of financial products also provide ethical codes for their members to follow (e.g. AANA, AMA, MRS). While these codes can be useful reference tools for marketing professionals, ethical theorists argue that such codes must be combined with a culture of ethics at an individual, organisational and inter-organisational level in order for ethical behaviour to exist (Taylor, 2017; Filabi & Bulgarella, 2018). After all, an organisation does not become ethical by signing up to a code alone. For example, firms making self-regulatory commitments to the Canadian Children’s Food and Beverage Advertising Initiative (CAI) to market

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food and beverages ethically to children on television were in fact found to have significantly more food/beverage promotions than the non-CAI firms and were also found to market a greater proportion of ‘less healthy’ options than non-CAI firms (Kent, Dubois & Wanless, 2011).

THE PLACE OF ETHICS IN THE FUTURE OF FINANCIAL PRODUCT MARKETING So what then is the place of ethics in the future of financial product marketing? Recent developments in the marketing of financial products, such as the ABA’s new code discussed above, have pointed to the responsibility to protect the most vulnerable in society, rather than exploiting their naivety and desperation as has sometimes apparently been the case. The future of financial product marketing is therefore likely to include fewer of the glossy brochures and clever television advertisements, and more of a personalised approach that focuses on the experience of, and service to, the customer, reflecting the concept that actions speak louder than words. The role of marketing professionals then becomes to educate consumers about financial products in a way that empowers the consumer and provides for better outcomes for all. It has also been suggested that further research and testing of disclosures can assist in this regard (Bertrand & Morse, 2011; Garrison et  al., 2012; Kozup et  al., 2012; Nicholson et al., 2019). Further, organisations need to ensure that an ethical culture permeates through all levels of their organisation. This may require increased scrutiny of marketing decisions so that attention is focused less on the organisation’s economic responsibilities (that tend to encourage self-interest) and more on its ethical responsibilities – a client focus. One way that this might be achieved is to include both measurement and reporting of ‘ethical’ key performance indicators (EKPIs) which could relate directly to an ethical target such as putting the customer’s needs first – for example, the type and number of customer complaints received, or the nature of social media comments posted (Chartered Accountants Australia and New Zealand, 2016).

CONCLUSION So what does the preceding discussion suggest about ethical marketing of financial products? Carroll’s pyramid of CSR (2016) provides a good

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summary of what managers must and should do. Firstly, organisations much consider their economic responsibilities – to staff, suppliers, shareholders and the broader community, as laid down in relevant legislation, because an organisation that does not fulfil its economic responsibilities is likely to suffer severe consequences, whether to its viability and/or to the reputation of the organisation and individuals involved. Economic responsibilities are usually closely associated with the second level of Carroll’s pyramid, legal responsibilities, because anything that violates legal responsibilities will typically threaten the shortand/or long-term profitability of the organisation. Ethical responsibilities are less absolute, because individuals can differ on what is the most ethical action to take at different times. For example, is it ethical to damage shareholder returns by terminating an employee who refuses to work as a team member and thereby harms overall productivity, instead working to maximise their own bonus? There is no clear answer, but leading management academic Robert Sutton discusses one organisation which fired the firm’s leading salesman, because he was hogging sales and would not share leads with other staff. After his firing, although nobody matched his sales level, overall store sales rose by almost 30% because everyone was cooperating more – as well as demonstrating effectively to all staff that collaboration was highly valued (Sutton & Wigert, 2019). So, organisations need to move beyond their economic and legal responsibilities, to consider their ethical responsibilities – to staff, customers and the community, as depicted in the two highest levels of Carroll’s pyramid. The ability to be ethical and engage in CSR activities relies on financial stability. However, financial stability assumes the organisation fulfils its legal responsibilities and engages in business and marketing activities that are based on ethical principles, and which engage consumers and build their trust in a way that is likely to increase customer loyalty. That way, businesses are more likely to provide better long-term outcomes for the business, its stakeholders and for society as a whole.

Notes 1

Enron was one of the USA’s top 10 companies before its share price collapsed and the firm was declared bankrupt in what was at the time the biggest corporate bankruptcy ever, after revelations that enormous financial losses had been concealed by complex accounting practices (Segal, 2019).

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LIBOR is the ‘London Interbank Offer Rate’, an interest rate benchmark based on estimates from different banks. Before the revelation that the rate was sometimes being manipulated for financial gain, the LIBOR was based on an average of interest rates quoted by financial traders at different London banks. The rate became particularly important during the 2008 financial crisis, when banks were under financial stress, and there were far fewer inter-bank loans (which would typically be based on the LIBOR). A bank could then make itself look more financially stable by quoting a high LIBOR (suggesting that its funds were very safe). At times when there were more inter-bank loans, quoting a higher LIBOR in one section of a bank could be used artificially to increase the revenue from a loan made by another section of the bank (ABC News, 2015; Davies, 2018).

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Carroll, A. B. (2016). Carroll’s pyramid of CSR: Taking another look. International Journal of Corporate Social Responsibility, 1(3), 1–8. Chartered Accountants Australia and New Zealand. (2016). A Question of Ethics: Navigating Ethical Failure in the Banking and Financial Services Industry. Retrieved from https://www.charteredaccountantsanz.com/news-and-analysis/insights/ research-and-insights/a-question-of-ethics Collett, J. (2019, 7 April). Super funds’ ethical options leave investors in the dark. The Sydney Morning Herald. Retrieved from https://www.smh. com.au/money/super-and-retirement/super-fundsethical-options-leave-investors-in-the-dark20190404-p51apg.html Commonwealth of Australia. (2001a). Australian Securities and Investments Commission Act 2001 (ASIC Act). Retrieved from https://www.legislation. gov.au/Details/C2018C00438 Commonwealth of Australia. (2001b). Corporations Act 2001, Section 763A. Retrieved from http:// www5.austlii.edu.au/au/legis/cth/consol_act/ ca2001172/s763a.html Commonwealth of Australia. (2001c). Corporations Act 2001, Section 1012C. Retrieved from http:// www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/ consol_act/ca2001172/s1012c.html?context=1; query=financial%20product;mask_path=au/legis/ cth/consol_act/ca2001172 Commonwealth of Australia. (2001d). Corporations Act 2001, Section 1013D. Retrieved from http:// www5.austlii.edu.au/au/legis/cth/consol_act/ ca2001172/s1013d.html Commonwealth of Australia. (2019). Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry: Final Report. Retrieved from https://financialservices.royalcommission.gov.au/Pages/reports.aspx Consumer Financial Protection Bureau. (2020, 6 January). Innovation: Trial disclosure sandbox. Retrieved from https://www.consumerfinance. g o v / a b o u t - u s / i n n o v a t i o n / t r i a l - d i s c l o s u re program/ Cull, M. & Sloan, T. (2016). Characteristics of trust in personal financial planning. Financial Planning Research Journal, 2(1), 12–35. Danckert, S. (2018, 24 November). ClearView faces criminal probe, The Age, p. 3. Davies, D. (2018, 28 June). How to get away with financial fraud. The Guardian. Retrieved from https://www.theguardian.com/news/2018/jun/28/ how-to-get-away-with-financial-fraud Eyers, J. (2019, 14 May). Bank compensation costs could hit $10b. Australian Financial Review. Retrieved from https://www.afr.com/companies/ financial-services/bank-compensation-costscould-hit-10b-20190513-p51mt6

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Fernyhough, J. (2019, 2 July). Ethical investments soar to nearly $1 trillion. Australian Financial Review. Retrieved from https://www.afr.com/companies/financial-services/ethical-investmentssoar-to-nearly-1-trillion-20190702-p5239b Filabi, A. & Bulgarella, C. (2018). Organizational culture drives ethical behaviour: Evidence from pilot studies. 2018 OECD Global Anti-Corruption and Integrity Forum. Retrieved from https://www.oecd. org/corruption/integrity-forum/academic-papers/ Filabi.pdf Financial Ombudsman Service (2019, 1 June). Missold travel insurance. Retrieved from https://www. financial-ombudsman.org.uk/businesses/ complaints-deal/insurance/travel-insurance/missold-travel-insurance Fortson, D. (2019, 24 March). Blood scandal that left a stain on Silicon Valley. Sunday Times: National, p. 6. Garcia-Navarro, L. (2018, 16 December). A decade after Madoff Ponzi scheme failed, money is still being recovered. NPR: Weekend Edition Sunday. Retrieved from https://www.npr.org/2018/12/ 16/677157666/a-decade-after-madoff-ponzischeme-failed-money-is-still-being-recovered Garrison, L., Hastak, M., Hogarth, J. M., Kleimann, S. & Levy, A. (2012). Designing evidence-based disclosures: A case study of financial privacy notices. Journal of Consumer Affairs, 46(2), 204–234. Godwin, A. (2009). The Lehman Minibonds crisis in Hong Kong: Lessons for plain language risk disclosure. UNSW Law Journal, 32(2), 548–586. Retrieved from https://www.austlii.edu.au/au/ journals/UNSWLJ/2009/32.pdf Hong Kong Monetary Authority. (2009). Report of the Hong Kong Monetary Authority on Issues Concerning the Distribution of Structured Products Connected to Lehman Group Companies. Retrieved from https://www.hkma.gov.hk/media/ eng/doc/other-information/lehman_report.pdf Ibbett, N. (2018a, 18 May). Far from the first-time consumers have been stung, The Sydney Morning Herald, p. 18. Ibbett, N. (2018b, 19 October). Gift cards often end up in the bin, but extending their life might not help. The Conversation. Retrieved from https:// theconversation.com/gift-cards-often-end-upin-the-bin-but-extending-their-life-might-nothelp-85592 Janda, M. (2018, 2 July). Banking royal commission hears of Indigenous financial ‘exclusion’, as farm hearings wrap up. ABC News. Retrieved from https://www.abc.net.au/news/2018-07-02/ banking-royal-commission-live-blog/9930510 Johnson, H. & Leary, J. (2017). Policy watch: Research priorities on disclosure at the Consumer Financial Protection Bureau. Journal of Public Policy & Marketing, 36(1), 184–191.

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Megaw, N. (2019, 30 August). After PPI, what could be the next banking mis-selling scandal? Financial Times. Retrievedfromhttps://www.ft.com/content/2abb8482c9b3-11e9-a1f4-3669401ba76f Mitchell, J. (2018, 11 October). Bank misconduct has led to suicide attempts: MP. Investor Daily. Retrieved from https://www.investordaily.com.au/ regulation/43774-bank-misconduct-has-led-tosuicide-attempts-mp New Zealand Parliament – Commerce Committee (2011). Inquiry into finance company failures. Retrieved from https://www.parliament.nz/en/pb/ sc/reports/document/49DBSCH_SCR5335_1/ inquiry-into-finance-company-failures-i1a Nicholson, G., Skelton, R. & Tarr, J. (2019). An exploratory study of regulatory failure in the Australian home mortgage market. Journal of Consumer Affairs, 53(1), 126–166. Reserve Bank of Australia. (2019). The Global Financial Crisis. Retrieved from https://www.rba.gov.au/ education/resources/explainers/the-global-financial-crisis.html Ricaldi, L., Finke, M. S. & Huston, S. J. (2013). Financial literacy and shrouded credit card rewards. Journal of Financial Services Marketing, 18(3), 177–187. Roche Kelly, L. & Ring, S. (2015, April 23). The most cringeworthy chat messages from the Deutsche Bank Libor transcripts: Could we pls have a low 6mth fix today old bean? Bloomberg. Retrieved from https://www.bloomberg.com/news/ articles/2015-04-23/the-most-cringeworthy-chatm e s s a g e s - f ro m - t h e - d e u t s c h e - b a n k - l i b o rtranscripts S&P Dow Jones Indices. (2019, 30 September). S&P 500 Financials: Factsheet. Retrieved from https://us.spindices.com/indices/equity/sp-500financials-sector Securities and Futures Commission Hong Kong. (2008). Circular to Issuers of Retail Investment Products. Retrieved from https://www.sfc.hk/edistributionWeb/gateway/EN/circular/openFile? refNo=H522 Segal, T. (2019, May 29). Enron scandal: The fall of a Wall Street darling. Investopedia. Retrieved from https://www.investopedia.com/updates/ enron-scandal-summary/ Singapore Press Holdings Ltd. (2018, 18 October). Two ex-Deutsche Bank traders convicted in Libor scandal. The Business Times. Retrieved from https://www.businesstimes.com.sg/bankingfinance/two-ex-deutsche-bank-tradersconvicted-in-libor-scandal

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Sutton, R. & Wigert, B. (2019, 6 May). More harm than good: The truth about performance reviews. GALLUP: Workplace. Retrieved from https://www. gallup.com/workplace/249332/harm-good-truthperformance-reviews.aspx Taylor, A. (2017). The Five Levels of Ethical Culture. San Francisco: BSR. Retrieved from https://www. bsr.org/reports/BSR_Ethical_Corporate_Culture_ Five_Levels.pdf The Sydney Morning Herald (2006, 12 August). Aussie Group in bait advertising concern. The Sydney Morning Herald. Retrieved from https:// www.smh.com.au/business/aussie-group-in-baitadvertising-concern-20060812-gdo5qh.html Thomson, J. (2018, 14 September). Regulator too chummy with CBA. The Australian Financial Review: First, p. 32. Truth In Advertising (TINA) (2014, 9 April). Bank of America to pay $727 million in deceptive marketing settlement. Retrieved from truthinadvertising. org: https://www.truthinadvertising.org/bankamerica-pay-727-million-deceptive-marketingunfair-billing/ US Department of Justice and US Securities and Exchange Commission. (2012). A Resource Guide to the US Foreign Corrupt Practices Act. Retrieved from https://www.sec.gov/spotlight/fcpa/fcparesource-guide.pdf USA Today (2012, 18 July). Libor scandal explained and what rate-rigging means to you. Retrieved from https://usatoday30.usatoday.com/money/ perfi/credit/story/2012-07-18/libor-interestrate-scandal/56322230/1#mainstory Velde, F. R. (2009). Was John Law’s system a bubble? The Mississippi bubble revisited. In J. Atak and L. Neal (Eds), The Origins and Development of Financial Markets and INstitutions: From the Seventeenth Century to the Present. New York: Cambridge University Press. West, J., Drew, M., Bianchi, R. & Walk, A. (2013). Financial product complexity and the limits of financial literacy: A special issue of the Journal of Financial Services Marketing. Journal of Financial Services Marketing, 18(3), 153–157. Yaping, X. (2009, 15 July). 48,000 ‘deep’ mini bonds Hong Kong banks suffered a crisis of confidence. China Securities Journal, China International News Center. Retrieved from http://www.china.com.cn/ economic/txt/2009-07/15/content_18138305.htm Young, A., Li, G. & Chu, T. (2010). The aftermath of the Lehman Brothers collapse in Hong Kong: The saga, regulatory deficiencies and government responses, Company Law, 31(11), 343–354.

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23 Consumer and Marketing Ethics: A Case of the Fashion Industry Srikant Manchiraju and Amrut Sadachar

INTRODUCTION The fashion industry is global in nature, which impacts all people because we all wear clothes based on our personal, social, or professional context of our lives (Hriscu, 2017). In other words, ‘fashion is an intrinsic part of human society and culture’ (Hriscu, 2017, p. 156). The importance of fashion in contemporary culture, society, and consumers has been noted (e.g., Atik & Firat, 2013; Cavusoglu & Dakhli, 2016). As Fogg expressed quiet succinctly on the importance of it: ‘fashion has always had cultural significance, implications, and associations, but in the 21st century, it managed to conquer more than ever with its fascinating and extensive mechanisms’ (2013, p. 13). As precisely expressed in an interview by Livia Firth (2019), who is the creative producer on ‘The True Cost’: ‘Fashion – i.e., what we wear every single day, has huge relevance and huge consequence on human, social, and environmental capital.’ Today, the fashion industry is highly globalized, and is an amalgam of a dizzying array of stakeholders and processes, from farming to clothing production to distribution to marketing and advertising (Hriscu, 2017). Also, the fashion industry has been labeled the ‘dirty’ industry for several reasons. For example, the production of fashion garments has been

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criticized for the effects on the environment, animal cruelty, labor exploitation, and pro-materialistic messages, among others (Cavusoglu & Dakhli, 2016). As such, the role of ethics is one of the biggest concerns in the fashion industry, as noted by Cavusoglu and Dakhli (2016). In fact, in recent years, there has been increasing attention toward ethics in the context of fashion (Manchiraju & Sadachar, 2014). For instance, according to the 2012 Ethical Consumerism Report, 42% of UK consumers bought ethical products compared to 27% at the dawn of the century (i.e., 2000). Likewise, in a large study, it was found that 60% of US consumers cared about ethical apparel products (Ryan Partnership Chicago/Mambo Sprouts Survey, 2012). Put simply, fashion ethics is gaining grounds on several frontiers. In this chapter, ethical consumption, marketing, and production (ECM&P) are conceived in the broadest sense, which is consistent with the complex nature of the fashion industry. Consistently, ECM&P is defined as activities that are consistent with one’s conscience, values, and morals (Reczek & Irwin, 2015). ECM&P covers a broad spectrum of fashion-industry-related issues from both consumption perspectives (i.e., consumer ethics) and production, distribution, promotion, and sales (i.e., marketing ethics). For the sake of clarity, ECM&P

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is used interchangeably with other terminologies employed in the consumer/marketing ethics literature, which include ‘responsible consumption’ (Fisk, 1973); ‘environmentally and ecologically concerned consumer’ (Kinnear & Taylor, 1973); and ‘ethical consumers’ (Strong, 1996), among others. We now focus on two aspects of ethics in the fashion industry, namely fashion consumer ethics (i.e., what is done by consumers) and fashion marketing ethics (i.e., what is done by fashion marketers to consumers) – both ethical and unethical issues engaged by consumers as well as producers or marketers. Firstly, we focus on topics related to fashion consumer ethics – overconsumption (including retail therapy), counterfeit fashion consumption, and collaborative consumption. Then, we briefly discuss the concept of ethical purchase gap from the perspective of consumers. Thirdly, we then focus on fashion marketing ethics related to environment well-being and social well-being. Finally, we list the criteria set forth by the Ethical Fashion Forum, which is widely regarded as an unofficial guideline for the fashion industry’s ethical practices goal and offer some concluding thoughts.

OVERCONSUMPTION Materialism. The average person purchases 60% more clothing items every year than they did 15 years ago and keeps it only half as long as they did then, generating a huge amount of waste (LeBlanc, 2019). The world now consumes approximately 80 billion new items of clothing every year and it is estimated that the average American throws away approximately 80 pounds (38 kg) of used clothing every year (LeBlanc, 2019). Thus, consumers can be considered as one of the main culprits for generating such an enormous clothing waste. Consumer values such as materialism, to some extent, can help explain the phenomenon of overconsumption. Materialism is defined as ‘the importance a consumer attaches to worldly possessions’ (Belk, 1984, p. 291). Noting the importance of materialism, Twitchell maintained ‘[o]f the 20th century’s various -isms, it has been the one that has ultimately triumphed’ (1999, p. 16). As a sociocultural phenomenon, materialism refers to cultures in which the majority of the people in the society value material objects highly (Larsen, Sirgy, & Wright, 1999). For example, the USA has been viewed as a highly materialistic society, more so than any other part of the world (Belk & Pollay,

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1985). As an individual phenomenon, materialism refers to a person who values material objects highly (Larsen et al., 1999). In other words, individuals who value materialism pursue material possessions and the accumulation of income and wealth (Richins & Dawson, 1992). For example, Myers (2012) mentioned a study conducted by the UCLA/American Council of Education that surveyed a quarter million collegians; the proportion of individuals who expressed financial success as very important to them grew from 39% in 1970 to 78% in 2009. Jackson (2005) posited that materialism poses a significant hindrance to sustainable consumption. In the context of fashion, O’Cass (2001) found a significant positive relationship between an individual’s materialistic inclination and fashion involvement (i.e., fashion’s centrality to one’s self-identity, Manchiraju, 2015). That means fashion-conscious individuals are prone to have higher materialistic levels. Furthermore, several researchers (e.g., Ashikali & Dittmar, 2012; Manchiraju, 2015) have noted that the fashion industry promotes materialistic lifestyles, to which consumers readily succumb (e.g., buying fast fashion1 that is dangerous, especially to environmental well-being but also social well-being through low-wage production systems). For instance, Manchiraju (2015) has noted that the fashion industry is one of the leading purveyors of American cultural ideals, namely ‘the body perfect’2 and ‘the material good life.’3 Echoing a similar sentiment, Guðnadóttir and Garðarsdóttir noted that ‘[fashion] media and advertising manage to create a seamless association between people with the “right” appearance and “right” material goods’ (2014, p. 2). In fact, recent studies (e.g., Manchiraju, 2015) have demonstrated that these two ideals were correlated, and the fashion and other industries’ depiction of such ideals can cause widespread consumer ill feelings (e.g., body dissatisfaction, decrement in self-esteem, developing materialistic attitudes, etc.). Consistent with the aforementioned proposition, Manchiraju and Sadachar (2014) found fashion-conscious consumers to be materialistic and more likely to engage in unethical consumption practices. At a global level, materialism leads purchase intentions toward counterfeit products (Davidson, Nepomuceno, & Laroche, 2019). This is discussed in detail in the following section. An empirical study conducted by Liu, Zhao, and Liu (2018) suggested that stressed people (i.e., individuals who experience higher levels of psychological stress) are more likely to tolerate unethical behaviors. More specifically, stress tends to increase the materialistic values that result in reducing the perceived severity of unethical behaviors (Liu et al., 2018).

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Retail Therapy. In the self-discrepancy theory, Higgins (1987) proposed that inconsistency between an actual and desired self-view generates many different types of emotional discomforts (e.g., anxiety, depression, and dissatisfaction). Consumers engage in certain behavior such as eating, shopping, and exercising when they need to relieve such emotional discomforts (Hess, Kacen, & Kim, 2006; Higgins, 1987; Tice, Bratslavsky, & Baumeister, 2001). It is estimated that about 6% of the US population suffers from buying–shopping disorder (Müller et al., 2019). Therapeutic shopping behavior (also referred to as retail therapy) is a consumption behavior that helps change a consumer’s negative emotional state to a positive one through the consumption of products and services (Atalay & Meloy, 2010; Kang & Johnson, 2011). Prior research (e.g., Kang & Johnson, 2010) suggested that therapeutic shopping is also associated with compulsive buying behavior. Compulsive buying is defined as ‘an abnormal form of shopping and spending in which the afflicted consumer has an overpowering, uncontrollable, chronic, and repetitive urge to shop and spend’ (Edwards, 1993, p. 67). Such habitual shopping results in purchasing unnecessary products (Bridgforth, 2004), and such shoppers suffer from financial problems. One such product that is a symbol of self-expression, often consumed as part of therapeutic shopping behavior, is clothing. Many consumers buy appearancerelated products such as a clothing item to reduce the discrepancies in relation to their physical appearance. Thus, such a type of consumer behavior contributes toward overconsumption of the clothing and fashion products.

COUNTERFEIT FASHION CONSUMPTION Counterfeit products go by several names, such as fake, copy, knock-off, and imitations, which have a slightly different meaning (Juggessur & Cohen, 2008). However, irrespective of the label used to describe counterfeit consumption, this is considered problematic at several levels, from the adverse effects on the company’s reputation to threating consumers’ health and safety (Juggessur & Cohen, 2008). In general, counterfeits are considered to be exact replicas of the original branded product, down to its packaging and trademark (Ang, Cheng, Lim, & Tambyah, 2001). In recent years, counterfeit consumption has grown exponentially (Davidson et  al., 2019). Furthermore, Davidson et al. (2019) found that when the counterfeit is not easily detected, materialism leads to positive

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purchase intentions toward counterfeit products, whereas materialism negatively predicts counterfeit purchase intentions when risk of embarrassment mediates this relationship (Davidson et  al., 2019). Thus, the acquisition of counterfeit products poses an ethical dilemma. Broadly, counterfeit goods are divided into two categories: (1) deceptive counterfeits (i.e., occurs when consumers assume that they are buying the real product but it is fake); and (2) non-deceptive counterfeits (i.e., occurs when the consumers recognize that the product is not authentic) (Grossman & Shapiro, 1988; Juggessur & Cohen, 2008). It has been maintained that counterfeit consumption is big business, with an estimated value of US$350 billion, and 7% of world trade is made up of counterfeit goods (Juggessur & Cohen, 2008). Typically, the majority of counterfeit products are fashion-related. As in Davies, Lee, and Ahonkhai’s (2012) study, consumers’ inclination to consider ethics is significantly lower when it comes to luxury purchases compared to some other commodity purchases. Some fashion luxury products (e.g., branded handbags, fur coats, and fashion accessories) are no exception to this phenomenon. Furthermore, materialism has been found to be positively associated with purchase intentions of counterfeit luxury fashion products (Yoo & Lee, 2009). Consumers engage in counterfeit fashion consumption for several reasons (Ha & Lennon, 2006). But, in general, the counterfeit consumption is propelled due to the low-price advantage of the counterfeit over the genuine product (Harvey & Walls, 2003). Therefore, consumers from lower socio-economic backgrounds may prefer counterfeit fashion products. Additionally, some consumers prefer counterfeit products due to the economic incentives they provide (Juggessur & Cohen, 2008). For example, these consumers do not view counterfeit products as an inferior option, but rather trade the low quality and poor craft expertise over the authentic product for the price (Albers-Miller, 1999). Yet, in some cases, the consumer of counterfeit fashion products sees no valid point in splurging big money on an expensive fashion product that will go out of style by the next fashion season. Thus, the purchase is rationalized from a utilitarian perspective. Typically, counterfeit fashion consumers are younger and earn considerably less than genuine product consumers (Tom, Garibaldi, Zeng, & Pilcher, 1998). Many consumers do not see the difference between the carefully crafted counterfeit product and the authentic product (Juggessur & Cohen, 2008). This might be one of the reasons why consumers continually engage in counterfeit fashion consumption because the associated risk

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(e.g., social risk such as embarrassment) is low when the counterfeit product resembles the original very closely (Albers-Miller, 1999). Additionally, some research (e.g., Wee, Tan, & Cheok, 1995) found that some consumers deliberately engage in counterfeit fashion consumption to criticize the fashion brands for selling their products at exorbitant prices. Hilton, Choi, and Chen (2004) argued that the counterfeit problem partly lies in the fashion industry itself. In sum, it is clear that consumers engage in counterfeit fashion consumption for several reasons (e.g., hedonistic vs. utilitarian) irrespective of their demographic profiles.

Fletcher (2007) first introduced the term ‘slow fashion.’ Some consumers are buying less and trying to get the most out of each piece they buy. If they know that they are not going to wear specific clothing items more than once or will wear it only on a specific occasion, they may not buy them in the first place but rather evaluate other options such as renting. This is where clothing rental and swapping services play a significant role. Thus, both collaborative consumption and slow fashion are considered as ethical consumption behaviors as a way to achieve sustainability in the fashion industry.

COLLABORATIVE CONSUMPTION

ETHICAL GAP

There are also positive (or ethical) sides to consumerism and consumption. Collaborative consumption, an increasingly prevalent form of exchange, is on the rise in recent years (Kim & Jin, 2020). Collaborative consumption (alternatively referred to as shared economy) is defined as ‘borrowing, renting, donating, swapping, and buying used, common, or idle resources in consumer or peer networks’ (Botsman & Rogers, 2011). The international market of collaborative consumption is expected to reach $335 billion by 2025 (PwC, 2015). There are numerous industry examples when it comes to collaborative consumption in the marketplace: for example, in other sectors, Uber (transportation service), Airbnb (a lodging service), and Rent the Runway (a clothing rental service). In the fashion industry, collaborative consumption can be categorized into two forms, online fashion rental services (e.g., Rent the Runway) and peer-to-peer platforms (e.g., Poshmark), that allow for the sale and exchange of goods (Park & Armstrong, 2017). Because collaborative consumption recirculates the goods (instead of manufacturing new ones), it also reduces the negative impact on the environment (Botsman & Rogers, 2011). Limited research (e.g., Belk, 2014; Kim & Jin, 2020; Park & Armstrong, 2017; Roos & Hahn, 2019; Sordi, Perin, Petrini, & Sampaio, 2018) has investigated collaborative consumption, which is considered a step toward more sustainable (i.e., ethical) consumption practices. It has the potential to reduce issues such as economic strain, resource depletion, and excessive waste (Botsman & Rogers, 2011). Collaborative consumption is most appealing to Millennials (Hwang & Griffiths, 2017). There is also a growing interest in slow fashion, which emphasizes quality through a slower production and consumption cycle (Jung & Jin, 2016).

In order to get answers to the question ‘why don’t consumers consume ethically?’ through a qualitative investigation of participants from eight countries (i.e., Australia, China, Germany, India, Spain, Sweden, Turkey, and the USA), Eckhardt, Belk, and Devinney (2010) found that consumers provided rationalizations for their lack of ethical consumption patterns. Three justifications emerged from their data, namely economical (i.e., consumers wanting to get the most economic value), institutional dependency (i.e., government and other agencies are responsible for regulating the circulation of ethical products in the marketplace), and developmental realism (i.e., corporations can become involved in some unethical behaviors so that macro-level economic development will occur). These rationalizations by consumers can be applied in the fashion context (unethical consumerism). For example, with the emergence of fast fashion, consumers are focusing on getting the most value for their money (economic rationale) by buying cheap and stylish clothes. Consumers think that government and other institutions (such as Environmental Protection Agency, United Nations) should monitor any circulation of products (e.g., counterfeit luxury fashion products, clothing that does not meet compliance standards) (Solomon & Rabolt, 2009). Lastly, it may be fine with consumers if branded apparel is manufactured in sweatshops in Third World countries because it gives such workers an opportunity to earn income in order to rise from their poverty (Manchiraju & Sadachar, 2014).4 Other alternative explanations for the ethical gap (i.e., many people profess they want to purchase ethical products, but only few actually act on this intention) are investigated in the fashion context (Manchiraju & Sadachar, 2014). For example,

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through a qualitative investigation, Wiederhold and Martinez (2018) found that there are barriers that impede the consumption of sustainable fashion. These are price, availability, knowledge, transparency, image, inertia, and consumption habits. For example, consumers often complain that the price of sustainable fashion is high. Also, often there are not many styles and colors available when it comes to sustainable fashion products in the marketplace. Manufacturers and marketers need to work on diminishing such barriers in order to fill the ethical gap.

FASHION INDUSTRY AND ENVIRONMENTAL WELL-BEING The production of clothing is energy-intensive, and apparel manufacturing processes use lots of natural resources. For example, to manufacture one organic polo shirt, Patagonia (a sustainable brand) uses 2,700 liters of water and generates 21 pounds (10 kg) of carbon dioxide, and other wastes (Chouinard & Stanley, 2012). These numbers are for a sustainable polo shirt. The numbers for regular polo shirts whose manufacturers do not make sustainability claims are even higher. There are some other concerning factors when it comes to use of textile fibers. For example, today, cotton represents approximately half of the total fiber used to make clothing. More than 90% of that cotton is now genetically modified, using a huge amount of water as well as chemicals (Pepper, 2019). Such cotton production techniques are even driving the pesticide and insecticide usage all over the world. Sustainability, defined as ‘meeting the needs of the present without compromising the ability of future generations to meet their own needs’ (World Commission on Environment and Development, 1987, p. 16), has gained popularity in recent years (Manchiraju & Sadachar, 2014). The Environmental Protection Agency (2015) and United Nations (2015) consider sustainability as a priority and have voiced their determination to protect the planet from degradation, including through sustainable production and consumption. In the apparel industry, a common driver for sustainability efforts is the joint concern for sustainable practices among apparel companies and consumers. Therefore, more and more apparel companies are investing their resources in sustainable apparel production, distribution, and sales. Ethical fashion refers to ‘fashionable clothes that incorporate fair trade principles with sweatshop-free labor conditions while not harming

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the environment or workers by using biodegradable and organic cotton’ (Joergens, 2006, p. 361). Likewise, Domeisen noted that ethical fashion encompasses ‘high-quality and well-designed products that are environmentally sustainable, help disadvantaged groups and reflect good working conditions’ (2006, p. 2). Clearly, one of the central aspects of ethical fashion is its relationship with the environment (Manchiraju & Sadachar, 2014). This should come as no surprise since the fashion industry is considered to be the second largest polluter on the planet after oil (Di Benedetto, 2017). For example, textile and fashion industries are resource-intense, which is contingent upon the supply of non-renewable natural resources (Cavusoglu & Dakhli, 2016). Additionally, the fashion industry is responsible for encouraging consumer overconsumption by providing cheap and low-quality clothing (e.g., fast fashion) that have a very high carbon footprint, which is detrimental for the environment (Goodwin, 2012).

IMPACT OF THE FASHION INDUSTRY ON ANIMALS In addition to the environmental impacts noted in the previous section, the fashion industry has also been accused of animal rights violations (Cavusoglu & Dakhli, 2016). For instance, animal-based materials (e.g., fur, wool, leather, etc.) have been used for clothing and accessories since the dawn of human civilization. Several brands and fashion designers (e.g., Dior) have used inhuman practices to acquire these animalbased materials. For instance, the fur industry (almost $40 billion global value) has undergone a lot of criticism in the past few years for its inhumane practices (George-Parkin, 2018). People for the Ethical Treatment of Animals (PETA), an international organization that focuses on four core issues (i.e., factory farming, fur farming, animal testing, and use of animals for entertainment), through its anti-fur campaign, has raised consumers’ awareness about animal’s suffering because of their luxurious furs (PETA, 2017). As a result of this, most recently, several luxury brands have taken an anti-fur stance to become crueltyfree. For example, Prada, Gucci, Chanel, Burberry, and the department store Macy’s announced that they will not be using or selling animal fur products starting in the year 2020 (Prisco, 2019). Concurrently, in recent years, there has been a rise in ethical fashion demand from consumers (Manchiraju & Sadachar, 2014). For example, in the only survey the present authors were

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able to locate, over 60% of the consumers surveyed wanted to purchase products from green or environmentally-friendly companies (Cavusoglu & Dakhli, 2016). Therefore, several brands are gearing up to cater for ethically produced fashion products to eco-conscious consumers. For instance, ethical labeling (Aspers, 2008; Bucklow, Perry, & Ritch, 2017) of fashion products helps consumers to find information about the ethical stance of the brand and make it easier to decide if they are willing to pay more to support fashion industry workers (discussed in detail in the following section) or other environmental causes (Cavusoglu & Dakhli, 2016). Similarly, several fashion companies (e.g., Tommy Hilfiger, Ralph Lauren, etc.) are refraining from using animal-based materials since animal rights activists and conscious consumers are demanding that brands refrain from using animal fur or leather in fashion clothing (Ramchandani & Coste-Maniere, 2017). Despite the fashion industry’s effort to care for environmental well-being, critics (e.g., Jo, 2011) contend that more needs to be done by the fashion industry and other sectors. With such a vision, the Sustainable Apparel Coalition (SAC), a leading alliance for sustainable production (Kozlowski, Searcy, & Bardecki, 2015), aims for ‘an apparel, footwear, and textile industry that produces no unnecessary environmental harm and has a positive impact on the people and communities associated with its activities’ (SAC, 2019). In order to measure environmental and social labor impacts across the entire supply chain, SAC has developed the Higg Index for all industry participants. By collecting data through the Higg Index (see https://apparelcoalition.org/ the-higg-index/), the apparel industry can analyze the inefficiencies, improve sustainability performance in its supply chain, and accomplish transparency (SAC, 2019). Several global brands and retailers (e.g., Adidas, Gap, Kohl’s, Nike, Patagonia, PVH, Walmart), manufacturers (e.g., Lenzing, Gildan, Du Pont, Avery Dennison), and academic, affiliates, government, and nongovernment organizations (NGOs) (e.g., American Apparel & Footwear Association,5 Cotton Incorporated,6 and Fairtrade7) are members of the SAC. Through their membership, these members gain access to essential resources to meet sustainability goals, share data and research results, and offer valuable suggestions for best practices. With the rise in internet and mobile shopping, where each and every item is packaged and shipped to individual customers, the fashion supply chain is facing challenges related to reverse logistics (Guo, Shen, Choi, & Jung, 2017) as 30% of all products ordered online are returned compared to 9% in brick and mortar stores (Saleh, 2019). This has become a major concern from

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the environmental sustainability point of view. From a ‘last mile’ (i.e., delivery of goods from local stores) perspective, Edwards, McKinnon, and Cullinane (2010) offered some insights into the carbon footprints of conventional and online retailing. They found that neither home delivery nor the conventional shopping trip have an absolute CO2 advantage. However, this scenario may differ if we add in the large number of returns that occur in online retailing compared to brick and mortar shopping.

FASHION INDUSTRY AND SOCIAL WELLBEING The fashion industry has come under close scrutiny in recent years with regards to several social concerns, from labor underpayment to labor rights violation, to child labor, and fashion model health issues, to mention but a few noted by Cavusoglu and Dakhli (2016). Di Benedetto (2017) noted that, compared to other sectors, the fashion industry has been slow to adopt the corporate social responsibility (i.e., providing some benefit to society) business model. Nevertheless, some issues, such as paying fair wages to laborers, community development, and addressing body image concerns, have seen some progress (Cavusoglu & Dakhli, 2016). Several incidents have revealed extremely poor and often unsafe working conditions for garment production workers, such as the deadly fire that occurred in Tazreen Fashions in Bangladesh in 2012 or the 2013 Rana Plaza collapse, also in Bangladesh, that killed over 1,100 people, mostly workers producing fashion garments (Barraud de Lagerie, 2016). The most recent incident that took place in New Delhi (India) killed 43 workers in a garment factory that caught fire due to faulty electrical wiring (Glover, 2019). Incidents such as these raise significant questions about the responsibility of global apparel corporations/retailers to ensure the safety of the facilities of their suppliers in developing countries and beyond (Peck, 2013). In the last two decades, major global apparel brands have started to monitor factories in their supply chain to ensure the codes of conduct regarding labor standards and working conditions (Dickson & Chang, 2015). Companies have included sustainability (environmental and social) criteria in their supplier evaluations (Winter & Lasch, 2016). No child labor, working hours, no forced labor, no discrimination, employment compensation, freedom of association, and health and safety practices are commonly used as social criteria, whereas end-ofpipe control (i.e., wastewater treatment systems)

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and environmentally-friendly materials are used as environmental criteria (Winter & Lasch, 2016). But many apparel manufacturers still use defensive and deceptive practices to do the minimal activity necessary to enable them to make environmentallyfriendly claims (Dickson & Chang, 2015). This situation is slowly changing, and some manufacturers who supply to global apparel brands have taken some world-class sustainable initiatives (e.g., The Wildlife Friendly Enterprise Network, Textile Exchange, and Regenerative Organic Alliance; see Cernansky, 2019). In the 1990s, sweatshop labor, which until then was a rampant practice in the fashion industry, was met with an international outcry from several stakeholders (Cataldi, Dickson, & Grover, 2010). Due to the anti-sweatshop movement that began in the 1990s, the fashion industry has addressed this issue to a certain extent. One of the consequences is that at least the multinationals that operate garment factories in developing countries have started paying fair labor wages (Lim, 2001). Likewise, several key players in the fashion industry have risen to the occasion by engaging in several cause-related marketing campaigns. Furthermore, the search findings related to causerelated marketing have found that such campaigns not only increase the brand image in a positive way, but also are beneficial for all the stakeholders involved (Lev, Petrovits, & Radhakrishnan, 2010). Consistently, charitable contributions by multinationals increased by 64% between the years 2010 and 2013, as noted by Cavusoglu and Dakhli (2016). Consistently, Kozlowski, Bardecki, and Searcy (2012) contended that the number of fashion brands that reported their corporate social responsibility initiatives has risen. One of the social concerns to have grasped the attention of consumers across the globe is that of fashion advertisements (Cavusoglu & Dakhli, 2016) – specifically, the role of physical beauty depicted in such advertisements. Research on fashion advertisements, which depict unrealistic and misleading images through Photoshop edits, indicates that when consumers are exposed to these images, feelings of inadequacy and harm to their self-esteem and psychological well-being may occur (Manchiraju, 2015). Some research studies have noted that exposure to thin ideals and unrealistic beauty standards causes body dissatisfaction (Manchiraju, 2015). Some scholars have also maintained that the fashion media are at least in part responsible for the widespread nature of eating disorders such as anorexia and bulimia (Smolak, 1996). The potential impact of fashion images and other idealized images were discussed in Chapter 12 of this Handbook. It is estimated that around 70 million individuals across the

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globe suffer from the eating disorders noted above (Cavusoglu & Dakhli, 2016). Consistently, although these social concerns are far from being addressed, the fashion industry is taking steps, and some progress is being made (Cavusoglu & Dakhli, 2016). For example, most recently, Victoria’s Secret promoted inclusivity in its new lingerie advertisements by including models who are plus size and transgender. Related to advertising and promotions, some of the apparel brands and retailers are accused of engaging in ‘greenwashing’, which refers to the practice of making unsubstantiated or misleading claims about an organization’s environmental impact (Berrone, Fosuri, & Gelabert, 2017; Huang & Chen, 2015; Laufer, 2003; Ramus & Montiel, 2005). Ethical issues around ‘green’ marketing claims were discussed in Chapter 18 of this Handbook. Environmental actions can serve as effective means for organizations to gain approval of their stakeholders (Berrone et  al., 2017), but not all environmental actions are effective. This is the case for those firms that do not take actions as expressed in their marketing and promotions and resort to greenwashing (Berrone et al., 2017) which can backfire. Walker and Wan (2012) investigated greenwashing measured as the difference between symbolic (i.e., green talk) and substantive action (i.e., green walk) from the financial gain point of view for firms. They found that green walk neither harms nor benefits firms financially, but green talk negatively affects their financial performance. This clearly indicates that if apparel brands and companies want to maintain their financial performance, they need to take substantive action (i.e., green walk) to address the environmental issues.

CONCLUDING THOUGHTS The fashion industry is a global and complex industry. In this chapter, we have described a few issues related to the fashion industry from consumer ethics as well as marketing ethics perspectives as such, and covered a few important topics ranging from the micro level (i.e., consumer) to the macro level (i.e., the industry’s impact). Several important issues pertaining to the fashion industry were raised, which include consumer materialism, counterfeit fashion consumption, fair trade concerns, social marketing issues, and promotion of impossible lifestyles, among others. After portraying some of the prominent issues that have become pervasive due to the fashion industry, we noted that the fashion industry has many ethical issues that need to be addressed. The Ethical Fashion Forum

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(2016) defines 10 criteria for ethical fashion, namely: (a) counteracting fast fashion and its damaging impact; (b) promoting fair wages, working conditions, and worker’s rights; (c) ensuring sustainable livelihoods; (d) avoiding harmful substances, such as toxic pesticides; (e) using eco-friendly materials; (f) reducing water usage; (g) recycling and incorporating energy efficiency; (h) supporting sustainable standards for fashion; (i) raising awareness on ethical behavior; and (j) promoting animal rights. Although there is some silver lining in this aspect, fashion companies have more to do. There has been some interesting trends with regards to the fashion industry and consumption in recent years, which include collaborative consumption, second-hand clothing, and stricter production and sustainability policies. We contend that the future of the fashion industry is bright, and many efforts are being taken to make it a more ethical industry. With time, it is possible that the fashion industry will be labeled an ‘ethical’ rather than a ‘dirty’ industry.

Notes 1

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5 6 7

Fast fashion refers to ‘designs (i.e., fashion) that move swiftly from runway to stores in order to capture the latest trends’ (Cortez, Tu, Van Anh, Ng, & Vegafria, 2014, p. 1). Examples of brands that practice fast fashion are H&M and Zara. The body perfect ideal refers to prevailing genderspecific, body shape ideals; in general, women want to be thinner and men want to be more muscular (Guðnadóttir & Garðarsdóttir, 2014; McCreary & Sasse, 2000). Whereas the material good life ideal refers to emphasis on affluence and luxurious possessions and lifestyles, which, in essence, define materialistic values (Dittmar, 2008; Kasser & Kanner, 2004). Several scholars (e.g., Dua, Kumar, Asli, & Bhavneet, 2006; Thompson, 2012) have noted the ethical ramifications of genetically modified crops and food. For instance, Dua et  al. (2006) noted the harmful consequences of genetically modified cotton on biodiversity and socioeconomic factors. https://www.aafaglobal.org/ https://www.cottoninc.com/ https://www.fairtradecertified.org/

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24 Ethical Considerations for Pharmaceutical Marketing C h r i s t i a n L o l k a n d C h a r l e s R . Ta y l o r

INTRODUCTION The pharmaceutical industry provides products that help sustain and improve the quality of life for billions of people around the globe (Kantor et al., 2015). While the exact extension of individuals’ lives might be difficult to quantify, there is consensus that humans, on average, live longer lives due to prescription drugs (Grootendorst, Piérard, & Shim, 2009). However, the production and commercial marketing of medications are controversial business topics rife with ethically charged considerations (Sillup & Porth, 2008). Indeed, few industries require the coordination of so many regulatory agents and links within the operations chain and result in a product that consumers depend on with the degree of trust required by pharmaceuticals. Some ethical controversies are introduced precisely because of the magnitude of benefit from medications. For instance, given that maladies are often indiscriminate of class or ability to afford treatment, there is an intuition that justice would entail access to affordable treatment as a human right rather than a commercialized commodity (Maitland, 2002). Different countries have responded to this consideration with a wide range of regulatory and governmental policy stances.

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However, some of the marketing impasses of producing and distributing medications are inescapable decisions corporations need to confront to conduct business (Danzon, Mulcahy, & Towse, 2015; Nguyen et al., 2014). The objectives of this chapter are to identify and review research on major issues related to pharmaceutical marketing and summarize the current state of affairs in terms of regulation and ethical views by way of noting prominent cases in the literature and discussing the underlying moral malignancies. The chapter also takes an internationally comparative approach, noting where the US and global market structures diverge on pharmaceuticals, and concludes with a forward-facing discussion of pharmaceutical marketing issues to come. The chapter begins by overviewing the stakeholders associated with the marketing of prescription drugs to set the backdrop for a survey of core marketing topics where ethical issues in pharmaceuticals have emerged in recent literature. The topics covered represent those most frequently investigated in this literature as well as those based on headlines of major ethical infractions from global companies, including a variety of issues in sales practices, an in-depth inquiry into direct-to-consumer (DTC) advertising, and overviews of privacy and pricing given modern technology and recent regulation.

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After reviewing the landscape of topical marketing ethics issues in pharmaceuticals, the chapter concludes with a discussion.

OVERVIEW OF STAKEHOLDERS As prescription medications can be either beneficial or harmful depending on the unique recipient and unique circumstances involved, many specialized stakeholders with competing interests converge in overseeing the production and distribution of drugs to ensure a controlled, safe, ethical administration of treatment. There are third-party payers such as the government, statutory health insurance funds, or private insurers; wholesale distributors; prescribing physicians representing their patients; dispensing pharmacists; and the governing bodies overseeing and taxing commerce (Kyle & Ridley, 2007). At each juncture between stakeholders, there are moral pitfalls within the need to communicate objectively and transparently to inform yet other stakeholders of the benefits and risks involved, all while achieving their own goals according to their function. Table 24.1, based on Kyle and Ridley, outlines the various interests reasonably expected for each stakeholder in question. Each of the outlined players pursues a specialized function and is obliged to industry reporting and regulation according to their goals, illuminating the complex and increasingly costly path medications follow from conception to consumption. It should be noted at the outset that the nature of the industry leads to a situation where vigilance

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is required. In providing examples of bad practice, the intent of this chapter is not to vilify the pharmaceutical industry and its employees, most of whom the authors believe largely behave ethically. Rather, the intent is to call attention to specific structural issues in the industry that lead to the need for considerable vigilance in avoiding unethical practices as in several contexts there are significant incentives for engaging in problematic practices that favor one stakeholder over another.

SALES PRACTICES Medical sales representatives (MSRs) operate in the space between direct prescribers and pharmaceutical producers, with the goal of maximizing market share for their product. These sales representatives have received considerable training and are large in number, now outnumbering physicians in the USA by 2.5 to 1 (Lyon & Mirivel, 2011). This investment is not only critical for cultivating effective penetration, but also necessary for negotiating ethically sensitive matters related to sales of pharmaceutical products. Indeed, since sales meetings with physicians can prove very influential in what medications doctors prescribe, and the implications for stakeholders are so grave, many regulations have been implemented to encourage savory communication practices (Chren & Landefeld, 1994; Wazana, 2000). Where other industries are afforded an opportunity to approach their market with creative and diverse value propositions, pharmaceutical companies must abide within tight protocols for

Table 24.1 Overview of Pharmaceutical Market Interests and Relationships from Producer to Consumer Stakeholder

Motive

Third-party payers

Acting on behalf of patients (consumers) Interested in reimbursement Distribution from production source to retail Eager to acquire from cheapest source Act as knowledgeable, informed surrogate for patients’ direct medical needs Usually follow a doctor’s direction re medication to dispense, act as local distribution outlet for pharmaceutical products Levy VAT, collect taxes on prescribed and pharmaceutical purchases Responsible for production of drug, including R&D and all phases of compliance Motive varies by country from maximizing profit to making an essential good available Receive the best treatment at the best price to promote personal health or manage a specific medical condition

Wholesalers Prescribing physicians Dispensing pharmacists Ministry of Finance (EU) Pharmaceutical company Patient/consumer

Source: Based on Kyle and Ridley (2007)

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communication practices, especially around drugs associated with any risks (Manchikanti et  al., 2012; Tarn et  al., 2006; Ziegler, Lew, & Singer, 1995). Thus, it is MSRs’ role to accurately convey safety information pertinent to the drug, specify the approved conditions for prescribing, and avoid grandiose claims while presenting their product in a positive light to the target market for increasing sales. Clearly, the temptation for deceitful or opaque sales practices exists, as examples found throughout the literature catalogue a variety of potential ethical violations for marketing sales practices, ranging from deceptive communications to accepting bribes and kickbacks, as discussed in following sections. In recent years, there has been a global trend toward stricter regulation of sales practices to prevent the tragic consequences that can occur when safety information is distorted and to ensure transactions are confined to promote the patients’ best interest irrespective of financial incentives (Lyon & Mirivel, 2011). Ultimately, the need for standardized communications with medications is to ensure Nilsen’s Standards of Significant Choice are upheld (Lyon & Mirivel, 2011). In ethical principle, consumers should be able to make free and fully informed decisions. The need for this is especially obvious when it involves the physical safety of the consumer, as through the health risks and implications associated with drugs.

OBSCURING RISKS AND SIDE EFFECTS Written Communication vs. Interpersonal Selling Although in most countries it is mandated that printed materials and online publications must be written to include figures that represent a full and balanced story for consumers to make up their own mind independently and for the information to be structured in specified ways to mitigate missing or biased information, notable contraventions have led to unfortunate consequences and drawn public ire. Consumers are more likely to read, remember, understand, and share written health information when they view the publisher as a trustworthy source, leading consumers to put their health in the hands of presumed treatment authorities (Bull et al., 2001). Lyon and Mirivel (2011) report that in one extreme case, an alleged 60,000 patient deaths are attributed to the period between 2000–2004 when a major global pharmaceutical company was accused of deliberately downplaying the risks of an arthritis medication, which ultimately ended up being pulled from the market due to its side effects.

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Other accusations of written communication deceit involve companies withholding negative study results, misrepresenting data, manipulating publications, and sidestepping independent oversight in the research process (Mulinari, 2016). While written communications can confer an authoritative source, they are subject to a level of review absent in interpersonal communication. In less formal dialogue, it has been observed that interpersonal communications between MSRs and physicians may leave the door open for deceptive or misleading communication practices (Ziegler et  al., 1995). For example, it is possible that unbecoming side effects or safety information can be deemphasized in favor of more positive points allowed through the expressive dynamics of dyadic conversation. Without the permanence of on-the-record printed presentations and scrutiny of review, interpersonal selling can allow for less regulated revelation of safety disclaimers and more focus on the orchestrated positive presentation of results in the context of sales promotion (Ziegler et al., 1995).

Off-Label Promotion Two types of illicit sales practices that sometimes occur in interpersonal conversations are the promotion of off-label and pre-label use. Off-label use is the prescribing of a medication to be used for treatment in a therapy area other than its directed and approved purpose. An example is found when a major pharmaceutical company pleaded guilty to promoting its epilepsy treatment for unrelated pain and psychiatric conditions (Kesselheim, Mello, & Studdert, 2011; Mulinari, 2016). Off-label promotion most commonly occurs when a treatment is used to target non-approved therapy areas, but it has also been asserted that pharmaceutical companies sometimes promote unapproved dosing schedules in favor of higher prescription volume (Kesselheim et  al., 2011). While this practice can naturally expand the market size of potential customers, such a practice of side-stepping regulation can come at a cost. In a record-setting violation, a global pharmaceutical company paid $3 billion in fines for promoting an anti-depressant for off-label use through interpersonal conversations between MSRs and prescribing physicians (Mulinari, 2016).

Corruption Beyond the potential for ethical issues in communications, the global pharmaceutical industry has made headlines for unfortunate instances of

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corrupt transactional exchanges in their sales practices as well (Mulinari, 2016; Witten, Parker, Holtmeier, & Koffer, 2008). Corrupt exchanges in the sales process can take several forms. When unethical behavior does occur, in some instances it may be sanctioned directly by the pharmaceutical company while at other times it happens at the discretion of sales representatives themselves, based on factors such as gain vs. loss frame of salesperson, high vs. low commission structure, loose company behavior control, and low perception of marketing norms (Hsu, Fang, & Lee, 2009; Lyon & Mirivel, 2011). Various forms of bribery are documented on a global scale throughout the literature and, at least in the past, have contributed to some perceiving a poor reputation for ethical standards and practices in the industry (Connors, 2009; Witten et al., 2008). Major global pharmaceutical leaders have been found guilty of corruption, including specific incidents where illicit payments through offshore banking was used to win business in Eastern Europe, Brazil, and China in 2012 incurring substantial penalties (SEC, 2012a; 2012b)

High-Prescribing Incentives and Kickbacks Another questionable practice is providing incentives for doctors prescribing a high volume of an ethical drug. For reaching certain preferred quotas of prescribing behavior, physicians may be offered either steep discounts or reward-like compensation packages. A recent example entailed Chinese prescribers being enticed to liberally dispense products with lavish gifts and extravagant entertainment (Katz, Caplan, & Merz, 2010). In a related vein, kickbacks are traditionally and culturally expected in many pharmaceutical markets even today and may come in the form of exorbitant gifts or entertainment (Hsu et al., 2009; Katz et al., 2010). There have been many documented incidences where kickbacks lubricate the rate and readiness with which prescribers reach for certain company’s products from their armamentarium depending on various levels of personal incentive. Gifts have been subject to significant debate and regulation in both developing and developed economies, leading to strict guidelines and self-regulation on proprieties of exchange in sales practices. In the USA, exchanged gifts are not to exceed $100 and occur infrequently, while small gifts benefitting the practice may be given with any regularity (Katz et al., 2010). However, nominal or minimas gifts have been shown to influence prescribing behavior nonetheless (Katz et al., 2010).

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Exchanges that mingle medication with incentives beyond fair market price lead to ethically worrisome conditions and a concern for patient interest. While some cultures may operate with reciprocity between supplier and distributor in certain industries, added incentivization can potentially contaminate objectivity in providing medical treatment to the ultimate consumer when it occurs in pharmaceuticals. More to the point, many studies have shown that when gifts are bestowed, humans inherit a sense of obligation or indebtedness with the gift (Gouldner, 1960; Katz et al., 2010; Mauss, 2002). Rather than having the ability to receive the best therapy they entreat their trusted providers to prescribe, it is highly problematic when patients are subject to distortions caused by negotiations between producers and local distributors.

DTC AND PRESCRIPTION DRUG ADVERTISING DTC prescription drug advertising refers to advertising that is targeted to consumers rather than doctors via some form of media, whether traditional media or the internet (Mogull & Balzihiser, 2015). Since DTC advertising was legalized in the USA in the 1980s it has been a source of controversy (Macias & Lewis, 2005). As of 2019, the only countries where DTC advertising is fully legal are New Zealand and the USA – and even in these countries, there are significant restrictions that include disclosure of side effects as well as balanced risk/reward information. However, residents of foreign countries where DTC is not prohibited can still have access to promotional materials online (Francer et al., 2014). The controversy from DTC advertising stems from different perspectives on its societal effects. Those who believe that the benefits of allowing DTC advertising outweigh the counter-arguments tend to focus on the ideas of providing consumers with information, including addressing undertreatment of some condition, allowing consumers to make more informed decisions, improving compliance with prescription, and improving relationships between doctors and patients (Auton, 2004). As noted by Auton (2004), those arguing that DTC advertising is beneficial to society believe the practice leads to several positive developments, including patients making more informed decisions, addressing under-treatment by informing consumers, improving the economic value of healthcare, improved drug treatment compliance, and improved relationships between doctors and

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patients. On the other side, those critical of DTC advertising believe that it: leads to patients pressuring doctors to prescribe drugs they do not need; harms the patient–doctor relationships; misleads patients, especially about the risks and benefits of drugs; and increases costs, thereby diverting funds from research and development. A review by Taylor, Capella, and Kozup (2007) suggested that, fundamentally, the debate over the ethics of allowing DTC advertising boils down to three underlying issues: (1) whether patients are better informed when exposed to DTC advertising vs. misled by it; (2) whether DTC ads contain a lack of balance that leads to misinformation about the drugs being spread, and whether costs and prices are raised by DTC advertising; and (3) whether DTC advertising raises prices. We now explore each of these issues drawing primarily on studies conducted in the 1990s and 2000s – times when general research on these issues was still able to make a new contribution to the literature.

Are Patients Better Informed or Misled by DTC Advertising? The issue of the impacts of DTC advertising on consumers has drawn widespread attention from regulators and academics alike. As detailed in Woodcock (2003), the US Food and Drug Administration (FDA) has conducted large-scale survey research on the topic. The FDA (2002; 2004) concluded that DTC advertising causes a majority of consumers to seek out more information on both the risks and rewards of prescription drugs as well as health conditions. A survey of 500 physicians conducted by the FDA found that a majority reported that DTC advertising played a positive role in their interactions with patients, leading to insightful questions and higher involvement in their own healthcare. At the same time a minority of the physicians indicated that they felt ‘very pressured’ (8%) or ‘somewhat pressured’ (20%) to prescribe a specific brand-name drug. These doctors reported that in such cases they suggested alternative measures such as prescribing an alternative drug with fewer side effects or a less expensive one (Woodcock, 2003). Consistent with these US findings, research from New Zealand from about the same time period, on balance, found support for DTC advertising informing rather than misleading consumers. For example, Hoek and Gendall (2002) analyzed consumer complaints about marketing practices and found that only a small proportion of complaints to the Advertising Standards

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Complaints Board were about DTC advertising. Coney (2002) reported contrary results, arguing that DTC ads do not provide quality information, but these findings pertained to only two specific examples of DTC advertisements. Meanwhile, Eagle and Chamberlain (2004), in a survey of consumers and doctors in New Zealand, found that 73% of respondents recalled seeing at least one DTC ad, but that only 9% were prompted to talk to a doctor about a medical condition they had not previously discussed. The authors reported that the percentage of doctors reporting ‘extreme pressure’ to prescribe a specific advertised drug was less than 1%. Subsequent studies have tended to support the idea that DTC advertising provides useful information. Main, Argo, and Huhmann (2004) conducted a content analysis of DTC magazine ads to determine whether such ads contained information and concluded that virtually all of the ads did contain information on the drug, the condition it is designed to treat, along with risks and benefits. White et  al. (2004) reported the results from a large tracking study that found that a substantial number of consumers seek out additional information when exposed to DTC ads, but that relatively few pressure doctors to prescribe drugs. In summarizing the literature, Huh and Becker (2005) concluded that prior studies found that DTC advertising led to more information-seeking about a drug, more discussions with physicians and pharmacists, and more communications with family and friends about the merits of a drug. They also concluded that consumers do not blindly rush to doctors asking for prescriptions, but tend to seek out more information from other sources, such as online research. In general, consumer and physician surveys have concluded that the US public has favorable perceptions of the advertising (Herzenstein, Misra, & Posavac, 2004; Mullner, Singh, & Smith, 2005). Moreover, Macias and Lewis (2005) found that web-based DTC advertising was viewed by the public to have educational value and to help consumers more actively participate in their own healthcare management. Additional research findings suggest that information associated with DTC advertising may improve under-treatment of some diseases and increase compliance, both of which can help lead to better health outcomes (e.g., Auton, 2006; Calfee, Winston, & Stempski, 2002). In sum, while not unanimous (e.g., Toop & Richards, 2003), the preponderance of research evidence from New Zealand and the USA supports the idea that DTC advertising provides beneficial information to consumers and that it is not misleading to large numbers of consumers.

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Are the Ads Themselves Balanced, or Do They Mislead Consumers about Risk/Reward? A considerable body of research has examined the balance present in ads between product risks and benefits. Historically, doctors were mainly responsible for communicating about the risks and benefits of prescription drugs via the learned intermediary (Wogalter et  al., 2002). However, concerns pertaining to increasing doctor workload and lower time spent per patient in the face of rising healthcare costs called reliance on this principle into question and DTC was positioned as a mechanism to help improve patient knowledge. From the inception it has been regarded as critical for information in a DTC ad to be communicated in a way that is clear and understandable, with much focus being on presentation format and ensuring that the information is balanced (DiMatteo & Friedman, 1982; Viscusi, Magat, & Huber, 1986). For example, when asked what kind of prescription drug information is in TV ads, 90% of respondents reported they saw drug benefits while 90% also said they saw drug risks or side effects (FDA, 2002). As a result, FDA regulations on format are quite strict, with 30 specific provisions for classifying an ad as misleading (Code of Federal Regulations 2000). The adequate provision of information and the fair balance doctrine are prominent among these provisions. Under the fair balance doctrine, advertisements are examined by the FDA to determine if an unbiased and balanced account of benefits and risks of drug usage are presented (Davis, 2000). Ad content is based on the product label and integrated with audio or both audio and visual elements. Prominence and readability play a major role in fair balance determination. For example, in a print ad context, font size and contrast are important determinants of whether the standards are met (e.g., Davis, 2000; Morris, 2001). A number of studies examined the fair balance requirement and have focused on optimal formats to get information across on both benefits and risks effectively (e.g., Morris et al., 1989). For example, Morris, Mazis, and Brinberg (1989) found that longer risk messages improve awareness and specific risk information is better recalled than general risk information. Wogalter et al. (2002) found that risk information is better recalled when information on the risks and benefits is separated and found that benefit information was more easily remembered, which they attributed to a ‘polyanna effect’ or tendency to recall positive information more easily. FDA surveys of consumers generally have shown that consumers believe that DTC ads

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show balanced representation of product benefits and risks (FDA, 2002). Some research remained focused on very specific aspects of balance, such as a study by Day (2004) that found that broadcast ads conveyed risk information in fewer sentences while using more difficult words. Yet, Kaphingst and DeJong (2004) found fewer benefit facts per second than risk facts. In general, researchers have emphasized the importance of making sure that both are recalled. Meanwhile, survey evidence bore this out. While there are some conflicting findings on design features of the ads and how they influence comprehension, the weight of the evidence clearly suggests that consumers process and recall both benefit and risk information in the USA. Findings from New Zealand also generally support the idea that balanced presentation gets through in spite of regulation relying on guidance for information provision instead of fair balance, though some critics have suggested that the ads are weighted more toward benefits (Hoek & Gendall, 2002; Hoek, Gendall, & Calfee, 2004). Critics argue that the lack of a fair balance standard in New Zealand has resulted in advertisements that are weighted toward product benefits. A survey of New Zealand consumers found that 80% of respondents supported more effective risk disclosure in prescription drug advertisements (Hoek & Gendall, 2002).

DTC Advertising and Prices Consistent with general debate about the economic effects of advertising, some believe advertising has the net impact of raising consumer prices, while others argue that advertising lowers prices (Farris & Albion, 1980). If the former proposition was true and advertising raised prices, a strong ethical argument could be made in favor of banning DTC advertising. Critics of DTC advertising assert that advertising in medical journals along with product sampling and personal selling are sufficient. In a review of prior studies, Kaul and Wittink (1995) found that, in general, studies had found that prescription drug advertising did not have a significant impact on prices, but that the finding was not undisputed. Subsequently, only a limited number of studies have addressed the impact of prescription drug advertising on prices. Three such studies conducted in the USA, namely, Berndt et al. (2007), Gonul et al. (2001), and Narayanan, Desiraju, and Chintagunta (2004), found no support for the idea of advertising raising prices, but reported mixed results for other types of sales promotion. Some subsequent studies focused specifically on price elasticity. For example, Bhattacharya and Vogt

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(2003) proposed that more advertising is done early in a pharmaceutical product’s life cycle and that it is typically raised later after patent expiration in an effort to be able to retain a shrinking number of consumers who are willing to pay a higher price. The study thereby supported the view that DTC advertising decreases price elasticity. Some additional studies have examined the effects of DTC and other promotional advertising on prices. Rizzo (1999) analyzed anti-hypertensive drugs in the USA over a 15-year period and found that advertising did not affect price but that personal selling directly to doctors resulted in higher prices for consumers. Manning and Keith (2001) analyzed data from the National Institute for Health Care Management from 2001 and found that a rank ordering of brands based on DTC was not significantly related to percentage increases in cost per prescription. A large-scale study of brand-name drugs across five major therapy classes by Capella et al. (2009) found no significant relationship between DTC advertising and price elasticity in any of the five categories. The authors concluded that there is a lack of support for the notion that consumers pay higher prices as a result of DTC advertising. In general, the overall evidence appears to support the idea that DTC advertising does not impact prices significantly, though other forms of promotion may.

PRIVACY ISSUES Another major ethical concern in the prescription drug arena is the degree to which companies can collect information on consumers for marketing purposes. A long-standing point of contention relates to situations in which consumers are asked to voluntarily enter information about themselves while seeking information (e.g., LaRose, Rifon, & Enbody, 2008). A potential privacy issue arises when information collected from consumers is shared among healthcare providers, pharmacies, insurance agencies, and potentially even marketers in other categories. Some practices are generally regarded as crossing ethical boundaries, such as selling patient medical records or using purchased medical records to which an individual did not consent in employment decisions (Baumer, Earp, & Payton, 2000; Choy et al., 2001). A notable accidental breach occurred in 2001 when a pharmaceutical company inadvertently released the names of patients taking anti-depressants (O’Harrow, 2005). It was also found by the California Health Care Foundation in 2000 that

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some companies did not follow their own privacy policies and that a third-party company had monitored and sold information reviewed by customers on websites with policies against date resale without consent. Attention to privacy issues in pharmaceutical marketing has accelerated over the last few decades as many consumers have sought out information online, including websites focused on healthcare, and including those that allow consumers to share information with each other (e.g., Goldman & Hudson, 2000). Cline and Haynes (2001) reported that, as of 2001, more than 50 million people sought out healthcare information online on 70,000 websites. The perceived problem pertaining to these websites is that some consumers may let their guard down in sharing information when in an environment they see as being designed to help them gain information about their care or that of a loved one. Ironically, consumer responses to privacy issues on the internet have been described as a paradox (LaRose & Rifon, 2007). On the one hand, consumers report being concerned about the privacy of their medical information (Choy et  al., 2001; Fallows, 2005; Metzger & Doctor, 2003; Westin, 2003), but on the other hand these concerns do not appear to stop most consumers from voluntarily sharing detailed personal information or effectively encourage the use of online privacy seals (Norberg et al., 2007; Rifon, LaRose, & Choi, 2005). A major focus of research on website privacy in the USA has been on whether health websites fully comply with the Federal Trade Commission’s Fair Information Principles (LaRose, Rifon, & Enbody, 2008; Ryker et al., 2002). In general, it has been found that a significant number of websites do not comply with the FTC guidelines. Personal privacy statements (PPS), which are detailed descriptions of how a website collects and uses information gathered from visitors (Sheehan, 2005), are present on many sites, but some research has found that this does not always lead to compliance with FTC guidelines. This led at least six trade associations in conjunction with professional associations, such as the American Medical Association, to put forward a self-regulatory code, but questions remain about the overall effectiveness of regulation in this area. Kim (2015) conducted a comprehensive study of all 179 warning letters and notices of violation sent by the FDA to companies during a 10-year period and found that most violations related to advertising on the brand’s own website, in paid online ads, or in online videos. In terms of the nature of the violations, lack of risk information and misrepresentation of efficacy were the two most common categories. These findings are suggesting of fair balance remaining an issue in

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online advertising of prescription drugs. As with other marketing-related regulatory issues, it is apparently taking regulators some time to catch up with practices on this comparatively young medium. There is little doubt that consumers do have serious reservations about the sharing of healthcare information. Goldman and Hudson (2000) report that one in five consumers in a national survey believe their health information is misused and that another survey showed that 75% of consumers are concerned about health websites sharing their information. A Pew study in 2001 found that 60% of a large sample of US adults did not want physicians, healthcare organizations, or insurance companies using the internet to keep track of their medical records (Bruckel & Capolozzoli, 2004). The research suggests that Canadian consumers have similar concerns about information being shared online, but a majority still felt the benefits of computerization were higher than the risks of losing confidentiality (Albinsson & Perera, 2011). In general, patients who access major sites such as PatientsLikeMe report high satisfaction with what they learn on the sites, again creating a level of trust that some believe can lead to lowered concern about privacy issues.

PRICING ISSUES Due in part to the complicated considerations involved in pricing any commodity, much less a good as anomalously categorized as health services, in some circles the industry is referred to pejoratively as ‘Big Pharma’ with an accompanying reputation for excessive pursuit of profits (Spinello, 1992). Further tangling the issue, a purely free-market American model of pharmaceutical innovation and enterprise sits in contrast with a mostly subsidized or government-regulated global alternative. In considering the marketing ethics for pricing pharmaceuticals, it is effective to review the primary types of ethical objections encountered when setting prescription prices in a free-market system, followed by a deeper analysis of the specific arguments for and against these positions. Unlike consumer commodities such as coffee, autos, or sneakers, prescription medications are perceived as fulfilling a vital service and therefore confer a common impression that they should be accessible irrespective of socio-economic privilege (Maitland, 2002; Menon & Giridhar, 2018). Some, including the editor emeritus of the New England Journal of Medicine, Arnold Relmer,

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go so far as to suggest that healthcare is a public good rather than an economic commodity (Maitland, 2002). This view considers medication to be a human right and argues that access should be based solely on need rather than ability to pay. Another related approach taken to oppose the US-style free-market pharmaceutical pricing scheme rests on the perception that profiting based on the suffering of others is fundamentally wrong. That is, illnesses and ailments are not opportunities for private entrepreneurs to create solutions and gain a profit in the process, rather human needs that deserve treatment as a natural right. Beyond the ostensible impropriety of profiting by way of others’ illness, there are economic complications in considering the bargaining power of stakeholders and the inherent worth of the goods being traded (Parker-Lue, Santoro, & Koski, 2015). In this view, monetizing health and wellness, or even life itself, is an exercise beyond the jurisdiction of free-market equilibrium. Regardless of the potentially priceless nature of life itself, the stakeholder seeking medical treatments is minimally in a compromised bargaining position of ‘desperate exchanges’ and not able to make a freely informed, rational decision considering the life-altering alternative (Maitland, 2002). Many European and Asian economies have side-stepped these ethical charges by opting away from a purely free-market pharmaceutical sector in favor of state-subsidized production. (Danzon et  al., 2015). Operating as the nucleus for pharmacological innovations, the US model of drug production does exist in contrast to many government-regulated European and Asian alternatives wherein maximizing share value is a major incentive for continued drug development (Paris & Belloni, 2013). The industry, driven by innovation, has, no doubt, had some very positive societal impacts, including increasing life expectancies and producing a variety of new products that improve quality of life and/or relieve pain. A relatively recent example is the effective development of drugs used to treat HIV/AIDS, moving its diagnosis from being a death sentence to one of a normally treatable disease. It also is commonly asserted that high profits are necessary to be able to make massive new investment in research and development. Moreover, many new products fail, leading to the argument that those that succeed must generate profit for companies to survive. Yet, accusations of excessively high profit margins, rapid price hikes, virulent patent tactics, and profiting from the sale of a vitally needed product, all confer the unpopular connotations associated with pharmaceuticals (Maitland, 2002). Looking past an intuitionist model reaction presents challenging ethical

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considerations to untangle. Here, the ethical prescriptions of distributive justice are noted in contrast to historic pitfalls for the pricing practices of pharmaceuticals and the regulations imposed by industry and government are discussed. A core principle of capitalist markets is high risk, high reward. If the maxim holds on scale, one perspective is that the high profit margins realized by pharmaceutical producers is commensurate with the great risk endeavored in developing and selling drugs. The capital investment incurred includes a research and development cycle that is scarcely paralleled, averaging $1.3 billion per drug brought to market (Hemphill, 2010). Just as daunting, the anemic success rates of discovering a new compound with safe, therapeutic benefit mean pharmaceutical companies must patiently invest in a shotgun approach to innovation, knowing the majority of their prospects will fail clinical trials. Indeed, only 1 in 10,000 compounds investigated is a viable treatment approved for patient use (Hemphill, 2010). The entire life cycle of inception to marketready product takes an average of 12–15 years per treatment (Hemphill, 2010). Once the product becomes available, the recoupment period is a narrow window dictated by patent laws. That is, a product may continue to be sold indefinitely; however, after the patent laws protecting exclusive rights to the chemical compound expire, generic alternatives and cheaper pricing undercut the potential to be sold as the primary treatment for the therapy area it was developed to target. In this way, pioneering pharmaceutical innovators shoulder the initial investment in development irrespective of the inevitable replication of their end result after a brief window of patent-protected indemnity. Despite undisputed heavy investment in development, the profit margin of pharmaceutical companies unveils a clear capitalist incentive for innovation. Congruently, consumers are willing to pay for incrementally increased costs to fund further innovation (Paris & Belloni, 2013). While there are other economic and governmental arrangements in place globally to ensure the continuity of pharmaceutical provisions, the pure free-market system is associated with the greatest driver for novel or improved treatments, hence some have argued that there is an American subsidization of global pharmacological innovation (Maitland, 2002). This translates to higher costs in the US model as well, as seen in price differences such as Roche’s Valium registering $9.70 in the USA compared to $3.60 in the EU (Spinello, 1992). The higher profit margins climb, the more the question becomes apparent, ‘how much is too much?’ While this is a contentious question across

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consumer goods and services, the nature of pharmaceutical marketing which involves profiting from the need created by others’ ailments, maladies, and suffering makes it especially relevant at a societal level (Maitland, 2002). One of the challenges to the organic fairness of free-market equilibriums in pricing is that consumers of medical services are often not in a fair bargaining position. Because the need is desperate and may even threaten the life or quality of life of the consumer, traditional pricing sensitivity is less responsive to excessive costs as consumers are not in a position to say no. Thus, medical treatment is viewed as a vital service which in the eyes of some should be viewed as a natural human right of the developed world (Maitland, 2002). Instances where corporate interests have conflicted with humanitarian appeal have returned a PR verdict staunchly in favor of the afflicted, such as when 39 pharmaceutical companies sued the government of South Africa for conspiring to devise laws circumventing patent protections on medications to treat AIDS and allow generic treatment options. Public outrage was so catalyzed at the litigation that the corporations dropped their lawsuit to allow the country with the most cases of AIDS to receive treatment despite being incapable of affording the market value of name-brand medications. Orphan drugs are a class of medications partially incentivized through government subsidization created for a minority need rather than an outright market opportunity. They target very rare diseases, and so the market potential for earnings is commensurately limited. While they are labeled in a category of their own, it may be most instructive to realize their defining contextual factors are extreme examples of the constraints pharmaceutical companies encounter on a spectrum: steep R&D, limited market opportunity, and significant regulatory hurdles in approval and distribution. Likewise, once a pharmaceutical company does manage to develop an orphan drug, there is increased temptation to take advantage of the market’s inelastic demand due to the life-threatening need consumers face and monopoly position providing treatment, and the consumer phenomenon of valuing treatments for rare diseases more highly (Paris & Belloni, 2013). Hemphill (2010) argues that it is socially irresponsible to implement dramatic price hikes on orphan drugs from legal, economic, socio-political, and ethical dimensions, and perhaps the rationale could be extended backward through the spectrum of non-orphan treatments (Hemphill, 2010). The pricing practices pharmaceutical companies deploy have become increasingly scrutinized in the court of public opinion. Recently, Martin

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Shkreli evoked public ire as the highly vilified posterchild for ‘pharma bro’ greed when he led Turing Pharmaceuticals to raise the price of a lifesaving HIV treatment 5,000% overnight. Shkreli’s explicit motive was the purpose of maximizing shareholder profit. Such examples reveal where corporate interests begin to blur the ethical responsibilities entailed in providing life-sustaining services with shrewd capitalist pricing practices of conventional consumer goods. Naturally, there is a counter-argument. Industry defenders would argue that many effective ethical drugs would not exist were it not for heavy investment motivated by a return, and it seems difficult to question the logic. The real question, however, is what boundaries need to be in place to simultaneously facilitate innovation and incentive for developing new drugs while ensuring access at an affordable price for those in need of them.

DISCUSSION AND CONCLUSION Throughout this chapter we have attempted to highlight major ethical issues in the marketing of pharmaceutical products as linked to various marketing functions. Because of the life-extending and/or pain-relieving benefits of products in this category, the stakes surrounding the debate are high. Clearly, this is a product category in need of responsible regulation. While some ethical lapses such as bribery or false representation are pretty clearly the result of monetary incentive and/or greed, other issues relate to a current structure in which heavy and, indeed, highly risky investment is necessary to make major breakthroughs, or at least to make them at a fast pace. The matter is complicated by different regulatory systems in different parts of the world. In general, it would be helpful for all parties involved worldwide to consider possible mechanisms for ensuring incentive and access at the same time. While such a proposition may sound utopian, the stakes are high. Not providing incentive for risk investment is highly likely to result in slower innovation, and a slower rate of breakthrough drugs. However, denying access to drugs to people in dire need of them due to lack of ability to afford them is clearly a major failure at a societal level. One very positive force at the moment is emanating from some of the companies themselves. As observed by McNeil (2019) in a New York Times article, pharmaceutical companies in recent years are doing considerably more to help the poor from a corporate social responsibility standpoint. However, the same author also reports that there is

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still a long way to go and that the programs are too reliant on donors (McNeil, 2019). Nonetheless, it is a positive development in that not only are donations and help for the poor increasing, but also companies are increasingly scored on the level of access the poor worldwide have to their drugs by indices such as that put out by the Access to Medicine Foundation. In an era where the Business Roundtable, a US-based organization bringing together CEOs of large corporations, put out a statement stating that the purpose of the firm is now to enhance stakeholder value as opposed to shareholder value, there is some reason to believe that public scoring of efforts to get widespread distribution via charitable donations, or lowered prices to those in need, could achieve some efficacy. With respect to some specific issues, future research should assess whether existing and new regulations, such as those aimed at sales representatives, have achieved their desired goals, such as helping to stop off-label promotion. As reviewed, the weight of the evidence from the USA and New Zealand suggests that properly regulated DTC advertising likely has a much larger positive impact on consumers than negative, suggesting that more countries may want to consider relaxing some regulations on advertising, or legalizing it. At the same time, more research on fair balance in DTC advertising on the internet is needed – as new selfregulatory and regulatory guidance comes out, it is vitally important to assess whether it is working and/ or how it could be made to work better. In general, research that helps policy makers make informed decisions about how to responsibly regulate the pharmaceutical industry continues to be needed. Topics related to privacy will continue an arm’s race of regulation versus informationsharing practices as modern technology facilitates increased targeting. As the penetration of internetera best practices pierce further into the healthcare and pharmaceutical industries, legislatures must retrofit regulations to ensure consumer privacy of sensitive information. More ethical inquiry is merited in the realm of pharmaceutical pricing. Given the discussion reviewed of disparate global models for incentivizing risk-intensive product innovation, there is increased need for well-founded theoretical ethical guidelines on acceptable profit margins.

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advertising to consumers. Journal of Public Policy & Marketing, 8(1), 64–80. Mulinari, S. (2016). Unhealthy marketing of pharmaceutical products: an international public health concern. Journal of Public Health Policy, 37(2), 149–159. Mullner, R., Singh, T., & Smith, D. (2005). Direct-toconsumer prescription drug advertising: a study of consumer attitudes and behavioral intentions. Journal of Consumer Marketing, 22(7), 369–378. Narayanan, S., Desiraju, R., & Chintagunta, P. K. (2004). Return on investment implications for pharmaceutical promotional expenditures: the role of marketing-mix interactions. Journal of Marketing, 68(4), 90–105. Nguyen, T. A., Knight, R., Roughead, E. E., Brooks, G., & Mant, A. (2014). Policy options for pharmaceutical pricing and purchasing: issues for low-and middle-income countries. Health Policy and Planning, 30(2), 267–280. Norberg, P. A., Horne, D. R., & Horne, D. A. (2007). The privacy paradox: Personal information disclosure intentions versus behaviors. Journal of Consumer affairs, 41(1), 100–126. O’Harrow, R. (2005). No place to hide. New York, NY: The Free Press. Paris, V., & Belloni, A. (2013). Value in pharmaceutical pricing. OECD Health Working Papers, No. 63. Paris: OECD Publishing. Parker-Lue, S., Santoro, M., & Koski, G. (2015). The ethics and economics of pharmaceutical pricing. Annual Review of Pharmacology and Toxicology, 55, 191–206. Rifon, N. J., LaRose, R., & Choi, S. M. (2005). Your privacy is sealed: Effects of web privacy seals on trust and personal disclosures. Journal of consumer Affairs, 39(2), 339–362. Rizzo, J. A. (1999). Advertising and competition in the ethical pharmaceutical industry: the case of antihypertensive drugs. Journal of Law and Economics, 42(1), 89–116. Ryker, R., Lafleur, E., McManis, B., & Cox, K. C. (2002). Online privacy policies: An assessment of the fortune E-50. Journal of Computer Information Systems, 42(4), 15–20. SEC. (2012a, August 7). SEC Charges Pfizer with FCPA Violations. Retrieved November 15, 2019, from https://www.sec.gov/news/press-release/ 2012-2012-152htm SEC. (2012b, December 20). SEC Charges Eli Lilly and Company with FCPA Violations. Retrieved November 15, 2019, from https://www.sec.gov/news/ press-release/2012-2012-273htm Sheehan, K. B. (2005). In poor health: an assessment of privacy policies at direct-to-consumer web sites. Journal of Public Policy & Marketing, 24(2), 273–283.

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Sillup, G. P., & Porth, S. J. (2008). Ethical issues in the pharmaceutical industry: an analysis of US newspapers. International Journal of Pharmaceutical and Healthcare Marketing, 2(3), 163–180. Spinello, R. A. (1992). Ethics, pricing and the pharmaceutical industry. Journal of Business Ethics, 11(8), 617–626. Tarn, D. M., Heritage, J., Paterniti, D. A., Hays, R. D., Kravitz, R. L., & Wenger, N. S. (2006). Physician communication when prescribing new medications. Archives of Internal Medicine, 166(17), 1855–1862. Taylor, C. R., Capella, M. L., & Kozup, J. C. (2007). Does DTC advertising provide information or create market power? Evidence from the US and New Zealand. In Cross-Cultural Buyer Behavior (pp. 9–30). Bingley: Emerald Group. Toop, L., & Richards, D. (2003). New Zealand deserves better. Direct-to-consumer advertising (DTCA) of prescription medicines in New Zealand: for health or for profit?. New Zealand Medical Journal (Online), 116(1180). Viscusi, W. K., Magat, W. A., & Huber, J. (1986). Informational regulation of consumer health risks: an empirical evaluation of hazard warnings. Rand Journal of Economics, 17(3), 351–365. Wazana, A. (2000). Physicians and the pharmaceutical industry: is a gift ever just a gift? Jama, 283(3), 373–380. Westin, A. F. (2003). Social and political dimensions of privacy. Journal of Social Issues, 59(2), 431–453. White, H. J., Draves, L. P., Soong, R., & Moore, C. (2004). ‘Ask Your Doctor!’ Measuring the effect of direct-to-consumer communications in the world’s largest healthcare market. International Journal of Advertising, 23(1), 53–68. Witten, R. M., Parker, K. A., Holtmeier, J., & Koffer, T. J. (2008). Prescriptions for compliance with the Foreign Corrupt Practices Act: identifying bribery risks and implementing anti-bribery controls in pharmaceutical and life sciences companies. Business Law, 64, 691. Wogalter, M. S., Smith-Jackson, T. L., Mills, B. J., & Paine, C. S. (2002). The effects of print format in direct-to-consumer prescription drug advertisements on risk knowledge and preference. Drug Information Journal, 36(3), 693–705. Woodcock, J. (2003). Direct-to-consumer advertising of prescription drugs: exploring the consequences. Statement to the Senate Special Committee on Aging, 1–9. Ziegler, M. G., Lew, P., & Singer, B. C. (1995). The accuracy of drug information from pharmaceutical sales representatives. Jama, 273(16), 1296–1298.

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25 Ethical Marketing of Harmful Products: Sugar, Alcohol and Tobacco K a r m e n L u ž a r, S t e v e n G r e e n l a n d a n d D a v i d L o w

INTRODUCTION This chapter contributes to the ethical debate around the marketing practices associated with widely available, yet harmful products that are consumed by large numbers of Australians. While there are services, such as those supported by the gambling industry, which are also legal yet detri­ mental to health, this chapter focuses on consum­ ables. The legal aspect is covered in the notion that the sale and advertising of these products are permissible by law, albeit frequently controlled to varying degrees by marketing regulation and con­ sumer protection legislation. Initially, the longer term consequences of con­ suming these harmful products are considered in relation to the global non­communicable disease (NCD) epidemic. Marketing initiatives associ­ ated with sugar (confectionery and soft drinks), alcohol and tobacco are then discussed in some detail. Marketing tactics associated with tobacco and alcohol have long been the subject of ethi­ cal debate, and more recently this debate has expanded to sugar. These represent the more con­ tentious products that are generally accepted as being the key drivers of NCDs. Throughout the chapter ethical issues are considered in the light of marketing practice and current regulation. At a

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fundamental level the moral question to address is: Whether it is acceptable, or not, for society, marketers and governments to allow the wholesale promotion of products that cause harm, ill-health and death. At the end of the chapter an overview is presented along with recommendations.

NON-COMMUNICABLE DISEASES NCDs are the leading cause of ill­health and death globally (World Health Organization, 2019). Cardiovascular disease, chronic non­infectious respiratory disease, cancer and diabetes mellitus are the four main NCDs. All have well­established metabolic and modifiable risk factors. Metabolic risk factors that contribute to an increased likeli­ hood of NCD include raised blood pressure, obe­ sity, hyperglycaemia (high blood glucose levels) and hyperlipoidaemia (high levels of fat in the blood) (World Health Organization, 2018b). Modifiable risk factors include behaviours such as tobacco use, unhealthy diet, unsafe use of alcohol and physical inactivity (World Health Organization, 2018b). Such behaviours are influ­ enced by society, economic differences and mar­ keting that ‘seduces’ people into buying and

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consuming legal harmful products (World Health Organization, 2019). Simply put, the social and economic environment in which we live, and the marketing cues which we are exposed to, have a direct impact on the consumption of harmful products. For instance, cheap but unhealthy fast foods are often particularly attractive to lower social economic consumers as a way in which to feed their families within the financial constraints of their circumstances. In total, NCDs are responsible for 41 million people dying each year, which equals 71% of all deaths globally (World Health Organization, 2018b). Of these, cardiovascular diseases such as heart attacks and strokes account for 17.9 mil­ lion deaths annually, cancers account for 9.0 mil­ lion deaths, chronic respiratory diseases including chronic obstructive pulmonary disease and asthma account for 3.9 million deaths, and diabetes 1.6 million (World Health Organization, 2018b). While the statistics show that 85% of these ‘pre­ mature’ deaths occur in low­ and middle­income countries (World Health Organization, 2018b), Australia as a developed country exhibits statistics that are no less concerning.

NCDs in Australia In 2016 Australia experienced a total of 160,000 deaths and a staggering 89% of these were prema­ ture, caused by NCDs – cancer 29%, cardiovascu­ lar disease 28%, chronic respiratory disease 7%, diabetes 3%, and 23% ‘other’ NCDs (World Health Organization, 2018a). In terms of modifiable risk factors, obesity affects 30% of Australians aged 18+ and 11% of adolescents; raised blood pressure also affects 19% of adults (World Health Organiziation, 2018a). In relation to harmful product consump­ tion by Australians aged 15+, 14% are regular tobacco smokers and 11% consume alcohol at levels considered harmful; 9% of adults aged 18+ also exceed the recommended daily intake lev­ els for salt/sodium (World Health Organization, 2018a).

Marketing and NCD risk Globally, if the major risk factors and behaviours associated with NCDs could be eliminated, then around 75% of heart disease, strokes and type 2 diabetes, as well as 40% of cancers, could be pre­ vented (World Health Organization, n.d.). It is therefore imperative to consider ways to reduce

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these risk factors (World Health Organization, 2014). However, public health initiatives, includ­ ing campaigns to promote healthier consumer attitudes and behaviours, are hindered by the manufacturers of harmful products, which use sophisticated marketing tactics with the sole aim of increasing sales and consumption rates (Greenland, 2019). It is therefore important to stimulate greater ethical debate around the mar­ keting of harmful products and the promotion of socially responsible marketing practices. The following sections examine marketing practices associated with the product categories that do most significant harm.

CONFECTIONERY AND SOFT DRINKS Confectionery can be divided into three broad types – chocolate­based, flour­based and sugar­ based confectionery (Edwards, 2019). Typical products include candy, chewing gum, biscuits and chocolate (Nieburg, 2013). All are character­ ised by significant sugar content, although seem­ ingly healthier ‘sugar­free’ confectionery is on the rise (Conway, 2018a). Confectionery is low in nutrients, but high in calories (Conway, 2018a) and frequently contains gelling agents, emulsifi­ ers, colours and flavourings (Edwards, 2019). Soft drinks are non­alcoholic beverages that are usually but not necessarily carbonated. They con­ tain natural or artificial sweeteners, edible acids and natural or artificial flavours (Pietka & Korab, 2019). Typical products include regular sodas or ‘fizzy’ drinks, fruit drinks, flavoured waters, iced teas/coffees, diet or low­calorie drinks, as well as sports drinks and caffeinated energy drinks (Harris et  al., 2014; History of Soft Drinks, 2019). Like confectionery, soft drinks offer little nutritional value (Gatenby, 2003) and their energy content is derived exclusively from sugars (Gatenby, 2003) – the average soft drink contains 150 calories per 12 ounces (340 g) (Marcus, 2013). Since confectionery and soft drinks fail to sup­ ply proper nourishment, food cravings occur and people want to consume more. In conjunction with largely sedentary lifestyles and without enough exercise to counter excessive consumption, obe­ sity and other health­related issues result (Libuda & Kersting, 2009). The World Health Organization’s (WHO’s) daily recommendation for sugar consumption is less than 10% of total energy intake (World Health Organization, 2014). However, over half of Australians (52%) exceed this amount, with 81% of the free sugars consumed coming from

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energy­dense, nutrient­poor ‘discretionary’ foods and beverages (Australian Government Department of Health, 2017). This explains why Australia has one of the highest obesity rates in the world (Hattersley, Irwin, King & Allman­Farinelli, 2009) as well as high levels of high blood pressure, heart disease and type 2 diabetes (Apovian, 2004; Edwards, 2019).

Ethics and Marketing Legislation The marketing of confectionery and soft drinks has been heavily criticised in its targeting of chil­ dren, its encouragement of impulse purchases, and for persuading regular consumers to consume larger amounts. Marketing is increasing the behavioural risk factors that promote ill­health and drive NCDs. Targeting children with sophisticated market­ ing raises obvious ethical and moral concerns. Advertising has been found to influence strongly the food preferences of Australian children (Nutrition Australia, 2009) and is contributing to childhood obesity (Kelly, Smith, King, Flood & Bauman, 2007). Globally, childhood obesity has doubled over the past two decades and it is now a major public health issue for all governments and societies (Fong & Zolkepli, 2019). Marketing ini­ tiatives that target children set them up for a life­ time of bad habits and health problems. (Chapman, Nicholas & Supramaniam, 2006). Advertising to children targets the still devel­ oping brain (Campbell et  al., 2014). With their limited cognitive and emotional processing capacity, children are therefore less able to evalu­ ate critically and resist persuasive communica­ tions (Ahuja, Walker & Tadepalli, 2001; Harris, Brownell & Bargh, 2009). Australian legislation offers consumers protec­ tion in relation to marketing techniques and com­ munications, including advertising on television and online channels. The Australian Competition and Consumer Commission (ACCC) enforces Australia’s 2010 Competition and Consumer Act, and other legislation, that aim to ensure fair and responsible trading practices (Australian Government, 2020). The ACCC, in accordance with the federal legislation, advises businesses in acceptable conduct, such as not making false or misleading claims in communications, as well as in the appropriate use of advertising, selling and promotional techniques (ACCC, 2017). However, the ACCC acknowledges that the legislation pro­ vides only general guidelines and advertising media regulations are not tailored to each com­ munication channel. As illustration, ‘There are no specific or different consumer laws in place for

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social media’ (ACCC, 2017, p. 11). Furthermore, there is only limited legislation relating to market­ ing to vulnerable market segments like children. For example, Australia’s Children’s Television Standards, 2009 (CTS) is the only regulation that deals specifically with advertising to children – applying content and scheduling restrictions for free­to­air television, but not other media (Obesity Policy Coalition, 2018). In addition to the government legislation, sev­ eral self­regulated industry watchdogs and asso­ ciations provide their own guidelines and codes of practice. As an example, the Code for Advertising and Marketing Communications to Children (Australian Association of National Advertisers, 2014) claims to ensure that advertisers and mar­ keters engage in socially responsible advertising and marketing to children aged 14 and younger. The code covers a wider range of media and pro­ vides guidelines relating to aspects such as food and beverage advertising content, including not encouraging inactive lifestyles or unhealthy eat­ ing habits, as well as not misleading or deceiving children in relation to nutrition or health claims. The following sections provide more insights to some of the more contentious aspects of marketing associated with confectionery and soft drinks.

Place Cheap confectionery and soft drinks are available everywhere. This widespread accessibility in con­ junction with low pricing stimulates high levels of consumption. In supermarkets, the main grocery sales channel in Australia, entire aisles are devoted to these products. Confectionery and soft drinks are also found at the point of sale, next to the cash regis­ ter, as well as at aisle­ends where trolley speeds are slow and impulse purchases are more likely (Nieburg, 2013). ‘Pester’ power (persistent requests) from children has been identified as significantly influenc­ ing parents’ purchasing behaviour (Campbell et al., 2014). High­profile in­store placement in the reach of or at the eye level of children has been shown to encourage parents to make impulse purchases, par­ ticularly when this in­store placement is accompa­ nied by price discount (Dixon, Scully & Parkinson, 2006). Figure 25.1 illustrates some of these high­ profile in­store merchandising techniques.

Price Another prominent marketing feature of confec­ tionery and soft drinks relates to bulk buy dis­ counting and supersizing. This plays on perceptions

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Figure 25.1 markets

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Confectionery and soft drink placements in one of the leading Australian super-

Source: Photographs by Karmen Lužar, 3 October 2019

of value for money and has promoted the wide­ spread consumer expectation of heavily discounted larger pack sizes and portions (Chandon, 2013). A study by Greenland, Gill and Low (2019) recorded prices of different pack size options for a selection of harmful product categories – alcohol, carbon­ ated soft drinks, confectionery, junk food and tobacco sold in Australia. All exhibited bulk buy discounting and soft drinks offered the most sig­ nificant discounts, providing clear evidence of a marketing tactic designed to get consumers to purchase larger volumes. This invokes larger pur­ chase habit formation and results in the overcon­ sumption of harmful products (Jain, 2012).

Sugar tax in other markets

Taxation of sugar in soft drinks and confectionery, that is the sugar tax, has been suggested as a pos­ sible preventive strategy to reduce consumption of these harmful products and address the public health concern of childhood obesity and spending on NCD management (Cobiac, Tam, Veerman & Blakely, 2017; Moretto et  al., 2014). While this has been introduced in some other markets and

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has been discussed in the Australian context, it has yet to be introduced.

Promotion and Communications Globally, the promotion of confectionery and soft drinks is dominated by television advertising that targets children (Cairns, Angus & Hastings, 2009; Kelly et  al., 2007). Advertisements frequently employ visual, audio and emotive cues that appeal specifically to children, using fantasy images, fun/ humour and cartoon characters (Hebden, King & Kelly, 2011). Egberts and Riley (2004) found that compared with adult television advertising chil­ dren’s TV food adverts had more cartoons (25.1%) and animated characters (13.7%), faster tempos (three­fold) and more themes of magic, adventure and violence (50%). Internet advertising integrated within the online social networks (e.g. Facebook, Instagram, etc.) is another common strategy for marketing confec­ tionery and soft drinks, and also targets the younger population (Freeman et al., 2014; 2016). This type

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Ethical MarkEting of harMful Products: sugar, alcohol and tobacco

of marketing frequently employs seamless interac­ tion with consumers through branded games, com­ petition prizes and giveaways. Several international studies suggest that playing these so­called ‘adver­ games’ – associated unhealthy foods, significantly increases consumption of and preference for high sugar, unhealthy products (Ells, Roberts, Mcgowan & Machaira, 2015). An Australian survey of over 12,000 12–17­year­old children also found a posi­ tive link between advertising exposure and the con­ sumption of unhealthy food and beverage products, and the link was particularly strong for online mar­ keting (Scully et al., 2012). In Australia, marketing legislation and industry codes of practice is supposed to ensure respon­ sible marketing and advertising. However, com­ pliance with the industry codes is voluntary, and violations and breaches of the recommended standards are commonplace. A study of 645 hours of programmes from three Australian com­ mercial stations available on free­to­air televi­ sion found a total 194 breaches of the Australian Children’s Television Standards (Chapman et  al., 2006). Another audit on the effectiveness of the Australian co­regulatory system in limit­ ing children’s exposure to unhealthy television food advertising, found a total of 951 breaches of the combined regulations (Roberts, Pettigrew, Chapman, Miller & Quester, 2012). Another study on advergames by Dahl, Eagle and Báez (2009) also found that the majority did not comply with Australian broadcasting codes of practice for advertising to children. Discordant with regulation, advertising mes­ sages and packaging labels often suggest that confectionery and soft drink products are actu­ ally ‘healthy’ and ‘balanced’ (García, Morillo­ Santander, Parrett & Mutoro, 2019). For example, Mehta et al. (2012) found that more than 50% of foods high in sugar and fat were promoted as being healthy and nutritious. Related to soft drinks, pro­ motion and labelling taglines frequently include ‘No artificial colours and flavours’, reflecting the manufacturers’ attempts to enhance a prod­ uct’s perceived ‘healthiness’, while reducing negative health risks associated with consumption (Greenland et al., 2019).

ALCOHOL Alcohol is a key driver of the NCD epidemic (Department of Health Commonwealth Government of Australia, 2018; World Health Organization, 2018b), second only to tobacco in relation to harmful products. It is highly addictive

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and prolonged excessive consumption is a contrib­ uting factor in more than 200 chronic diseases. Excessive alcohol consumption is also associated with inappropriate behaviours and significant social issues, including domestic violence, under­ age drinking and crime. Alcohol is used widely in Australia, with almost 80% of adults reporting to have consumed it in the past year (Australian Bureau of Statistics, 2019), and 6% consuming it daily (Australian Institute of Health and Welfare, 2017). In Australia, alcohol is attributed with causing more than 5,500 deaths annually (Gao, Ogeil & Lloyd, 2014). It is also the most frequently mentioned drug that people think causes the most deaths (Australian Institute of Health and Welfare, 2017). Alcohol creates a serious financial burden for tax payers (Department of Health Commonwealth Government of Australia, 2018; Hobday, Chikritzhs, Liang & Meuleners, 2015; Stevenson & Lind, 1999). As illustration, Australia’s Northern Territory has among the highest alcohol consump­ tion rates and the most significant alcohol­related social problems in the world. A recent study into the effects of alcohol consumption (Smith, Whetton & d’Abbs, 2019) reported the cost to society to be equivalent to $7,577.94 per adult liv­ ing in the Northern Territory. The total social cost was estimated at $1,386.8 million, with tangible costs of $701.3 million (including costs of health­ care, road crash, crime and child protection) and intangible costs of $685.5 million (including costs relating to permanent impairment from road crash injuries, as well as insecurity relating to crime).

Marketing Regulation Research shows that alcohol accessibility and pro­ motion encourage risky drinking and initiation of alcohol use earlier in life (Jernigan, Noel, Landon, Thornton & Lobstein, 2016). Alcohol restrictions related to where people can drink differ for each state and territory (Department of Health Australian Government, 2019). Most have some sort of alco­ hol­restricted or prohibited areas. For example, the Northern Territory Liquor Act delineates ‘alcohol protected areas’ and ‘general alcohol restricted areas’ (Barazani, 2014). There are more than 100 communities and places where alcohol is banned under the law (Northern Territory of Australia, 2019). Other geographic restrictions include the Two Kilometre Law where it is illegal to drink alcohol in a public place within 2 kilometres of a licensed premise (Barazani, 2014). An industry self­regulated Alcohol Beverages Advertising Code (The ABAC Scheme Limited,

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2017) guides alcohol marketing practices. The Alcohol Advertising Review Board, governed by public health agencies, is also in place to man­ age complaints against the industry, such as those relating to advertisements making health claims (Pierce, Stafford & Daube, 2017). Despite marketing controls and legislation, as well as the Alcohol Beverages Advertising Code, it has been acknowledged that a lot more needs to be done to combat harmful drinking. For example, currently alcohol producers are not legally required to provide health­risk labels on packaging. Furthermore, advertisement breaches of the Alcohol Beverages Advertising Code are common (Public Health Advocacy Institute of Western Australia, 2019). Voluntary alcohol marketing self­regulation has proven ineffective, especially in terms of protecting the vulnerable younger population (Jones et  al., 2008; Noel, Babor & Robaina, 2017; Pierce et al., 2019; World Health Organization, 2010). Some consider self­ regulation to be a common strategy employed by harmful products/industries to delay government regulations (e.g. Moodie et al., 2013). Australia’s National Alcohol Strategy 2019– 2028 (Australian Government Department of Health, 2019) is a recent initiative designed to strengthen alcohol marketing controls. This will be achieved through restricting availability and implementing bans on alcohol advertising, as well as strengthening control of price and point­of­sale promotion, including bulk buys and two­for­one offers. Suggested pricing and taxation reforms include the introduction of a minimum unit price and volumetric taxation. While reports concern­ ing the efficacy of minimum unit pricing have been disputed, a recent study found that hospital presentations due to acute alcohol misuse in the Northern Territory dropped by 54% following the introduction of the regulation (Swannell, 2019). When the National Alcohol Strategy proposal was put up for public consultation, the alcohol industry’s response was strong and, as observed by the Foundation for Alcohol Research and Education (2015), subsequent changes made to the strategy benefit the alcohol industry by failing to provide strong enough measures to reduce alcohol harm. The following sections provide greater descrip­ tion of some of the contentious aspects of the marketing mix elements associated with alcoholic drinks.

Product Alcoholic beverage categories include beer, wine and spirits, which includes ready­to­drink pre­ mixed drinks. All categories have extensive brand

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ranges differentiated on the basis of price and perceived quality – for example, high­, medium­, and low­quality beers (Gruenewald, Ponicki, Holder & Romelsjo, 2006). These diverse product ranges are used to maximise appeal to specific market segments, including young adults, women, and people of different cultural backgrounds. In line with the increased health consciousness trend among consumers, the alcohol industry has been developing new, supposedly healthier prod­ ucts (Keric & Stafford, 2019). As illustration, recent product launches from big alcohol compa­ nies in Australia have targeted young adult drink­ ers, women and millennials in particular (Keric & Stafford, 2019), with organic, low­alcohol, low­ carb and low­sugar products that appeal to these health­conscious segments (Bennett, 2016). Unfortunately, consumers view these products as being less harmful, or as even offering health ben­ efits, which contributes to increased alcohol con­ sumption (Miller, McKenzie, de Groot, Davoren & Leslie, 2010).

Place In Australia, despite restrictions on where alcohol is sold and where people can drink, it remains widely available in grocery retail outlets, supermar­ kets and ‘bottle shops’, as well as in bars, hotels, restaurants and licensed clubs (Livingston, 2012). This widespread availability is recognised as pro­ moting the harmful and disruptive consequences of alcohol consumption (Department of Health Commonwealth Government of Australia, 2018).

Price and Promotion Like confectionery and soft drinks, bulk buy dis­ counting is used extensively in alcohol promotion (e.g. Greenland et  al., 2019), which stimulates larger purchases and increased consumption. The industry has also come under criticism in relation to communications that seek to reduce the perceived risks of alcohol consumption (White, Oliffe & Bottorff, 2017). Labelling beverages as ‘natural’, ‘gluten free’, ‘no artificial colourings or flavours’, ‘good for you’, as well using advertis­ ing images of natural ingredients and healthy life­ styles, play a significant role in this regard (Keric & Stafford, 2019). Likewise, sponsorship of sport­ ing events, as well as team sponsorship such as paying for branded uniforms, strengthen associa­ tions with healthy pursuits and encourage societal acceptance of alcohol (O’Brien, Lynott & Miller, 2012).

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Ethical MarkEting of harMful Products: sugar, alcohol and tobacco

Presence on social media seems to be an ines­ capable necessity for brand marketing nowadays. Alcohol is no exception and is heavily promoted through social media channels (Foundation for Alcohol Research and Education, 2015). An Australia­wide study of Facebook brand market­ ing in 2014 identified nearly 2 million fans of the 10 most popular alcohol brands (Lim, Hare, Carrotte & Dietze, 2016). In 2019, the Facebook alcohol fan base for beer, wine and spirits grew to over 3.5 million (Socialbakers, 2019). Similar to confectionery and soft drinks, this type of mar­ keting employs direct interaction and engagement, often via competitions between the social media users that seek to turn them into greater consumers of alcoholic beverages by normalising daily con­ sumption (Lim et al., 2016; Nicholls, 2012).

TOBACCO Tobacco Harm and Regulation Smoking is the leading driver of NCDs globally (World Health Organization, 2014). For Australia, Tait, Whetton and Allsop (2019) report 20,000

345

premature deaths annually attributable to smok­ ing, along with 1.7 million hospital separations. They estimate this equates to an overall annual cost of $136.9 billion, that is $19.2 billion in tan­ gible costs, such as healthcare and workplace costs, and $117.7 billion in intangible costs, relating to premature mortality and smoking­ attributable ill­health. Since tobacco media advertising bans were introduced in the early 1990s, tobacco regulation has intensified in Australia. It is regarded by the industry as one of the toughest markets to operate in. In 2012, Australia was the first country to intro­ duce plain packaging legislation, which prohibits the use of colours, company logos and branding, other than the brand name in a standard font. Plain packaging, launched in 2012 in conjunction with tax excise increases, represents the loss of a key tobacco branding element. Similar legislation has subsequently been introduced, or is in the process of being introduced, to many other countries. While the tobacco industry continually disputes the need for controls and denies the efficacy of ini­ tiatives like plain packaging, the impact of regula­ tion has been profound. Over the past 20 years the cumulative impact of Australia’s tobacco control has been a dramatic reduction in the adult smoking rate (see Figure 25.2).

Figure 25.2 Percentage of Australians aged 18+ years who smoke daily and tobacco regulations since 2000 Source: Adapted from the Australian Government Department of Health, 2018, Table 1 and Graph 1, p. 3

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Despite Australia’s regulatory constraints, tobacco manufacturers continue to promote their products. Ironically, marketing regulation has helped the industry to become even more effective in using the remaining unregulated elements of the marketing mix to circumvent controls. The ways tobacco manufacturers utilise the remaining mix elements in Australia are now described, followed by greater discussion of industry attempts to circumvent regulation.

Product Continuous innovation in tobacco brands and products seeks to create novelty and appeal, stimulating consumer interest. For example, Australian cigarette brand ranges are regularly refreshed with new brands, new brand variants and frequent name changes (Greenland, 2015). The big three tobacco companies (British American Tobacco, Imperial Brands and Philip Morris) all have extensive brand ranges to seg­ ment the market. For example, British American Tobacco Australia sells nine brands and most of these have significant numbers of variants. For example, Winfield, the leading brand, has 23 variants – see Table 25.1 (British American

Tobacco Australia Limited, 2018). Each variant caters for a specific market segment and facili­ tates marketing to be tailored to a specific cus­ tomer group. This represents an extremely high level of brand differentiation, the logic for which is simple – differentiated product lines sell more than undifferentiated ones (Kotler, Keller & Burton, 2009). Recent product innovations in Australia include new filter formats, new flavours and flavour cap­ sules, extra­long and slim cigarettes, as well as packs with bonus cigarettes (Scollo, Bayly, White, Lindorff & Wakefield, 2018). The number of cigarettes in a pack is less regulated in Australia than some markets – the UK, for example, where cigarettes are restricted to packs of 20. Australian cigarettes are sold in a variety of pack configu­ rations, including 20, 22, 23, 25, 30, 40 and 50 (Greenland, Johnson & Seifi, 2016). Different pack sizes are used to appeal to different segments and encourage more smoking – larger packs lead to greater consumption (Persoskie, Donaldson & Ryant, 2019; Wansink, 1996). Globally, the industry has experimented with non­combustible tobacco, such as Tobacco Heating Products (British American Tobacco, 2019) and nicotine e­cigarettes or vapes. These have experienced tremendous growth in many

Table 25.1 Winfield brand variants sold in Australia in 2018 Brand variants in 2018 Winfield Original Sky Blue Winfield Original Gold Winfield Original Blue Winfield Original Red Winfield Original Grey Winfield Original Red + Taste Flow Filter Winfield Original Blue + Taste Flow Filter Winfield Original Gold + Taste Flow Filter Winfield Original Grey + Taste Flow Filter Winfield Original Sky Blue + Taste Flow Filter Winfield Original White + Taste Flow Filter Winfield Menthol Fresh Winfield Optimum Menthol Boost Winfield Optimum Crush Blue Winfield Optimum Crush Gold Winfield Optimum Crush Green Winfield Optimum Crush Sky Winfield Optimum Crush Summer Rush Winfield Explorer Country Blend Winfield Explorer Coastal Blend Winfield Explorer Outback Blend Winfield Jets Original Blue Winfield Jets Original Gold Source: Data extracted from Annual Tobacco Ingredients Report - British American Tobacco Australia Limited, 2018

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markets (Cantrell et  al., 2018). However, the commercial import and sale of nicotine smoke­ less tobacco products is prohibited in Australia (Australian Bureau of Statistics, 2019).

Place Despite Australia’s strong regulations, tobacco products remain ubiquitous across a wide range of retail outlets (e.g. Freeman & Burton, 2012). Higher tobacco retailer density is also found around the target markets, which are frequently young people and disadvantaged groups. High levels of accessibility and availability of tobacco are recognised as promoting sales and providing environmental cues to smoke (Henriksen, 2012). Australian regulation therefore bans tobacco retail displays and requires products to be hidden in cabinets, although these can frequently be found with their doors open.

Price Tobacco price has risen significantly in Australia due to substantial annual tax excise increase. Regardless, brand ranges continue to be highly differentiated based on price with premium, mid­ range and economy brand segments. In recent years there has been a proliferation of brands in a growing super­value market segment (Scollo et al., 2018). This presents price­sensitive smokers with increased options for switching to cheaper brands. In Australia an increasing availability of roll your own (RYO) tobacco brands in an array of smaller pouch sizes offers yet more cheaper alter­ natives, and this has resulted in a steady rise in RYO tobacco consumption (Bayly, Scollo & Wakefield, 2019).

Promotion Despite bans on tobacco advertising the industry is adept at finding new ways to communicate with customers in the wide range of targeted market segments. These include vulnerable and disadvan­ taged groups. As illustration, the targeting of Aboriginal people by the tobacco industry has been a focus for some researchers in Australia (e.g. Thomas & Bond, 2012). Social media like Facebook, Instagram, Twitter and Snapchat have provided endless possibilities for targeting young people. One recent trend has been an escalation in ‘influencer’ marketing. Tobacco companies are

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prohibited from directly advertising or communi­ cating via social media, but regulation has not prevented them from using social media influenc­ ers to post content that promotes their products to young people (Kozinets, 2019). In­store tobacco communications are restricted to in­store price lists, although the sales staff are also able to direct sell and communicate with cus­ tomers about new offers and products.

Public Relations Globally, the tobacco industry public relations (PR) machine is in constant overdrive to try and offset negative perceptions. PR initiatives include political lobbying and donations, as well as spon­ soring high­profile events. PR communications frequently highlight the thousands of jobs created by the industry, the significant government reve­ nues generated from tobacco sales, as well as the positive impact of corporate social responsibility (CSR) initiatives. The industry also funds anti­regulation cam­ paigns, as well as research that disputes the impact of tobacco on health, as well as the efficacy of marketing regulation. This often involves ‘astro­ turfing’ PR initiatives (Davies, 2010; Wells, 2016). Industry sponsorship of such initiatives is hidden, and it appears that messages originate from and are supported by grassroots stakeholders, thereby adding legitimacy to the claims. Evidence of this includes the tobacco industry’s bankrolling of the Alliance of Australian Retailers ‘It just doesn’t make sense’ campaign (Greenland, 2012), as well as reports produced by ‘independent’ industry analysts (Chapman, 2011).

Overcoming Regulation and Consumer Motives for Not Smoking Tobacco manufacturers employ a range of market­ ing tactics devised specifically for minimising the impact of regulation and overcoming the main reasons consumers have for not smoking, namely health and price. The industry has long promoted the idea of healthier cigarettes. In the 1970s and 1980s this was communicated via ‘low­tar’, ‘light’ and ‘mild’ brand variant names, which smokers believe to be less harmful. When such terms were banned, the industry switched to using colours, with colours like black and red synonymous with stronger vari­ ants and lighter colours like white, silver and blue indicating less harmful options. Following the introduction of plain packaging in Australia, when

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pack colours were banned, there was a significant rise in variant names that included a colour. As illustration, 17 of the 23 Winfield brand variants available in 2018 included a colour in the name (see Table 25.1). Promoting the notion of ‘healthier’ brand vari­ ants dupes consumers into believing them to be less harmful. Unfortunately, these products are equally, if not even more deadly since the filter ventilation (basically holes in the paper around the filter) in the ‘lighter’ variants means smokers suck harder on the cigarette and draw smoke deeper into the lungs causing deeper, inoperable cancers. Tactics for reducing the price ‘barrier’ to smok­ ing and overcoming recent tax­excise­related price hikes include discounted twin packs and dropping the prices for some brands – in effect repositioning them from premium to economy brands (Greenland, 2016), as well as introducing new low­cost brands and adding bonus cigarettes in packs (Scollo et al., 2018). Promoting a wider variety of RYO products, including smaller pouch sizes (Bayly et al., 2019), also increases the range of cheaper options available.

CONCLUSIONS The NCD epidemic demands urgent reflection on the sale and promotion of harmful products, as well as associated regulation designed to protect consumers. The review presented in this chapter indicates that existing regulation is insufficient and across the range of products examined

common unethical practises were identified (see Table 25.2). It will always be difficult to set regulation where the product is essentially legal and may only cause harm in circumstances of high consumption. This is the essential difference between products such as tobacco and sugar. However, the individual marketing professional needs to perceive that ethics and social responsibility are important considerations and act accordingly (Singhapakdi, Kraft, Vitell & Rallapalli, 1995; Singhapakdi, Karande, Rao & Vitell, 2001). While choosing to act ethically is, overall, an individual decision, the context in which this chapter examines this issue is one in which an individual invariably resides within a corporate environment. With a lack of either regulatory requirements, or regulations that can be gamed, organizational culture is an important factor (Trevino, 1986). Indeed, Singhapakdi, Marta, Rao & Cicic (2001) found that organisational culture was influential on the importance of ethics and social responsibility across a number of country cultures. They further concluded that international compa­ nies can find common ground if they have a simi­ lar importance on ethics and social responsibility. These findings are important because much of the products that harm are global products, produced by global companies, and that are marketed across borders. Their findings suggest that the ethical framework is set by the company. This frame is further challenged when, as is the subject of this chapter, the products themselves harm. Academics often teach students about ethics by getting them to examine their own moral code and if certain behaviour is validated by that (Hunt & Vitell, 2006). Yet some studies show that in the influence

Table 25.2 Common unethical marketing practises used by harmful product manufacturers – confectionery and soft drinks, alcohol and tobacco Political lobbying, public relations and CSR initiatives designed to inhibit regulation implementation and promote a socially responsible industry image Appearing to behave ethically through industry self-regulation and apparent cooperation with regulators, while consistently breaching marketing standards and legislation Targeting vulnerable and easily influenced groups, such as children, young adults, low-income and indigenous market segments Disseminating misinformation regarding the need for, as well as the efficacy of, regulation Utilising unregulated marketing elements to circumvent regulations designed to protect consumers Promoting the health characteristics of certain harmful product brands and to reduce this most obvious motivational barrier to consumption Bulk buy discounting, and larger pack sizes, that habituate larger purchases and increase individual consumption – particularly concerning for highly addictive harmful products Maintaining highly differentiated brand ranges, which generates more sales than undifferentiated approaches Ensuring products and brands are available everywhere, not only to ensure supply, but also to maintain society’s acceptance of harmful products

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of corporate culture, often a corporation is moti­ vated by profit to market and sell products that have been demonstrated to cause harm. Given the harm that products like sugar, alco­ hol and tobacco cause and their addictive habit­ forming nature, is it appropriate to recommend special treatment regarding marketing? Many jurisdictions have made this decision with regards to tobacco and alcohol, with purchase restrictions such as age, and marketing limitation including package constrictions, though the manufacturers of these products sometimes choose strategies to attempt to get around these restrictions (e.g. Dunhill and its luxury goods business). There are many ideas that could be considered for implementation, with regards to regulation in addition to a financial levy, such as: • Greater consumer education so consumers are aware of the impact of marketing tactics, and are aware of the significant impact on consumption behaviour, which should help to overcome the Nanny state claims. • Banning promotions, such as the bulk buy discounts, that are specifically designed to encourage greater consumption and promote habit-forming consumption. ° This could include standardised pack sizes with uniform price per volume/amount. Encouraging smaller pack sizes for harmful products might be also be relevant. • Banning communications that seek to reduce the perceived harm of consumption, or that suggest healthier dimensions. However, the greatest effect would be to instil a sense of ethics, community responsibility and fair play into those organisations producing and sell­ ing products that harm. The only way to do this is to bring ethics, and ethical foundations, to the forefront of business practice and culture. This must be largely done by individual effort and a commitment to ensure that our businesses pro­ cesses and products tread lightly on this planet. In conclusion, further significant research is required regarding the ethics and marketing of harmful products such as confectionery and soft drinks, alcohol and tobacco.

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White, C., Oliffe, J. & Bottorff, J. (2017). The marketing of better-for-you health products in the emergent issues of men’s obesity. Health Sociology Review, 23(2), 113–124. World Health Organization. (2010). Global strategy to reduce the harmful use of alcohol. Geneva. Retrieved from https://www.who.int/substance_ abuse/publications/global_strategy_reduce_harmful_use_alcohol/en/ World Health Organization. (2014). Global status report on noncommunicable diseases. Geneva. Retrieved from https://www.who.int/nmh/publications/ncd-status-report-2014/en/ World Health Organization. (2018a). Australia, Noncommunicable diseases (NCD) country profiles, 2018. Retrieved from https://www.who.int/nmh/ countries/aus_en.pdf?ua=1 World Health Organization. (2018b). Noncommunicable diseases. Retrieved from https://www.who. int/news-room/fact-sheets/detail/noncommunicablediseases World Health Organization. (2019). Non-communicable diseases. Retrieved from http://www.searo. who.int/nepal/documents/NEP_NCD/en/ World Health Organization. (n.d.). Fact file: 10 facts of noncommunicable diseases. Retrieved from https://www.who.int/features/factfiles/noncommunicable_diseases/facts/en/index4.html

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26 Food Marketing Ethics Morven G. McEachern

INTRODUCTION Food ethics is an interdisciplinary subject area that impacts economically, socially and environmentally upon a variety of actors within a complex supply chain (Kaiser & Algers, 2016). Indeed, the global food sector is vital to the economies of both developed and developing countries. China is regarded as the world’s biggest importer, producer and consumer of food and employs over 300 million labourers – a figure almost as high as the US population (Ross, 2019). Albeit far from the scale of China, India, the USA and Brazil (i.e. the world’s four largest food producers), the UK’s food sector is estimated at a value of just under £110 billion and employs over 10% of its population – a scale similar to Canada’s (DEFRA, 2016). Consequently, the food sector’s ethical impact upon our environment, society and economy is enormous, ranging from issues such as land degradation, greenhouse gases, loss of biodiversity and food insecurity to nutritional health (Moons et  al., 2018). Its importance in the debate around ethics and sustainable development is supported by the fact that the agri-food sector potentially impacts on all the Sustainable Development Goals (SDG) targeted by the UN (see https://sustainabledevelopment.un.org/?menu=1300), the main SDG in this context being No. 12 – Responsible Production & Consumption.

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Societal trends such as an increased urbanisation of society and worldwide access to media have helped to fuel rising ethical concerns around the origins of our food, its production, manufacturing processes, where it is sold and how it is disposed of. It is also useful to acknowledge at this point the often contradictory nature of food ethics, whereby as a result of market entanglements, addressing one unethical aspect of a food market may impact upon another ethical issue (e.g. removing certain types of food packaging will inevitably result in significantly more food waste; switching from cows’ milk to dairy-free substitutes will substantially encourage intensive cropping systems of production). While there is not the scope to cover all ethical issues relating to food in this chapter (e.g. gender issues in the food supply chain, transport, food cultures, etc.), I will endeavour to cover key ethical areas involving food production, food consumption and food disposal. As agriculture is considered the ‘bedrock of the food system’ (Tansey & Worsley, 1999, p. 16), the first section looks at ethical issues surrounding the production of our food.

ETHICS AND FOOD PRODUCTION Governed by strict regulations and protocols, a network of producers, manufacturers, wholesalers

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and retailers is responsible for delivering a quality-controlled ‘farm to fork’ approach to food production. As the food supply chain is extremely complex and fragmented (Schröder, 2003), this network expands exponentially if the product undergoes further processing prior to reaching our supermarket shelves. Such complexity has led to a ‘distancing between the production and consumption of food’ (Maye et al., 2019), and conceals the reality of intensive food production systems often used to meet consumer demand, thus making it difficult for consumers to learn about where their food comes from, how their food was made or how they can make ethical food choices (Berry & McEachern, 2005; Carrigan, 2018). As population estimates are anticipated to increase to 9 billion by 2050, technological innovation and global efficiencies are paramount if the agri-food sector is to meet increasing demand for food (Godfray et  al., 2010; Innovate UK, 2018). Here, the USA leads the way in large-scale agricultural systems featuring more than 50,000 concentrated animal feeding operations (CAFOs) and another 250,000 industrial-scale facilities (Harvey et  al., 2017). To give the reader an idea of the scale of agri-food production, a CAFO refers to a facility that houses over 125,000 broiler chickens, 82,000 laying hens, 2,500 pigs, 700 dairy cows or 1,000 beef cattle. Similarly, there are reported to be just under 800 CAFOs (or mega-farms as they are more commonly known) in operation across the UK, with the majority of eggs, chicken and pork being produced on an intensive scale (Wasley et al., 2017). Accompanying this production shift towards greater adoption of intensive farming systems is an unprecedented rise in animal and human health concerns (Nestle, 2004).

Ethical Food Production and Human Health Implications There are currently numerous studies that emphasise the immorality of intensive farming and animal suffering (Atkins & Bowler, 2001; Lindgreen & Hingley, 2003), but the public were first made aware of the ethical issues underpinning industrial-scale food production in the 1960s as a result of Carson’s (1962) Silent Spring and Harrison’s (1964) Animal Machines. Although both authors acknowledge the association between poor animal welfare/health and human health, Nestle (2004) specifically apportions blame for the rise in foodborne diseases such as Salmonella and Campylobacter to the intensification of agricultural production. However, consumers are noted as being more concerned about contaminant-based

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‘food scares’ relating to the use of antibiotics, hormones and pesticides (Miles et al., 2004). Despite the existence of legislation prohibiting the use of antibiotics to control disease (Meikle, 2004), antibiotic usage in intensive food production systems continues and is commonly cited as a contributory factor in lowering human resistance to antibiotics (Harper & Le Beau, 2003). Similarly, the EU-wide prohibition of growth-promoting hormones in beef production and the use of recombinant Bovine Somatotropin (rBST) have seen tensions between European and international regulatory bodies such as the WTO and Codex Alimentarius Commission rise (Knowles et al., 2007). These contaminant-based concerns are applicable to not just livestock production systems but also arable production systems whereby pesticide residues in food causes significant concern for consumers (Haung, 1993; The Co-op, 2001; Kushwah et  al., 2019), especially in relation to the synergistic effects (i.e. ‘cocktail effect’) of consuming different pesticide residues (Luijk et al., 2000) in one meal. Similarly, another issue influencing consumer trust in the food sector is the use of biotechnology to alter crop characteristics (e.g. increase yields, defend against crop pests). Although the majority of soy, corn, canola and sugar beet grown in the USA is genetically modified, few American consumers appear to show any resistance to genetically modified organisms (GMOs) (Lusk et al., 2018). This is in contrast to the ‘precautionary approach’ taken by over 60 countries including Japan, Australia and all countries within the EU as they have imposed either significant restrictions or a ban on the production and sale of GMOs. One food safety issue which strongly influenced consumers to pay attention to ethical issues surrounding the origin of their food and how it was produced was undoubtedly Bovine Spongiform Encephalopathy (BSE) in the mid-1990s. In an attempt to achieve cost efficiencies, animal feed manufacturers created feedstuffs prepared using the remains from other ruminants and reduced temperatures during feedstuff preparation, thus allowing the prions responsible for causing BSE to transfer from contaminated carcasses to healthy cows (Pennington, 2003; Schröder, 2003; Lien & Nerlich, 2004). The disease is also linked to a fatal brain disorder in humans, namely new variant Creutzfeldt– Jakob Disease (nvCJD), and despite a ban on British beef implemented soon after the scare, BSE has affected 231 individuals across 12 countries to date (CNN, 2019). Accompanied by significant media coverage and the attention of NGOs such as CIWF (Compassion in World Farming – https://www. ciwf.org.uk/) and PETA (People for the Ethical Treatment of Animals – https://www.peta.org/), the global nature of the food supply chain means that

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the scale of people affected will be much greater. Nestle (2004) warned the industry that all food problems were global problems due to ‘porous borders’ and that international approaches were required to ensure a safe food supply (p. 255). Nowhere is this more prevalent than the futile efforts of single countries attempting to contain Avian Flu outbreaks. Avian Influenza, or ‘Bird Flu’ as it is more commonly known to consumers, is regarded as one of the most highly pathogenic influenza viruses (RTD, 2006). The H5N1 Avian Influenza epidemic has been spreading since 1997 when the virus first appeared in Hong Kong. Two years later, the virus reappeared in South Korea and subsequently spread to eight eastern Asian countries (Lean & Carrell, 2005). From China, infected birds followed their migratory route across Siberia. Consequently, in the autumn of 2005, H5N1 appeared on the borders of Europe in Romania, Turkey and Croatia (Nicoll, 2005). Of the 861 human cases of H5N1 infection identified to date, 455 were fatalities, many of those occurring in Indonesia, Egypt or Vietnam (WHO, 2019). A key policy response to the above food issues saw the creation of institutions responsible for the implementation and verification of food standards. After much criticism of its handling of the BSE scare, the UK established an agency independent of government – The Food Standards Agency (FSA) – its main initial remit being for food safety (Shears et  al., 2001). Although previously criticised for its ‘ad hoc approach to the formulation of a European food policy’ (Knowles, 2001, p. 180), the European Commission also identified food safety as a key policy priority in response to the BSE crisis and in 2003 the European Food Safety Authority (EFSA) was created with a clear focus on the consumer as opposed to the product/market, though not in the areas of nutrition and diet. The US system is much more fragmented with the US Department for Agriculture (USDA), Food & Drug Administration (FDA) and the Environmental Protection Agency (EPA) all taking responsibility for food safety. Despite such efforts, consumers continue to express a significant level of distrust

towards food producers and regulatory bodies, and instead place more trust with retailers as a source of protection and disseminators of relevant information regarding production concerns (Kjærnes et al., 2007). After the aforementioned food scares and prominent media campaigns around animal confinement (e.g. tethered sows, battery hens, veal crates, etc.) public calls for greater assurances around safety, animal welfare and quality were made (McEachern & Tregear, 2000). The food industry duly responded with a variety of assurance schemes and quality labels to assist the consumer in making ethical choices (McEachern & Tregear, 2000; Ortega & Wolf, 2018).

Ethical Food Marketing and Communications To help rebuild consumer trust, despite very little difference between primary food brands, a range of labelling mechanisms were implemented and used to communicate product features, quality and safety from the mid-1990s onwards (McEachern & Tregear, 2000; Kjærnes et al., 2007). Using a variety of terminology, which arguably contributed to further consumer confusion, the food marketplace featured increasing numbers of values-based labels, quality labels and eco-labels (see Barham, 2002; McEachern, 2008). As these labels were generally reserved for primary food commodities (e.g. meat, cereals, eggs, fish), and aimed to communicate the ethical nature of production attributes and, where applicable, specific areas of animal welfare and traceability (Schröder & McEachern, 2004). Table 26.1 shows that, aside from the RSPCA and the Soil Association (i.e. both strongly emphasise animal welfare and the environment), most labels largely emphasise the safety and traceability aspects (see Ilbery & Kneafsey, 2000) rather than go beyond minimum standards relating to animal welfare criteria (McEachern & Tregear, 2000; McEachern et  al., 2007). This is because a sole focus on animal welfare is seen as risky by the industry (i.e. it may

Table 26.1 Main UK assurance schemes Labelling scheme

The Red Tractor

Freedom Food

Lion Quality Mark

The Soil Association

Standards covered

Food safety Animal welfare Environmental protection

Animal welfare

Food safety Animal diet Traceability

Certifying body Date established

Assured food standards 2002

RSPCA 1994

British Egg Industry Council 1998

Animal welfare Animal diet Environmental protection Food processing Packaging The Soil Association 1946

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actually put consumers off eating meat/fish) and thus largely ignored in favour of reporting on wider concerns around environmental sustainability (Lever & Evans, 2017). In the absence of more recent food scares and growing meat consumption in other parts of the world such as China, it is argued that the food industry places little priority and/or any consistency in setting or communicating animal welfare standards across international markets to help educate/inform consumers. Interestingly, European consumer engagement in food production standards may return to post-BSE levels as the UK intends to reduce food production standards (e.g. accept imports of chlorinated chicken from the USA) and engage in new trade agreements post-Brexit (Millstone et al., 2019). Given the various animal health issues and welfare criticisms in conventional farming production, a number of consumers switched their buying behaviour from conventionally produced foodstuffs (especially fresh meat and eggs) to organic food production (Harper & Makatouni, 2002). As with other countries (i.e. mainly Western although increasingly growing in Asian markets such as China and India), American consumer demand has increased year on year since organic standards for organic production were implemented by USDA in 2002 (Illukpitiya & Khanal, 2016). Expected to reach a worldwide value of €100 billion, purchases of organic food were reported to be €40 billion in the USA and €37 billion in the EU (Robert, 2019). Although motivated more by health and safety concerns, ethical identity is recognised as a strong predictor of organic food consumption (Brennan et al., 2003; Michaelidou & Hassan, 2008; Kushwah et al., 2019). Additionally, buyers of organic food products are generally perceived as being older (see also Carrigan et al., 2004), of a higher socioeconomic group and educated (McEachern & McClean, 2002). These traits are also generally associated with the profile of the ethical consumer (Harrison et al., 2005; Newholm & Shaw, 2007; Rokka & Uusitalo, 2008) in general. Another popular labelling mechanism used by food manufacturers to communicate ethical attributes is Fairtrade. The Fairtrade movement began in the 1950s and addresses international issues in the supply chain such as child labour, working conditions and a fair price for the commodity (O’Connor et al., 2017). Coffee and chocolate are among the largest Fairtrade markets in terms of volume and with just under 2,500 companies paying to use the Fairtrade mark on their food products; $9 billion worth of Fairtrade products were sold in 2017, benefiting 1.66 million producers (Subramanian, 2019). Many ethical issues are raised regarding food supply chains, particularly in relation to commodities sourced from the Global South. Nicholls and

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Opal (2005) summarise these issues as low prices paid to producers, poor working conditions for those at the producer/manufacturer level (i.e. especially under conditions of subcontracting), a lack of labour rights enforcement and reliance upon short-term contracts. As the Fairtrade concept is designed primarily to reconfigure trade and power relationships, the supply chain of a Fairtrade commodity is typically shorter than a conventional food supply chain and attributes greater power to bottom-up actors as opposed to the dominant topdown approaches from retailers (Eagle & Dahl, 2015). In the case of The Day Chocolate Company, a fairer model is implemented whereby on top of a Fairtrade minimum price, a social premium is paid to producers to cover production and living costs. Added to this is a social premium which permits investment into community infrastructure projects (see also The Co-operative’s Fairtrade activities at https://www.coop.co.uk/our-suppliers/ fairtrade – the first retailer to commit to Fairtrade and now celebrating its 25th year of involvement with Fairtrade). These commitments are agreed through long-term contracts, allowing producers to plan ahead (for a case study of The Day Chocolate Company and its impact see Doherty & Tranchell, 2005). Consequently, rather than the portrayal of Global South producers as marginal actors (see Konefal & Hatanaka, 2011) as per conventional supply chains, Onyas et al. (2018) illustrate the significant role of farmers in co-constructing sustainability when trade/power dynamics are driven by a bottom-up system. Of course, crucial to the success of Fairtrade supply chains is commitment and understanding of the process from the consumer. The Fairtrade logo is one of the most recognised by consumers as they increasingly criticise larger corporations for not doing more to alleviate poverty (Nicholls & Opal, 2005). However, as the label has become more popular among consumers, more mainstream organisations have now gained Fairtrade licences for their own products, with the result that the potential for ‘fairwashing’ (i.e. akin to greenwashing but in the context of fair trade) has become greater (Eagle & Dahl, 2015). The practice of fairwashing whereby companies promote themselves as being more ethically responsible than they actually are (Doherty et al., 2013) was especially prevalent among major brands such as Nestlé and Mars which gained Fairtrade accreditation for just one of their chocolate confectionery brands (i.e. KitKat and Maltesers respectively) and in some cases spent more on promotion of the accredited chocolate brand than the social premium paid to producers (McEachern, 2015). Unsurprisingly and similar to other labelling mechanisms, while consumers’ awareness of the Fairtrade mark is high, their understanding of what

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the mark signifies and how it works is limited. Here, McEachern (2015) reveals how consumers appear to confuse the Fairtrade logo with organic attributes and that they are unsure whether the payment premium is actually received by the farmer. Despite greater visibility of the ethical consumption movement in recent years, ethical food consumption remains challenging for consumers as it requires continuous information-seeking, deliberation and negotiation across a variety of food contexts (McEachern, 2018). Unfortunately, the ability of the Fairtrade mark to alleviate poverty is dependent upon consumers being able to ‘process information regarding the true benefits engendered by the Fair Trade label’ (Basu & Hicks, 2008, p. 477). This, however, may become much harder for consumers to ascertain as many leading companies are leaving the Fairtrade mark to establish their own ethical assurances and gain control of their supply chain – Nestlé’s Cocoa Plan and the UK supermarket chain J. Sainsbury’s launch of ‘fairly traded’ tea being just two examples of companies that have recently withdrawn from the Fairtrade Foundation’s accreditation scheme (Subramanian, 2019). As Fairtrade has become the industry standard in certain food sectors (e.g. as per the premium coffee market), it is inevitable that industry-based codes will effectively replace this accreditation scheme (Nicholls & Opal, 2005), making it harder for consumers to identify, select and consume ethical products and services.

ETHICS AND FOOD CONSUMPTION In contrast to the conventional food market which declined by 0.9% in 2015, ethical food markets grew by over 5% and are estimated to have a net value of just over £9 billion (Ethical Consumer, 2016). Described as a political practice which should not be ignored (Sherry, 2013), ethical consumption is supported by the mainstreaming of ethical food products sold in supermarkets (Doherty & Tranchell, 2007; McEachern, 2015); these consumption trends are fuelled by increasing availability of ethical food retail outlets (McEachern & Warnaby, 2017). While the above discussion deliberates mainly on ethical concerns and the positive buying behaviours of ethical consumers, it is also recognised that certain ethical concerns motivate anti-consumption, nonconsumption or boycott behaviours (Eagle & Dahl, 2015). Indeed, much research which points to an increasing awareness of the associated environmental impact, health concerns and animal welfare issues (McEachern et  al., 2007; Miele & Lever, 2013; Wexler, 2016; Moons et  al., 2018) is also linked to reduced and/or non-consumption of meat (Lever & Evans, 2017) and the growing uptake of vegetarianism and veganism as lifestyle choices.

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Ethical Food Consumption Choices – Vegetarianism and Veganism Trends Compared with countries such as China which are witnessing rising disposable incomes and increased consumption of meat (Browne et al., 2017), India, in contrast, demonstrates the highest rate of vegetarianism in the world (38%), almost a third higher than European countries that typically report a rate of 9% among their populations (Sawe, 2019). With 7% and 5% of the UK population now considered to be vegan and vegetarian respectively, another consumption trend displayed by 25% of consumers is a reduction of their meat consumption (Vegetarian Society, 2013; Tree, 2018). Organised by a coalition of over 60 NGOs and supported by media campaigns such as ‘Eating Better’ (https://www. eating-better.org/), celebrity chef Hugh FearnleyWhittingstall also calls for consumers to eat less meat and support farming systems that benefit the environment, health and animal welfare (WWF, 2013; Tree, 2018). Other NGO campaigns such as Meat-free Mondays and Veganuary led to over a third of consumers indicating a willingness to reduce their meat consumption (Vegetarian Society, 2013), resulting in the worldwide growth of ‘flexitarianism’ and ‘reducetarianism’ dietary trends. Flexitarianism describes a trend whereby the individual remains flexible but is conscious about food decisions, as well as ethical and environmental concerns (Ambler, 2017). While flexitarians mainly eat plant-based foods along with the occasional consumption of meat, eggs and dairy, reducetarians instead gradually reduce their consumption of animal products. This reductionism is also evidenced by Statista (2017) which concludes that 56% (i.e. 23% strongly agree; 33% agree) of consumers now feel that they do not need meat to have a good meal. Compared with the one-size-fits-all argument whereby meat eaters are condemned by vegetarians/ vegans, the ethos of both reductionist trends away from meat consumption is underpinned by a pragmatic and flexible acceptance: that it is significantly better to make meaningful changes to our diet no matter how small. Simultaneously, the Veganuary charity (Veganuary, 2018) is capitalising on the popularity of flexitarianism and reducetarianism trends, and encourages consumers to shun meat/ meat products throughout the month of January. In January 2017, of the consumers who participated, 67% say they will remain vegan in the future, and of those not staying vegan 95% say they will reduce or stop eating meat from cows and 92% say they will reduce or stop eating meat from chickens. Such movements are echoed globally, with the likes of the Taiwanese government who implemented a ‘one day vegetarian every week’ policy and now 13% of the population are confirmed as being vegetarian (Sawe, 2019).

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Motivations for reducing/avoiding meat consumption or switching to a plant-based diet are often cited as either ethical drivers (i.e. care for animal rights) or increased health consciousness (Moons et al., 2018). However, an alternative view proposed is that moving to a plant-based diet is just as ecologically harmful in that it drives production towards intensive crop production systems. Tree (2018) takes a more holistic view and argues that more sustainable forms of livestock production can actually help restore soil quality and biodiversity in contrast to conventional cropping systems that utilise pesticides and fertilisers, as well as soil erosion. This ‘blended’ approach of reducing meat consumption and increasing consumption of organic plant-based products may offer a more sustainable option but an increasing number of consumers do not have the capacity to make a choice regarding the type of food they consume or, in some cases, are not able to access sufficient food.

Ethical Food Consumption – Wealth and Its Impact upon Dietary Health While not attributing greater ethical concerns to wealthy consumers compared with poorer members of society (Hill, 2002; Park, 2018), much of the ethical consumer literature refers to a typical ethical consumer profile of a more educated individual and belonging to a higher income bracket which by default, therefore, has the earning capacity to pay a price premium often incorporated in ethical food products. This process immediately denies a significant proportion of society the opportunity either to make ethical food choices or in some cases afford to buy food. Despite Article 25 of the Universal Declaration of Human Rights which stipulates the human right to food, over 820 million people experience hunger and malnutrition and 2 billion are food insecure on a daily basis (FAO, 2019). Throughout the 1970s, 1980s and 1990s, food insecurity featured regularly in the context of famine and drought in sub-Saharan African countries. More recently, however, food insecurity has been a feature of Western economies, representing an urgent challenge for policy makers (Taylor & Loopstra, 2016; Galli et  al., 2018; Panori et al., 2019). As the UN places ‘zero poverty’ as one of its sustainable development goals, numerous short-term solutions are proposed in the form of foodbanks, food clubs, pantries, community kitchens and food vans (Lambie-Mumford & Dowler, 2015), all of which have especially increased in numbers since the global recession in 2007. Food poverty and hunger statistics are commonly documented in the USA, for example. Food

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poverty affects one in eight people in the USA – equivalent to 40 million people – with Feeding America (a US-based food relief charity) providing 4 billion meals through 200 foodbanks each year (Layne, 2019). From a Europe-wide perspective, Galli et  al. (2018) report on the European Federation of Food Banks now providing meals for over 6 million people across 23 EU countries. Similarly, food insecurity across the UK has never been higher, with 14.2 million people living in poverty (Social Metrics Commission, 2018). The UK’s main charitable organisation is the Trussell Trust, which currently operates approximately 1,200 foodbanks and provided 658,048 emergency supplies to people in crisis between April and September in 2018 (Trussell Trust, 2018). These statistics, albeit illustrating a growing emergency food trend, do not, however, reveal the full picture of food poverty in the UK (McEachern et al., 2019) as many as another 800 or so independent organisations are also involved in emergency food provision in the UK (IFAN, 2018). A key criticism around the foodbank model is that foodbanks do not deal with the root of poverty (Galli et al., 2018) or how to help transition vulnerable individuals out of food poverty (McEachern et al., 2019). In contrast to the ‘band aid’ solution of the foodbank (see Devin & Richards, 2018), one example of a food poverty relief model designed to provide a more permanent solution for vulnerable individuals experiencing food poverty, and one that helps to fulfil a closed-loop retail food system and simultaneously fulfil social objectives, is the social supermarket. A social supermarket is defined as a supermarket that ‘receives surplus food and consumer goods from partnership companies (e.g. manufacturers, retailers) for free and will sell it at symbolic prices to a restricted group of people living in or at risk of poverty’ (Holweg et  al., 2010, p. 2). Regarded as an innovative approach geared towards the provision of goods and services for the poor (Rahman & Hussain, 2012), the concept of social supermarkets arose in France in the late 1980s and in 2014 featured an estimated 800 stores, the highest number of social supermarkets in Europe. In contrast to the foodbank model, a key advantage of the social supermarket model is that while it attempts to address food poverty by selling surplus food to individuals on income support, it also aims to assist vulnerable individuals to return to work and/or address the root causes for the need for emergency food (McEachern, 2017; Saxena & Tornaghi, 2018). As emergency food providers such as the foodbank and the social supermarket depend largely on volunteer labour and entirely on food waste (i.e. wonkyshaped food, inaccurately packaged food, food past its best before date, etc.), donations from corporates (e.g. Asda-Walmart and Fareshare partnership) and

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private individuals, it becomes difficult for such business models to provide a stable, nutritious diet (Garthwaite, 2016; Saxena & Tornaghi, 2018). Together with calls for welfare reform (Alston, 2018), the growing reliance on emergency food provision for vulnerable populations raises public health fears for the future (Bazerghi et al., 2016). Income is regarded as one of the most significant influencing factors when looking at the relationship between health and diet (Atkins & Bowler, 2001). Contrary to media portrayal, Garthwaite (2016) argues that individuals who use/had used a foodbank generally possessed very good cooking skills and knowledge about what foods contributed to maintaining a healthy diet and lifestyle but were, instead, limited in their consumption due to income and mobility issues (e.g. food deserts). Consequently, the rich–poor gap is also recognised as contributing to a greater prevalence of obesity throughout society and other dietary-related diseases (Cohen, 2018). Of the world’s population 30% (i.e. 2.1 billion) are classified as obese – a rate that has tripled since 1975 (World Population Review, 2019). Obesity trends among the food insecure is magnified by two things: (1) healthy food is three times as expensive as mass-produced, processed food and therefore is often the first part of the diet to be cut back on; (2) due to the increased perishability of fresh fruit and vegetables, greater amounts of tinned/processed foods are donated to foodbanks and therefore impact upon dietary quality for many (Garthwaite et  al., 2015). Despite access to healthy fresh fruit and vegetables being central to addressing food security, dietary quality and obesity (Drewnowski, 2009; Calloway et al., 2019), this makes the issue of food waste an ethical concern from both a production and a consumption perspective as it represents a waste of materials (e.g. land, labour, energy, and produces CO2 emissions) as well as a missed opportunity to redistribute (in some cases) fresh fruit and vegetables to disadvantaged populations via social supermarkets and/or foodbanks.

ETHICS AND FOOD DISPOSAL It is estimated that one-third of global food production is lost, equating to a value of $1 trillion annually (Melikoglu et  al., 2013; FAO, 2019). This is despite a UN goal to halve food waste at retail and consumer levels by 2030 (UN General Assembly, 2015). Paradoxically, despite the food-insecure statistics noted above, the USA, Canada and the EU are responsible for 90% of global food waste (Melikoglu et al., 2013). Aside from the economic impact of this waste, the environmental impact is enormous and is associated with significant

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methane and CO2 emissions, as well as excessive water usage and fertiliser applications (Papargyropoulou et al., 2014). In the USA and Canada alone, food waste is estimated at 144 million tonnes of CO2 per year, using 14.9 billion cubic metres of water on 17.7 million hectares of cropland (Heller, 2019). The environmental impact of food disposal is thought to be even greater when taking into consideration changing dietary trends towards imported, non-seasonal fruit and vegetables and increased consumption of resource-intensive foods such as meat (Thyberg & Tonjes, 2016), not to mention shifts towards processed foods incorporating greater use of single-use plastics.

Ethical Food Disposal – The Scale and Impact of Food Waste There are many causes underpinning the reasons for food waste along the supply chain. From a UK production perspective, it is estimated that 3.6 million tonnes (i.e. amounting to a value of over £1 billion) of food is wasted before leaving the farm, due to a failure to meet strict quality standards (i.e. including colour, shape, length, etc.), fluctuations in demand or problems experienced during packing or storage (Butler, 2019). Similar reasons are attributed to the Australian supply chain and are noted as being particularly problematic in countries where retail market power is concentrated (Devin & Richards, 2018). Although food waste has generally been overlooked by governments, scientists, retailers and the general public (Evans et al., 2012; Lever et al., 2018), some NGO/policy-led efforts have been made. For example, as part of Agenda 2030, the UN General Assembly aims to halve food waste (UN General Assembly, 2015). In the USA, tax incentives for donors have helped waste reduction as well as implementation of the US Federal Food Donation Act of 2008 (Thyberg & Tonjes, 2016). Also bringing together local authorities, producers, manufacturers and retailers, voluntary commitment to the Courtauld 2025 aims to cut carbon, water and waste by at least a fifth (WRAP, 2019a). Other countries such as France and Italy have gone further and attempted to address food waste by implementing regulations and initiatives to restrict the disposal of surplus food. It is argued, however, that the voluntary-led approaches of the food supply chain and the CSR efforts of retailers have had minimal impact upon reducing food waste (Devin & Richards, 2018) and that household waste needs to be targeted also (Thyberg & Tonjes, 2016). Certainly, the consumer is viewed as one of the biggest contributors to food waste, representing up to 50% of food waste in the EU and up to 60% in

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the USA (Stancu et al., 2016). Bread (11%), fruit and vegetables (34%) and dairy/meat (15%) are reported to be the most common food items to be disposed of unnecessarily (WRAP, 2019a). In addition to a lack of awareness, the most common response by consumers when discussing household food waste is that it is perceived as a ‘waste of money’ (Graham-Rowe et al., 2014) as opposed to its being an ethical issue. Anxieties about food safety and social desirability (e.g. avoidance of safe food for aesthetic reasons such as uneven shape/ bruised produce; avoiding negative feedback from serving reused food) are other causes attributed to consumers’ food waste practices (AschemannWitzel et  al., 2018). While consumer skillsets (i.e. food planning, cooking with leftovers) may also be limited (Stancu et  al., 2016), it is argued that retailers can also do more to minimise food waste (Aschemann-Witzel et  al., 2015; Swaffield et  al., 2018). Echoing such calls, WRAP (2019a) acknowledges the upstream and downstream flows of influence within the food system and suggests that changes to food packaging and labelling could offer a useful intervention to improve manufacturing, retail and household waste.

Ethical Food Disposal – Food Packaging and Single-Use Plastics As discussed per the stages of food production and food consumption, there also exists many ethical implications around food packaging. Despite food packaging helping to extend shelf-life and minimise food waste either by adopting smart packaging technology (e.g. moisture absorbers, RFID tags) or by permitting relevant marketing information to consumers to inform purchase (Han et al., 2018), Heller (2019) argues that by making adjustments to packaging, 189,000 tonnes of food waste with an economic value of $715 million could be diverted in the US food supply chain. Although a core purpose of packaging is often to ensure food quality (e.g. prevent bruising of fresh fruit) and food safety (e.g. prevent contamination from dust, pathogens, light or humidity) and therefore minimise food waste, the increased adoption of packaging materials has created a substantial environmental impact. Despite expressing preferences for environmentally-friendly packaging (Rokka & Uusitalo, 2008), consumers are often unclear about the meaning of packaging information as well as unaware of how packaging can extend the food product’s lifespan (WRAP, 2015). Consequently, a quarter of household food is wasted due to food packages being too large (e.g. 33% free offers; single households having to buy family sized products), food packages being awkward to empty completely (e.g. sauce bottles)

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and best before dates contributing to perfectly edible food being disposed of (Williams et al., 2012). These disposal behaviours point to significant tradeoffs for food producers and retailers with regards to addressing policy-led, food safety and environmental requirements, as well as responding to the needs and attribute preferences of consumers. Consequently, many food companies are now looking either to reduce packaging materials where possible or to create more environmentallyfriendly, biodegradable or compostable packaging solutions. However, most if not all food packaging innovations involve plastic (Heller, 2019). Despite taking more than 450 years to degrade, of the 300 million tonnes of plastic produced each year, only 12% is recycled (Maye et al., 2019). This statistic is even more alarming when considering that for the majority of food packaging, its single-use function is extremely short-lived (e.g. drinks bottles, plastic bags, and takeaway cups/cutlery). With the USA as just one exception, most countries have implemented a levy or an outright ban on plastic bags to reduce the 1–2 million plastic bags that are purchased globally every minute (Nielsen et al., 2019). Similarly, global brands such as Costa Coffee and Pret a Manger have introduced discounts for consumers who use their own reusable cups to reduce the 500 billion disposable coffee cups that are used globally, as only 1% are recycled (Ferreira & Ferreira, 2018). TV programmes such as Hugh Fearnley-Whittingstall’s War on Waste and Sir David Attenborough’s Blue Planet II have helped raise public awareness of plastic waste and industrial pollution of the oceans (Maye et  al., 2019), but the limited efforts to date from companies have been the subject of much criticism, especially in the UK as only 10% of the cost of waste disposal is met by businesses, the rest being met by taxpayers. This practice varies by country with French companies paying a sliding scale depending on the amount of waste produced and German companies paying 100% of costs (Maye et al., 2019). Coincidentally, corporate and government efforts to minimise waste and environmental impact have escalated after China introduced its import ban on waste plastic in 2017. In the UK, for example, WRAP (Waste & Resources Action Programme) joined forces with the Ellen MacArthur Foundation and launched the UK Plastics Pact in April 2018 to encourage a more circular approach to plastic recycling and create more sustainable end-markets (WRAP, 2019b). To date, just under 130 companies have signed up to the pact in its first year, with each signatory committed to eliminating unnecessary single-use packaging through redesign; making all plastic packaging 100% reusable, recyclable or compostable; achieving recycling and composting rates of 70% or more for packaging; and including 30% recycled content across all packaging by 2025

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(George, 2019). The uptake of the Plastics Pact has now widened and has been successfully launched in France, the Netherlands and Chile (WRAP, 2019b). While some of the waste targets set also appear in the UK government’s 25 Year Environment Plan, it may be argued that many companies are simply getting on board before being pushed. Indeed, grassroots initiatives such as the Extinction Rebellion movement currently taking place in the USA, UK, France, New Zealand, Germany, Spain and Austria are successfully being used to demand action from governments on the environmental front, as well as the likes of Greta Thunberg’s international campaign criticising countries’ actions on carbon emissions and climate change (BBC News, 2019). Overall, to ensure further environmental progress is made, much improved government policy and sustainable business models are called for (Lever et al., 2018).

CONCLUSION This chapter clearly illustrates how the realm of ethics is connected to our food at every stage of the supply chain. Moreover, it provides evidence that ethics is applicable to all foods and not just organic, welfare-friendly, vegan or fairly traded food products (i.e. alternative food markets). In drawing together safety, social welfare and health issues around food production, consumption and disposal, it is evident that the neoliberal market model does not (and perhaps cannot!) offer a sustainable solution to the ethical issues revealed above. Certainly, more robust regulatory interventions are needed to address ethical issues. However, due to the fragmented nature of the global food supply chain, the above discussion reveals the difficulty in addressing various ethical issues as no one single actor is either fully responsible for any negative impacts or can address fully any negative impact created by the production, retailing, consumption or disposal of food. Additionally, too much of a switch to alternative systems upsets the balance of resources (e.g. switching from a meat-based diet to a plant-based diet). Our role as part of the global economy means that we must ‘bear some of the collective political responsibility’ for its impact (Maye et  al., 2019). Consequently, a food systems approach which collectively involves all stakeholders to take responsibility is needed to achieve a sustainable and ethical food sector (Leary et al., 2014; Galli et al., 2018). This takes into consideration the need to pay attention to the economic, social and environmental impact of our food system as well as the moral imperative of ensuring that the welfare of nonhumans (e.g. land, animals) be considered also (see Tree, 2018; Tisenkopfs et al., 2019). Finally, if we

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are to address successfully the unsustainable nature of our food supply and meet the SDGs by 2030, we must recognise and incorporate ethics as a core dimension of sustainability.

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https://www.theguardian.com/commentisfree/2018/ aug/25/veganism-intensively-farmed-meat-dairy-soyamaize Trussell Trust (2018). End of Year Stats. Accessed 10t December. Available at: https://www.trusselltrust. org/news-and-blog/latest-stats/end-year-stats/ UN General Assembly (2015). Transforming our World: The 2030 Agenda for Sustainable Development. Accessed 20 October. Available at: https:// sustainabledevelopment.un.org/post2015/transformingourworld/publication Veganuary (2018). Try Vegan This Month – Take the Pledge. Accessed 1 March. Available at: https:// veganuary.com/ Vegetarian Society (2013). Public Attitudes/Consumer Behaviour. Accessed 1 March 2018. Available at: https://www.vegsoc.org/page.aspx?pid=755 Wasley, A., Harvey, F., Davies, M., & Child, D. (2017). UK has nearly 800 livestock mega farms, investigation reveals. Guardian, 17 July. Wexler, J. (2016). Meat-free: Veggie vs meat. Ethical Consumer, May/June, p. 11. WHO (2019). Cumulative Number of Confirmed Human Cases of Avian Influenza (H5N1) Reported to WHO. Accessed 8 October. Available at: https:// www.who.int/influenza/human_animal_interface/ H5N1_cumulative_table_archives/en/ Williams, H., Wikström, F., Otterbring, T., Löfgren, M., & Gustafsson, A. (2012). Reasons for household food waste with special attention to packaging. Journal of Cleaner Production, 24(March), 141–148. World Population Review (2019). Most Obese Countries Population. Accessed 15 October. Available at: http://worldpopulationreview.com/countries/ most-obese-countries/ WRAP (2015). Consumer Attitudes to Food Waste and Food Packaging, Project Code: CFP104-000. Accessed 27 February. Available online: http:// www.wrap.org.uk/sites/files/wrap/Report%20-% 20Consumer%20 attitudes%20to%20food%20 waste%20and%20packaging_0.pdf WRAP (2019a). Courtauld Commitment 2025. Annual Review 2016/17. Accessed 16 October. Available at: http://courtauldreview.wrap.org.uk/ WRAP (2019b). Plastics: Market Situation Report 2019. Accessed 18 October. Available at: https:// w w w . e d i e . n e t / n e w s / 5 / O n e - y e a r- o n – H o w has-WRAP-s-Plastic-Pact-changed-business-s-approachto-single-use-plastics-/ WWF (2013). Hugh Fearnley-Whittingstall Backs Major New Alliance for Less and Better Meat. Accessed 1 March 2018. Available at https://www. wwf.org.uk/updates/hugh-fearnley-whittingstallbacks-major-new-alliance-less-and-better-meat

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27 Ethical Aspects of Digital (eHealth and mHealth) Marketing I s a b e l l K o i n i g , S a n d r a D i e h l a n d R a l f Te r l u t t e r

INTRODUCTION Digital health technologies, comprising concepts like mHealth (mobile health; Abidi, 2015) and eHealth (electronic health; Eysenbach, 2001), are driving change toward more individually centered, self-responsible, and empowered healthcare (Banos et al., 2016), not only enhancing the accessibility of health information but also contributing to more efficient and precise health delivery (Bhavnani et al., 2016). eHealth can be defined as ‘a broad group of activities that use electronic means to deliver healthrelated information, resources, and services’ (WHO, 2017). mHealth is typically viewed as part of eHealth and refers to ‘the use of mobile and wireless technologies to support the achievement of health objectives’ (WHO, 2011). According to the WHO’s mHealth report, issued in 2011, mHealth serves as a basis for one of the United Nations’ Sustainable Development Goals – the objective being to ‘ensure healthy lives and promote well-being for all at all ages’ (UN, 2017). While the WHO (2011) has repeatedly stressed the necessity to discover new horizons for health through mobile technologies, it has also pointed out that the areas of eHealth and mHealth

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warrant further research, especially against the background of increasing ethical concerns. Health, defined as ‘a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity’ (WHO, 1946), has a broad scope and integrates aspects of diet, fitness, and wellness among others (Schiavo, 2014; Banos et al., 2016). New technologies have altered how people perceive health, opening up new opportunities for consumer empowerment (Koinig, 2016; Koinig et  al., 2017). Individuals take a more active part in their healthcare and management (Bhavnani et al., 2016), as new technologies allow them to better track, manage, and improve many areas in life that contribute to their own or their families’ health (Morolla, 2019). The present investigation will start out by discussing the key principles of the current healthcare landscape, including the digitization of health content, eHealth, mHealth, as well as the ongoing datafication, including medical information. After elaborating on both the advantages and disadvantages of new healthcare technology, ethical issues of mHealth and eHealth will be thematized. Ethical issues concern data use and privacy, digital health literacy, information asymmetry, and data harvesting as well as new technologies and their implications for healthcare. The chapter will conclude with directions for future research.

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ADVANCING HEALTH: THE INCREASING RELEVANCE OF DIGITAL HEALTH The Internet has transformed conventional notions of both personal and public health (Eng and Gustafson, 1999; Sonnenberg, 1997) and is seen as responsible for extending ‘the scope of health care beyond its traditional boundaries’ (Eysenbach, 2001, p. 20; Viswanath, 2005; Stevenson et  al., 2007; Fox and Jones, 2009). Health Information Technology (HIT; Buntin et al., 2010) as provided on the Internet has been responsible for significantly altering individuals’ health-seeking behaviors. As information channels have multiplied, digital health information has become available in abundance. Following a 2018 Accenture survey, 75% of US respondents perceive new technology as either very important or important to their health. The most commonly used electronic health managing tools are websites (56%) as well as mobile phones (46%) (Accenture, 2018b). The last two decades have also witnessed a dramatic increase in health monitoring systems (Baig and Gholamhosseini, 2013). Services range from software to hardware solutions, encompassing email, text messages, apps and wearables, just to name the most prominent ones. Healthcare systems around the world have started to prioritize the implementation of advances in new digital technology in the healthcare sector, where these new developments have also been found to resonate with consumers. For instance, although being burdened by already high healthcare costs, surveys indicate that Americans would still leverage health technology, even expressing a high willingness to pay for innovative services (Makovsky Health, 2015). New tools have the potential to improve communication with clinicians, offer access to personal health information, and foster health education to prepare patients to take a more active role in their care (Franklin et al., 2009). Digitization and new technologies generate a massive amount of data. The ‘datafication of everything’ also heavily affects the health sector (Mayer-Schönberger and Cukier, 2013), with private data being of high value in and to the healthcare market (Nissenbaum and Patterson, 2016). In the process, the scope of data has become broadened, since any type of data, be it sleeping or eating habits, personal interests, or social ties, is rendered meaningful (Bächle, 2019). Moreover, values that are directly associated with consumer culture (e.g., group affiliation, location, movement, and purchase behavior) are suddenly of large economic value as people leave digital traces everywhere (Bächle and Wernick, 2019). Bächle and Wernick

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(2019) talk about a ‘universal valorization of data,’ that is, turning data and its use into new streams of revenue. Hence, data is not only tracked but also utilized for large-scale research (Ofcom, 2015). This massive collection and extraction of data from online sources is often labeled ‘data harvesting’ (Lupton, 2014). In the process, however, new social and economic divides are generated, forcing policy makers to install more lenient data protection regulations (Bächle and Wernick, 2019). In consequence, calls for data protection and confidentiality are on the rise.

IMPORTANT DIGITAL HEALTH PRODUCTS: HEALTH APPS, WEARABLES, AND FITNESS TRACKERS Health Apps Health apps refer to smartphone applications which target either healthy or unhealthy individuals with the goal of supporting them in obtaining a healthy lifestyle (HealthOn, 2016). In 2014, mHealth apps and services were already used by more than one-third of Americans (39%; Statista, 2017a); by 2018, numbers had risen, as almost half of all US respondents claimed to utilize mHealth apps (46%; Accenture, 2018a). Previous studies have found mHealth applications to be specifically popular among younger respondents who also had a higher education (Bhuyan et  al., 2016). The scope of mHealth apps is continuously expanding, now also comprising areas such as biofeedback, which can be useful to individuals dealing with health conditions like insomnia (Taylor and Roane, 2010), headaches (Nestoriuc et  al., 2008), and chronic pain (Palermo et  al., 2010). Biofeedback describes the process in which physiological functions of the human body (e.g., heart rate, muscle tone, skin conductance) are monitored through technical devices (e.g., smartwatches, sensors), allowing the individual not only to receive information about his/her body but also to learn to control his/her bodily functions (Durand and Barlow, 2009). In 2012, the highest download rates were reported for dieting and exercise apps (Fox and Duggan, 2012), classifying as lifestyle apps that assisted individuals in achieving their dietary and nutritional goals (Bert et al., 2014; Alghamdi et al., 2015). In a 2015 study, the majority of apps were referred to as ‘wellness management apps’ and comprised fitness apps (36%), lifestyle and stress management apps (17%), as well as diet and

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nutrition apps (12%; IMS Health, 2017). On the other hand, disease-related apps assist individuals in managing existing health conditions (e.g., by signaling that medicine must be taken), preventing and reducing the risk of disease while also maintaining their health. These apps fulfill a variety of purposes, ranging from information, instruction, recording, and monitoring of data, through data display and guidance, to reminders and patient– provider communication (IMS Health, 2015). As of May 2019, more than 320,000 healthcare apps were available for download through the Apple Store or Google Play (Mulder, 2019). App use is particularly appealing given the services’ comparatively low costs (Gowin et  al., 2015). Many of these apps are even free of charge (e.g., Drink Water Reminder and Samsung Health App) and then financed by in-app advertising or data commercialization, but there are also paid apps (e.g., Auto Sleep or Heart Watch) (Statista, 2019a; Apple, 2019). Through a combination of the words free and premium, freemium models mean that the utilization of basic features of the app are free in order to gain customers, while consumers are then charged for any upgrades to the basic package (de la Iglesia and Gayo, 2008).

Wearables and Fitness Trackers Wearables allude to computer technologies which are attached to the human body or head for the purpose of recording human (and health-related) data (Technopedia, 2019). For instance, at present, wearables are being used by almost one-third of the American population (Statista, 2018b), and are predicted to take on greater significance. The most important vendors of wearables are Apple, Xiaomi, Huawei, Samsung, and Fitbit (Statista, 2019a). The US market is the largest market, with a sales volume of about $3.1 billion for smartwatches and $1.8 billion for health and fitness devices in 2015 (Statista, 2017b). As of 2019 (Q2), more than 34 million wearables were sold worldwide (Statista, 2019a). By 2022, the sales volume of wearables and fitness trackers is expected to increase substantially, reaching 190 million sold pieces (Statista, 2017b). This increase can be ascribed to the ever-broadening scope of these gadgets’ functionalities, which claim to offer individuals a lot of health-related benefits and enable them to optimize individual performance. Whether this number can be obtained, however, remains to be determined since data security and privacy are still listed as the prime reasons as to why consumers refrain from using wearables altogether (Goodyear et al., 2019). The data generated through these gadgets also offers

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viable input to insurance companies, doctors, and commercial companies (Wang et al., 2016). Common areas for wearable use concern both rehabilitation and the monitoring of health symptoms (O’Neil, 2019), while these gadgets are also useful in providing information for independent living in the case of elderly people (Godfrey, 2017). Recent statistics, however, indicate that wearables are more frequently acquired by people who are in good health and want to remain in good shape through the use of wearables (Piwek et al., 2016).

BENEFITS ASSOCIATED WITH DIGITAL HEALTH-RELATED PRODUCTS Following Bächle and Wernick (2019), digital health potentials should be assessed from three different perspectives: a patient perspective, a medical perspective, and a research perspective. From a patient perspective, new technology allows for better access to information sources, tailored communication, and targeted treatments, further enabling patients to become empowered and have a greater say in their healthcare (Koinig, 2016; Koinig et al., 2017). Digital health technologies provide personalized health information, and, with this, consumers’ interest in health, fitness, and sport has been elevated as well, as these devices allow them to assume more control over their healthcare (Klasnja and Pratt, 2012). mHealth/eHealth potentials are manifold, ranging from booking and confirming appointments, over receiving test results or treatment plans, to diagnosing symptoms, consulting doctors, complying with treatment or dietary regimes, health monitoring and tracking, even across long distances (Gold et al., 2012; Lewis et al., 2012; Piette et al., 2012; Atkin and Rise, 2013; Capurro et al., 2014; Loss et  al., 2014; Lupton, 2015; Statista, 2017b). Through the digitization of content, information is immediately accessible, benefitting both individuals and professionals alike (Javitt, 2014; Boulous et  al., 2015). Further advantages of eHealth and mHealth solutions comprise access to information around the clock, anonymity, elimination of the potential for discrimination, mutual support, as well as the opportunity of getting a second opinion (Cline and Haynes, 2001; White and Dorman, 2001). From a medical perspective, the growing relevance of swift health delivery in the form of telemedicine (i.e., the delivery of healthcare via telecommunications technology and without inperson visits; WHO, 2010) and mHealth solutions

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is continuously stressed, as is the necessity to digitize health information to ensure proper information access across multiple populations and continents (Bächle and Wernick, 2019). mHealth solutions are suited to benefit especially low- and middleclass communities as well as remote communities or rural areas (WHO, 2011; Horne-Moyer et  al., 2014; O’Neil, 2019), making healthcare delivery more efficient and precise (Bhavnani et al., 2016). mHealth can have positive implications for the healthcare system, facilitating reduced healthcare costs and doctor consultations, examinations as well as shorter hospital stays (Statista, 2017a). The individual medical provider (e.g., physician) can also benefit from improved digital health technology. For instance, through online ratings on physician rating websites (e.g., Terlutter et al. 2014; Bidmon, 2019), the rated physician is able to gather information on patients’ perception of the physician’s service, allowing him/her to improve the service level. From a research perspective, the management of new and increasing streams of data – namely, big data (Mayer-Schönberger and Cukier, 2013) – opens up avenues for research. The abundance of data collected through digital technologies enables researchers to base their research on broad empirical evidence. In addition, the data can be analyzed with methods of artificial intelligence, for instance, in order to detect unseen and yet unexplored relationships in the data, a further exploration of which might deliver new insights and knowledge. For instance, such analyses can be used to predict epidemic outbreaks or disease processes in a much improved way (Lupton, 2014). Regardless of the perspective (patient, medical, research) taken, new ethical questions and challenges arise (Bächle and Wernick, 2019; O’Neil, 2019). In detail, we have formulated four guiding questions: 1 How can we be assured that technological advances in the areas of eHealth and mHealth benefit the individual? 2 How can we be guaranteed that everybody has equal access to eHealth and mHealth services? 3 How do we deal with the data produced by eHealth and mHealth? 4 Ultimately, which challenges originate from the introduction of new technologies like VR, AR and gamification? In the following, a set of selected ethical issues related to the four guiding questions outlined above will be elaborated on in more detail, paying specific attention to their implications for marketing executives in the field of eHealth/mHealth. After discussing the challenges associated with each aspect, each section will conclude with recommendations for marketers.

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ETHICAL ISSUES ASSOCIATED WITH DIGITAL-HEALTH-RELATED PRODUCTS AND RECOMMENDATIONS FOR HEALTH MARKETERS How Can eHealth and mHealth Benefit the Individual? Quality and Effectiveness of Health Apps and Their Promotion While the promise of self-tracking devices predominantly concerns individualized and tailored healthcare solutions, assisting individuals in improving their lifestyles and health altogether (Maher et  al., 2017), critical researchers warn users to be cautious ‘against the excessive optimism towards the role and the potential of selftracking technologies’ (Trinkhaus, 2019, p. 79). Usage of apps and wearables is often avoided on the grounds of missing evidence on their effectiveness, privacy concerns as well as data security (Ahmad et al., 2006; Hou and Shim, 2010; Ratzan, 2011; Donker et al., 2013; Wang et al., 2018).

Quality of produced data and longterm benefits

Uncertainty exists regarding the accuracy of data produced by wearables and apps as well as the long-term effects associated with app and wearable use (e.g., Hosseinpour and Terlutter, 2019; O’Neil, 2019). For example, Vandelanotte et  al. (2016) observed that eHealth interventions – especially if taking the target audience’s needs into consideration – can lead to positive short-term changes in individual behaviors. Fewer research studies, however, have dealt with the long-term effects of app use. This might also be grounded in the fact that most apps are developed without the help of behavioral experts (Sukalla and Karnowski, 2019), suggesting that evidence-based theories are seen as secondary in mHealth intervention planning and development and, thus, also missing from the academic discourse. Several authors therefore plead for the inclusion of behavioral theories into the mHealth research agenda to make apps more successful (Vandelanotte et  al., 2016; Hosseinpour and Terlutter, 2019). For instance, the use of models of technology acceptance such as the unified theory of acceptance and use of technology (UTAUT 1 or UTAUT 2) (Venkatesh et  al., 2012) might be useful points of reference for better app designs. Considering its relevance to previous research, the utilization of the theory of planned behavior (TOB) might be fruitful as well (e.g., Parkinson et al., 2016).

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The ethical aspects of app design are addressed by Sharp and O’Sullivan (2017). Their literature review revealed that while privacy and security are commonly taken up in academic research, ethical issues receive only limited attention. The authors encourage more in-depth studies to be done on selected ethical aspects in mHealth, as these are likely to impact individual app usage. Likewise, the authors emphasize that ethical issues already need to be thematized in the app design process, suggesting that the development of guidelines might assist developers in taking up relevant issues at an early stage. Selected aspects warranting further research also concern data protection or data encryption, as suggested by Silva et al. (2013) or Gurman and colleagues (2012). Based on the observations presented above, the following recommendations for marketers can be derived.

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health apps by the public is likely to increase in the future. First tendencies pointing in this direction have already been observed, with selected EU member-states (e.g., Germany) authorizing practitioners to prescribe mHealth/eHealth treatment (Ärzteblatt, 2019). Marketers are therefore advised to consider the following aspects:

ETHICAL RECOMMENDATIONS FOR MARKETERS • Provide a state-wide implementation of mHealth/eHealth solutions to ease the cost-ridden healthcare system. • Collaborate with health practitioners to increase awareness for and relevance of eHealth/mHealth solutions. • Highlight the potentials of apps to enable a more involved and active lifestyle.

ETHICAL RECOMMENDATIONS FOR MARKETERS • Try to improve the quality of an app by including medical experts in the app development process (‘evidence-based’ development). • Include a clear definition as to what the app is meant to achieve and who it is intended to be used by. • Introduce mandatory app development guidelines and quality standards.1 • Identify clear measurements of (shortterm and long-term) app success.

Promoting effective apps

Some apps are more effective than others, some are free to download, while others require a nominal or substantial charge, contradicting the WHO’s and UN’s desperate call to ensure ‘health for all’ (Koinig and Diehl, 2020). It is important to note that costs alone are not indicative of app quality or service effectiveness. Rather, individuals have to be made aware of the relevance and health-related benefits that come with the use of eHealth/ mHealth solutions. For instance, it is recommended that health professionals – who still enjoy high levels of trust – point out the use and efficiency of selected apps to individuals, who have proven more likely to take up apps on recommendation (Lucht et al., 2019).2 Once healthcare professionals start to realize the potential of mHealth in personalized healthcare (Dünnebeil et al., 2012; Fitzgerald and McCelland, 2017), the use of

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How Can Equal Access to eHealth and mHealth Services Be Guaranteed? mHealth/eHealth Access and Digital Health Literacy The present-day health information landscape is still characterized by information asymmetry, leaving selected population groups at a disadvantage regarding message comprehension or access to health-enabling information (Williams et  al., 2003). This inability to access or comprehend information has further implications, negatively affecting patient compliance with doctors’ recommendations or medication adherence, as well as inhibiting respondents’ intentions to change their behaviors (Laugesen et al., 2015).

Information asymmetry

Information asymmetry is defined as people having access to unequal amounts of information – a state that then determines differences in health decisions and outcomes. Generally, this information gap exists between consumers (‘lay experts’) and professionals (‘medical experts’; Retchin, 2007). Throughout the world, information asymmetry has been blamed for healthcare systems’ inefficiency (Cruz and Kini, 2007), leading countries to struggle with high healthcare costs (De Fraja, 2000; Chalkley and Malcomson, 2002; Siciliani, 2006; Barile et  al., 2014; Beeknoo and Jones, 2017). It is the growth of the Internet and its potential that allows patients to work towards the

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reduction of this information asymmetry (Cruz and Kini, 2007), fostering developments towards a more consumer-driven model of health. With the ‘googlisation of health research’ (Sharon, 2018), patients’ status changes – they are ‘wired’, equipped with access to digital health information and services (Middleton, 2005; Makovsky Health, 2015), and thus become lay-experts, building up a counterbalance to doctors as medical experts (Williams et al., 2003). There are also a number of problems associated with digital health information. On the one hand, the quality of information is often unclear (Arrow, 1963). Due to the complexity and abundance of information available to consumers, they are confronted with the burden of how to evaluate this information (Arrow, 1963). Furthermore, gathering and evaluating correct information can turn into a time-consuming activity (Haas-Wilson et al., 2001). However, there is a clear potential for new technology to reduce the existing information asymmetry between the different stakeholders in the healthcare sector (Cruz and Kini, 2007; Major, 2019). This holds especially true for developed and digitally advanced countries (Major and Kiss, 2013), where experts claim that it takes a joint effort to reduce information asymmetries (Mascarenhas et al., 2013). In this context, health marketers are advised to utilize the following strategies.

ETHICAL RECOMMENDATIONS FOR MARKETERS • Develop information standards. • Implement ‘seals of approval’ indicative of app quality. • Ensure information credibility by increasing transparency, and invest in search engine optimization (SEM) to prioritize quality health information.

Digital health literacy

Besides having access to health information, understanding the retrieved information is key. A survey among German physicians revealed that many patients bring up incorrect or misunderstood information as found on the Internet in the doctor’s office (Moick and Terlutter, 2012). The comprehension of health information is aided by health literacy, which constitutes one of the most important assets to be achieved through health

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communication (Schiavo, 2014). The WHO (2009) defines health literacy as ‘the cognitive and social skills which determine the motivation and ability of individuals to gain access, to understand and use information in ways which promote and maintain good health.’ By improving people’s access to health information and their capacity to use it effectively, health literacy is critical for empowerment. This basic conceptualization of health literacy does not suffice in our present-day interconnected and interactive health environment, rather digital health literacy – or eHealth literacy – is required (see, e.g., Norman and Skinner, 2006; Gilstad, 2014) that demands high levels of computer literacy and media literacy, too (Gilstad, 2014). Given the multidimensionality of digital health literacy, a number of recommendations for marketers can be derived. ETHICAL RECOMMENDATIONS FOR MARKETERS • Keep information short and simple to reach those target audiences with low literacy skills and reduce misunderstandings in the process. • Present information in a variety of forms, including videos, visuals, and checkboxes. • Give individuals some choice regarding the selection of content. • Integrate links to additional information to encourage individual skill development by designing multi-channel and multimedia information materials.

What Happens to the Data Produced by eHealth and mHealth Services? Data Privacy and Information Transparency The use of new technologies in the health sector has also been found to lead to ‘the invasion and loss of privacy’, ‘surveillance and control’, or the ‘loss of human agency [on grounds of automation]’ (Bächle and Wernick, 2019, p. 8). Users have little control over which data is published online (Williams et al., 2003), leaving them in the dark as to what happens to their data as well as the risk of false and misleading data being spread (Ferguson, 1997). In addition, the sources of online health information might not be reliable – the Internet allows for lay opinions after all. Also, comprehension among online message recipients

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might be limited due to their low health literacy levels (Adams et  al., 2009). If message comprehension is inhibited, this might also lead to insecurity among recipients.

Information transparency and ‘purpose limitation’

Through increasing ‘universal datafication’ (Bächle and Wernick, 2019), a continuous invasion and/or loss of privacy has been reported, which contradicts the high value of privacy attributed to health information in Western societies (Nissenbaum, 2010). Patients are turned into ‘data subjects’ who are permanently surveilled and monitored (Lyon, 2007). In the process, a shift of power occurs, allocating the responsibility to the individual as the ‘responsible and healthy subject’ (Bächle, 2009, p. 53). Of course, while empowerment can be seen as a blessing by some, it can be seen as a burden by others (Bächle, 2019). The availability of online services makes for a faster delivery of care and increased participation (Street, 2003); however, ethical concerns regarding consumers’ privacy have been found to be at stake. While digital technology is on the rise, the legal requirements have been found not to fit this complex field of law which covers not only services and products offered by a number of private and commercial actors, but also the provision of services across the borders of national countries (Bächle and Wernick, 2019). Moreover, due to their novel and innovative product character, many medical gadgets (e.g., wellness apps) cannot be categorized, challenging current legal regulations (Mulder, 2019) by, for example, falling outside the scope of the Medical Device Act. Likewise, as technical developments are hard to predict, eHealth technologies were purposely not addressed by legal documents in order to avoid a continuous adaption of laws (Bächle and Wernick, 2019). Even though harmonization was meant to be achieved with the introduction of the EU General Data Protection Regulation (GDPR), it has only been achieved in part so far (e.g., the processing of sensitive health data is prohibited according to Art. 9 GDPR). A common and well-known problem is that healthcare is subject to individual member-states’ jurisdiction (Bächle and Wernick, 2019; Mulder, 2019). Moreover, the legal authorities are required to develop solutions in shorter periods of time, since technology is advancing so rapidly (Askland, 2011; Mulder, 2019). Health issues have been found to be highly private, and, as a consequence, individuals value the privacy, anonymity, and confidentiality of their

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health-related data (Horgan and Sweeney, 2010). Due to the nature of health data as ‘sensitive data’ (Art. 9 GDPR), its use is limited, labeled as ‘purpose limitation’ (Art. 5 1c GDPR). This implies that any health-related data or information ‘can only be processed for specific, explicit, and legitimate purposes’ (Mulder, 2019, p. 40). Besides data security and confidentiality, control is a core issue in the health context (Bächle, 2019). Data collection is most of the time intentional (e.g., through self-tracking devices or apps), yet in other instances data is recorded unintentionally (e.g., when using a smartphone for tracking purposes). Although data is produced through individuals’ actions, it is important to note that the data itself is not owned by them but by third parties (Fairfield, 2017), who have the tendency to monetize this information (Ajana, 2017) – a fact lots of users are unaware of. This then results in new social divides (Prainsack, 2017). Based on the arguments presented above, the following recommendations for marketers can be derived which are particularly relevant if the legal regulations are unclear.

ETHICAL RECOMMENDATIONS FOR MARKETERS • Ensure data privacy and inform users about the data privacy policy. • Refrain from data harvesting without users’ consent.

Privacy paradox

Previous studies have revealed that individuals’ behavior with regards to maintaining their privacy is rather inconsistent (see, e.g., Norberg et  al., 2007). In opinion polls, for instance, only 3% of people claim not to care what happens to their private data, while 70% of all interviewees are reluctant to provide commercial parties access to their data (Bitkom, 2015). This seems to be particularly true for sensitive data like health information (GfK, 2016). Although privacy seems to be highly valued by individuals, recent studies reveal a dangerous tendency: in 2015, 87% of people inquired appeared willing to share private data and/or information if the provision of personal data was to their benefit (e.g., free service use or discount; Buxmann, 2015). In the literature, this controversial behavior has received a significant amount of attention and is discussed as the ‘privacy paradox’ (Acquisti and Grossklags, 2003; Boyd and Ellison, 2007; Norberg et  al., 2007;

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Smith et  al., 2011; Schütte, 2019). In detail, this paradox refers to individuals sharing personal information even though they express fear and concern that their privacy might be invaded or harmed – thus, their actions contradict their beliefs (Gerber et  al., 2017; Schütte, 2019). Contradicting and opposing behavior on behalf of individuals might be triggered as granting companies access to private data comes with a ‘surplus value’ – a premium that can take either monetary form (e.g., virtual rewards, special offers; Piwek et al., 2016), or social form (inclusion, participation; Dinev and Hart, 2006; Karwatzki et  al., 2017). In most instances, the problem lies with vaguely formulated privacy policies. When analyzing 30 privacy policies, Mulder (2019) identified a total of 19 different processing purposes, which range from providing services or providing care, information provision, marketing, identity confirmation, or making information available to third parties. Due to the broad range of purposes, Mulder (2019) encourages a more detailed description of processing purposes to provide users with more insights as to what is happening with their data. In order to do so, she calls upon app developers and providers to collaborate with the European Data Protection Board (EDPB; Mulder, 2019). Based on the arguments presented above, marketers are encouraged to invest in the following areas. ETHICAL RECOMMENDATIONS FOR MARKETERS • Develop more ‘accurate’ ethical categories. • Implement industry-specific codes of conduct or self-regulation guidelines. • Educate consumers as to what they consent to. • Disclose to consumers what the data is precisely used for.

Data harvesting

With the availability of abundant (health-related) data, big data analyses have become common (Mittelstadt and Floridi, 2016). Big data refers to large sets of structured and unstructured data, with data volumes ranging from terabytes to zettabytes (Everts, 2016). The healthcare sector is renowned for its large amounts of complex data (Mulder, 2019). In recent years, the collection and monetization of health data (data harvesting) have increased (Wang et  al., 2016), leading health

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insurance companies to reward individuals for changing their behaviors to improve their health (AOK, 2018; Barlyn, 2018; Barmer, 2018). There are also concerns that data may result in some people being unable to get insurance or required to pay higher premiums (Allen, 2018). Patients are cautious when it comes to issues of data security (82%; Bitkom, 2016). Fears predominantly concern issues like becoming ‘transparent’ (63%), hacker attacks (60%) as well as data abuse (57%; Statista, 2018a; 2019b). Following the 2019 eHealth Barometer, patients’ reservations regarding the far-fetched use of their data is somewhat understandable, with one-third of all respondents indicating that they prefer not to share their data (eHealth Barometer, 2019). When considering this kind of data and granting gadgets access to highly personal and sensitive data, users need to meet these concerns with a high degree of trust (Cappel and Kappler, 2019). For these reasons, marketers are advised to stress which measures are taken to protect highly personal/sensitive data from being exploited by commercial companies.

ETHICAL RECOMMENDATIONS FOR MARKETERS • Stress the relevance of protecting and/or carefully managing health-related data. • Invest in consumer protection initiatives and consumer education. • Increase awareness as to how marketers can utilize health-related data in a sensitive way. • Familiarize consumers with the concepts of data harvesting.

Which Challenges Originate from the Introduction of New Technologies Like Robotics, VR, AR, AI, or Concepts such as Gamification? New Trends, New Ethical Challenges Having moved beyond Web 1.0 (direct one-way communication) and Web 2.0 (interactive twoway communication), Web 3.0 elevates human communication to a whole new level, including the healthcare context (O’Neil, 2019). Several core developments are responsible for more advanced notions of communication in the Web 3.0 context, most of which are based on the Internet of Things (IoT) and artificial intelligence (AI). At the same time, content is enriched with ‘game’ elements, renowned for involving

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individuals further in their healthcare. With time, these developments are predicted to revolutionize healthcare.

Robotics, virtual reality, and artificial intelligence

New technological developments, whose effects are likely to spill over into the health domain, comprise the IoT, virtual reality (VR), and AI. The IoT takes on a more elaborate role by embedding technology such as RFID in smart objects (Gathegi, 2013), which can communicate with other virtual objects when provided with an appropriate infrastructure (Medaglia and Serbanati, 2010; Kopetz, 2011). As a second big development, VR has helped establish a new setting and communicative social venue for health promotion (Gold et  al., 2012; Loss et  al., 2014). For instance, VR programs have been found to benefit individuals suffering from autism (Gregiore, 2014) as well as stimulate healthier food choices (HealthCommunication.nl, 2019). Increasingly, also AI and algorithms are used in order to diagnose and treat health issues (Bächle, 2019). In utilizing a complex autonomous system which is programmed to perform tasks without human direction or without supervision, robots in healthcare act as ‘autonomous moral agents’ (Wallach and Allen, 2009), thus removing responsibility from human agents. In most instances, the responsibility is hybrid, shared between human and non-human agents (Latour, 1993). In a recent survey, individuals reportedly felt content with their doctors proposing AI solutions (60%; ePharma Insider, 2018). Yet, in order to convince individuals of choosing AI/VR solutions, marketers have to engage in open communication. We therefore advise them to do the following:

ETHICAL RECOMMENDATIONS FOR MARKETERS • Present technological advancements as relevant for future treatments. • Invest in patient education regarding the advantages/disadvantages of AI/VR. • Use success stories to promote and build trust in new and advanced technology and explicitly address questions of liability.

Gamification

Presenting serious and complex health issues in an appealing manner can be a challenge. For this purpose, the concept of ‘gamification’ has been

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repeatedly utilized, referring to ‘the use of design elements of games in non-game contexts’ (Deterding et al., 2011, p. 2). The most frequently used gamification elements are based on extrinsic rewards, such as badges and medals (O’Neil, 2019). As the use of wearables is seen to come at the expense of enjoyment, researchers advocate the inclusion of extrinsic rewards to encourage app usage (Etkin, 2016). The inclusion of gamification elements might also prevent users from stopping to use wearables, which is likely to happen after 6 to 12 months (Ledger, 2014). While gamification has been found to improve and/or change health behavior for a number of conditions, including physical activity, cancer, pain management, and mental disorders (Fernandez-Aranda et al., 2012; Boulos and Yang, 2013; Lister et  al., 2014; Albu et  al., 2015; Concepcion, 2017), the inclusion of game elements in mHealth and eHealth settings has also been subject to criticism, especially when it comes to presenting serious health issues in a more favorable (and less harmful) light. For this reason, healthcare marketers have to bear the following aspects in mind. ETHICAL RECOMMENDATIONS FOR MARKETERS • Highlight the (health-related) benefits of including gamification elements. • Do not ridicule serious health issues. • Clarify the (health-related) goals to be achieved through gamification.

CONCLUSION AND DIRECTIONS FOR FUTURE RESEARCH The objective of this chapter was to review and pinpoint the ethical challenges that confront marketers in an ever-changing and advancing (digital) healthcare marketplace. Although mHealth and eHealth have gained in importance over the past few years and have started to enjoy popularity among individuals throughout the world, diverse ethical concerns prevent eHealth/mHealth from gaining momentum. Most common fears concern data breaches and the loss of privacy, given the sensitive nature of health-related data. Hence, marketers are advised to clearly indicate which purposes the data serves and who receives access to this kind of information (‘purpose limitation’; Mulder, 2019). Moreover, ethical concerns also arise with regard to app effectiveness as previous research

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has determined that apps and wearables lack theoretical underpinnings (O’Neil, 2019), rendering the evaluation of results rather difficult (Dennison et al., 2013). Hence, it is recommended that practitioners and researchers engage in collaborations to not only understand but also exploit the potential of ever-advancing technologies for medical purposes (Melton et al., 2014; Piwek et al., 2016). Likewise, it is of utmost importance that ethical aspects receive consideration early in the process of app development rather than as an afterthought (Bächle, 2019). The health context is renowned for applying a number of ethical principles, including the ‘foundational ethical principles’ of non-maleficence, beneficence, respect for a person’s autonomy as well as justice and fidelity (Strohm Kitchener and Anderson, 2011). Both the credibility and relevance of apps can be further enhanced through medical experts, who are starting to recognize the relevance of apps and wearables to the healthcare context. The United Nations’ Sustainable Development Goals do not fail to emphasize that ‘[e]nsuring healthy lives and promoting the well-being at all ages is essential to sustainable development’ (UN, 2017). With digital technology being at the forefront and guiding developments toward more patientcentered and personalized healthcare (Dünnebeil et  al., 2012; Fitzgerald and McCelland, 2017), the potential of cutting-edge technology will help ease the burden on cost-ridden health-care systems across the world to offer affordable and accessible healthcare solutions. For this reason, future research should not fail to address issues such as the acceptability of mHealth/eHealth services, the usability of these solutions, as well as their effectiveness. Moreover, research should direct some attention toward information standards and criteria that help determine information quality, in order to reduce individuals’ fears of encountering harmful or damaging health information. With regard to the credibility and comprehensibility of health-related information, individual states are called upon to invest in building up the individual’s digital health literacy – a complex concept that is likely to evolve even further with time. Since expert sources still enjoy high acceptability and levels of trust, marketers are recommended to also not lose sight of practitioners’ relevance in creating awareness of and interest in health apps. Similar tendencies are also likely to affect ever-evolving technologies such as robotics, AR, and VR or AI, which are ascribed increasing potential as well. Finally, as also highlighted by Koinig et  al. (2018), not only short-term effects, but also long-term effects of eHealth and mHealth services should be put at the focus of future research in an attempt to ensure that the potential positive effects of digital health are sustainable.

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Notes 1

2

For an example, see the Health Suisse’s Guideline for App Developers at https://www.e-healthsuisse.ch/fileadmin/user_upload/Dokumente/ 2018/E/180731_Leitfaden_fuer_App_Entwickler_def_EN.pdf For an example, see IMS Appscript, an app listing more than 100,000 apps for healthcare consumers, at http://www.appscript.net

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S., and Maher, C.A. (2016). Past, present, and future of eHealth and mHealth research to improve physical activity and dietary behaviors. Journal of Nutrition Education and Behavior, 48(3), 219–228. Venkatesh, V., Thong, J.Y., and Xu, X. (2012). Consumer acceptance and use of information technology: extending the unified theory of acceptance and use of technology. MIS Quarterly, 36(1), 157–178. Viswanath, K. (2005). Science and society: the communications revolution and cancer control. National Review of Cancer, 5(10), 828–835. Wallach, W. and Allen, C. (2009). Moral Machines: Teaching Robots Right from Wrong. Oxford: Oxford University Press. Wang, J.B., Catmus-Bertram, L.A., Natarajan, L., White, M.M., Madanat, H., Nichols, J.F., Ayala, G.X., and Pierce, J.P. (2016). Wearable sensor/ device (Fitbit One) and SMS text-messaging prompts to increase physical activity in overweight and obese adults: a randomized controlled trial. Telemedicine and eHealth, 21(10), 782–792. Wang, K., Varma, D.S., and Prosperi, M. (2018). A systematic review of the effectiveness of mobile apps for monitoring and management of mental health symptoms or disorders. Journal of Psychiatric Research, 107, 73–78. White, M. and Dorman, S.M. (2001). Receiving social support online: implications for health education. Health Education Research, 16(6), 693–707. WHO. (1946). Constitution of the World Health Organization. Copenhagen: WHO. WHO. (2009). World Health Organization 7th Global Conference in Nairobi. Geneva: WHO. WHO. (2010). Telemedicine: Opportunities and developments in member states. Retrieved from https://www.who.int/goe/publications/goe_telemedicine_2010.pdf WHO. (2011). mHealth: New horizons for health through mobile technologies. Retrieved from www.who.int/goe/publications/goe_mhealth_ web.pdf WHO. (2017). eHealth – Where are we now? Retrieved from http://www.euro.who.int/en/healthtopics/Health-systems/e-health/ehealth-whereare-we-now Williams, P., Huntington, P., and Nicholas, D. (2003). Health information on the Internet: a qualitative study of NHS Direct Online users. Aslib Proceedings, 55(5/6), 304–312.

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Part VI

Ethical Issues in the Marketing Mix

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28 Product and Branding Ethics Béatrice Parguel and Elisa Monnot

IntroductIon While ‘marketing practices are often perceived by consumers to be the most unethical component of business’ (Bone and Corey, 2000: 199), products and brands, the most visible parts of marketing practices, appear to come under particular scrutiny. It is therefore of utmost importance to identify clearly the ethical issues raised by product and brand management, and that is the focus of this chapter. Ethical issues that may arise in product management are mainly operational and include environmental damage, health and safety threats, and consumer deception. Ethical issues arising in brand management operate at a more strategic level, as they relate to brand power, brand deception or brand counterfeiting, and extend to brand tribes management.

EthIcal IssuEs In Product ManagEMEnt As climate change becomes a more pressing priority than ever before, protection of the environment appears as an important ethical issue in product

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management. According to Dangelico and Pujari (2010), 60% of product managers take it into account when developing and marketing new products. Other ethical issues concern consumer protection, particularly consumer health and safety, consumer information and intellectual property.

Product Management and Protecting the Environment Measuring the impact of product management on the environment requires a life cycle assessment, that is ‘a systematic set of procedures for compiling and examining the inputs and outputs of materials and energy and the associated environmental impacts directly attributable to the functioning of a product or service system throughout its life-cycle’ (International Organization for StandardizationISO 14040). In other words, product managers should assess all the impacts of product management in terms of consumption of essential resources and the generation of waste, from the design stage to the product disposal stage (Guiltinan, 2009). To address the environmental impact in terms of consumption of essential resources, new product designs should aim to make the most efficient

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use of natural resources. This concerns both the amount of resources and their nature. In the specific case of energy consumption, for example, the environmental impact depends on the energy mix in the country where the product is manufactured and used (i.e. the proportion of fossil fuels, nuclear and renewable generation sources used to meet the energy needs in a given location). Waste management, meanwhile, is driven by three main principles: reduce, reuse and recycle (Abdul-Rahman and Wright, 2014). The first of these concerns source reduction: that is, producing less waste in the first place. The second aims at reusing the product, repairing it if necessary. The final principle, recycling to turn waste into a valuable resource, is not the best option, as it requires reprocessing of the product. The ethical questions raised by the consumption of essential resources and waste management are discussed below with reference to each stage of the product life cycle.

The Design Stage The earliest environmental impact related to consumption of essential resources can occur at the product design stage. For example, some manufacturers design products that do not incorporate recycled or bio-sourced materials. As a counterexample, in 2017, Danone Waters, Nestlé Waters and Origin Materials launched a partnership to bring the first 75% bio-based PET bottle to commercial scale by 2021. Other manufacturers build in planned obsolescence (see Box 28.1) instead of lengthening the usable life of their products to reduce waste generation. With clever design (Tingstrom and Karlsson, 2006), they could invent longer lasting products with built-in upgradability or classic looks that will never go out of fashion. Volvo, for instance, has favoured timeless design for its cars for years. Manufacturers should also offer consumers easy solutions to lengthen their products’ lifespan. The European Union has regulated product durability and reparability through the Ecodesign Directive included in the Action Plan for a Circular Economy (Maitre-Eken and Dalhammar, 2016). France passed a law in 2019 on mandatory repairability of appliances and is considering introducing a repairability index to inform consumers so they can choose products with a longer life. These initiatives have the potential to reverse manufacturers’ planned obsolescence strategies in the coming years. In the design stage, manufacturers also need to design packaging that does not impact the environment more than the products themselves (Bone and Corey, 2000). Interestingly, reconsidering the natural resources used to make packaging

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can benefit both the environment and manufacturers. For deodorant manufacturer Unilever, a new design for compressed aerosol cans cut the quantity of aluminium by 25%, which represents 800 tons fewer CO2 emissions, due to the lower weight during transport. Manufacturers could also consider redesigning tertiary packaging. As an illustration, the luxury brand Louis Vuitton has developed new flat packaging for some of its bags: fewer trucks are now required for their transportation, reducing both the carbon footprint and logistics costs. Another aspect of more environmentally-friendly packaging is using less ink, which specifically affects graphic design choices. Beyond resource consumption, companies have an ethical responsibility to design products that could easily generate new resources at the end of their life cycle, for use in other production processes. In this general circular economy perspective, governments could consider making market authorizations for certain products conditional on those products incorporating a minimum rate of recycled materials. Another possibility would be a bonus/malus scheme that rewards manufacturers who use eco-friendly product design and penalizes the opposite approach. Going further, Singh and Ordoñez (2016) suggest that, for new products, manufacturers should always prioritize a design that avoids waste in initial production over a design that anticipates waste recycling – preventing waste is better for the planet than recycling.

The Production Stage The consumption of resources should also be closely examined in the production stage. Manufacturers should first try to minimize the amount of raw materials used to make the product. They should scrutinize the water and electricity consumption throughout the whole manufacturing process, to preserve essential resources. The amount of water needed to grow, dye and process enough cotton to produce just one pair of blue jeans is estimated at 500 to 1,800 gallons (1,895 to 6,815 litres) depending on the sophistication of the irrigation systems available in cotton-producing countries. In addition, this cotton is grown in one country, dyed in another, then taken to a third country to be made into garments that are finally sold all around the world. A single pair of blue jeans therefore has significant environmental impacts at every stage of production. Aware of increasing stakeholder criticism, 30 global fashion groups – including Adidas, Nike, Gap, H&M, Inditex, Chanel, Hermes, Kering and Carrefour – signed a ‘fashion pact’ in 2019 to reduce voluntarily their impact on climate, biodiversity and

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Box 28.1 Planned obsolescence: a specific Ethical Issue at the design stage Planned obsolescence means deliberately designing a product with a limited useful life so it will become obsolete, unfashionable or no longer functional after a certain period (Bulow, 1986). The aim of shortening the usable life of a product is to accelerate its replacement by new versions, to increase product sales and thus support long-term business growth. This approach is encouraged by the rapid diffusion of innovations, greater competition in the markets, and allegedly fast-changing consumer needs. The literature identifies several different kinds of planned obsolescence (Rivera and Lallmahomed, 2016): •

technological or functional obsolescence (Levinthal and Purohit, 1989), where products become out of date as higher performance versions arrive on the market (e.g. software, iPhones); • psychological obsolescence, that is loss of desirability, where market trends fuel consumers’ desire to buy different and newer versions of products (e.g. the fashion industry); • systemic obsolescence, where neither servicing nor repairs are possible (e.g. electronic appliances containing batteries that cannot be replaced); • obsolescence in products deliberately designed to fail or break after a while, even when used normally (e.g. plastic toys). The tendency to replace products faster is not without environmental consequences, as a shorter product lifespan consumes more resources and generates more waste. Most of the responsibility for technological and systemic obsolescence lies with the manufacturers. Their engineers and industrial designers share responsibility with managers for product replacement strategies (Guiltinan, 2009). Engineers/designers purposely design products to fail or break after a predetermined number of uses, without specifically informing consumers about product durability, and managers deliberately deceive consumers into believing that the new versions of some products will bring them higher utility. However, consumers can be considered complicit in the case of psychological obsolescence, as their impulsive and variety-seeking consumption behaviours encourage manufacturers constantly to accelerate renewal of their product lines and collections.

oceans (stating targets such as 100% renewable energy and banning plastic packaging by 2030). Ethical issues within the fashion industry were discussed in detail in Chapter 23. It is noteworthy that the overwhelming majority of fashion’s environmental impacts are not caused directly by the fashion groups, but indirectly by their foreign subcontractors (e.g. 90% of impacts for Kering, one of the largest personal luxury goods companies in the world with brands such as Gucci, YSL or Bottega Veneta). Manufacturers should make sure they choose suppliers that take an eco-friendly approach to resource consumption, or deliver ecoresponsible raw materials. Managing the supplierand raw-materials-related environmental risk is of paramount importance to avoid potential longterm damage to the company. The Ferrero Group, for example, is widely criticized for using palm oil in products such as Nutella, as this fuels the demand for oil palm plantations, the expansion of which is threatening the Malaysian and Indonesian rainforests. Hitchcock and Willard (2006) provide a ‘sustainable products checklist’ to select responsible providers of raw materials and supplies, with criteria such as reusability, recyclability, biodegradability, energy efficiency, non-toxicity, minimal packaging and local availability. Esty and Winston

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(2006: 117) add further questions to assist manufacturers in their choice of suppliers (e.g. ‘What resources are our suppliers most dependent on? Are they abundant or constrained, now and in the near future?’). Walmart uses its own ‘Supplier Sustainability Index’ to audit its suppliers’ performance regarding energy and climate, material efficiency, natural resources, people and community (Dai and Blackhurst, 2012). The ISO 14001 standard provides a framework for an Environmental Management System (EMS) plan, that is a set of processes and practices enabling organizations to reduce their environmental impacts, mainly regarding pollution control and waste minimization (Melnyk et  al., 2003), to orient certified organizations towards eco-responsible suppliers.

The Use Stage The consumption of essential resources while the product is in use should also be measured. Printers offer an interesting example, as they could be preprogrammed to print on both sides, thus saving paper. While regulators do not often intervene in manufacturers’ consumption of essential resources, they are beginning to set stricter

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standards for pollution emissions, at least for certain high-pollution industries. Failure to meet these standards can result in revocation of market authorizations, but cheating is even riskier, as illustrated by the Volkswagen Dieselgate scandal that broke in 2015. Volkswagen diesel engines had been programmed to activate their emissions controls only during laboratory emissions testing. As a result, the company was officially approved as meeting US nitrogen oxides emission standards, whereas in real-world driving its vehicles emit up to 40 times more. Such scandals are costly. Financially, the cost to the Volkswagen group is expected to top $33 billion in fines, recall costs and civil settlements. And beyond purely financial considerations, Volkswagen’s image will be affected for years (Siano et al., 2017), making the reputational cost more difficult to assess. All things considered, manufacturers would be well advised to take appropriate steps on their own initiative, before ‘hard’ standards are introduced. Airline companies, for instance, which emitted 918 million tons of CO2 in the sky in 2018, should consider less polluting flights (e.g. using biofuels instead of traditional jet fuel; designing lighter, more fuel-efficient engines). The same goes for the electronics industry: manufacturers should consider improving standby and off-mode power consumption in new electronic appliances for today’s ‘always-connected’ environment.

The Disposal Stage At the product disposal stage, manufacturers should be considered accountable for the waste they generate, suggesting that they need to integrate the whole cost of product disposal into management control as a real cost (Guiltinan, 2009). Governments are currently working on the question of who should pay for ‘end-of-life’ product costs, as evidenced by recent French government initiatives that include free recovery of old devices and appliances when consumers buy new ones in the same product category, either in-store or online (the aim being to avoid uncontrolled dumping), and a ban on the destruction of unsold textiles (to prevent the annual destruction of 10,000 to 20,000 tons of textile products in France – once or twice the weight of the Eiffel Tower). To promote the circular economy, the European Union has proposed waste directives providing a framework for the various options open to manufacturers (Singh and Ordoñez, 2016), including recycling their products back into the product stream so that less waste is generated.

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Second-hand peer-to-peer platforms also provide opportunities to limit the accumulation of waste caused by the acceleration of product life cycles. As these platforms offer second-hand items online for sale or free collection, encouraging zero waste and giving objects a second life, they are assumed to be intrinsically virtuous (Parguel et al., 2017). At the disposal stage, product packaging also generates a good deal of waste. Manufacturers need to consider their overall packaging strategy and aim to design more eco-responsible packaging. Eliminating packaging, or at least reducing its volume, appears as a first route. Not using overpackaging can also be a way for manufacturers or retailers to cut the amount of waste generated and make packaging disposal easier for consumers. This would be particularly easy in several product categories such as yoghurts, toothpastes and mayonnaise, where overpackaging serves no real technical purpose. However, overpackaging elimination could have a negative impact on brand image and purchase intention due to lower perceived quality (Monnot et al., 2015). This is especially true when less environmentally-conscious consumers observe that competitors in the same category still use overpackaging for their products (Monnot et  al., 2019). All manufacturers would ultimately benefit from the general elimination of overpackaging, but they will not go down that path unless their competitors do the same. This prisoner’s dilemma can be solved through cooperation (Monnot et  al., 2019), or market regulation by a third party (e.g. an inter-professional organization, public policy makers) encouraging manufacturers to talk to each other, negotiate and reach a collective agreement on overpackaging elimination. Apart from volume considerations, manufacturers can also make packaging reusable or at least easily recyclable, for example by using sustainable materials rather than plastic, avoiding packaging that mixes different materials (e.g. cardboard, plastic, aluminium) which is more difficult to recycle, and minimizing use of chemical ink, varnish or glue. In conclusion, product management has a significant impact on the environment at every stage of the product’s life cycle and interdependently, as an improvement in one stage can have a negative impact on other stages. To address these impacts effectively, it is vitally important that manufacturers consider all of them right from the initial product design stage. An ethical response to the challenge of sustainable product development often requires deep organizational change for companies, which explains why not all companies have the same potential for change at a specific moment (see Box 28.2).

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Box 28.2 Progressing towards more sustainable Business Models Elkington (2001) identifies four kinds of companies (locusts, caterpillars, butterflies and honeybees) depending on the level of sustainability of their business model and their potential or tendency to switch to more sustainable activities or operations. ‘Corporate locusts’ have an unsustainable business model and are unable to foresee the negative impact of their activities. ‘Corporate caterpillars’ also have an unsustainable business model, but they have the potential to evolve towards a more sustainable mode of production. ‘Corporate butterflies’ have a reasonably sustainable business model and a strong commitment to corporate social responsibility. Finally, ‘corporate honeybees’ have a sustainable business model throughout the product’s life cycle. Other companies should strive to imitate them as far as possible, favouring sustainable business models based on permanent innovation and ethics-based business principles.

Product Management and Consumer Protection As well as measuring environmental impacts, a life cycle approach can also be used to measure the impact of product management in terms of health and safety. In the product design stage, it is obviously important to design products or services that are safe for consumers. According to Meel and Saat (2002), the right to safety is one of the fundamental consumer rights – but safety is relative. It is particularly important when dealing with health products and services (see Box 28.3). Although there is no such thing as zero risk, the question is how much safety consumers are willing to pay for. In a context of fierce competition, companies may be tempted to limit safety tests

through negligence, intentional or otherwise, to save money and shorten the time to market (Desjardins, 2009). Product safety is an issue for the people responsible for product design, who are the most competent to evaluate and control it. Importantly, manufacturers can be held liable for the consequences of safety failures affecting their consumers, but also for the collateral victims of events attributable to their products. For example, combined health damages from the Volkswagen emission fraud in Europe and in the USA have been estimated at US$39 billion (Oldenkamp et  al., 2016). When there is an impact on the environment, manufacturers of unsafe products are exposed to significant reputational risks. Sony’s image, for example, was tainted when it was revealed that PlayStation cables contained too much cadmium.

Box 28.3 the safety of health Products and services Health products and services must pass stringent medical tests to show that they are safe for patients, yet fraud and misconduct in clinical research appear to be widespread. As Gupta (2013) explains, the problems can stem from researchers’ greed, ambition or laziness. The fact that clinical research is dependent on commercial pharmaceutical laboratories is a more contextual determinant. Over-the-counter medications (as opposed to prescription-only drugs) carry an additional ethical issue. While the general public can use such products without seeking the advice of a health professional, their misuse can still result in serious health consequences. For example, acetaminophen, a seemingly innocuous substance used in pain relief and fever reduction, can destroy liver cells and cause general organ failure and death if too much is absorbed unsupervised over several days. The same goes for laxatives and diet pills for weight control, which are especially susceptible to abuse by young people (Pomeranz et al., 2013). Considering that over-the-counter medical products are often aggressively marketed, strict regulation of advertising claims would appear important. Other ethical issues in the healthcare sector relate to counterfeit drugs, mostly sold on the Internet to patients in both developing and developed countries. According to the World Health Organization, one in ten drugs in circulation is estimated to be fake, meaning that patients are taking medication that will be ineffective at curing or preventing disease. This results in a waste of money for the people and health systems that buy these products, but could also lead to serious illnesses and even deaths. Another issue concerns the booming industry of medical and surgical tourism: there are doubts about the safety and quality of care received by patients seeking low-cost health services in countries such as Malaysia or Thailand, where the healthcare industry is more lightly regulated (Unti, 2009). A further connected ethical issue is that health tourism may lure experienced doctors in developing countries away from essential care for the local population, and thus increase health inequalities between countries.

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Still, product designers cannot be deemed responsible for ignoring safety threats that are not yet proven or known. Manufacturers of babies’ bottles used to use the chemical bisphenol A at a time when there was no reason to believe it could affect children’s development, immune response and cancer risks. The manufacturers could have been held liable for product defects, but not for health issues, even though consumers can legitimately expect products to be safe under normal conditions of use. However, as soon as studies report doubts about the safety of a component or material, carrying on production and sale as before becomes ethically objectionable and negligent in the eyes of the law. This is illustrated by the concept of the ‘product ethical life cycle’, proposed by Meel and Saat (2002), which distinguishes three phases: (1) the stage of ‘ignorance’, where nobody has any knowledge about potential hazards of the product (as was initially the case for Freon in fridges; Freon has been identified as an ozone-depleting substance); (2) the stage of the ‘ethical dilemma’, where the potential risks are known to some, but companies take no action because of competition, or fuel uncertainty so they can continue operating on the market (as happened in the tobacco industry after the first research findings concerning cancer risks); and (3) the stage of ‘legal regulations’, where the potential harm is known and sometimes addressed by the law (as in the case of Freon, the production and import of which were banned in the USA on 1 January 2020). As well as the manufacturers’ responsibilities, there are questions about the responsibility of consumers demanding the highest possible quality for the lowest possible price. They cannot seriously expect the same level of safety from countries that do not have the same standards. Games and toys made in China have been shown by the European Union to be likely to harm children: they may contain heavy metals such as lead and cadmium that could cause serious poisoning, and some even use chemicals that can cause hormonal disorders. As Harney (2008) suggests, the ‘China price’ has to be paid for, one way or another. Sub-standard consumer safety appears to be one of those ways. In the production stage, ethical issues regarding health and safety mostly concern workers’ health and safety. One notorious illustration is the collapse of the Rana Plaza building in Bangladesh on 24 April 2013, which killed 1,138 textile workers who were working in unsafe conditions to reduce subcontractors’ costs. Subcontractors’ responsibility in such situations should be considered shared by their Western outsourcers, who pass on to their subcontractors the competitive pressures of manufacturing, namely ‘low costs, order

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completion, and quick delivery’ (Lim and Phillips, 2008: 144). It is sometimes argued that consumers also have a share in this responsibility because they are reluctant to display their endorsement of corporate CSR policies through responsible purchasing behaviour (Smith et al., 2010). During the use stage, ethical issues regarding health and safety mostly relate to user incompetence, as illustrated by consumers’ misuse of over-the-counter medication (see Box 28.3), or negligence when products are used in disregard of instructions or warning labels. As noted by Carroll and Buchholtz (2008: 551), ‘consumers seem to have an uncanny ability to injure themselves in novel and creative ways, many of which cannot be anticipated’. Whatever efforts are made by manufacturers to educate consumers about product safety and to monitor their products’ safety performance, safety incidents will inevitably occur and will have to be fully and honestly investigated to see whether product recall is appropriate. In the disposal stage, the possibilities of health and safety failures are multiplying. Products are becoming extremely complicated, often incorporating the latest scientific advances, and as emerging markets, where safety tests are less common, are currently calling the shots in world manufacturing, ethical questions arise in product recalls. Companies recalling products not only bear the cost of the operation but also suffer damage to brand equity, as product recalls are often accompanied by resoundingly negative publicity, challenging consumer willingness to purchase the brand in the future (Siomkos, 1999; Laufer et al., 2005). To avoid those significant drawbacks, companies may be tempted to respond to problems in ethically questionable ways. As shown by Carvalho et al. (2015), one strategy is to pass on responsibility for unsafe products to subcontractors, which is all the easier now that companies outsource design, component sourcing, manufacturing, and marketing work to entities in many countries. The same authors also show that consumers are biased against subcontractors: they are more likely to attribute a product–harm crisis to the subcontractors, especially when the country of production has a poor image. This makes ‘passing the buck’ easier for companies trying to limit their own reputational damage. Findings also suggest that subcontractors get more of the blame when a product recall notice is ambiguous and vague instead of providing a clear explanation, as a nonspecific recall prompts assumption of a manufacturing flaw (Carvalho et al., 2015). To address product defects in a more ethical way, companies should communicate candidly about the origin of the defect when announcing a product recall. They should issue the recall

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promptly, stating what they already know or are still investigating, and recognizing responsibility without scapegoating. It is possible to be responsible but not at fault. Assisting or compensating any victims and organizing a proactive recall plan (Vassilikopoulou et  al., 2009) are ways to show that the company is taking its responsibility seriously and not minimizing it. Additionally, an effective crisis management plan would prepare managers for such an eventuality and make them aware in advance of the ethical issues at stake.

Product Management and Consumer Information More than ever before, for many purchases (e.g. medicines, electronic appliances, insurance), consumers do not have enough information to appreciate clearly what they are buying. This puts them at an informational disadvantage when making consumption choices, and they are a potentially ‘easy target for quick profits’ for unscrupulous companies (Desjardins, 2009: 175). Ethical marketing practices should promote adequate provision of relevant information and clear consumer understanding before any sale. It is therefore the companies’ responsibility to help consumers make informed choices. Regarding the accessibility of information, the ‘small print’ at the end of sales contracts or on packaging, using terms that only experienced engineers or lawyers can understand, could be considered as failing to provide true and fair information and thus failing to elicit informed consent. Some product leaflets may be unavoidably difficult to understand, for example the technical details issued for complex electronic or financial products that require specific expertise to appreciate fully. The aim of information accessibility raises the question of consumer literacy and numeracy (Adkins and Ozanne, 2005), as individuals do not all have the same ability to choose and use products appropriately. It is therefore important that all consumers, from the most vulnerable (e.g. poorly educated, elderly or very young consumers) to the most expert, should be able to understand what they are purchasing. Product instructions must be written so as to be clear to every consumer, even the partially sighted, and manufacturers should provide intelligible translations in all languages. They should make use of pictograms or colours, which can sometimes be easier to understand than text. In 2017 the French government introduced the Nutri-score, a front-of-pack nutrition information label to promote healthier food-buying choices. Using a simple five-letter classification – with ‘A’

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as the top score and ‘E’ a poor score – rather than a multi-criteria format clearly facilitates consumers’ understanding of products’ nutritional quality (Chantal et al., 2017). Without lying about product characteristics, companies tend to glorify the merits of their products and give consumers misleading information to present them in a more flattering light (Carroll and Buchholtz, 2008). This may lead to overconsumption and health risks for consumers. Chandon (2013) reports that the health and nutrition claims made on packaging create ‘health halos’ that make foods appear healthier than they really are. In the same vein, packaging design (cues, shapes and sizes) biases people’s perception of quantity, and increases preference for supersized packages and portions that are bigger than they seem. The same goes for attractive pictures on packaging that do not in fact resemble the actual product, or promote potentially dangerous products (Bone and Corey, 2000). Storytelling can also give a false image of companies’ processes, including their production techniques. Luxury brands sometimes carry pictures of craftsmen making products by hand, leading consumers to imagine – wrongly – that the entire manufacturing process is based on traditional methods. Slack packaging, that is the use of bigger-than-necessary packaging leading consumers to overestimate the product’s volume or quantity, could mask product downsizing and is considered equally misleading (Wilkins et  al., 2016). To address these ethical issues, companies must provide relevant and non-misleading information about their products and services. Going further, manufacturers should always avoid lying by omission, which is often practised – quite legally. Some cosmetics companies, for example, declare that they do not test products on animals, but do not mention that their products incorporate raw materials that are tested on animals. Electronics companies do the same when they claim to be environmentally responsible but fail to mention, for example, that cobalt mining for lithium-ion batteries has a high human cost with Congolese diggers, including children, working in very hazardous conditions without any safety gear. In the food industry, the true origin of raw materials is also becoming difficult to trace, even for manufacturers, and this is a problem as different countries have different quality standards. Inaccessible, vague, ambiguous or complex information leads to uninformed choices that are ethically questionable. Companies must be fully upfront and honest with consumers if they want to retain consumers’ trust in their products and services. Public policy makers can also impose mandatory information requirements for packaging, and apply stricter regulation of authorized claims.

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Product Management and Intellectual Property Product management can also be concerned by questions of intellectual property. As observed by Fassin (2000: 193), innovation is increasingly coming from ‘start-up companies, most technology-based enterprises financed by private persons or companies, or through venture capital funds and public offering’. Additionally, such knowledge-based innovation often involves academics. As all these stakeholders have different statuses and objectives, collaborative innovation raises important ethical issues regarding intellectual property and confidentiality of information. In particular, the actual inventors of an innovation may find themselves deprived of a legitimate share of the revenues it generates, because the role of their expertise may be treated as less important than the huge financial resources invested in its development. In the same vein, Laursen and Salter (2006) show that 68% of innovations involve input from suppliers and 66% involve input from customers. Although co-creation and concurrent engineering reduce the time to market for the most relevant innovations, they also raise the question of who holds intellectual property of the innovation and how any profits should be shared. A clearly negotiated code of conduct, or transparent information sharing between innovation team members, is necessary to settle these matters in advance. Going further, when an innovation can benefit society as a whole, open innovation may be the most ethical arrangement from a teleological perspective. Danone Waters and its partners have decided to share the technology and processes behind the first 75% bio-based PET bottle with the entire industry, in the hope of spurring change on a global scale. Another example of a new opensource innovation in 2019 is Corona’s Fit Packs that link several cans together without the need for Hi-Cone plastic packaging. If pharmaceutical laboratories more often shared innovations to solve major health problems in emerging countries, they would probably benefit from a more ethical image.

EthIcal IssuEs In Brand ManagEMEnt Beyond product management, brand management involves general ethical issues relating to brand’s relative power in a globalized overbranded context, and their ability to deceive consumers. Brand counterfeiting and brand tribes call for further specific ethical consideration.

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Brand Management and Power Issues As Smith et  al. (2015: 221) note, ‘brands are attacked because the marketing machineries behind them are perceived as a significant source of social and environmental harm in globally expanded supply chains’. The power of brands raises ethical questions linked to their economic power in marketing channels, their symbolic power over consumers and their cultural power in a globalized world. Firstly, private labels may give rise to ethical concerns when retailers take advantage of their relative power in their channel to oblige national brands to develop and produce private-label products that are very similar to their own. They can be priced well below national-brand products even when they meet higher specifications. While the biggest and most powerful national brands can resist such ‘coercion in the channel’ (Murphy et  al., 2016: 23), smaller ones find themselves threatened with delisting (i.e. being removed from a retailer’s inventory) if they do not cooperate (Sloot and Verhoef, 2008). The existence of multiple brands in the same category made by the same company, or multiple products under the same brand, has also been criticized. This differentiation, which is presented as a way to address differing consumer needs, is often highly artificial but pushes retail prices up (Putsis, 1997). Secondly, brands tend to focus consumers’ minds on valued social and moral ideals (Holt, 2002) rather than products or services. They create powerful, meaningful symbols and stories to build an emotional and hopefully long-lasting connection with consumers, especially younger ones. Naomi Klein (2000) criticized brands for their growing domination over spaces and minds, observing their invasion of urban landscapes, music, art, collective events, sports and schools, making brand-free spaces almost inconceivable. Brands thus appear to be not so much ‘product producers’ as ‘meaning brokers’, imposing on society their own system of ‘ethical’ and aesthetic values, with their own cultural and possibly political representations, hence threatening freedom of thinking. In addition, brands can use their symbolic power over brand-sensitive consumers to make them accept high prices; this could be considered as unethical exploitation of the weakness of consumers who are prepared to make sacrifices to obtain these brands. This situation raises the question of whether consumers are really free and independent in their consumption choices, and treated with respect by brands. This ethical issue increases with the power of brands, and is therefore even more important for luxury brands, whose intrinsic ethics is often questioned (see Box 28.4).

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Box 28.4 Perceived Ethics in luxury Brands Luxury brands often seem less ethical than their non-luxury counterparts. Consumers buying luxury items are not particularly attentive to sustainability issues, and tend to focus instead on brand, quality, prestige, product attributes, self-image and price (Davies et al., 2012; Kapferer and Michaut, 2014b). Some may even respond negatively to the use of recycled materials in luxury goods (Achabou and Dekhili, 2013), highlighting a contradiction between luxury, often seen as superficial and designed to exclude people, and sustainability (Kapferer and Michaut, 2014b). CSR communication that refers to a self-transcendence concept (i.e. protecting the welfare of all) could actually conflict with the self-enhancement concept (i.e. dominance over people and resources) inherent to most luxury brands, resulting in lower appeal (Torelli et al., 2012). Luxury brands are thus sometimes intrinsically associated with waste and irresponsibility.

Thirdly, globalization also raises brand-related ethical issues. When several cultures are involved, one challenge for internationalization is navigating values and ethical standards from both home and host countries. At one extreme, globalized brands, often created in highly developed countries with high social and environmental standards, apply their home country’s values and standards to other countries. Host countries can perceive this as ‘ethical imperialism’, resulting in pushing local products out of the market and limiting consumer freedom (Klein, 2000). Such practices are known as ‘McDonaldization’, defined as ‘the process by which the principles of the fastfood restaurant are coming to dominate more and more sectors of American society as well as of the rest of the world’ (Ritzer, 1993: 7). The term was coined after McDonald’s Corporation pre-cooked its fries in North America in beef fat, before freezing and exporting them worldwide for further frying in their restaurants. Many commentators considered this unacceptable from a cultural point of view, especially for Hindu consumers. At the other extreme, ‘cultural relativism’ means always following the host country’s values and ethical standards, taking the view that no culture should be placed higher than another. In between these extremes, brands should define a global code of minimum ethical standards to be respected in every part of the world where they operate. What is ultimately at stake is brands’ coherence with the values that drive them (Palazzo and Basu, 2007), which is important to build attractiveness (CurrasPerez et al., 2009).

Brand Management and Brand Deception Brand positioning refers to the conceptual place managers want their brand to occupy in consumers’ minds, that is the specific benefits they want

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consumers to think of when they think about the brand. Developing a distinctive positioning with benefits for consumers gives brands a competitive advantage. Regarding the relationship between ethics and positioning, ‘(un)ethical marketing practices represent a form of differentiation’ (Martin and Johnson, 2015: 150). On the positive side, companies abide by ethical rules to differentiate themselves from the competition. The example of telecommunication brands is emblematic in this regard: whereas most brands were locking their customers into long-term contracts, Virgin Mobile USA disrupted the market by offering customers both transparency and fairness through simple packages, with no hidden fees or any restricting contract (McGovern and Moon, 2007). On the negative side, however, brands deceive consumers by displaying an attractive positioning that does not faithfully reflect what they actually offer. The French cosmetics brand Yves Rocher is a good example of ‘greenwashing’, defined as tactics that mislead ‘consumers regarding the environmental practices of a company or the environmental benefits of a product or service’ (Parguel et al., 2011: 15). Evocations of nature and plants are omnipresent in Yves Rocher’s communication, from its signature – the brand claims to be the ‘creator of botanical beauty’ – to its pledge that its products are made entirely from natural botanical ingredients. This brand also has a Foundation that takes action against deforestation. However, if consumers look at the ingredients list on the product packaging, which of course overuses green elements (Parguel et  al., 2015), they may be surprised to discover some controversial ingredients. The same observation can be made regarding ‘organic washing’, a branding strategy that aims at misleading consumers regarding the organics character of a product. For example, the Organix (now OGX) brand, whose slogan is ‘we’re beauty, pure and simple’, uses many polluting and potentially harmful ingredients. Any brand may use

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organic-based terminologies in the brand name of their products, such as ‘Bio’, ‘Ecolo’, ‘Organic’ and others. But regulations worldwide impose that these terms do not mislead the consumer. As an illustration, Danone had to change the name of its fermented yogurts in 2006 from ‘Bio’ (which means organic in French) to ‘Activia’ to comply with a European directive. Other brands such as Bioderma or Biotherm (skin products) have nothing to do with organic produce, although they use the prefix ‘Bio’ in their brand names. To avoid falling into such brand traps, consumers must learn how to identify authentic organic labels.

Brand Management and Counterfeiting Issues For the World Trade Organization, counterfeiting means ‘unauthorized representation of a registered trademark carried on goods identical or similar to goods for which the trademark is registered, with a view to deceiving the purchaser into believing that he/she is buying the original goods’. This illegal practice is increasing at a faster pace than ever, and developing into a major economic problem with a global impact expected to reach US$4.2 trillion by 2022 (International Chamber of Commerce, 2017). Despite its potential contribution to the diffusion of innovation, especially in the luxury industry (Hietanen et al., 2018), counterfeiting can be a significant threat for brands, damaging their reputation, reducing demand for legitimate products, entailing additional costs to protect against trademark infringement, and resulting in lower business revenues (Kapferer and Michaut, 2014a). The first problem raised by counterfeiting concerns brand intellectual property, whose infringement can be discussed from an ethical perspective. In fact, counterfeiting may be considered ethical from certain standpoints. Firstly, brand intellectual property is protected in law, theoretically to ensure appropriate returns from high and risky investments in innovation. It thus encourages innovation and may contribute to economic and social progress for society as a whole. From a moral perspective, protection of intellectual property can also be regarded as an elementary right to the benefits of one’s creative labour. But it is also possible to argue in favour of counterfeiting, using the exact same rationales but from other stakeholders’ standpoint. Considering that counterfeiters often operate from very poor countries, Hilton et al. (2004: 349) question which moral right takes precedence: the right to benefit from one’s creative labour or the right ‘to make a living whatever way one can in order to survive’.

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From this standpoint, counterfeiting appears less ethical when it aims at a ‘business’ gain (Shore et al., 2001) rather than being for personal use or subsistence motives. It can also be argued that counterfeiting provides access to products some consumers could never have otherwise, because of insufficient resources or brand scarcity strategies such as in the luxury sector (Wilcox et  al., 2009; Pueschel et  al., 2017). In this view, counterfeit consumption helps consumers meet their needs, from the vital to the symbolic, and this increases the general well-being of society. The problem of counterfeiting can be considered to lie partly in brand strategies themselves, which may stoke consumer desires while restricting access to the desired brands, triggering consumer resentment. Some frustrated or critical consumers may even take pleasure in brand counterfeiting, and buy counterfeit brand products as a form of retaliation against brand strategies that are perceived as unfair (Viot et al., 2014; Marticotte and Arcand, 2017). From a macro perspective, counterfeiting also indirectly involves issues of tax evasion, loss of legitimate jobs and a deficit in the trade balance in developing countries (Viot et al., 2014). But it can also be argued that counterfeiting entails tax attraction, new jobs and a surplus in the trade balance for certain developing countries. The attitude towards counterfeiting depends on culture (Shore et  al., 2001; Yang, 2005), justifying a relativistic perspective on the associated ethical issues. In particular, consumers from more individualistic cultures are likely to regard counterfeiting more positively than consumers from more collectivistic cultures, who may believe that innovation belongs to the public and cannot be privatized (Lai and Zaichkowsky, 1999). Beyond collectivism, ‘copying and imitation [are also culturally perceived] as an effective way of learning in a transformative way’ by Chinese consumers, who therefore value them intrinsically (Husted, 2000: 286). This may explain the greater tolerance of manufacturing and selling counterfeit goods found in Asian countries, first and foremost China, where fake markets are often included in the top ‘things to do’ in Shanghai. Beyond cultural relativism, however, there can be less justification of counterfeiting when it fuels problems related to illegal trading channels, including child labour and terrorism funding (Eisend, 2019). Counterfeiting can thus be considered as less ethical when the copied product required a high level of investment from the innovator and it is driven by extrinsic motives, and more ethical when it has a significant positive impact on society welfare. Illicit copying of designs in the fashion industry may therefore be regarded as less ethical than

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counterfeiting of health products that have already recouped the initial investment cost in developed countries in order to make treatments available in developing countries. Counterfeiting is also considered more legitimate when it is non-deceptive: that is, when consumers consciously and willingly purchase fake products (Staake et al., 2009).

Brand Management and Consumer Tribes Underlining how brands can fuel interaction and social cohesion, Schouten and McAlexander (1995: 43) conceptualized sub-cultures of consumption as ‘distinctive subgroups of society that self-select on the basis of a shared commitment to a particular product class, brand, or consumption activity’. This paved the way for the identification of brand tribes, namely ‘specialized, non-geographically bound communities, based on a structured set of social relations among admirers of a brand’ (Muniz and O’Guinn, 2001: 412), be it a niche or luxury brand (e.g. Harley-Davidson) or a mass-market brand (e.g. Red Bull, Nutella). As in any sub-culture, members of brand tribes share ‘beliefs and values, unique jargons, rituals, and modes of symbolic expression’ (Schouten and McAlexander, 1995: 43). Interestingly, brand tribes can be developed deliberately by companies or organizations, but they usually originate from consumers themselves (Amine and Sitz, 2004). Whatever the case, brand tribes connect consumers that share an emotional attachment to specific brands (Veloutsou and Moutinho, 2009). Pursuing their own ends when joining the tribes, they cannot be considered as mere commercial stakeholders by brands. Following brand tribes raises two kinds of ethical issues concerning how marketers should interact with brand tribes and how brand tribes should be managed. From an external point of view, brand managers first need to identify how, and whether, they should interact with members of their brand tribe. The fact that brand tribes should be regarded as legitimate stakeholders vis-à-vis the brand (Richardson, 2013) does not give brand managers the legitimacy to interact freely with the members of their brand tribes. On the contrary, they must respect their culture, specific objectives and operating practices (e.g. rules, norms). To avoid ex post disappointment and suspicion, or feelings of betrayal and anger, brand managers must be open about their professional identity and why they want to be accepted into the network of tribal relationships. Ideally, they should have an authentic interest in the topics at hand. A thorough cultural understanding of the brand tribe’s

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values is of utmost importance so that brand managers can respect these values and operate ethically inside the tribe. They must not join primarily due to professional obligations. Whatever the origin of the tribe, Richardson (2013: 63) questions repeated ‘attempt[s] to artificially drag the conversation back to those things’ that are directly relevant to a specific corporate agenda. If official brand managers are accepted into the brand tribe and wish to consult the tribe members to achieve some specific purpose (e.g. turning the tribe’s ideas into commercial profit), they must make their intentions clear, respect tribe members’ freedom to opt out, and promise not to share the information collected with third parties or store it for further purposes. Still, more often than not, corporate objectives diverge from the tribes’ objectives, and favouring the former over the latter turns the tribe into a means rather than an end in a Kantian perspective. To avoid this, brand managers should take every opportunity to provide support to the tribes and enhance its bonding values (e.g. organization of events, access to exclusive information, presentation of innovation, free use of some copyright materials). Helping the tribe to achieve its own objectives and goals could lead to a fairer ethical basis. In the case of consumer-generated brand tribes, brand managers must accept that they may not be welcome to join (Patterson and O’Malley, 2006). As summed up by Richardson (2013: 139), ‘the decision as to the degree of formal contact and official relationship between them and the corporation is primarily theirs [the tribe’s] – and not the corporation’s – to make’. This also means that the brand has no control over a brand tribe acting in an ethically questionable way, and needs to keep its distance or disengage from the tribe in such instances. From a more internal point of view, ethical standards also apply to relations between the members of the tribe. In particular, tribe members should always respect each other’s autonomy and freedom of choice. As such, excessive normative pressure to comply with group norms and rituals, be it implicit (e.g. validation by others) or more overt (e.g. criticism or expulsion threats), is highly questionable (Algesheimer et  al., 2005). Brand tribe members must observe a minimum level of tolerance for fellow members’ positions about the brand or its competitors, and not restrict their freedom of action within the community.

conclusIon Interestingly, although the ethical issues related to product and brand management concern manufacturers first and foremost, this chapter clearly illustrates

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that these issues are broader and to some extent also concern consumers and public policy makers. For the manufacturers, product designers’ responsibility is more relevant in the earlier stages of product development, while brand management places more responsibility, at a more strategic level, on product and brand managers. Consumers, meanwhile, are likely to be more ethically sensitive than product and brand managers and have the power to condemn their unethical practices, to encourage them to revise their marketing actions (Bone and Corey, 2000). Therefore, if they continue purchasing products and services from unethical companies, they have to take a share of the responsibility. In the end, product and brand management are the most visible parts of marketing practices and, as such, both an important lever for ethical companies and a source of risk for unethical ones. In both cases, companies should make decisions about product and brand management their priority as they move towards more ethical marketing practices.

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Hilton, B., Choi, C. J., & Chen, S. (2004). The ethics of counterfeiting in the fashion industry: Quality, credence and profit issues. Journal of Business Ethics, 55(4), 343–352. Hitchcock, D., & Willard, M. (2006). The business guide to sustainability. Sterling, VA: Earthscan. Holt, D. B. (2002). Why do brands cause trouble? A dialectical theory of consumer culture and branding. Journal of Consumer Research, 29(1), 70–90. Husted, B. W. (2000). The impact of national culture on software piracy. Journal of Business Ethics, 26(3), 197–211. Kapferer, J.-N., & Michaut, A. (2014a). Luxury counterfeit purchasing: The collateral effect of luxury brands’ trading down policy. Journal of Brand Strategy, 3(1), 59–70. Kapferer, J.-N., & Michaut, A. (2014b). Is luxury compatible with sustainability: Luxury consumers’ viewpoint. Journal of Brand Management, 21(1), 1–22. Klein, N. (2000). No logo. London: Flamingo. Lai, K. K.-Y., & Zaichkowsky, J. L. (1999). Brand imitation: Do the Chinese have different views? Asia Pacific Journal of Management, 16(2), 179–192. Laufer, D., Silvera, D. H., & Meyer, T. (2005). Differences between elderly and other adult consumers in judgments about product harm crises. Academy of Marketing Science Review, 7. Laursen, K. & Salter, A. (2006). Open for innovation: The role of openness in explaining innovation performance among UK manufacturing firms. Strategic Management Journal, 27(2), 131–150. Levinthal, D. A., & Purohit, D. (1989). Durable goods and product obsolescence. Marketing Science, 8(1), 35–56. Lim, S. J., & Phillips, J. (2008). Embedding CSR values: The global footwear industry’s evolving governance structure. Journal of Business Ethics, 81(1), 143–156. Maitre-Ekern, E., & Dalhammar, C. (2016). Regulating planned obsolescence: A review of legal approaches to increase product durability and reparability in Europe. Review of European Community & International Environmental Law, 25(3), 378–394. Marticotte, F., & Arcand, M. (2017). Schadenfreude, attitude and the purchase intentions of a counterfeit luxury brand. Journal of Business Research, 77, 175–183. Martin, K. D., & Johnson, J. L. (2015). Marketing ethics and differentiation: Implications for normalized deviance. In A. Nill (Eds), Handbook on ethics and marketing. Cheltenham: Edward Elgar (pp. 150–167). McGovern, G., & Moon, Y. (2007). Companies and the customers who hate them. Harvard Business Review, 85(6), 78–84. Meel, M., & Saat, M. (2002). Ethical life cycle of an innovation. Journal of Business Ethics, 39(1–2), 21–27.

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29 The Ethics of Pricing Juan Manuel Elegido

INTRODUCTION For a long time, the ethics of pricing was understudied (Elegido, 2009; Schlegelmilch and Oberseder, 2010). However, in the last 20 years the situation has changed and a good number of articles have been published on this issue (Barrera, 1997; Elegido, 2009; 2011; 2015; Hockett and Kreitner, 2018; Koehn and Wilbratte, 2012; Marcoux, 2006; Meng, 2005; Michel, 1999; Perrone, 2014; Reiff, 2013; Snyder, 2009; Walsh and Lynch, 2002; Wertheimer, 1992; Zwolinski, 2008; 2010). There is now also a rich empirical literature on factors affecting perceptions of unfairness in pricing (Bolton et al., 2003; Bolton et  al., 2010; Ferguson et  al., 2014; Kahneman et al., 1986; Kalapurakal et al., 1991; Oliver and Swan, 1989; Xia et al., 2004). However, this latter topic is outside the scope of this chapter, which concentrates on normative issues. Justice in pricing, like many other issues in marketing ethics and in ethics more generally, is a deeply contested topic. There are two basic cleavages. The first divides those who believe that it is possible to identify in this area objective criteria of right and wrong from those who believe that there are no objective standards in this issue. The second basic divide opposes those who believe (or, perhaps more often, just assume) that where there

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are competitive markets there is no need for ethical principles on pricing, to those that insist that the task of ensuring that prices are just cannot be left exclusively to the market. The issue of whether or not there exist objective ethical standards is too large a subject to address within the confines of this chapter. By and large, this entire book is premised on the view that there are such standards and insofar as the issue is addressed within its covers, the interested reader can find relevant discussions in the first part, devoted to the foundations of marketing ethics. At any rate, this chapter takes for granted an objectivist conception of ethics. As for the second basic cleavage mentioned above, the refusal to address the issue of justice in pricing has since the eighteenth century been for many part of a wider effort to think of economics as a science studying a self-regulating mechanism and detach it from its origins as a branch of ethics. A striking example of this attitude is offered by R.G. Collingwood (1926: 174, cited in Boyd, 2018): It is, therefore, impossible for prices to be fixed by any reference to the idea of justice or any moral conception. A just price, a just wage, a just rate of interest, is a contradiction in terms. The question of what a person ought to get in return for his

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goods and labor is a question absolutely devoid of meaning. The only valid questions are what he can get in return for his goods or labor, and whether he ought to sell them at all.

The more common approach among economists has been to rely on the operation of the market and to correct its undesirable results (usually seen in terms of distribution of wealth rather than as injustice in individual transactions) through mechanisms such as redistributive taxation and transfer payments. Business ethicists tend to have different concerns from economists, but when they have looked at the issue of pricing, some of them have identified morally positive characteristics of market-determined prices such as that the market mechanism is itself unbiased, that pricing freedom in a market allows participants to exercise their autonomy, and that markets tend to be efficient in promoting utility (Velasquez, 2006; Zwolinski, 2010). This may also have tended to strengthen the emphasis on concentrating efforts in ensuring the efficiency of markets rather than on trying to identify specific principles of justice in pricing. Of course, it is widely recognized that factors such as transaction costs, monopoly, lack of information, and negative externalities, may cause market failure. Currently, many scholars recognize that markets that differ substantially from the perfect competition model are not isolated oddities but frequent occurrences (Bator, 1958). Whenever there is a market failure, it will not be possible to assume that the market can be trusted to produce a fair result, and principles to guide decisions in such cases will need to be identified. The rest of this chapter will examine the ideas of those who believe that there is need to identify such principles of justice in pricing and that it is possible to do so. In trying to identify the conditions that would have to be met to ensure that a price is just, there are two approaches which have found numerous supporters during long periods of time. One of them stresses voluntariness as the main ethical requirement for just exchanges, and therefore also for pricing. The other demands some equivalence between the price paid and the value of the item sold. Alongside these two main approaches, a wide variety of proposals have been put forward that seem more or less attractive, but which have not inspired sustained work and which therefore have not been defined in sufficient depth and detail, beyond the efforts of their original proponents. Of course, it is always possible that one of these proposals may find supporters in future and that it may become the object of long-term collaborative efforts.

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The two approaches that have been defended by a larger number of writers, spanning long periods of time, will be examined first.

VOLUNTARINESS During much of the nineteenth and twentieth centuries, due in good part to the influence of generally accepted legal doctrines, it became a common view that all that is needed for a price to be ethical is that it, and more widely the terms of a deal, be the result of a genuine agreement between the parties. In other words, for defenders of this view, any exchange, whatever its terms, will be just if the agreement between the parties is not vitiated by factors like fraud or duress. The reduction of justice in exchanges to a requirement for genuine voluntariness has been prevalent in the legal domain. From being strong and even largely dominant in law, it seems to have been adopted uncritically also as an approach in ethics. However, there is a problem in making this transition from legal doctrine to the ethical realm. There are indeed strong arguments for the law to refrain from intervening in rectifying agreements between competent parties, but the situation is very different when we are approaching the question from an ethical point of view and trying to clarify my responsibilities in a given situation. The foundation of this approach to justice in pricing was laid clearly by Hobbes in his oftenquoted statement that ‘the value of all things contracted for is measured by the appetite of the contractors, and therefore the just value is that which they be contented to give’ (Hobbes, 2006: I.15). The point this statement makes is that it is impossible to assign a single non-arbitrary value to any product or service and accordingly all we have left is what the parties are willing to give, provided only that that decision expresses their free choice. This is indeed the key point of contention between this view and that which stresses the exchange of equivalent values, which we will discuss next. Michel (1999) provides a good example of this position. He defines a just price as ‘one that is agreed upon in the course of a voluntary transaction’. He then proceeds to make it clear what he means by voluntary: ‘Voluntary must not be understood to imply chimerical price-setting mechanisms … A transaction is voluntary when one of the parties does not use or threaten physical violence towards the other’ (1999: 193). At a different point in his article, he also introduces the requirement that to be truly voluntary an

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agreement should not be motivated by intentional or unintentional deception. Obviously, most agreements that are voluntary, in the sense described by Michel, are likely to be unobjectionable from an ethical point of view, for, as a general rule, each of us can be expected to be the best judge of our own interests and of how to advance them. Also, voluntary agreements will usually be useful instruments of our self-governance. Still, to identify as a necessary matter the voluntariness of an agreement with its justice may be thought taking things too far. Ultimately, as Michael Sandel has pointed out: of any contractual agreement, however free, it is always intelligible and often reasonable to ask the further question, ‘But is it fair what they have agreed to do?’, where this question cannot be translated to the merely vacuous question, ‘But is it what they have agreed to?’ What makes it fair is not just that it was agreed to, but is a further question. (1982: 106)

Specific problems that might make it easier to get parties to a voluntary agreement (in the sense defined by Michel) to agree to an unfair price include their special needs, lack of knowledge of the prevailing prices in a given market, poor bargaining ability or business understanding, weakness of will, and psychological handicaps (such as additions). Taking advantage of any of these factors to extract a significantly higher price than that which would have been agreed to in the absence of such factors will be considered unethical in the light of many Aristotelian, Kantian or Utilitarian ethical theories.

EQUALITY The view that for a price to be just it has to be ‘equal’ to the value of the item sold is at least 23 centuries old. It has waxed and waned over time, but eventually always seems to revive and find new defenders. Even amid the confusion prevalent nowadays on this issue, it is still the single view that has the largest number of proponents, though they are far from being a majority among contemporary business ethicists. The perennial revival of the equality principle for justice in pricing is strongly linked to its origin in Aristotle. As Aristotelian ethics has enough intrinsic strength to ensure that it always has at least some defenders and that under favourable circumstances it becomes a leading ethical view, it

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is not surprising that its approach to pricing ethics is always assured of at least some vitality. The idea of equality in pricing is for Aristotle part of a broader requirement of equality in interactions between two parties. Referring specifically to prices, Aristotle (1985: V, 5) stated that a price is fair if there is ‘equality’ between the price paid and what the thing bought is worth. Aquinas and writers who preceded and followed him elaborated on this idea (Aquinas, 1962: I, viii; 2006: II-II, 71 and 78; also Albert the Great, 1890–1899: IV; Bernardine of Siena, 1963: 157–158; Wolter, 2001). In the sixteenth and seventeenth centuries members of the Salamanca School wrote entire books applying the same idea not only to pricing justice in general, but also to more specific problems such as the pricing of commodities and luxury goods, prices in auctions, and the pricing of credit and of labour (Elegido, 2009); later writers such as Hugo Grotius (1939), Samuel Pufendorf (2014) and John Locke (2004) also defended just price doctrines based on equality. There are also detailed contemporary defences of the principle of equality as the basis of pricing justice by Gordley (1981; 1991), Elegido (2009; 2015; 2016) and Perrone (2014). All these authors discuss specifically ethical principles and norms, but if we widen our search to encompass also religious writers working on the basis of religious principles (which are not difficult to connect to ethical principles), we will find discussions of the need for equality in pricing by several Church Fathers (Ambrose, 1886: III, 1; Basil, 1963: Hom. I on Ps. XIV, 6; Chrysostom, 1980: 11.5; Lactantius, 2003: 6, 18), the main Protestant Reformers (Calvin, 1979: 131; Luther, 2015) and many Catholic moral theologians from the thirteenth to the twentieth centuries (Aertnys and Damen, 1950: 669–674; Elegido, 2009; Liguori, 2017: III, V, VIII; Prummer and Shelton, 1956). Some strong points of this principle are that it is free from the problems of the alternative standards that are discussed in this chapter; that it coheres well with the intuitions of ordinary people; that it is deeply linked to Aristotelian ethics, which grounds it in deeper conceptions of justice and saves it from being just an ad hoc theory to solve an isolated ethical problem; that it has been the subject of a continuing discussion over many centuries, as this has contributed to a robustness in its articulation which is obviously lacking in other conceptions that do not have such a long pedigree; and that it also coheres well with other approaches to ethics such as Kantian respect for persons and at least some versions of consequentialism. Some recurrent criticisms of this principle are that it depends on an indefensible belief in the

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intrinsic value of products and services; that at its root there must stand a ‘labour theory of value’ or, more generally, a ‘cost theory of value’; and that its attempt to find a mathematically exact point at which a price becomes just is highly implausible. However, at least as usually formulated, such criticisms can be shown to be based on misunderstandings. The doctrine of the just price as an ‘equal’ price was claimed to be based on an extreme (and extremely implausible) cost theory of value by several writers in the early twentieth century, who claimed that the just price was linked to the cost of production and the latter to the income needed by the producer to sustain his station in life (Robinson, 1960; Tawney, 2017; Weber, 2017). Suffice to say that from the middle of the twentieth century more careful research of the primary sources led to the abandonment of the view that the more prominent defenders of equality theories had argued that the just price was linked to the income needed to sustain a vendor in his life station (Baldwin, 1959; De Roover, 1958; Noonan, 1957). Some writers of note have defended a more plausible version of the idea that the notion of fair prices must be based on a cost theory of value. Thus, John Duns Scotus and his followers defended a theory of just price which was based on cost price plus a moderate profit. However, this has always been a minority position (Langholm, 1992; Scotus, 1893: 22), although very recently Hockett and Kreitner (2018) have defended it again. Aquinas (2006: II-II, 77, 4, 2) argues specifically that it will not be unjust to sell a thing for a higher price than one paid for it, even if one has not worked on the thing, provided ‘that the value of the thing has changed with the change of place or time’, and this position has enjoyed strong support among writers who defend the equality conception of justice in pricing. Thus, for instance, even before the birth of modern economics, Vitoria and his disciples insisted that considerations of labour costs, expenses or risks incurred are irrelevant in arriving at a just price (1934: 120; Soto, 1968: 547–548). As for the criticism that the notion of the worth or value of a thing must refer to some intrinsic property of that thing, the more important writers in the just price tradition were emphatic that, for the purpose of the determination of fair prices, what matters is not the ontological quality of a thing, but rather its usefulness for human beings. Aristotle (1985: V, 5) said that ‘it is … necessary that all commodities shall be measured by some one standard … And this standard is in reality the demand for them, which is the common bond of all such dealings’; an example that is used often by writers in this tradition is that a horse can be sold for gold even though a horse is a living thing and has a much more sophisticated design than gold

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(Aquinas, 1962: V, 9; Augustine, 1998: XI, 16; Vitoria, 1934: 77.1). The transaction can still be fair because there can be an equivalence between a horse and a certain quantity of gold in their usefulness to human beings in a certain context. The accusation of hankering after an implausible level of uncertainty is not justified either, at least in relation to the more prominent defenders of this conception of justice in pricing. Like many other just price theorists, Aquinas (2006: II-II, 77, 1, 1) is careful to state that ‘the just price of things is not fixed with mathematical precision, but depends on a kind of estimate, so that a slight addition or subtraction would not seem to destroy the equality of justice’. A more significant problem with this standard is the difficulty in determining in a non-subjective way the value of an item. Historically, as was mentioned above, some have focused on the cost of producing the item, but the majority approach among equality theorists has been that the exchange value of an item is properly determined by its ability to serve human interests as indicated by the market. It should be noted that when most defenders of this view referred to a market price, they did not have in mind a market in which perfect competition obtained; they simply required that there be a multiplicity of buyers. In their view this is enough for a market to provide a reliable indication of the use value of a product or service at a time and place. It seems clear that more work is needed in justifying this way of determining the value of an item and in seeing how it can be applied in various market situations such as auctions, bargaining encounters in which no specific price is announced, monopolistic firms, and regulated industries. At a deeper level, the reasons why it should matter if one sells a product or service for more than it is worth remain contentious and in need of more elaborate justification.

OTHER PROPOSALS Having discussed the two approaches to pricing ethics that can be considered to have been dominant over time, it remains to review briefly the main ones among the proposals which seem not to have found continuity, at least up to now.

Hypothetical Market Price It is important to distinguish clearly this approach to the determination of a just price from that, discussed above, which just assumes that there is no

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need to worry about how to determine a just price, as the market does not leave room for pricing decisions and/or ensures that the best possible outcome will result. Proponents of a hypothetical market price as a standard of justice are actually trying to do the work of determining a just price which the market by itself is unable to do, usually because there is a situation of market failure. It is just that they recommend that the way to determine that just price is to try to identify the result that a well-functioning market by itself would tend to produce. In many cases such an approach to justice in pricing is implicit and tends to function in a negative way. Often social commentators assume that if a product or service is being sold at a price that exceeds the price that would prevail under conditions of perfect competition, this by itself will indicate that the seller is exploiting the buyers. But while this is often an implicit assumption, there have been business ethicists who have defended a similar position explicitly. An example is Wertheimer’s discussion of pricing justice. Wertheimer (1996: 230–236) argues that, at least for a range of cases, a hypothetical market price – the price that would be generated by a competitive market – provides the standard for a fair transaction. On the basis of his statements and of the examples he offers in his discussion of this issue, the best interpretation of Wertheimer’s position would seem to be that even when there is not an actual competitive market, sellers should try to estimate what the price for their products or services would be if such a market existed, and that is the fair price. The proposal to achieve justice in pricing through approximating the prices that would obtain in a competitive market, even in situations in which a seller is not operating in that type of market, may seem attractive at first sight, but it is vulnerable to damaging criticisms. Estimating what would be the equilibrium price in a hypothetical market is not difficult. The price generated in a competitive market is the marginal cost of producing a product efficiently, and this has significant consequences in assessing the fairness of this standard. In the first place, many industries such as pharmaceuticals, biotechnology, telecommunications, semiconductors and software are characterized by high fixed costs and very low marginal costs. Where that cost structure obtains, setting prices at the level of marginal costs will make it impossible to recoup the original investment. It is counterintuitive, to say the least, to argue that fairness demands that sellers ruin themselves by setting prices which make it impossible for them to recover their investment. Of course, in practice

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this would not happen for long. If all investors were strongly ethical and all of them came to be convinced of the soundness of Wertheimer’s position or, more realistically, if that position came to be enshrined in legislation, the result would be that no investment would be made and no new products would be developed in industries with that cost structure. Another significant problem with this standard is that it denies innovators the right to benefit from the value created by their innovations. Where products or services are priced at their marginal cost, all the benefit of an innovation will go to the buyer, rather than to the seller. The buyer benefits from the superior value provided by the new product or service or the lower cost of an old product or service produced with an innovative method, while the innovator only covers his costs.

Non-exploitative Prices Another conception of justice in pricing has been put forward by Valdman. His key idea is that a fair price has to be non-exploitative. This requires, in his view, that the price ‘[fall] into a range bounded by the lowest amount that a seller would accept and the highest amount that a buyer would pay if both were informed and if neither had unacceptable non-transaction costs’ (Valdman, 2009: 12). Valdman defines a non-transaction cost as ‘the cost incurred by refusing to accept an offer’ (p. 9) and states that such cost will not be ‘unacceptable’ for a buyer when she ‘can reasonably reject the other [party’s] offer’ (p. 12). Valdman thinks that the buyer will be able to do so if rejecting an offer would not render her unable to satisfy an urgent need (p. 9), that is to say, a need whose nonsatisfaction would mean being put in a position in which she could not live a decent life (p. 10). A first problem with Valdman’s conception of just prices is that defining unacceptable transaction costs by reference to what somebody needs in order to live a ‘decent life’ seems too restrictive. Consider the following scenario: A has a crucial job interview. On his way to the interview one of the tires in his car is damaged in a deserted road. On trying to change it, he discovers that he does not have a jack. After 30 minutes of waiting, finally another car passes by and stops. A explains his predicament and why it is so important for him to attend the interview and the other driver offers to lend him her jack in exchange for $1,000.

Valdman’s definition of unacceptable transaction costs fails to capture the problem that this case poses. If A was unemployed and in urgent need of

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a job, getting that job would have been for him something needed to have a ‘decent life’. But what if we assume that he already had a good job, but that the job for which he was interviewing was a very good job? A very good job is not a necessary element of a decent life, but the difference between a very good job and a good one can well be enough to move A to pay an abnormally high price for the use of a jack. We need a broader concept if we are going to account for the different ways in which a price may be excessive. A second important problem with Valdman’s proposal is that the range of possible prices extending between ‘the lowest amount that a seller would accept and the highest amount that a buyer would pay if both were informed and if neither had unacceptable non-transaction costs’ can be very wide, especially in relation to innovative products. The marginal cost of producing and delivering a single copy of new computer software may be almost zero, while the value for the buyer of such software may be very high; let us assume, for instance, that it is $10,000. The seller could be willing to sell the software for $100 per unit if nobody were ready to offer a higher price as $100 is better than nothing and is higher than her production costs. The buyer on his part would be ready to pay $9,000 for the product because there is no comparable software to be bought at a cheaper price and that price is still lower than the value she will be getting. To be told that a nonexploitative price will be one falling between $100 and $9,000 is not very specific guidance.

Affordability Some authors have stressed the importance of considerations of affordability in determining what is a fair price. While the main defenders of this position do not claim that only such considerations are relevant, they give them great importance. Some writers, such as Spinello (1992), who stress the need of affordability, refer only to essential goods and therefore their view needs to be supplemented by additional criteria to be used for non-essential goods. Koehn and Wilbratte (2012) defend the position that the just price is most fundamentally the price that a just person will agree to pay. While according to them a just person will take into account considerations of costs and risks, this just person price also ‘takes into account the well-being of all who are parties to a given transaction and the good of the larger community’ (p. 503). Among other requirements, a just price must make it possible for all buyers to afford their basic requirements ‘to

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sustain biological, family, and public life … [and] develop and use practical reason in daily life’ (p. 506) and must not be such ‘that it serves only those able to pay and excludes the poor’ (p. 509). Spinello (1992), in a paper in which he explores the ethical obligations of pharmaceutical companies to charge fair prices for essential medicines, also argues that affordability should be a critical factor in the set of variables used to set prices for these pharmaceuticals. He explicitly points out that ‘the normative conclusions reached in this analysis might be applicable to other industries which market essential consumer products’ (p. 617; italics in the original). The reason why Spinello stresses the issue of affordability in pricing of essential products is that, as he says: [t]he consequence of a premium pricing strategy whose objective is to garner high profits would appear to be an inequitable distribution pattern. As we have seen, due to the expensiveness of AZT and similar drugs they are often not available to the poor and lower middle class unless their insurance plans cover this expense or they can somehow secure government assistance which has not been readily forthcoming. (p. 621)

He concludes that ‘these products should be distributed on the widest possible basis, but in a way that permits companies to realize a realistic and reasonable level of profitability’ (p. 622). Sirgy (1996) has also argued along similar lines to the effect that firms should seek to make progress in ‘offering consumers an affordable product that facilitates a healthful focal behavior’. This is not an absolutist demand as he explicitly states that in making pricing decisions organizations should balance consumer affordability desiderata with long-term profitability objectives. The preceding theses have proved very popular among activists and NGOs concerned with making essential drugs (for instance, those needed for the treatment of HIV/AIDS) widely available to those who need them. However, in the discussion of the issue of fair pricing, the more difficult step is to move from the assertion of a right to a basic level of healthcare on the part of the needy to a duty on the part of the sellers of these products to price them at a level that will make it possible for needy buyers to achieve that basic level of healthcare. It is far from evident that, outside of situations of urgent need, the burden to provide to the disadvantaged what they need should fall on the sellers of a relevant product rather than being shared among all the members of that society through individual charitable contributions and the social security and tax systems. Already

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400 years ago, this point was made by Luis de Molina. He argued that if, for reasons of equity, there is a need to help some people, justice requires that ‘all tax themselves in proportion to their capacity and condition, and contribute in the measure demanded by equity’ (2011: 198). The same point has been made more recently by Maitland who, like Spinello, also refers to AZT and the company that made it, Burroughs Wellcome: Just because Burroughs Wellcome discovered AZT … does not mean that the company has a special responsibility to make the drug affordable, even at the expense of its own profits. Burroughs Wellcome is no less entitled to its profits on AZT (if they were earned fairly and playing by the rules) than the Ford Motor Company is to its profits on its line of pick-ups (or a tenured professor of business ethics is entitled to his salary). It is morally irrelevant that the company developed and produces AZT. If people with AIDS are entitled to an affordable price, then that is an obligation all of us share equally, and one best met by taxing us all according to some fair formula. The auto manufacturer, no less than the drug maker, shares that responsibility. To demand that Burroughs Wellcome shoulder a burden that rightly belongs to all of us is compassion on the cheap. It makes moral freeriders of all the rest of us. (2002: 460)

Zwolinski (2008: 350) and Block (2002) have also argued along similar lines.

Fair Trade Much attention has been paid in recent years to the fair trade movement (Jaffee, 2014; Leclair, 2002; Littrell and Dickson, 1999; Moore, 2004). The basic problem this movement tries to address is that of people (often rural workers in developing countries) who work very hard but are unable to provide for themselves, their families, their employees and their employees’ families a minimally dignified life with the money they are paid for their output. Fair trade refers to the attempt to make sure that such people receive a sufficient income by adjusting the margins of the companies that buy their output and/ or those of other members of the value chain and/or the prices the ultimate customers pay for the final products that incorporate that output. Engaging in fair trade practices or buying fair trade products may be presented as a voluntary practice aimed at helping needy producers and as such it seems clearly praiseworthy, but lies outside the scope of this chapter. When fair trade is presented as a strict requirement of justice, two main objections can be addressed to it.

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In the first place, assuming that on the basis of whichever standard of justice seems appropriate in other cases the prices paid along the value chain are just, if certain communities are unable to earn enough to have a dignified livelihood it is not clear why it is only the people who buy their output who have the responsibility to provide them with a suitable standard of living by paying higher prices than those which are already determined to be just, rather than this being considered a more general responsibility to be shouldered by all the members of the relevant national or international community by whichever mechanisms seem appropriate. It will be appreciated that this is the same objection as that addressed at proposals to incorporate standards of affordability into pricing decisions, as a matter of justice. Secondly, there are also apparently insurmountable practical problems. As Barrera has pointed out: Given the dispersion of suppliers worldwide, how does one arrive at a living wage [to be used in the calculation of the just price of a commodity] that takes into account a wide variety of living conditions? … Setting the moral price floor for the commodity requires data on its net labor content. Given the more complex production processes of contemporary goods, identifying and breaking down the net labor content for each commodity becomes an interminable task [footnote omitted]. And as if these problems were not enough, all these calculations will have to be constantly redone in a dynamic setting where relative prices for resources and commodities keep shifting as new products, new resources, new technologies, and new methods of work organization arise. (1997: 112)

Cost Plus There have always been defenders of the position that a fair price is one that allows the producer to cover her costs and obtain a ‘reasonable profit’. An example of this position is provided by Hanly (1991) in an article in which he articulates a defence of rent control. His arguments aim at showing that it is unfair for landlords to make windfall profits from the rents paid by tenants. More recently, a cost-based theory of justice in pricing has been proposed by Hockett and Kreitner (2018). Several arguments have been offered against this type of position. In the first place, as Maitland (2002) has pointed out, for it to be fair that profits should be limited, losses also would have to be

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limited, but there are practically insuperable practical problems to do this. Secondly, if there are limits to profits, but not to losses, people who limit their profits will necessarily have negative expected rates of return whenever they approach a risky project and therefore these projects will be avoided. Of course, ‘risky projects’ include such socially valuable activities like research for new drugs and selling or lending to socially disadvantaged groups. The third argument refers to the distribution between seller and buyer of the benefits provided by an innovative product. In a new product which either provides significantly greater value to the user than pre-existing products or provides similar value at a significantly lower cost, if the seller were to limit the mark-up of her product, she would effectively be channelling to the buyers much of the new value created by this product. In the meantime, she would be limited in her ability to contribute to the needs (which might well be greater than those of the average buyer) of people like her staff, family and neighbours. It is not clear on what basis one would be able to argue that the responsibilities of sellers to their customers are greater than those they owe to these other people.

Avoidance of an Unrestrained Profit Motive Walsh and Lynch (2002) have defended the position that a price is unjust if the profit motive is determinative in an agent’s price-setting determinations. They explain that this will happen whenever a seller seeks profit in a transaction unconstrained by moral side-constraints upon his/her commercial behavior so that the desire for gain overtakes other important considerations or, at the extreme, such considerations are totally absent from the agent’s deliberations, even in cases in which they are obviously relevant. In such cases the motives of the seller would be objectionable ‘because he or she is willing to sacrifice significant interests of other human beings in order to maximize his or her own profit-seeking’ (p. 18). Walsh and Lynch see as a significant advantage of their position that it makes sense of common intuitions in regards to prices without demanding a commitment to the ideas of things having an inherent commercial value. However, as we saw above, many defenders of the position that justice in pricing is defined by equality between the price paid and the value of the item sold could equally well make sense of the same common intuitions without being committed to the idea that all things have an inherent commercial value.

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Perhaps the greatest shortcoming of this view is that while many ethicists will agree that the motives of agents are crucial for the morality of their actions, in issues of justice it is objective considerations that are decisive. For instance, in deciding whether a judicial sentence is just or unjust, the fundamental question is whether or not the accused person actually committed the crime of which they are accused, and the prescribed procedural requirements were followed. If this was the case, the finding of guilt will be just and the motives that may have moved the judge to reach this decision, while critical for the determination of the judge’s moral character, would seem to be irrelevant to the characterization of the verdict as just or unjust. It would seem that similar considerations should govern decisions about the justice or injustice of a price. Contrary to what Walsh and Lynch claim (p. 19) our intuitions that certain prices are unjust are often not directed at the activity of price setting, but at the price itself. Also, in matters of justice we often may wish to guide others on how to act. Thus, for instance, the central office of a company may wish to provide policy direction for the actions of its branches, or a legislature may wish to legally require certain behavior in relation to price setting. In such cases the inability to describe objectively the behavior required or proscribed will be a grave limitation. Of course, if all that can be done is to indicate to others that they should act ‘from proper motives’, this limitation will have to be accepted, but this is not an ideal situation from the point of view of a business ethicist who is trying to help practitioners to make better decisions. The point is that, before accepting that only a motivational account of right behavior in relation to pricing can be offered, it should be quite certain that none of the more objective accounts reviewed in this chapter are defensible.

THE JUST PRICE AND BACKGROUND INJUSTICE The way a market operates may reflect serious structural injustices. Thus, for instance, the fees charged by professionals such as accountants, architects or doctors may comply with the conditions prescribed by several of the conceptions of justice in pricing discussed above. Still this does not necessarily make them fair, if, as is the case in many countries, professional bodies are allowed to keep artificially low the number of people allowed to practise some professions (Winston and Crandal, 2011). Other background conditions

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which may systematically disadvantage a party to a transaction and have been suggested to be unjust in the literature include unjust global trade laws (Synder, 2010), an insecure standard of living (Mayer, 2007) and, insofar as we consider salaries to be the price of labour services, the after-effects of colonialism in some societies or the failure of international institutions to protect the right to a living wage (Snyder, 2010). It seems clear that whenever unjust background conditions exist, they will cast the gravest doubts on whether a price significantly influenced by them can actually be considered just. Whenever that happens most ethical views will require that, insofar as it is possible to do so, the party who is put in an advantageous position by the unjust background conditions should either not transact at all or adjust the terms of the transaction in order not to take unjust advantage of the situation. Against the suggestion in the preceding paragraph, Wertheimer has argued that in a competitive market contractors do not have the space to transact at a price that prevents them from taking advantage of a background injustice, even if they would like to do so. He says: ‘If a seller charges too little, she will not be able to cover her costs. If an employer pays his employees too much, he will be driven out of business by competitors who can undersell him because they are paying less to their employees’ (Wertheimer, 1996: 218). However, these arguments are not decisive, at least in many cases. Sellers often have some latitude in determining the prices they will charge because the markets in which they sell are less than fully competitive. Also, goods and services are often bought for personal use and it is within the power of the buyer to pay a fair price higher than that prevalent in the market. Think, for instance, of personal employees or ‘fair trade’ products.

PRICING JUSTICE IN SPECIFIC CONTEXTS Up to this point, this chapter has discussed general principles of justice in pricing that should be applicable to a wide variety of products and services. However, some of the most interesting recent discussions of justice in pricing have not been conducted at this high level of generality but have rather focused on the pricing problems that may arise in some specific domain of activity. This has the advantage that it allows us to focus in much greater detail on a specific set of circumstances. This type of discussion has also the added interest that it may aspire to guide the legal regulation of that specific area of activity.

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It is not possible to summarize here the main ideas and conclusions of all these studies, but it may be useful at least to list some of the topics that have been examined in the literature and the more important papers that have done this. The main issues discussed in this area of research include interest (Bhandari, 1997; Graafland, 2010; Labat and Block, 2011; Lewison, 1999; Mayer, 2013; Sandberg, 2012), rent (Hanly, 1991), price gouging (Snyder, 2009; Zwolinski, 2008; 2010), ‘necessary products’ (Hemphill, 2010; Kantarjian et  al., 2013; Maitland, 2002; Pfister, 2013; Spinello, 1992), employee and executive compensation (Arnold and Bowie, 2003; Arnold and Hartman, 2006; Moriarty, 2005; 2009; 2016; Zwolinski, 2012), price discrimination (Elegido, 2011; Marcoux, 2006) and fair pricing in regulated industries (Boyd, 2018).

CONCLUSION: PAST, PRESENT AND FUTURE OF THE STUDY OF THE ETHICS OF PRICING The predominant views held at different times in relation to the ethics of pricing tend to parallel the dominant positions on other issues in marketing and business ethics. The reason is that, as should be expected, positions on specific points are strongly affected by the more general views that dominate or contest for supremacy at different times. Thus, for instance, the idea that justice requires equality in exchanges waxes and wanes in parallel with changes in the popularity of Aristotelian ethics. The ethics of pricing is peculiar, however, in which it is an area of business ethics that has a far richer and longer history than other business ethics issues. To say no more, Aristotle (1985: V, 5) already discussed the issue. An interesting characteristic of current work on the ethics of pricing is that there is greater interest in investigating specific issues and situations. Examples were mentioned in the previous section. Still, given the condition of relative confusion about general principles of pricing ethics that can be seen generally from this chapter and that are summarized in the next paragraph, a general characteristic of this more specific work is that, while it provides a great deal of detailed information and puts forward interesting ideas for legal regulation of different issues, it tends to be weaker and non-committal when addressing the foundational ethical principles on which it relies. Still, it would seem safe to predict that the tendency to do more work on the ethics of pricing in specific situations,

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probably with a focus on guiding legal regulation, will continue and even grow in coming years. Nowadays the following would seem to be a fair description of the situation in the ethical discussions of pricing: (1) The view that has most supporters, though not a majority, among ethicists working specifically on the ethics of pricing is the principle of equality in one or other of its variants; (2) a majority of ethicists that write generally on marketing ethics and have to say something about pricing tend to adopt a non-committal attitude, making statements such as: there are several alternative principles that can cast light on this issue …; this seems to suggest that they have not yet been fully convinced by the efforts of the ethicists in the previous group; and (3) a majority of writers on marketing more generally still seem to believe that, as far as issues of pricing are concerned, for as long as deception is avoided and non-competitive tendencies are curbed, all is well from an ethical point of view. If the preceding paragraph provides an approximately correct description of our current situation, it would seem clear that the task for the future, for ethicists working in this area, is making a greater effort to attain more clarity and a better grounding of their positions on pricing in more basic ethical principles. A complementary approach, in order to make practical progress in this area, on which the present writer has already worked in some past publications, is to try to show how specific principles capable of guiding our decisions on pricing issues can be justified on the basis of several alternative, more ultimate, ethical principles, in a somewhat similar way to what is obtained in much of the contemporary discussion of human rights. If this effort proves to be ultimately successful, it could have significant practical importance, as it is most unlikely that the deep issues that divide, say, Aristotelians, Kantians and Utilitarians will be resolved to general satisfaction any time soon. While the overall impression this chapter could leave on the reader is one of theoretical disarray, in my view it is possible to end on a more optimistic note. It would seem fair to say that 40 or 50 years ago the prevalent attitude among business practitioners, and even among theorists working in many areas of business and management, was that there was nothing especially wrong with taking advantage of the ignorance or special need of some people to charge them a higher price, provided that there was no actual fraud. Nowadays there is a quite general agreement among academic writers on business that such an attitude is unethical. That means that, at the level of practical consequences, a lot has already been achieved and the remaining differences among different ethicists working on this topic, while theoretically

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important, are relatively less consequential from the point of view of a practitioner.

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30 Personalization in Digital Marketing: Implementation Strategies and the Corresponding Ethical Issues Roseline van Gogh, Michel Walrave and Karolien Poels

INTRODUCTION Imagine entering the word ‘pharmacy’ in your search bar and getting presented with several nearby pharmacies. These geographical results are shown to you, based on your personal location, as they could actually be very helpful to you at that specific moment in time (Fish & Harrison, 2005). Later, when you are somewhere else, the exact same list of results you saw earlier would now be completely irrelevant to you, as you are no longer near these pharmacies. Secondly, think of the personalized operation of content deliverers, such as Spotify, Netflix, or YouTube. These platforms provide you with a unique homepage that displays and recommends relevant items, by explicitly asking what content you prefer, but also by implicitly recording your activity on the platform (Bennett & Lanning, 2007; Davidson et al., 2010; Gomez-Uribe & Hunt, 2016; Millecamp et  al., 2018). For example, in the category ‘Because you watched X’ Netflix displays and recommends similar content, based on your previously shown interests and what similar others have also watched. These are examples of how personalization occurs in various ways in the daily lives of consumers. Chellappa and Sin (2005) define personalization as ‘the ability to proactively tailor products and product purchasing experiences to

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tastes of individual consumers based upon their personal and preference information’ (p. 181). However, its implementation in many unrelated contexts (e.g., in education, architecture/environmental psychology, social contexts, content delivery, brick-and-mortar service, or digital marketing) makes it difficult to have a clear and consistent understanding of what personalization is exactly (Fan & Poole, 2006; Keefe, 2007; Kim, 2002; Riecken, 2000; Sunikka & Bragge, 2008). Therefore, this chapter prevents any ambiguity by limiting its focus to the implementation of personalization for digital marketing purposes in particular. In this context, personalization is defined as: ‘the combined use of technology and customer information to tailor electronic commerce interactions between a business and each individual customer’ (Fan & Poole, 2006, p. 182). Personalization is not a new concept in the world of marketing (Kim, 2002; Petrison et  al., 1997). In their research, Yu and Cude (2009) summarize the essence of personalization as conveying the right message at the right time to the right person. To draw the analogy between the traditional offline personalization practices in marketing and the more recent and probably more issue-raising online variations, take the example of local sellers. Due to frequent contact, offline local sellers learn several things about their loyal customers (e.g.,

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usual purchases). Subsequently, they implement their knowledge about particular customers into conversations with these customers. They call them by name, for instance, or offer them a personal discount. Based on what customers purchased before, the seller even gives relevant recommendations for complementary items in their range. Put differently, local sellers take the things they know about customers into account to establish a personalized experience. A similar yet more complex process occurs online. By means of technology, online sellers also collect information about consumers to establish a personalized digital experience (Schultz & Schultz, 1998). However, the difference is that these online sellers are able to provide this service to all their customers instead of only to the loyal ones. Moreover, the learning process immediately starts from the first visit instead of after frequent contact, and also much more information about customers is gathered, even before they purchase anything. While local sellers personalize their service based on customers’ past purchase behaviors, online sellers are able to draw conclusions from the products that customers checked online or added to their online shopping cart and eventually did not buy. Based on individuals’ behavior across the Internet, a growing amount of consumer data is already available, before consumers even showed interest in specific products or services in an online shop (Roosendaal, 2011). By drawing this analogy, it becomes clear that the implementation of personalization in digital marketing transcends the offline abilities. This has, of course, a lot of potential for companies as well as for consumers. Yet, at the same time, it raises ethical implications that need to be considered as well. Think of data gathering of minors, sensitive data being used for personalization, data collection across multiple unrelated websites in order to construct terrifyingly detailed user profiles (cross-site profiling), excluding certain customers from beneficial marketing offers once their user profile appears not profitable enough, knowing too much about individual Internet users, and so on. Therefore, the purpose of this chapter is to critically address the current strategies that are used to implement personalization in digital marketing, while simultaneously pointing out the corresponding ethical implications. Thereafter, the chapter concludes with future directions for ethical considerations in personalization in digital marketing.

goods or services using digital technologies in order to reach and convert leads into customers and preserve them’ (p. 52), the author also mentions the ability of digital marketing to personalize offers and programs based on customer profiles, behavior, and preferences. As previously mentioned, personalization generally entails conveying the right message at the right time to the right person (Yu & Cude, 2009). To further clarify personalization as a digital marketing effort, Arora et  al. (2008) state that advertisers have three choices when devoting marketing efforts to customers: to make no distinction between individuals and perform no level of personalization; to subdivide them into different groups and perform segmentation personalization; or, lastly, to address them each individually and perform extreme personalization or micro-targeting. The first option performs no level of personalization and thus adds no value to the topic of this chapter. The last two options, however, do perform some level of personalization and should thus both be included in this chapter. This is consistent with the framework for personalization suggested by Sunikka and Bragge (2012). In this framework, they refer to personalized practices targeted at a group of individuals as ‘mass personalization’ and to personalized practices targeted at a particular individual as ‘one-to-one personalization.’ Additionally, Sunikka and Bragge (2008) note that a combination of both processes is actually closer to reality, given that personalization is often based on the behavior of the group in which the customer is allocated due to group similarities, as well as on personal characteristics or behavior at an individual level. With the aim of being inclusive, these personalized practices (targeted at groups of individuals based on shared behavior or preferences, targeted at an individual based on personal behavior or preferences, or both) are covered by the term ‘personalization.’ However, it not only is important to whom the personalized digital marketing effort is addressed (one individual, a homogeneous segment, or both), but it also depends which data are used for personalization and who has access to it (directly or indirectly). In accordance with the classification of the latter, the chapter will now continue to elaborate on the implementation of personalization, firstly based on direct data that is gathered by the advertiser, and secondly based on indirect data that is gathered by intermediaries. Both personalization practices will be accompanied with the ethical concerns they raise.

IMPLEMENTATION OF PERSONALIZATION IN DIGITAL MARKETING

PERSONALIZATION BASED ON DIRECT DATA GATHERED BY THE ADVERTISER

While Todor (2016) defines digital marketing as ‘the targeted, measurable, and interactive marketing of

Personalization can only occur if an advertiser has access to personal information about its (potential)

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customers. This section focuses on personalization practices that rely on customer data that advertisers themselves have gathered, and thus have direct access to. Having direct access to customer data, however, is not the only necessary thing to personalize. Knowing how to leverage data and how to transform knowledge into value are at least as important and serve as an additional factor that determines to what extent some advertisers distinguish themselves from others (Blattberg et  al., 1994; Leeflang et al., 2014).

Database Marketing Managing databases is the first data collection technique with the purpose of personalization to be discussed. In their research, Petrison et  al. (1997) give a detailed overview of the history of database marketing that serves as a well-founded guide of the transition from marketers’ massmarket approach with general appeals to a more segmented approach with targeted appeals. The authors denote ‘database marketing’ as a progressive step toward more targeted and individualized communication, given its ability to learn about customers and to deliver more personalized, relevant marketing messages based on one’s characteristics, needs, and wants. As the term itself already indicates, database marketing is about gathering information in databases, and using this information for (personalized) marketing purposes (Stone & Shaw, 1988). The ever-increasing technological improvements resulted in enhanced customer relationship management systems with efficient automation processes, changing the whole operation of database marketing. The underlying mechanism, however, still remains the same. Information gathered in databases can be of all sorts: customer data (e.g., name, gender, address, phone number, customer service history, markers such as VIP customer or frequent complainer), transaction data (e.g., orders, returned goods, purchase frequency and recency, amounts spent), customer scores (that link one’s characteristics with the likelihood of interaction), product data (what product is bought by whom, when, from where), promotional data (contacts, sales, and profits resulting from launched campaigns), and geodemographic data (customers’ living area, social category, or business category) (Stone & Shaw, 1988). With the emergence of the Internet, and the corresponding high-tech tools, corporate databases could also be enriched with online behavioral data. The subsequent section, related to (first-party) cookies, will elaborate on this type of data.

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By harnessing all the information gathered in corporate databases, advertisers are able to identify (potential) customers as individuals with unique characteristics, making it possible to address them personally and to build an ongoing relationship with them (Kahan, 1998). There are four closely related terms that fit the above description and that are often used interchangeably: database marketing, one-to-one marketing, relationship marketing, and direct marketing. However, the emphasis of each term varies. This chapter opts for ‘database marketing’, as it emphasizes that advertisers gather information about (potential) customers in databases that then serve as the starting point for personalization. The other terms focus on different aspects of personalization: providing communication services for one particular customer individually (one-to-one marketing), enabling a long-term connection, possibly enhancing customer engagement and loyalty (relationship marketing), while addressing and supplying the customer directly without any intermediary (direct marketing).

Cookies (First-Party) The second data collection technique that advertisers perform for personalization purposes is the use of cookies. A cookie is a small text file that is stored in a user’s web browser to serve multiple purposes (Cunningham, 2002; Sit & Fu, 2001). The cookie includes a unique identifier which makes it possible to recognize the web browser on a later occasion. Some cookies are necessary and serve functional purposes, such as keeping a user logged in, saving their preferences (e.g., language, customized settings), remembering what stage of the purchasing process someone is at, etc. Other cookies also serve less essential purposes, such as tracking a web browser’s activity – or more accurately, tracking the user that uses this browser (Cunningham, 2002; Sit & Fu, 2001). In this case, it makes a tremendous difference who places the cookie, and thus who is able to track the user’s online activity. Cahn et al. (2016) distinguish two different types of cookies, first-party cookies and third-party cookies, respectively enabling first-party tracking and third-party tracking. First-party cookies are ‘cookies placed by the domain shown in the browser’s address bar,’ whereas third-party cookies are ‘cookies placed by a domain that is different than what is shown in the browser’s address bar’ (Cahn et al., 2016, p. 891). Before they are allowed to use any cookies, however, cookie-hosting websites are legally obligated to communicate all cookie-related information to their visitors and to receive their consent (GDPR.EU, 2020a). That is why websites

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inform Internet users during their first visit to the website, and ask for their permission regarding the cookie policy. By choosing ‘I Agree’ without changing any of the default settings, users usually – consciously or unconsciously – allow both firstparty and third-party cookies to be stored in their web browser. By permitting other (third) party to store cookies, websites authorize third parties to follow the online trace of visitors on this particular website too (Mayer & Mitchell, 2012). As the one placing the cookie has sole access to the cookie, the website itself does not have access to the cookies placed by third parties (Roosendaal, 2011). Therefore, only the use of first-party cookies for personalization purposes is explained in this section. The use of third-party cookies for personalization is explained in the section related to personalization based on data to which only the third party has direct access. From the moment that a website places a firstparty cookie on the user’s web browser, it is able to track the activity of this (potential) customer within its own website. This enriches the corporate databases by collecting data about users who may potentially be interested in the products or services presented. For example, an advertiser is able to determine the number of website visitors, as well as how many of them are new or repeated visitors and how often repeated visitors revisit the site (Brain, 2000). Moreover, first-party cookies allow advertisers to keep track of users’ navigation paths and clickstream information, as well as to provide shopping cart persistence (Brain, 2000; Cahn et al., 2016; Milne, 2000). The latter entails remembering the unpurchased items that are added to the cart not only within the same session, but also over multiple visits (Brain, 2000; Cahn et al., 2016). Furthermore, first-party cookies are able to register the user’s time of arrival, duration of visits, viewed parts of the website, what was clicked on, and so on (Berbers et al., 2018). However, this information is brought together by a unique identifier, which means that the advertiser does not necessarily know the identity of the visitor. However, once the visitor provides personal identifiable information – by subscribing to a newsletter, creating an account, purchasing something, etc. – the unique identifier is linked with a personal record. Then, this data can be utilized for personalized communications with the (potential) customer, for instance, by sending a reminder email when collected yet unpurchased items are left in the shopping cart.

Data Mining These data collection techniques, however, are only the first step in acquiring in-depth knowledge about

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(potential) consumers. The subsequent step that actually leads to high-quality insights is data mining. Data mining is a data analysis technique that advertisers use to reveal useful yet untapped knowledge that is hidden in large databases (Shaw et al., 2001). This technique is discussed separately from database marketing, as it transcends the mere collection and basic analysis of personal records. In fact, the large datasets kept by advertisers potentially serve as a source for more enhanced, aggregated analysis (Kim, 2002). In their research concerning the challenges that advertisers face, Leeflang et  al. (2014) indicate that gaining customer insights in an overwhelmingly amount of data is one of the most important challenges in the current digital age. By using data mining techniques in a well-thought-out manner, an advertiser can manage this challenge. Berry and Linoff (2004) state that the goal of data mining for advertisers is to better understand customers by means of discovered meaningful patterns and rules. A better understanding of (potential) customers can in turn improve an advertiser’s marketing, sales, and customer support operations (Berry & Linoff, 2004). Although the main purpose of the data mining process is to discover and create profitable knowledge, also more specified learning purposes or models can be distinguished (Berry & Linoff, 2004; Kim, 2002; Ngai et al., 2009; Shaw et al., 2001). It is for instance possible to generate association rules from data when it is discovered that the purchase of items frequently occurs together or one after the other (Berry & Linoff, 2004; Kim, 2002; Ngai et al., 2009; Shaw et al., 2001). These association rules could potentially reveal cross-selling opportunities and potential promotion strategies, such as promoting soundbars to someone who has recently purchased a television (Berry & Linoff, 2004; Shaw et al., 2001). Another learning model is sequence discovery or sequence analysis, which entails identifying longitudinal associations, patterns, or trends in databases that already store data for a longer period of time (Mitra et  al., 2002; Ngai et  al., 2009). Databases thus hold valuable yet hidden knowledge about customers on a larger scale, and it also informs advertisers about customers on a smaller or even an individual scale. In fact, with the knowledge they unravel in this data mass, advertisers can get hold of useful tools to personalize communications with individual customers, since advertisers learn the needs, wants, and preferences of different types of people, and discover what works (or will work) best for them. By matching the data mining insights on an aggregated level with the personal information about a (potential) customer at a micro level, advertisers are able to cleverly tailor their digital marketing program for specific individuals.

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Ethical Implications The fact that advertisers store all sorts of data about (potential) customers is by no means a new phenomenon. Both the historical study of Petrison et  al. (1997) about database marketing and the study of Stone and Shaw (1988) about the different types of gathered data date back to before the turn of the century. There was thus enough knowledge on gathering customer data in databases for marketing purposes back then, implying that this process has already been happening for decades. The ever-increasing abilities, however, simultaneously enable increasing expectations for appropriate collection, storage, exchange, processing, and use of this data (Cannon, 2002; Karjoth et  al., 2002; Phelps et al., 2000). In order to address the emerging ethical issues, the focus of this section is on how the data underlying the practice of personalization is collected, stored, exchanged, processed, and used by advertisers. Since May 2018, the EU’s General Data Protection Regulation (GDPR) has been in effect. This is a data privacy and security law that sets out the rules on the handling of personal data to reinforce users’ data privacy, rights, and protection (GDPR.EU, 2020c; Sanchez-Rola et  al., 2019). Personal data includes ‘any information that relates to an individual who can be directly or indirectly identified’ (GDPR.EU, 2020c). This obviously includes directly identifiable data such as names and email addresses, yet it also includes location data, ethnicity, gender, biometric data, religious beliefs, web cookies, political opinions, and in some cases pseudonymous data. The GDPR presents strict legal obligations regarding the handling of this data. However, it only brings a legal framework to protect personal data – it does not provide any explanation of the technical requirements or best practice. Many advertisers (and other non-advertising companies) therefore often remain in the dark, questioning whether or not they are complying with the regulations. For example, the GDPR states that appropriate technical and organizational measures must be implemented to ensure data security at all times (European Parliament and the Council, 2016). But what about ignorance or not being properly trained to be able to do so, which could possibly result in a data breach after all? In order to be fully GDPR compliant, a collaboration is advised between lawyers who interpret the legislation, on the one hand, and technical staff who implement the requirements on the other. In the context of securing personal data for personalization, advertisers could take precautions, for example, by dividing user data over different databases so that if one database is granted unauthorized access, not all data is compromised.

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This relates to the ethical issue of appropriate data storage, since information is often being stored in the cloud or on other database platforms to which inappropriate or unintended receivers could potentially have access (King & Raja, 2012; Milne, 2000). Regardless, the implementation of the GDPR is a step in the right direction to counter advertisers (or other non-advertising companies) that do not take privacy too seriously or that even hide data breaches. However, prior to storing data properly, it should be collected in an appropriate way as well. From the legal perspective, the GDPR states that advertisers (and other non-advertising companies) are not allowed to collect or process data, unless the user has given specific, unambiguous consent by opting into marketing email lists or by allowing cookies during the first website visit, for example (GDPR.EU, 2020c). Once consent is given, advertisers (and other non-advertising companies) comply with the legal obligations. The ethical implications, however, transcend mere compliance with the law. It is not about whether it is allowed to collect and process data, it is about whether it is worth the risk of potentially jeopardizing one’s privacy. A person’s privacy has three aspects: territorial privacy (a physical area), privacy of a person (protection against undue interference, such as physical search), and informational privacy (Holvast, 1993; Kokolakis, 2017; Rosenberg, 2013). Kokolakis (2017) states that the aspect of informational privacy is about ‘controlling whether and how personal data can be gathered, stored, processed, and disseminated’ (p. 123). In this chapter, only informational privacy concerning the control of personal data is of relevance. When it comes to disclosing personal information, an informational privacy paradox appears to occur. This phenomenon is such that, despite expressing clear privacy concerns, individuals nevertheless share personal information (Kokolakis, 2017; Norberg et  al., 2007). The inconsistency between individuals’ privacy attitudes and privacy behaviors highlights an important ethical implication: individuals act contrary to what they believe. Especially in the case of immediate gratification for disclosing personal information (e.g., receiving a discount when subscribing to a newsletter), the benefits at the moment of disclosure exceed the future risks (Acquisti et al., 2015; Kokolakis, 2017). The ethical question then arises: just because advertisers are able to convince an individual to disclose information, does it mean that they should? The rewards do not even have to be that rewarding. For instance, when Internet users arrive at a website, they are asked to allow cookies. In some cases, it is more convenient for users just to accept all cookies and get access to the website, without an

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‘accept cookie’ bar that covers half their screen, than to pause their search to actively fulfil the sometimes challenging task of indicating which cookies are (not) allowed. The benefits of having access to the site without seeing the irritating cookie bar or without performing the interruptive act of disabling cookies, are two immediate rewards that trump one’s potential privacy concerns. In addition, corporate databases with lots of user data (and derived customer trends) also raise other ethical implications. Think of the data collection of minors through first-party cookies, for example. Nourishing other privacy issues or being excluded from advantageous marketing offers, resulting from database profiling, are related ethical issues as well (Patterson et al., 1997). The fact that countless data scandals have occurred in the past implies that privacy concerns are justified. In November 2019, Security Magazine announced that 5,183 data breaches had already been reported that year, with the exposure of a total of 7.9 billion records as a result (Security Magazine, 2019). Although this involves not just leaks of data in the marketing industry, it does highlight the severity of the problem. Furthermore, Antón et al. (2010) discovered that customers are most concerned about information transfer, and that the level of concern had increased over time. Concerns about information transfer refer to the uncomfortable feeling that customers have about their data being traded with, shared with, or sold to third parties. Antón et  al. (2010) indicate in their research that both the growing number of fraud/identity theft complaints and news stories about data breaches and the operation of data brokers might be responsible for this increased level of concern over time. This is consistent with a more recent study as well, revealing that 70% of respondents presume that their data is less protected today than it was five years ago (Pew Research Center, 2019). Another striking result in this study was that three in ten Americans have already been involved in a data misuse event.

PERSONALIZATION BASED ON INDIRECT DATA, GATHERED BY INTERMEDIARIES The chapter will now focus on the personalization practices that utilize consumer data that advertisers have not gathered themselves, and thus have no direct access to. Instead, search engines (e.g., Google), social networking sites (e.g., Facebook) or other third parties gather data about Internet users and provide advertisers with indirect access to these data by serving as intermediaries in the

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personalization process. These third parties are able to do this for advertisers by means of thirdparty cookies that allow them to track users across multiple websites (Mayer & Mitchell, 2012). This chapter has already explained in an earlier section why websites use first-party cookies. But why would websites host third-party cookies? In fact, there are multiple motivations for websites to do so: for example, to receive extra revenue from selling ad space on their website; to embed external content (e.g., YouTube videos or Google Maps locations); to gain additional insights into user profiles (e.g., using analytical tools to find out how visitors landed on the website); or to enjoy other benefits that result from another third-party service. Since third parties provide their service for multiple advertisers, and thus are able to store and recognize cookies all over the Internet, these third parties have access to huge amounts of user data. This way, third-party tracking results in much more elaborate user profiles than those resulting from first-party tracking. In what follows, this section first elaborates on personalization processes mediated by search engines and is then followed by a similar focus on the operation of social networking sites.

Search Engines The first intermediary that provides advertisers with third-party services is search engines such as Google or Bing. On the one hand, search engines offer search engine advertising (SEA) opportunities. SEA is an online marketing practice where advertisers pay these search engines so that they first display the advertisers’ web search result above other organic web search results that have not been paid for (Ghose & Yang, 2009). On the other hand, these search engines also offer services as an advertising network. Lambrecht and Tucker (2013) describe advertising networks as aggregators of ad space across multiple websites. The online ad space is then sold separately to advertisers that make use of the advertising network’s services – in this case, the advertising services of search engines (e.g., Google Marketing Platform, Bing Ads). By means of embedding ad space, websites allow search engines to load third-party cookies into the web browser of the website visitors. The unique identifier included in the cookie that was stored in the user’s browser when encountering a first banner ad can then be recognized when the user encounters another banner ad that is managed by the search engine on a different website (Sit & Fu, 2001). In fact, it is possible to place cookies not only by means of advertisements, but also by transparent 1 × 1 pixels (unnoticeable

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blank images, also called beacons or gif/web/pixel bugs) that are hosted on the websites (Pierson & Heyman, 2011). With all this insightful data, search engines are able to construct detailed user profiles. However, search engines gather data both as an advertising network and through the other services they offer. For instance, they gather data when a user visits websites with embedded ad space, and also when the user uses other services of the search engine itself (e.g., Google Maps, Bing Maps). Consequently, the already detailed user profiles are further elaborated with additional data, and in some cases even identified (e.g., being logged in to a Google account). Based on these detailed user profiles search engines can provide advertisers with targeted advertising services (Balebako et al., 2012; Sit & Fu, 2001). An example of a personalized practice that these search engines typically organize on behalf of an advertiser is the process of retargeting (Lambrecht & Tucker, 2013). Retargeting involves offering online advertising to Internet users, based on the particular kind of online content they saw or searched for earlier (Goldfarb, 2014). Lambrecht and Tucker (2013) describe the process of retargeting as follows: an Internet user visits a certain website and views the products of advertiser X. By tracking the user’s website behavior through third-party cookies, the search engine registers which items received specific attention and amplifies the existing user profile with this newly captured information. Then, when the user continues to browse the Web and ends up on another website whose ads are also managed by this search engine, it is possible to identify the user and previous visits to the website of advertiser X, as well as the user’s interest in specific items on this website. At that moment, the search engine can design a retargeted ad related to (the items of) advertiser X and display it to the user. As a result, the user is stimulated to revisit the website of advertiser X and potentially even complete a purchase. Moreover, there are three specific precautions advertisers can take to avoid irritation regarding retargeting. The first is the implementation of a frequency cap. A frequency cap determines the maximum number of confrontations of a certain person (linked to a certain cookie) with the same banner. The second precaution is the use of rotating ads. This means showing other versions of the banner ad to users that have already seen a particular ad several times but have not yet clicked on it. The last precaution involves a burning pixel. By means of this burning pixel, the search engine registers when a user has completed a purchase. Although this user will no longer be retargeted with advertising related to the purchased product, it enables cross-selling opportunities. The

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user can be retargeted with advertising related to complementary items. After an Internet user purchases a television in an e-shop, for example, that user can be retargeted with ads about the e-shop’s soundbars. The fact that search engines construct such elaborate user profiles, continuously being amplified with new information, indicates that performing personalized retargeting services for advertisers is not the sole ability of search engines. When users do not show their explicit interest in (the products of) advertiser X by visiting their website, for example, the search engine is still able to provide other personalized advertising services such as online behavioral advertising (Lambrecht & Tucker, 2013; Roosendaal, 2011). Balebako et al. (2012) define online behavioral advertising as ‘tailoring Internet advertising based on an individual’s online history and behavior’ (p. 1). The authors highlight the fact that third parties, such as search engines, follow users around the Internet and register individuals’ web usage across various websites. By revealing not only the users’ explicit interest, but also their implicit interests, search engines can determine what ads could be of relevance to a certain Internet user. This results in exposing potentially interested individuals to ads related to the products of advertiser X, even before these prospects have showed any explicit interest in them.

Social Networking Sites The subsequent intermediary that provides advertisers with third-party services and is able to track users across the Internet is social networking sites. However, website owners do not embed ad space into their websites that is managed by social networking sites, such as with the advertising services of search engines. Instead, websites integrate social plug-ins, such as a Like button, or other track-enabling tools such as a Facebook pixel, that authorize the related social networking sites to store a cookie in the user’s web browser, regardless of whether the user clicks on it (Facebook, 2020e; Roosendaal, 2011). Once a cookie is stored in the user’s web browser, the social networking site can identify the web browser, and thus the user. By means of thirdparty tracking, social networking sites can already gather a lot of data about Internet users. However, the sites also offer other services that result in even more elaborate data gathering. Take Facebook, for example. Although Facebook started as a social networking site, it is now an entire company that also owns other companies, among which are the social networking site

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Instagram and the social messaging and calling service WhatsApp (Reiff, 2019). Therefore, Facebook is able to combine the data resulting from third-party tracking with the data resulting from first-party tracking, such as tracking one’s activity on Facebook, and also on Instagram and WhatsApp, for example. Consequently, the access to all this data results in extremely detailed user profiles on which Facebook relies to provide advertisers with targeted advertising services (D’angelo et al., 2009). Moreover, since platform members are logged in to their account, Facebook can link these detailed individual user profiles with the identifiable information that the platform member voluntarily entered while signing up for the social networking site or revealed while using the platform (D’angelo et  al., 2009; Mayer & Mitchell, 2012; Roosendaal, 2011). Advertisers are aware of the far-reaching knowledge of Facebook and therefore rely on its online behavioral targeting services to reach target audiences with advertising. Advertisers can create a preferred target audience by setting parameters that correspond to the characteristics of the users they want to address. For instance, say a car company wants to address an ad, requesting a test ride in its newest model, to male platform users between 18 and 25 years old, who use an iPhone, who have a strong interest in cars, and who attended a car-related event such as the Brussels Motor Show in 2020. Moreover, the car company wants to personalize the content of the ad based on the unique characteristics of the targeted group, for example, by referring to their attendance at a predetermined event. Since Facebook members enter their gender and age when signing in, expose their device data while using the platform, show their implicit interest in cars – by liking car-related pages or photos, commenting on car-related topics, watching car-related videos, etc. – and reveal their attendance by checking in at the designated event, Facebook knows to whom these ads are best directed. By comparing user profiles to the parameters set by the car company, Facebook can determine the most relevant members and display the targeted ad to them in the ad spaces embedded in its own platforms (D’angelo et al., 2009). Analogous to the operation of search engines, Facebook also provides advertisers with retargeting services, yet it utilizes the embedded ad space in its own platforms to do so (Facebook, 2020c). By means of the Facebook Pixel, Facebook is able to expose explicitly interested Internet users to retargeted ads. The Facebook Pixel is a little tool that websites install to authorize Facebook to set a cookie in an Internet user’s web browser when they visit this website (Day, 2018; Facebook, 2020d; 2020e). Then, when visitors show

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explicit interest in (the products of) advertiser X, Facebook registers this and can display retargeted ads to these prospects on its own platforms. In turn, the ad could stimulate the users’ return to the website of advertiser X, which could potentially lead to conversion. For instance, when an Internet user searches for shoes in an e-shop that integrates the pixel, the e-shop allows Facebook to register the visitor’s interest in specific shoes, so that Facebook can retarget them with ads related to these shoes on its own platforms.

Ethical Implications Analogous to the previous ethical issues, the EU’s GDPR serves as the starting point here as well. Although this data privacy and security law is part of European legislation, the provisions of the GDPR also apply to organizations outside the EU, in case they handle the personal data of EU citizens or residents (GDPR.EU, 2020b). This includes data gathered from offering goods and services to people in the EU, as well as data gathered while monitoring EU visitors’ online behavior. Facebook and Google are both American-based companies whose services are accessible to anyone on the World Wide Web, including European citizens and residents. Nevertheless, these companies are subject to the GDPR when it comes to handling the personal data of European Internet users (GDPR.EU, 2020b). As well as this legal limitation, other initiatives attempt to decrease the power of these data giants. For example, Safari includes a privacy preference that prevents cross-site tracking by third parties (Apple, 2020). Another example is Firefox, which protects the privacy of its users by blocking trackers by default through Enhanced Tracking Protection (Mozilla, 2020). In response to these third-party cookie-blocking techniques, Google and Facebook both came up with ways to work around them. Google implemented its _gac cookie, a Google Analytics cookie that websites can host which is nothing strange as such (Google, 2020). However, this _gac cookie is no longer considered a third-party cookie given that Google (a third party) no longer sets the cookie itself, yet the website hosting the _gac cookie (a first party) does it for Google (Marvin, 2017). Similarly, Facebook created a Facebook Pixel based on first-party cookies instead of third-party cookies and presented this first-party cookie pixel as the default option (Zawadziński & Wlosik, 2018). This way, the websites hosting the first-party cookie pixel are those responsible for the data that Facebook collects, and thus become

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the ones to blame in the case of data misuse or data breaches. Facebook’s first-party cookie pixel is now actually a third-party cookie in disguise: it looks like a first-party cookie, yet it still acts like a third-party cookie, since it is able to communicate with and send data to Facebook, which still remains a third party (Zawadziński & Wlosik, 2018). Taking these events into account, there appears to be an action–reaction dynamic in the field of data and privacy protection. This results in an ethical issue: that is, the fact that powerful companies, such as Apple and Mozilla, set up and support data and privacy protection initiatives implies that these are in some way necessary. However, these initiatives are subverted by clever workarounds that arise at high speed. Are the hosting parties aware of this? And are Internet users aware, let alone okay, with it? The ever-changing complexity of third-party tracking activities helps maintain the ignorance of less technically inclined individuals, advertisers, website owners, etc. The question then arises: when it is this hard to keep up with third parties, will it ever be possible to properly and accurately limit their power in favor of protecting user data and privacy? Another ethical issue that ensues from this one is the fact that some third parties have a dual function when it comes to tracking Internet users. Facebook and Google, for example, not only provide others with third-party services, but also offer first-party services to their own platform users (Facebook, 2020a, 2020b; Google, 2019). This means that these companies manage an unimaginable amount of data about potentially identifiable individuals: they construct extremely detailed user profiles, and they can also find out which particular user is attached to which profile when the user logs on to an account. However, both Facebook (2020b) and Google (2019) ensure that no personally identifiable information is shared with or sold to others, and that user data and privacy are protected. Yet these claims shift the focus from two essential data-related aspects that need to be considered as well. Firstly, it might be forgotten that Facebook and Google do have access to this user information themselves, and this might result in knowing too much about individuals when it is linked to personal identifiable information, regardless of whether this information is being shared with or sold to others. Secondly, these companies also have protection vulnerabilities, regardless of whether they are aware of them. Take the example of the Facebook–Cambridge Analytica scandal. It appeared that Cambridge Analytica had harvested the personal data of millions of Facebook users without their consent and used it for political advertising purposes, basically manipulating behavior (New York Times, 2018).

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In a blog post, the Chief Technology Officer of Facebook revealed that information on up to 87 million individuals had been improperly shared with Cambridge Analytica (Schroepfer, 2018). Leaving aside whether Facebook was aware of it or not, an external party gained access to personal data that should have been inaccessible. The last ethical implication that this chapter addresses is about the ability of third parties to track users across the Internet. The previous sections have already explained how third-party cookies enable third-party tracking on multiple sites. Consequently, these third parties have the unique ability to perform cross-site profiling, which could also jeopardize users’ privacy (Brain, 2000). On the internet, users – consciously or unconsciously – disclose all sorts of information. This also includes confidential information, such as search behavior related to politics or health, for example. By tracking users across the Internet, third-party data therefore could reveal sensitive information such as medical conditions or political opinions (Sanchez-Rola et  al., 2019). In case of the companies mentioned above with a dual function, the user’s privacy is definitely on the line, since their third-party data can be merged with first-party data, potentially identifying the person to whom this sensitive information belongs. Note, however, that Facebook and Google are already able to derive such sensitive information themselves, from the user’s activity on their own platforms.

FUTURE DIRECTIONS FOR ETHICAL CONSIDERATIONS IN DIGITAL MARKETING PERSONALIZATION This chapter provided an overview of the main implementation strategies of personalization in the field of digital marketing. Based on the (direct/ indirect) access that an advertiser has to the data that is used to personalize, the chapter distinguished two types of personalization: that based on data gathered by the advertiser and that based on data gathered by intermediaries. With regard to the ethical implications that come with personalization, this distinction appears to be useful as well. For example, the ethical concerns raised by the latter are remarkably more worrying than the ethical concerns raised by the former. Certainly, in the case of data collected by companies with a dual function, the situation is critical. Of course, the ethical concerns that come with first-party and third-party tracking apply separately to them. However, the severity of the concerns in this case is even higher, since the simultaneous occurrence

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of ethical concerns leads to synergetic reinforcement. The potential privacy risks increase and transcend the risks that result from first-party or third-party tracking separately. By outlining the European legal framework in this chapter, it became clear that complying with the law is not the only aspect that companies need to consider while handling personal data. Since the online tracking industry is evolving at such a high rate, it is impossible for legislators to restrict companies whenever and wherever necessary. This inevitably means that, although companies have some legal obligations, they also have obligations toward users that are not written down in terms of law. The current and ever-increasing complexity of tracking activities could, for example, enhance users’ state of ignorance or their feeling of powerlessness. In turn, this denies consumers the possibility to make a truly informed choice about whether they want to be involved in such activities or not. The lengthy cookie policies, the fast-changing technologies, the complex explanations that require at least some level of IT-related knowledge, and so on, all serve as barriers that prevent people from acquiring the knowledge that is necessary to make such choices. These issues arise not only for customers, but also for the advertisers themselves. When it comes to unraveling the mechanisms underlying personalization practices, advertisers are often ignorant and kept in the dark by third parties too. Consequently, they could potentially be jeopardizing their own trustworthiness without even realizing it. Take the example of retargeting. When Internet users are exposed to (multiple versions of) a retargeted ad, they get the feeling that this ad is following them around, not only on other websites, but also on their beloved social networking sites. However, it might be possible that users wrongfully attribute this uncomfortable feeling to the advertiser. As it is in fact a third party such as a search engine or a social networking site that manages this personalized practice, the attribution is unfair and negatively affects the user’s trust in the advertiser. The same goes for the example of managing targeted advertising. Search engines and social networking sites construct detailed individual user profiles that serve as a valuable source for conveying the right message at the right time to the right person. In some cases, the targeting service is so frighteningly accurate that it could be experienced as creepy by those exposed to it. As the advertiser is in fact the one paying for the ad, the user may blame the advertiser as the one responsible, whereas in reality the invisible third party that manages the targeted advertising is the one behind the operation. These third parties all rely on the ignorant state of both the user and the advertiser to

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continue to operate in the way they do now, and in the future possibly in even more advanced ways, without anyone being able to take control or to set limits to their possibilities. However, by actively investing in relationships with (potential) customers, advertisers could to some extent counter the disadvantageous consequences that could result from the incorrect attribution, as well as from users’ ignorance and feelings of powerlessness. Suggested trustbuilding strategies that advertisers could perform in order to do so are increasing transparency and increasing users’ behavioral control. Research has showed that transparency reinforces trust and that individuals desire to be more in control of their data (Morey et  al., 2015; Phelps et  al., 2000). Increased transparency relates to being honest and open about tracking activities and data handling in such a way that it is understandable for everyone. Increased behavioral control relates to empowering (potential) customers to decide for themselves how they want their data to be collected, stored, processed, exchanged, and used. When doing this correctly, the advertiser simultaneously informs (potential) customers about what they reveal to the advertiser. This is also important for building trust, as research has found that Internet users are often unaware of the information they unconsciously share while being online (Morey et al., 2015). While giving (potential) customers more control over their own data, the advertiser makes them more ‘data literate’ for the future as well. Consequently, users might be better skilled to protect their online privacy elsewhere on the Internet. This relates to the study by Büchi et al. (2017) on Internet users’ self-help activities in protecting their privacy online. This study provides evidence that one’s Internet skills are a positive direct predictor of privacy protection behavior. Other positive direct predictors are the attitude of users toward the importance of online personal privacy, and their prior involvement in a data breach. By increasing transparency and perceived behavioral control, advertisers contribute to an unwritten (ethical) obligation they have toward users: helping them improve their online privacy protection knowledge and behavior. To properly protect one’s own online privacy, especially in the case of children or adolescents, it is important to understand the advertiser’s intent to target users (which refers to one’s persuasion knowledge), yet it is also important to understand how the underlying mechanisms work exactly (De Pauw et al., 2018; Zarouali et al., 2018). This chapter is an attempt in this direction, by clarifying the operation of the mechanisms underlying personalization, as well as by pointing out the ethical implications.

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https://www.nytimes.com/2018/03/19/technology/facebook-cambridge-analytica-explained.html Ngai, E. W., Xiu, L., & Chau, D. C. (2009). Application of data mining techniques in customer relationship management: A literature review and classification. Expert Systems with Applications, 36(2), 2592–2602. doi: 10.1016/j.eswa.2008.02.021 Norberg, P. A., Horne, D. R., & Horne, D. A. (2007). The privacy paradox: Personal information disclosure intentions versus behaviors. Journal of Consumer Affairs, 41(1), 100–126. doi: 10.1111/ j.1745-6606.2006.00070.x Patterson, M., O’Malley, L., & Evans, M. (1997). Database marketing: Investigating privacy concerns. Journal of Marketing Communications, 3(3), 151–174. doi: 10.1080/135272697345943 Petrison, L. A., Blattberg, R. C., & Wang, P. (1997). Database marketing: Past, present, and future. Journal of Direct Marketing, 11(4), 109–125. doi: 10.1002/ (SICI)1522-7138(199723)11:43.0.CO;2-G Pew Research Center. (2019). Americans and Privacy: Concerned, Confused and Feeling Lack of Control over Their Personal Information. Retrieved February 7, 2020, from https://www.pewresearch.org/ internet/2019/11/15/americans-and-privacyconcerned-confused-and-feeling-lack-of-control-overtheir-personal-information/ Phelps, J., Nowak, G., & Ferrell, E. (2000). Privacy concerns and consumer willingness to provide personal information. Journal of Public Policy & Marketing, 19(1), 27–41. doi: 10.1509/jppm. 19.1.27.16941 Pierson, J., & Heyman, R. (2011). Social media and cookies: Challenges for online privacy. Journal of Policy, Regulation and Strategy for Telecommunications, 13(6), 30–42. doi: 10.1108/14636691111174243 Reiff, N. (2019, June 25). Top Companies Owned By Facebook [Blog post]. Retrieved January 29, 2020, from https://www.investopedia.com/articles/ personal-finance/051815/top-11-companiesowned-facebook.asp Riecken, D. (2000). Introduction: Personalized views of personalization. Communications of the ACM, 43(8), 26–28. Roosendaal, A. (2011). Facebook tracks and traces everyone: Like this! Tilburg Law School Legal Studies Research Paper Series No. 03/2011. doi: 10.2139/ssrn.1717563 Rosenberg, R. S. (2013). The social impact of computers. San Diego, CA: Academic Press. Sanchez-Rola, I., Dell’Amico, M., Kotzias, P., Balzarotti, D., Bilge, L., Vervier, P.-A., & Santos, I. (2019, July). Can I Opt Out Yet? GDPR and the Global Illusion of Cookie Control. Paper presented at the ACM Asia Conference on Computer and Communications Security, Auckland, New Zealand.

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Schroepfer, M. (2018, April 4). An Update on Our Plans to Restrict Data Access on Facebook [Blog post]. Retrieved February 5, 2020, from https:// about.fb.com/news/2018/04/restrictingdata-access/ Schultz, D. E., & Schultz, H. F. (1998). Transitioning marketing communication into the twenty-first century. Journal of Marketing Communications, 4(1), 9–26. doi: 10.1080/135272698345852 Security Magazine. (2019, November 13). 7.9 billion records exposed so far in 2019. Retrieved February 4, 2020, from https://www.securitymagazine.com/ articles/91267-9-billion-records-exposed-so-farin-2019 Shaw, M. J., Subramaniam, C., Tan, G. W., & Welge, M. E. (2001). Knowledge management and data mining for marketing. Decision Support Systems Journal, 31(1), 127–137. doi: 10.1016/S01679236(00)00123-8 Sit, E., & Fu, K. (2001). Inside risks: Web cookies: Not just a privacy risk. Communications of the ACM, 44(9), 120. Stone, M., & Shaw, R. (1988). Database marketing. In D. Lock (Ed.), The Gower handbook of management (pp. 351–338). Aldershot: Gower. Sunikka, A., & Bragge, J. (2008, January). What, who and where: Insights into personalization. Paper presented at the 41st Annual Hawaii International Conference on System Sciences, Waikoloa, Hawaii doi: 10.1109/HICSS.2008.500 Sunikka, A., & Bragge, J. (2012). Applying textmining to personalization and customization research literature – Who, what and where? Expert Systems with Applications, 39(11), 10049– 10058. doi: 10.1016/j.eswa.2012.02.042 Todor, R. D. (2016). Blending traditional and digital marketing. Bulletin of the Transilvania University of Brasov. Economic Sciences. Series V, 9(58), 51–56. Yu, J., & Cude, B. (2009). ‘Hello, Mrs. Sarah Jones! We recommend this product!’ Consumers’ perceptions about personalized advertising: Comparisons across advertisements delivered via three different types of media. International Journal of Consumer Studies, 33(4), 503–514. doi: 10.1111/ j.1470-6431.2009.00784.x Zarouali, B., Verdoodt, V., Walrave, M., Poels, K., Ponnet, K., & Lievens, E. (2018, June). Adolescents’ persuasion skills and privacy protection strategies in the context of targeted advertising on social networking sites: Implications for regulation. Paper presented at the 17th International Conference on Research in Advertising, Valencia, Spain. Zawadziński, M., & Wlosik, M. (2018, December 20). What Facebook’s First-Party Cookie Means for AdTech [Blog post]. Retrieved from https://clearcode. cc/blog/facebook-first-party-cookie-adtech/

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31 Ethics in Digital Marketing and Social Media Annmarie Hanlon

INTRODUCTION Digital marketing has disrupted traditional communications from a two-step or multi-step approach (Lazarsfeld and Katz, 1955; Katz, Blumler and Gurevitch, 1973; Robinson, 1976) to a different understanding of the communications landscape that comprises: email, websites, search engine optimisation and marketing, blogs, social media networks and social media advertising. Technology has evolved to enable targeted customer experiences resulting in a series of automatic processes including: sequential email flows dependent upon the users’ actions, routine reminders when goods are left in website shopping carts, retargeting via search engines, adaptive and localised goods that are proposed via search engines, data capture by means of downloads from blogs and websites, plus significant amounts of data harvesting via social media networks. Social media networks provide consumers with varied uses and gratifications (Katz et  al., 1973) such as: social interaction (Krishen et  al., 2016), entertainment (Luchman, Bergstrom and Krulikowski, 2014), information (Muntinga, Moorman and Smit, 2011), personal identity and status development (Shao, 2009; Muntinga et al., 2011), communication (Whiting and Williams,

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2013; Luchman et  al., 2014), community development (Shao, 2009), relaxation or passing time (Whiting and Williams, 2013), convenience utility (Whiting and Williams, 2013), remuneration (Muntinga et al., 2011) and surveillance (Whiting and Williams, 2013). Thus in an online environment individuals can express opinions, share feelings, build connections and discover brand products and services, thereby offering a valuable and accessible source of data. This data affords organisations an array of individual consumer information comprising; demographic identifiers, psychographic information and webographic data (Chaffey and Smith, 2008; King, Racherla and Bush, 2014; Hanlon, 2017; Winter and Lavis, 2019), for example: • demographic identifiers – names, date of birth, place of birth, home town, relationship status, linked relationships, family members, friendship groups, significant anniversary dates, work and education records; • psychographics – interests and hobbies, religious affiliations, political views, preferred music, films watched, favourite brands; and • webographics – web pages visited, social media pages liked, comments added, downloads performed, videos watched, videos added, purchases

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made, multisensory and polyphonic artefacts followed, added and created (hashtags, GIFs, memes, emojis), as well as actions taken from website visits. According to Lamberton and Stephen (2016), the first era of social media (2000–2004) founded digital marketing. Since this time the leitmotivs in the literature have considered the impact of technology with a focus on (1) consumer expression and communication; (2) decision support tools; and (3) market intelligence. The macro-level review by Lamberton and Stephen (2016) demonstrated that there was limited consideration of ethics in digital marketing and social media: for example, when reviewing the introduction, development and future of social media there were only two questions raised around ethical issues: (a) whether it was ethical to use individuals’ conversations as data sources; and (b) whether it was ethical for firms to acquire consumer data. Additionally, the notion of seeking permission to capture and discuss data is not considered in several earlier studies that utilised different online sources for data, for example: personal blogs (Lin and Huang, 2006), YouTube videos (Lorenzo-Dus et  al., 2011; Misoch, 2015; Ahmad et  al., 2017) and Twitter (Swani, Brown and Milne, 2014; Yoon, Polpanumas and Park, 2017). However, the concept of data anonymity and privacy is considered in some earlier works (Lockett and Blackman, 2004; Trusov, Bodapati and Bucklin, 2010) and some studies requested permission from community managers, but not the participants (Phillips and Broderick, 2014). The overall picture illustrates the infancy of ethics within digital marketing and social media. However, as digital marketing and social media are newer areas in the domain of marketing this is not altogether remarkable. While consumers gained access to the internet and shared content, scholars identified the research opportunities, gathering quantitative material via data extraction and gaining qualitative content through online communities. It has long been recognised that the internet and in particular social media facilitate unobtrusive access to a rich array of publicly available published material (Kozinets, 2002; Bucklin and Sismeiro, 2009; Sloan et al., 2019). However, reflection of the implications of the data gathering and subsequent usage are secondary and thus the notion of ethical approval for capturing online data lacks consistency. One of the recognised challenges in online research is the blurred boundaries (Hibbin, Samuel and Derrick, 2018; Samuel et al., 2018) which has led to multiple approaches from: ‘cafeteria ethics’ where researchers choose their preferred ethical

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option (Samuel et  al., 2018, p. 454); or implied ethics as users signed up to access the social media platform and thus consent has been secured (Hutton and Henderson, 2015); or requirements for ethical approval are ignored as the data is considered as ‘published text’ (Hibbin et  al., 2018, p. 150), or the notion of a ‘consent waiver’ is adopted (Ravn, Barnwell and Barbosa Neves, 2020. p. 2). As digital marketing and social media have evolved with such velocity and variation in platform types (Samuel et al., 2018), it is not unusual that there is a lack of guidance in digital marketing and social media ethics among both practitioners and academia, although the Association of Internet Researchers (Markham and Buchanan, 2012) and the British Sociological Association (2017) have attempted to bridge the gap by providing guidelines for researchers. Within a legal framework, in 2018 the European Union introduced The General Data Protection Regulation to govern the use of data protection and privacy, which was intended to harmonise and update inconsistencies surrounding data protection across Europe. While the application of the legislation focused on organisations, unresolved issues remain, for example universities are classified as public authorities (not organisations), which enables the processing of data within the ‘public task’ basis and is thus ‘considered to be compatible lawful processing operations’ (Information Commissioner’s Office, 2018, p. 18). However, while collecting data for scientific research is within the remit of lawful processing operations, the notion of ethical approval or additional permissions are not addressed. The European legislation focuses on the notion of being fair and lawful and obtaining consent, it does not tackle the thorny issue of data sources, a situation that is echoed worldwide, for example: • Australia has Privacy Principles (APP) which explicate the context alone and while research is considered, the focus concerns government and health records, rather than other forms of research (Australian Government: Office of the Australian Information Commissioner, 2019). • In China there is a ‘piecemeal approach’ as several legal frameworks govern data, including the more recent ‘Guideline for Personal Information Protection within Information Systems for Public and Commercial Services’ (Kshetri, 2014, p. 40). • The USA has a fragmented approach, due to the lack of country-wide data protection law, instead providing differing approaches across individual states. As a result the worldwide legislative landscape around the ethics of data capture and application

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lacks cohesion and consistency. As a result, data deception has occurred on an international basis, culminating in the downfall of the data analysis firm Cambridge Analytica, which worked with Facebook to micro-target users (Isaak and Hanna, 2018) through the promotion of an app which appeared to be a personality test but was a datagathering tool (Berghel, 2018). In this setting where ethical constraints are absent, organisations have recruited consumers to deliver unpaid or undeclared work by creating their content, contributing to the role of influencers and thus further blurring boundaries. Simultaneously the role of individuals has changed as negative and risky behaviours have emerged online, as some seek to amplify their values and principles in a space with a worldwide audience, while trying to maintain their privacy. These issues are addressed in the next section which also considers harmful online behaviour and policies around digital marketing and social media.

CUSTOMER DATA DECEPTION March 2018 witnessed a seminal shift in the relationship of trust with the social media companies. On this date a 27-year-old computer scientist turned whistle-blower provided a journalist with details of how Facebook shared data from millions of user accounts with Cambridge Analytica. Three days after this disclosure Facebook showed platform users how to check whether their data was included in this process and how to better manage their privacy settings (Facebook Inc., 2018). Subsequently, one-month later Facebook founder Mark Zuckerberg admitted that 87 million accounts could have been shared with Cambridge Analytica (Isaak and Hanna, 2018) and thus the social media platform was summoned to the UK’s Parliament to provide evidence at the House of Commons (Digital, Culture, Media and Sport Committee, 2019) where a Facebook representative explained that the practice was both legal and within the framework of European data protection legislation. These disclosures revealed that customer data deception was occurring on an extraordinary scale, as consumers signed up for entertaining apps, such as ‘thisisyourdigitallife’ (Berghel, 2019) and failed to read the overlong terms and conditions. Thus their identifiable demographic, psychographic and webographic profiles were associated with additional data that was harvested from the app, which was based on

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the ‘OCEAN’ psychological profile – openness, conscientiousness, extraversion, agreeableness and neuroticism (Tupes and Christal, 1992; Isaak and Hanna, 2018) and made available to third parties in order to deliver targeted advertisements. It appeared that this practice was ubiquitous and that Cambridge Analytica was ‘one of many businesses benefiting from the Facebook feature that enabled third parties to use personal data without consent’ (Laterza, 2018, p. 1). This practice, termed ‘behavioral microtargeting’ (Ward, 2018, p. 133) or ‘political behavioral targeting’ (Dobber et  al., 2019, p. 1212) has the negative impact of manipulating voters independent judgement (Ward, 2018) where the outcomes have delivered unexpected election results. Likewise, to deliver more relevant advertising content, other online firms have been using customer behaviour data, for example Google harvests data from email content (Raben, 2018) and Apple collects data from product use – whether from an app or asking the voice-enabled search assistant Siri (Apple Inc., 2019). These concepts may seem new as being situated within digital and social media, but the construct of customers as ‘economic units’ where behaviour is linked to economic outputs, along with the notion of customer segmentation, has been considered in the marketing domain for decades (Wyner, 1996). The issue is whether the online targeting can harm consumers. While Cambridge Analytica may have disappeared from the landscape, similar organisations continue to thrive, such as Data Trust (thedatatrust.com) and i360 (i-360.com) with a focus on enhancing political data, although consumers are more aware of data use. Since October 2018 Facebook has publicly shared its library of political and campaigning adverts (Facebook, 2019a), making the content and budgets related to political campaigning more transparent, which addresses calls for all political messages in social media to be clearly identified (The Electoral Commission, 2019), although this is not yet widely available in all countries. However, coping strategies by users may lead to falsification or omission of data (Norberg and Horne, 2014).

BLURRED BOUNDARIES While organisations have been harvesting data concerning individual profiles, the domain of digital marketing and social media has created blurred boundaries between the professional, personal and societal states which an individual may exhibit

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online. Clark (2000) introduced boundary management in her theory of work/family balance and raised issues concerning how individuals managed these boundaries. Four central concepts of boundary management theory were identified: (1) work and home domains; (2) borders between work and home; (3) the border-crosser; and (4) the border-keeper. Central to this is the notion of permeability where one domain is permeated by the other due to an interaction, or the borderland. This permeability establishes the integration or segmentation from one state to another and according to Kreiner, Hollensbe and Sheep (2006) there are intra-identity boundary interfaces where boundaries within identity are negotiated and interidentity boundary interfaces where those between individual and organisational identities are negotiated. These identities may be integrated where the individual and organisation blend together or differentiated where the two are separate. Thus, individuals may have a single identity on a professional work platform such as LinkedIn and a different identity on Facebook or Instagram which do not immediately appear to be connected. However, blurring boundaries has become commonplace on social media as the platforms facilitate the blending of individual and organisational identities. Individuals are more aware of their online identities as Marwick and boyd (2011, p. 115) observed that ‘participants have a sense of audience in every mediated communication’. This concurs with research from Bareket-Bojmel, Moran and Shahar (2016) who recognised that individuals were using three ‘enhancement’ strategies to better present their online self: (1) presentation of the self in a positive manner (behaviours, attributes, attitudes and feelings); (2) presentation of the self in a socially desirable manner; and (3) self-promotion designed to impress an audience with one’s competence or talent (p. 791). These themes resonate with Goffman’s self-presentation theory where the individual manages their presentation by exhibiting their best self to their audience (Goffman, 1956).

Personal Blurred Boundaries One of the ethical challenges with the blurring of boundaries is the notion of personal material being privately yet publicly shared, alongside publicly available content. This is not a simple continuum between personal and public, but a multi-faceted state as other actors may be involved in facilitating the boundary-crossing process (Ravn et al., 2019). Users may share personal data on public social media platforms, with the intention of updating friends and family, but without considering

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the wider available access to the same material. Furthermore, while users control settings and some may decide that their content is not to be publicly shared, thus establishing their account as private or locked, the challenge is that the user settings of friends and family may not follow this protocol, resulting in content being publicly reshared among their social network, whether intentionally, accidentally or without consideration, thus rendering earlier privacy settings void. A growing ethical concern is the privacy of personal imagery across social media and the concept of Content Based Image Retrieval (Huang et  al., 2018). According to Prosser and Loxley (2008), visual content comprises: (1) found data (such as historical artefacts); (2) researcher-created images (images captured or created by researchers); and (iii) respondent-generated materials (materials provided or created by respondents). This creates additional complexity where researchers may not be aware of cultural norms, which can result in negative effects when researcher-created images are shared on social media (Thorpe, Hayhurst and Chawansky, 2017). In a digital marketing setting, online images are easily retrieved via search engine functionality through dedicated tools including Google and Bing Image Search, as well as the availability of many photo-sharing websites, and the advent of instant online storing of images afforded by mobile telephony. The ethical dilemma is that imagery is susceptible to further sharing, online storage or potential malicious distribution (Weng et  al., 2015) and that images may contain background information which could reverse any anonymity that may have been granted. Additionally, photos taken of others without consent, termed ‘creepshots’, may be shared publicly (Highfield and Leaver, 2016, p. 58). Yet when taken in a public place, this is a specialist photography genre known as street, candid or social document photography (Jardin, 2017) where the ethical guidelines focus on the legislation, suggesting that it is allowable to capture images for editorial or fine-art purposes without permission (Jardin, 2017). Yet as Batdorff (2015, chapter 8) observed, ‘The camera phone has become so ubiquitous that it’s unrealistic to expect or control privacy in public domains’ and he suggested the crux of this issue is understanding the notion of a ‘public space’. Methods to enhance and improve images which when combined with artificial intelligence have created ‘digital manipulations’ (Chesney and Citron, 2019, p. 148) enable users to alter images for improvement. This was initially a useful digital marketing development that has turned sinister. Termed ectypes and deepfakes (Floridi, 2018), these

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are copies from an original that appear to represent genuine content. While these media manipulations could be positively harnessed for the benefit of museums and educators who could preserve historical artefacts or recreate historical scenes for educational endeavours, the process has been misused where the digital techniques recreate images or videos, in order to damage the subject in the material. For example, this may include politicians purporting to make comments that were never made, actors appearing in unsavoury videos in which they were never involved (Day, 2019), resulting in misinformation and character destruction. While a simple altered image may be discovered, the difference with deepfakes is their lack of resistance to detection and when transmitted in the form of video, seem more authentic. Thus, there are concerns that deepfakes could be applied by non-state actors, disrupt politics and threaten democracy (Chesney and Citron, 2019). Solutions being developed include the development of digital watermarks or certificates of authenticity for genuine content (Chesney and Citron, 2019; Hasan and Salah, 2019), as well as the adoption of a total open boundary management system (Ollier-Malaterre, Rothbard and Berg, 2013) in a more extreme form of lifelogging – recording all aspects of daily life (Parker and Van Belle, 2016; Bolanos, Dimiccoli and Radeva, 2017). To counter the abuse of a digital technology designed for good, both Facebook and Google have launched programs to detect deepfakes (Dufour and Gully, 2019; Schroepfer, 2019) and a politician in the USA has proposed legislation in California to outlaw deepfake images before an election (Gardiner, 2019). This is an emerging area requiring further research. Regardless of whether users have consented to their images being shared or used online, they may have created content that was not intended for consumption by researchers (Ravn et al., 2020). Yet, as further observed by Ravn et  al. (2020) within the realm of research, scholars may perceive threads of public intimacy as part of a dataset, contributing to an overarching theme or fragments, which when pieced together construct ‘ethically important moments’ (Guillemin and Gillam, 2004). Wiles et  al. (2012) suggested anonymisation of images and although not possible in some situations, this is a quandary for researchers, because if the anonymisation is too great, the essence of the image is removed.

ONLINE SHAMING Beyond data sharing with or without consent, another factor in the blurring of personal

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boundaries is the quest for greater accountability of content that is shared online, or statements made in a public space which can be repeated across social media networks, as demonstrated in the concept of online public shaming. Basak et al. (2019, p. 208) define this as ‘condemnation of someone who is in violation of accepted social norms to arouse feeling of guilt in him or her’. Online public shaming is different from bullying per se as it is often a single episode that can result in life-changing consequences, such as inappropriate comments that were perceived by the individual to be humorous and were interpreted by the audience as offensive. The characteristics of online shaming comprise: (1) a definite single target or victim; (2) an action committed by the victim perceived to be wrong; and (3) a cascade of condemnation from the society (Basak et  al., 2019, p. 208). Notable examples of online shaming include the senior academic and Nobel Prize winner Tim Hunt who made sexist comments at a conference that were shared online (Adkins, 2019) and the PR professional Justine Sacco who posted racist remarks on her Twitter feed (Basak et al., 2019). Both examples resulted in temporary job loss or withdrawal from the community, the ultimate penalty for a personal observation being shared in a public space.

THE PRIVACY PARADOX Within the construct of communication privacy management (CPM) theory, Child and Petronio (2018) placed the emphasis on how individuals described privacy within their context and suggested that CPM is founded on five principles: (1) private information is personally owned; (2) individuals control the sharing of their information to others; (3) individuals use privacy controls to manage sharing; (4) once shared, the information is collectively owned; and (5) if privacy rules fail, boundary turbulence will occur (Child and Petronio, 2011). Thus, in a CPM framework, privacy is controlled by individuals who have defined and managed their online privacy, yet there is a disconnect between articulated and actual behaviour as a further nuance of the boundaries occurs with the notion of the privacy paradox (see e.g. Barth and de Jong, 2017). This is unsurprising as the social media platforms require individuals to disclose an amount of personal data (as noted in Introduction) which users share in order to access the networks. The privacy paradox suggests that there is disparity

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between behaviour and attitudes towards privacy, as individuals self-disclose significant amounts of personal data yet concomitantly have either conscious or subconscious concerns about their online privacy. Younger people are often attributed as over-sharing and lack consideration of privacy, although researchers Masur and Scharkow (2016) discovered that young people are concerned with their online privacy, contrary to popular opinion. The challenge is managing the amount of personal data that is disclosed.

Professional Blurred Boundaries Within a professional context, openness across social media networks is encouraged as representing best practice. For example, LinkedIn’s user agreement stipulates that users should have a single identity (LinkedIn, 2012), rather than portraying multiple selves, and the founder of Facebook, Mark Zuckerberg, perceived having two identities as a lack of integrity and argued that segregating personal information was challenging in an online setting (Kirkpatrick, 2011), thus proposing the notion of one identity. While this sounds laudable, according to van Dijck (2013, p. 211), ‘Users arguably have a need for multiple “stories” about themselves, each story concerning different parts of their identities and addressing a limited audience.’ This concurs with a statement from Brusseau (2019, p. 1) who selfidentified as ‘A father in the morning, a lecturer in the afternoon, a husband in the evening.’ Another dimension is propounded by Werbin, Lipton and Bowman (2017, p. 30) who stated that Zuckerberg’s one identity stance was ‘hegemonic patriarchy seeking to diminish feminist, queer and other intersectional subjectivities’. One identity is thus a simplistic notion that does not apply in all online situations and may traverse too many boundaries. In an offline setting, customary work behaviour involves attending social events and sharing some level of personal detail, for better integration with co-workers (Dumas, Phillips and Rothbard, 2013; Ollier-Malaterre et  al., 2013). Earlier research found that blurring the boundaries and using social media within an organisational situation were beneficial for professional networking and strengthening ties, although issues were identified with over-sharing personal information (Skeels and Grudin, 2009). Other factors contributing towards the blurring of professional and private spaces include longer working hours (van Prooijen, Ranzini and Bartels, 2018) and that some social media networks provide both personal and professional interactions as individuals become online

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friends with co-workers (Ollier-Malaterre et  al., 2013). Moreover, Banghart, Etter and Stohl (2018, p. 339) propound that the notion of discrete identities has become ‘irrelevant’ with the evolution of technology and the social media platforms. However, managing boundaries between both personal and professional identities can lead to boundary turbulence (Child and Petronio, 2011), resulting in the failure of boundary management due to ‘role conflict’ or ‘role overload’ (Liu and Wang, 2018, p. 1008). To better manage these boundaries and minimise boundary turbulence, individuals have developed behavioural strategies. Ollier-Malaterre et al. (2013) identified four types of boundary management behaviour and Thunman and Persson (2018) advanced these behaviours into specific roles, using the example of teachers in Sweden who were early adopters of social media for work (Persson and Thunman, 2017). These behaviours and roles are based on the axes of segmentation and integration, where segmentation centres around a mechanism to combat the boundary blurring, thus separating professional and personal states, and integration accepts the lack of distinction and merges the states. Segmented behaviours identified by OllierMalaterre et al. (2013), were (1) audience boundary management – dividing professional and personal contacts, often resulting in separate social media accounts; and (2) hybrid boundary management – while the professional and personal outwardly appeared to be connected, but these individuals created lists and groups to ensure boundary management. The two segmented roles found by Thunman and Persson (2018) included: (1) the neutral chairman – maintaining their distance, ignoring any issues; and (ii) the privacy protector, also adopting the audience boundary management behaviour where the role segments their identities with separate accounts. However, this practice may not be easily available to all, as those segmenting their accounts were found to have access to equipment from their workplace, such as iPads in addition to their personal devices. Furthermore, the concomitant management of assorted devices and multiple profiles requires significant effort and digital competence, for example using separate web browsers for different accounts (Persson and Thunman, 2017) or different email accounts to access online profiles. Integrating boundary management is manifest as behaviour that embraces social media with a single identity. Ollier-Malaterre et  al. (2013) described integrated behaviour as (3) open boundary management – merging both professional and personal identities; and (4) content boundary management – carefully considering the data that was shared. The roles developed by Persson

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and Thunman (2017) followed a similar pattern with (3) the moral agent, who assumes open boundary management behaviour and may monitor students’ content and bring online issues into the classroom for discussion; and (4) the moral role model, who exercises control over their private information that is shared, adopting content boundary management behaviour. Integrating social media profiles has been recognised as bringing benefits, such as strengthening social capital (van Prooijen et al., 2018; Tijunaitis, Jeske and Shultz, 2019). Nevertheless, in some business sectors a professional distance is advised, for example the American Medical Association recommends: ‘To maintain appropriate professional boundaries physicians should consider separating personal and professional content online’ (AMA Council on Ethical and Judicial Affairs, 2015, p. 1). Notwithstanding this directive, the blurred boundary of merged professional and personal social media application and the impact on employees remains complex and is an area requiring further research (van Zoonen, Verhoeven and Vliegenthart, 2017). While employers may be keen for employees to merge the boundaries and harness social media for organisational benefits while at work, one emerging issue within the research is the notion of social media overload, as a notion based on too much communication and information which can trigger stress and social media exhaustion (van Zoonen and Rice, 2017; Yu et al., 2018). Ultimately, whether an individual attempts to maintain boundaries and develops separate accounts for professional and personal use may become immaterial as another area of research is user identity linkage (Lee et  al., 2018), where software can match profiles across networks even where different user names are adopted. This is achieved through software that explores similarities in the content that is posted across social media and subsequently mapped against repeated individuals in their relationship networks, resulting in identification of the segmented private and public accounts and thus the removal of all audience and content boundaries.

HARMFUL ONLINE BEHAVIOUR Managing boundaries is partly driven by concern as social media have fostered newer forms of harmful online behaviour where individuals exhibit negative and risky online behaviour from bullying and trolling to ‘dying for selfies’. The role of individuals seeking to amplify their values

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and principles in a space with a worldwide audience is explored in this section.

Trolls, Sockpuppets and Vandals Found online, especially in public arenas such as forums and social media platforms, trolling has been described as the act of sharing content designed to provoke reactions, disrupt conversations and often used to waste time (Baccarella et al., 2018) and ‘behaving in a deceptive, destructive, or disruptive manner’ (Buckels, Trapnell and Paulhus, 2014, p. 97) which is why it has been cited as an example of deviant and antisocial behaviour (Ditrich and Sassenberg, 2017; Synnott, Coulias and Ioannou, 2017). Not all online antisocial behaviour is identical and thus trolls were categorised by Bishop (2014) as: (1) classic trolls, intending to entertain the audience; (2) anonymous trolls, creating content for self-gratification and the denigration of others; (3) flame trolls, engaging others for online abuse; and (4) kudos trolls, offending part of the audience to amuse others. Their behaviour has been explored to understand which elements of the Dark Tetrad of personality – narcissism, Machiavellianism, psychopathy and sadistic personality (Buckels, Jones and Paulhus, 2013) – were exhibited and it was found that everyday sadism was exhibited by online trolls, taking pleasure in the vilification of others which is manifest in classic and anonymous trolling. Furthermore, due to the anonymity afforded on the internet, individuals can conduct antisocial behaviour and meet others with similar personality traits (Buckels et  al., 2014). Under the veil of anonymity or identity deception, they can also create multiple fake troll accounts – sockpuppets – which may be of their own making, or controlled by a puppetmaster, or troll farm, in order to repeat the same views and gain attention swiftly (Kumar et al., 2017b), effectively creating a reference group that influences the behaviour of others. Trolling can have a devasting impact on those being abused online, which at worst has included cases of suicide (Bishop, 2014). Some troll behaviour has resulted in legal action and subsequent custodial sentences, although as the number of trolls has increased significantly, jail terms are now exceptional as there are too many cases to prosecute (Synnott et al., 2017). Another element of online antisocial behaviour is the notion of vandals, who, according to Kumar, Cheng and Leskovec (2017a, p. 947) are those ‘who make destructive edits, prominently on collaborative spaces such as Wikipedia’. Vandals do not enter into a discussion, their aim is to damage

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online artefacts such as fan pages, web pages and maps. They are often anonymous and may be controlled by puppetmasters to deliberately destroy online material (Wang et al., 2018). There have been many approaches to combat trolls, sockpuppets and vandals, from campaigns focused on lolz - laughing out loud together – rather than lulz – laughing at loud to belittle or attack others (Bishop, 2014), to algorithmic systems created by researchers that can detect antisocial behaviour and alert the platform owner (Wang et al., 2018). One difficulty with the online vandal detection systems such as ClueBot NG and STiki is that these find elements such as vandalised content post-publication. These are post facto based on linguistic analysis and machine learning of already published material, rather than a preidentification system that would remove or block behaviour of the vandal before the damage occurs (Kumar, Spezzano and Subrahmanian, 2015). As Marne Levine, VP of Global Public Policy at Facebook commented: ‘These are complicated challenges and raise complex issues’ (Levine, 2013), as content still creeps through the systems as those wishing to share inflammatory material often circumnavigate content detection by creating posts with innocent-sounding names with no connection to the content posted. Within forums, the community and its moderators can often ban trolls. Although, yet again, this often occurs after the damaging material has been shared. However, in some online spaces there is functionality to premoderate all comments before posting, for example with the settings in LinkedIn Groups and the controls on blog commenting tools. Measures to counter deviant behaviour also comprise human intervention because, within online groups, researchers have also found evidence of group members regulating antisocial behaviour through exclusion of those breaking the group’s norms (Ditrich and Sassenberg, 2017). Wikipedia vandals are afforded their own project, the CounterVandalism Unit (Ayers, Matthews and Yates, 2008; Wikipedia community, 2019), where the community strives to eradicate the damage. Antisocial behaviour has occurred for centuries offline and while online behaviour mimics some of the same characteristics, the difference is the anonymity afforded by the online setting and the speed with which the content can be posted.

2015). Sari and Camadan (2016, p. 317) provided a comprehensive definition of cyberbullying as ‘a deliberate, repetitive and permanent behavior pattern against a defenseless victim mostly by an unknown group or individual through electronic environments such as text messages, picture/video clips, phone calls, emails, chat-rooms, instant messages and websites’. Facilitated by technological developments, factors have contributed to the pervasive nature of cyberbullying and include: the perpetrator has anonymity (Hinduja and Patchin, 2008; Notar, Padgett and Roden, 2013; Abbasi et al., 2018), the activities transpire in a context where there are often no witnesses present (Abdullah Moafa et  al., 2018) and can arise at any time, with time and place boundaries being removed in an always-on culture (boyd, 2014; Abbasi et al., 2018). Through the lens of the theory of planned behaviour, research by Heirman and Walrave (2012) found a strong positive relationship between adolescents’ attitude towards cyberbullying and their behavioural intention to perpetrate it, thus cyberbullying could be predicted. While exhibiting antisocial and harmful behaviour, the critical differences from trolling are that with cyberbullying most victims know the perpetrators, and this more often applies to younger people, teenagers and students (boyd, 2014; Antoniadou and Kokkinos, 2015; Sari and Camadan, 2016). Social media networks have attempted to intercede with harmful online behaviour as van Laer (2014, p. 95) noted: ‘Facebook has the option for users to report friends and mark posts as spam and Twitter allows users to block and report followers’. Combined with interventions for the social media networks, the future of widespread cyberbullying may be limited as researchers have been exploring methods to tackle cyberbullying, including using sentiment analysis and machine learning (Purba, Asirvatham and Murugesan, 2018) and, while not perfected, schemes for automatic detection of cyberbullying have been piloted (Hong, Isa and Ashianti, 2017), although cyberbullies may circumvent these systems. However, better education of the impact of this behaviour within schools (Notar et al., 2013), along with mitigation strategies to manoeuvre harmful online behaviour (boyd, 2014), may provide a more effective longer term solution.

Cyberbullying

Dying for Selfies

Bullying per se is not a recent phenomenon and is evident in all countries, across different age groups and settings (Antoniadou and Kokkinos,

In 2013 selfie was nominated as word of the year (Oxford Dictionary, 2013). This online self-portraiture phenomenon (Kedzior and Allen, 2014)

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has witnessed the development of an extreme practice known as daredevil or risky selfies, defined by Chen et  al. (2019, p. 2) as ‘pictures displaying the social media user in a dangerous situation’ and these have also been nominated as killfies due to their unintended consequences (Lamba et al., 2017; Santacroce, Martinotti and Di Giannantonio, 2017). This is a phenomenon that spans domains with articles from telematics, travel, healthcare and medicine, safety promotion, consumer studies and psychology. Seeking celebrity status on image-sharing social media networks such as Instagram has led to people taking greater risks to achieve Instafame (Marwick, 2015), a behaviour where individuals challenge themselves and others to obtain more extreme images in order to prove their endeavours and share with a wider audience. Evidence has found that 120 to 250 fatalities have been reported due to this phenomenon (Lamba et  al., 2017; Bansal et al., 2018) which has been described as being ‘on the edge between physiological and psychopathological processes’ (Santacroce et al., 2017, p. 468). According to Wang, Yang and Haigh (2017) those sharing selfies may be demonstrating a need for popularity and engaging in strategic self-presentation. In addition to attention-seeking behaviour, the increase in selfie deaths has also been attributed to external factors including ‘best selfie competitions’ (Bansal et  al., 2018, p. 3), encouraging greater risks for better images. Ethical issues surrounding dangerous selfies are impacting the wider society and actions to mitigate dangerous selfies has varied according to the context and has included guidance to specific groups (Flaherty and Choi, 2016) and creation of safe selfie campaigns (BBC News, 2015). Other actions include the establishment of no-selfie zones in several contexts, from historical monuments to sporting events (Flaherty and Choi, 2016; Lamba et al., 2017; Bansal et al., 2018) as well as the creation of safe selfie spots. While the literature has indicated this behaviour is more common in younger people (Bhogesha, John and Tripathy, 2016; Jain and Mavani, 2017; Wang et al., 2017; Bansal et al., 2018; Chen et al., 2019), the issue is communicating the consequences of risky behaviour, which is a long-standing conundrum.

THE ETHICS OF GAINING CONTENT FROM CUSTOMERS While individuals exhibit risky online behaviour, organisations gamble when garnering online artefacts. Earned media or user-generated content

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(UGC) concerns non-organisational media activity on third-party sites, for example posts on social media, comments in community forums, online ratings and reviews, feedback on blogs, reaction on podcasts or videos (Stephen and Galak, 2012; Chang et  al., 2018). Typically, earned media are created by customers and also referred to as usergenerated content (UGC) and user-created content (UCC; OECD Directorate for Science Technology and Industry, 2006). UGC is manifested in numerous formats: text, hyperlinks to other content, moving or fixed images, audio, music, animation, video or a mix of these elements (Naab and Sehl, 2017). Crowston and Fagnot (2018) considered UGC as ‘voluntary participation from virtual team members’ (p. 90) and the OECD defined user-created content (UCC) as (1) content made publicly available over the internet, (2) which reflects a ‘certain amount of creative effort’, and (3) which is ‘created outside of professional routines and practices’ (2006, p. 4). Motives for individuals that create and share this content are said to include; the perceived need for contributions, domain expertise, curiosity, fun and positive feedback (Crowston and Fagnot, 2018). The essence of UGC is that it is personal, published and outside the domain of the contributor (Naab and Sehl, 2017) and consequently there are many advantages of UGC for organisations: it often costs nothing to create (Vanden Bergh et al., 2011); users actions in social media are shared with their networks, as well as across the brand pages, widening the potential audience (Colicev, O’Connor and Vinzi, 2016); other consumers identify blog articles created by other users as more credible (Kim and Hanssens, 2017); search engine results are often based on UGC (Petty, 2012); UGC can assist the consumer decision journey (Vázquez et  al., 2014); and UGC can transform elements of a business (Dong and Wu, 2015). This contrasts with disadvantages of UGC for organisations, for example the content is outside the organisation’s control (Vanden Bergh et  al., 2011), it is without guarantees and can be unpredictable, creating risk as the organisation may be promoted negatively as well as positively (Kumar, Choi and Greene, 2017). Ethical issues around UGC include obtaining free, unrewarded content from customers and the notion of content integrity which considers fake and deceptive content. Different methods of obtaining UGC have been employed, such as directly petitioning customers; one example is TripAdvisor, which has a Review Express program deigned to obtain content from guests as ‘review solicitation programs generate additional postings’ (Litvin and Sobel, 2019, p. 375).

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The automated nature of this program facilitates immediate and constant content being gathered from ‘users’. Other methods of gaining UGC are via ‘calls to action’ (Westberg et al., 2018, p. 30) which these authors have classified as firms inviting users to: (1) collaborate; (2) compete; (3) celebrate; and (4) consume. The call to collaborate asks for content to be shared by posing questions, the answers to which could result in prizes being awarded. The call to compete centres around an integrated competition with a prerequisite for purchases to be made. The call to celebrate harnessed the camaraderie around a larger event and the research by Westberg et al. (2018) investigated alcohol brands where, in this example, it was about a national team’s performance. The final action was the call to consume, which was more explicit, directly inviting and normalising consumption – in this case of alcohol – and sharing these images. Content integrity concerns whether the material is authentic, as there have been cases of fake reviews solicited by companies, which remove the customers’ trust (Stevens et  al., 2018). This is a domain of much research and an online fake review assessment tool based on machine learning was created by scholars at Cornell University (Ott et al., 2011) enabling any user to add a review and immediately assess whether the content is more likely to be true or deceptive (Review Skeptic, 2013). Where deception has occurred in online content, firms have been required to remove advertising where it appears that the user is voluntarily supporting a product – creating positive and promotional UGC – while being paid to produce the material (see e.g. Federal Trade Commission, 2016; Advertising Standards Authority Ltd, 2019: Chapter 29, Advertising ethics and self-regulation, and Chapter 33, Ethics of promotion including paid media advertising and the dimensions of fake promotions).

The Role of Influencers One growing area in terms of both integrity and authenticity is the surge in influencer-generated content. The concept of influence is well documented and the literature includes the early work into political influence conducted by Lazarsfeld and Katz (1955) which nominalised the opinion leader – an informal expert trusted by their peers. Digital marketing has seen the growth of key opinion leaders (KOLs), micro-celebrities or influencers who are being engaged by organisations to promote their goods due to the nature and size of their online following. In his Diffusion of

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Innovations theory Rogers (1962) identified five adopter categories for the success of new products, one of which was the group of early adopters who were opinion leaders that were motivated to adopt new products and seek information before others (Hanlon, 2019); thus influencers is not a new concept, but a rebranded form of opinion leader. Indeed Freberg et  al. (2011, p. 90) suggested that social media influencers (SMIs) were a ‘type of independent third party endorser who shape audience attitudes through blogs, tweets, and the use of other social media’ and thus while celebrities can be influencers, influencers might not be celebrities, hence the rise of the ‘micro-celebrity’. In a media environment where traditional marketing such as newspaper readership and terrestrial television viewing has decreased, new methods of communication have emerged through social media networks such as WeChat, YouTube and Instagram. In these platforms the influencers engage in self-branding and develop a ‘unique selling point, or a public identity that is singularly charismatic and responsive to the needs and interests of target audiences’ (Khamis, Ang and Welling, 2017, p. 192). According to Jerslev (2016), digital marketing elements including social media have germinated the SMI which could be described as the personification of a branded online self where individuals implement affective labour through significant personal disclosure, within an open boundary management structure (Ollier-Malaterre et al., 2013; Raun, 2018) and may gain reward for these services. The SMI is said to be ‘expected to perform various kinds of labour, many of which are time and energy consuming but not necessarily economically profitable’ (Raun, 2018, p. 100) in order to retain audience attention. There are distinctions between those gaining income from the practice of influence to those sharing opinions without reward. Categories of influencers have been described in a binary context, as both professionals or hobbyists (Harrington, 2017) as well as alchemists or artists (Dion and Arnould, 2016), where the professionals or alchemists explicitly understand the rules and thus perform accordingly, ‘in return for payment or sponsored products and services, influencers often produce content on social media platforms that are similar to advertorials’ (Dhanesh and Duthler, 2019, p. 4). A much debated ethical issue within the area of influencers is that the commercial relationship with the product owner may not be disclosed and, as research has found, that where no disclosure is provided, the followers assume the impartiality of the content (Carr and Hayes, 2014). However, Raun (2018, p. 103) found that with YouTube the advice provided by influencers was entangled to

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such an extent that it was necessary to explain when content was not commercially reviewed, by adding the phrase ‘*Not a sponsored video*’ to the content. Therefore, the line between paid for and earned media can be blurred and thus the content created could be considered as deceptive or hidden advertising, where the fans or followers are unaware – or deceived – that payment was made for content placement. This was critical where an influencer is considered trustworthy, because fans will forgo their usual checks and accept the information provided (Chu and Kamal, 2008). However, research has identified that while this is unethical practice and falls foul of local guidelines, it is also weak practice, as full disclosure of commercial arrangements was more likely to offer greater credibility for the SMI and the brands promoted (Carr and Hayes, 2014; Dhanesh and Duthler, 2019). Similar to data privacy regulations, the legislation regarding disclosure of sponsorship or benefit in kind varies according to country. For example, in Europe and the USA those gaining money by promoting goods or services are required to disclose the commercial relationship. Another approach has been found where in 2018 the United Arab Emirates took a further step to regulate aspects of digital marketing where influencers are required to register and obtain an operating licence (National Media Council, 2018; Dhanesh and Duthler, 2019). In order to manage the vagaries of the sponsorship arrangements, a new business phenomenon of social media influencer intermediaries has emerged to connect influencers and brands. These intermediaries have formalised the process by offering services to both brand owner (investigating the influencers’ authenticity and followers, supervising campaigns) and influencers (creating the contracts and managing the rewards), providing a structured approach to the relationship (Stoldt et  al., 2019) thus protecting both parties and ensuring legislative guidelines are more likely to be followed.

Furthermore, the codes of conduct or terms of service vary in nomenclature, format and content across the different social media platforms which are complex (Custers, van der Hof and Schermer, 2014), for example: • Facebook has a Terms of Service as well as a data policy (Facebook, 2018; 2019b), which combined are 11 pages of text. • WeChat has a Terms of Service and separate privacy policy totalling 21 pages (WeChat, 2018a; 2018b). • Twitter has a single User Agreement which comprises its Terms of Service, Privacy Policy, the Twitter Rules and Policies, although this is 34 pages of text (Twitter, 2019). • Google’s Terms of Service has 6 pages (Google, 2019). • Bing is part of Microsoft and thus the terms and conditions incorporate all aspects of Microsoft products and is 33 pages (Microsoft, 2019).

POLICIES AND CODES OF CONDUCT

Thus the balance of power, in controlling access to the social media platform, rests with the platform owner (Murphy, 2009). Many consumers fail to read the terms and conditions as they are lengthy and ‘usually drafted from a legally conservative perspective, from which a privacy policy that is vague or all-encompassing is seen as somehow benefiting the company if things go wrong’ (Goldfarb and Tucker, 2013, p. 10). Nevertheless, there is an alternative technique to the granulated data analysis where anonymity can be removed. Within digital marketing, Apple Inc. has adopted a more stringent approach termed differential privacy (Apple Inc., 2018). This ensures individuals cannot be identified from the elements of data provided (Zhu et  al., 2017) due to strict methods of privacy-preserving data analysis, where a software barrier is placed between the raw data collected and the analyst (Microsoft Corporation, 2012). This process warrants that researchers can only investigate the aggregated data and cannot access the original sources of information, ensuring de-identification is preserved.

The Social Media Platforms’ User Agreements

Digital Marketing Policies in Firms

Within these blurred boundaries and data misuse there are, inevitably, appeals for social media platforms to recognise their responsibility in caring for the data (Murphy, 2009). The main process for obtaining consent is a binary approach that provides users with the simple option of either consenting to the conditions to gain access, or failing to consent and subsequently access is denied.

Transparent social media policies are said to benefit organisations (Goldfarb and Tucker, 2013) to promote trust and remove privacy concerns. Although not legally required, regulated sectors such as financial services and healthcare are likely to follow official guidance (Loop and Malyshev, 2013; Pillow et al., 2014) and to confirm that their users understand how their data is used in different

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channels. In other sectors, some organisations have formulated their own social media policies in the absence of clear frameworks (Gilstrap and Minchow-Proffitt, 2017), although the orientation of social media policies is often inward-looking concerning staff, organisational privacy and confidentiality (Johnston, 2014; Hebblewhite, 2017; Shah and Jha, 2018) rather than external users. Pasquini and Evangelopoulos (2017) termed the approach to social media policy within the higher education sector as ‘sociotechnical stewardship’ where the steward aids the community (p. 231). This is a nurturing approach that takes a positive stance which was also suggested by Goldfarb and Tucker (2013) who recommended changing the notion of privacy from ‘a compliance burden to thinking of treating data with courtesy as a fundamental part of the relationship with their customers’ (p. 10). Again, this concerns the balance between the legally required content as well as a respect for the data captured and, while requiring further research, this may provide a proactive path for those involved in all aspects of digital marketing.

CONCLUSION: FUTURE DIRECTIONS OF DIGITAL AND SOCIAL MEDIA MARKETING ETHICS Digital and social media marketing may be approaching the end of the fourth era and while this will continue to evolve as the social media platforms recognise the need to address dishonesty and deception, the users possess greater understanding of authenticity, fake news, data deception and rights to privacy. Users have developed a range of management strategies, although as personal and professional boundaries collide (Ollier-Malaterre et  al., 2013), it will become increasingly more challenging to separate the different identities and thus a new form of open/content management boundaries may occur where in-app settings afford greater separation between audiences, or that users adapt and adopt strategies of careful sharing. However, harmful online behaviour such as trolls and cyberbullying are unlikely to be eradicated. Thus, earlier educational intervention about the harm caused may contribute to a reduction in this antisocial behaviour (Sari and Camadan, 2016; Chan, Cheung and Wong, 2019). While mechanisms are being developed to detect the potential in individuals to engage in cyberbullying (Hamiza Wan Ali, Mohd and Fauzi, 2019), it would be difficult for an educational establishment to deploy these among students, without fear of greater invasion of privacy.

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Another solution could be regulation, though the legislation is fragmented and struggles to keep up with emerging nefarious practices such as deepfakes. Licensing all digital media services in one location – such as the United Arab Emirates – may be possible, but rolling this out across entire continents where the regulations vary according to location is a herculean task. As we move towards the next era of digital and social media marketing, an open ethics standard may develop for researchers wishing to harness data. Ward and Wasserman (2014) proposed an epistemology of open ethics founded on ‘the right to the right to be listened to, and to be understood’ (p. 834). They argued that media ethics was primarily parochial and controlled by professionals and there was a need for a panoramic open construct created on a global scale by citizens as well as professionals. Their aim was the removal of control and dominance from the social media platforms and the Global North and thus the notion of open ethics is a common ground rather than consensus, with a belief in a dialogic and participatory approach. The notion of dialogic ethics is also considered by Gilstrap and Minchow-Proffitt (2017) who suggested negotiation to manage the legal and community requirements. This resonates with other researchers who have recommended the adoption of enlightened data principles (Morey, Forbath and Schoop, 2015, p. 104) that focuses on (1) educating users as to what data is captured and how this is utilised; (2) passing control to the users so they can decide who accesses which data segments; and (3) using the data to deliver value in the form of more relevant content. Vayena et al. (2016, p. 423) proposed a new ethical framework that considered big data and ‘how the benefits can be captured in a way that respects fundamental principles of ethics and privacy’. For researchers, Samuel et  al. (2018) recommended better practices by changing categories of text research and considering ethical issues along a continuum from commencement to aftercare. Winter and Lavis (2019, pp. 2–5) proposed the notion of (1) active listening where researchers consider all artefacts holistically, moving beyond textual analysis to incorporate memes, GIFs, imagery and video, and (2) adaptive listening where researchers construct a nuanced understanding of the digital space moving across platforms to investigate themes. Common to these proposals for new ethical frameworks is the concept of placing the user at the centre, rather than the organisation. Digital marketing and social media ethics may need to remove the previous approaches of consequentialist and deontological ethics, as the example of Cambridge Analytica highlighted that

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the ends failed to justify the means, and that the means failed to justify the ends. Thus, this new era of digital and social media marketing may see the development of universal dialogic ethics, which is adopted by all social media platforms and online services, and that is supplemented with contextual ethics to address local perspectives. Whichever ethical structure is adopted, digital and social media marketing are emerging domains (Misirlis and Vlachopoulou, 2018) where privacy has become a concern for consumers (Kumar, 2018) that will need to be addressed by both organisations and researchers.

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Santacroce, R., Martinotti, G. and Di Giannantonio, M. (2017) ‘The light at the end of the tunnel is a train: Risky behaviours in the era of social networks’, International Journal of Social Psychiatry, 63(5), pp. 468–469. doi:10.1177/ 0020764017709301 Sari, S. V. and Camadan, F. (2016) ‘The new face of violence tendency: Cyber bullying perpetrators and their victims’, Computers in Human Behavior, 59, pp. 317–326. doi:10.1016/j.chb.2016.02.027 Schroepfer, M. (2019) Creating a Data Set and a Challenge for Deepfakes, Facebook Artificial Intelligence. Available at: https://ai.facebook.com/ blog/deepfake-detection-challenge/ (Accessed: 29 September 2019). Shah, N. R. and Jha, S. K. (2018) ‘Exploring organisational understanding of foundational pillars of social media: A qualitative content analysis of social media policies of technology companies’, Journal of Management Research, 18(4), pp. 226–245. doi:ISSN: 0972-5814. Online ISSN: 0974-455X Shao, G. (2009) ‘Understanding the appeal of usergenerated media: A uses and gratification perspective’, Internet Research, 19(1), pp. 7–25. doi:10.1108/10662240910927795 Skeels, M. M. and Grudin, J. (2009) ‘When social networks cross boundaries: A case study of workplace use of facebook and linkedin’, in GROUP’09 – Proceedings of the 2009 ACM SIGCHI International Conference on Supporting Group Work. Sanibel, Florida, pp. 95–103. doi:10.1145/1531674. 1531689 Sloan, L., Jessop, C., Al Baghal, T. and Williams, M. (2019) ‘Linking survey and Twitter data: Informed consent, disclosure, security, and archiving’, Journal of Empirical Research on Human Research Ethics. doi:10.1177/1556264619853447 Stephen, A. T. and Galak, J. (2012) ‘The effects of traditional and social earned media on sales: A study of a microlending marketplace’, Journal of Marketing Research, 49(October), pp. 624–639. doi:10.1509/jmr.09.0401 Stevens, J. L., Spaid, B. I., Breazeale, M. and Jones, C. L. E. (2018) ‘Timeliness, transparency, and trust: A framework for managing online customer complaints’, Business Horizons, 61(3), pp. 375–384. doi:10.1016/j.bushor.2018.01.007 Stoldt, R., Wellman, M., Ekdale, B. and Tully, M. (2019) ‘Professionalizing and Profiting: The rise of intermediaries in the social media influencer industry’, Social Media and Society, 5(1), pp. 1–11. doi:10.1177/2056305119832587 Swani, K., Brown, B. P. and Milne, G. R. (2014) ‘Should tweets differ for B2B and B2C? An analysis of Fortune 500 companies’ Twitter communications’, Industrial Marketing Management, 43(5), pp. 873– 881. doi:10.1016/j.indmarman.2014.04.012

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Synnott, J., Coulias, A. and Ioannou, M. (2017) ‘Online trolling: The case of Madeleine McCann’, Computers in Human Behavior, 71, pp. 70–78. doi:10.1016/j.chb.2017.01.053 The Electoral Commission (2019) Report: Digital campaigning – Increasing transparency for voters, electoralcommission.org.uk. Available at: https:// www.electoralcommission.org.uk/who-we-areand-what-we-do/changing-electoral-law/transparent-digital-campaigning/report-digitalcampaigning-increasing-transparency-voters (Accessed: 15 September 2019). Thorpe, H., Hayhurst, L. and Chawansky, M. (2017) ‘“Once My Relatives See Me on Social Media … It Will be Something Very Bad for My Family”: The ethics and risks of organizational representations of sporting girls from the Global South’, Sociology of Sport Journal, 35(3), pp. 226–237. doi:10.1123/ ssj.2017-0020 Thunman, E. and Persson, M. (2018) ‘Ethical dilemmas on social media: Swedish secondary teachers’ boundary management on Facebook’, Teacher Development, 22(2), pp. 175–190. doi:10.1080/1 3664530.2017.1371634 Tijunaitis, K., Jeske, D. and Shultz, K. S. (2019) ‘Virtuality at work and social media use among dispersed workers: Promoting network ties, shared vision and trust’, Employee Relations, 41(3), pp. 358–373. doi:10.1108/ER-03-2018-0093 Trusov, M., Bodapati, A. V and Bucklin, R. E. (2010) ‘Determining influential users in internet social networks’, Journal of Marketing Research, 47(August), pp. 643–658. doi:10.1509/jmkr.47. 4.643 Tupes, E. C. and Christal, R. E. (1992) ‘Recurrent personality factors based on trait ratings’, Journal of Personality, 60(2), pp. 225–251. doi:10.1111/j. 1467-6494.1992.tb00973.x Twitter (2019) Twitter User Agreement, Twitter.com. Available at: https://cdn.cms-twdigitalassets.com/ content/dam/legal-twitter/site-assets/privacy-policynew/Privacy-Policy-Terms-of-Service_EN.pdf (Accessed: 15 September 2019). Vanden Bergh, B. G., Lee, M., Quilliam, E. T. and Hove, T. (2011) ‘The multidimensional nature and brand impact of user-generated ad parodies in social media’, International Journal of Advertising, 30(1), pp. 103–131. doi:10.2501/IJA-30-1103-131 van Dijck, J. (2013) ‘“You have one identity”: Performing the self on Facebook and LinkedIn’, Media, Culture and Society, 35(2), pp. 199–215. doi:10.1177/0163443712468605 van Laer, T. (2014) ‘The means to justify the end: Combating cyber harassment in social media’, Journal of Business Ethics, 123(1), pp. 85–98. doi:10.1007/s10551-013-1806-z

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van Prooijen, A. M., Ranzini, G. and Bartels, J. (2018) ‘Exposing one’s identity: Social judgments of colleagues’ traits can influence employees’ Facebook boundary management’, Computers in Human Behavior, 78, pp. 215–222. doi:10.1016/j. chb.2017.10.002 van Zoonen, W. and Rice, R. E. (2017) ‘Paradoxical implications of personal social media use for work’, New Technology, Work and Employment, 32(3), pp. 228–246. doi:10.1111/ntwe.12098 van Zoonen, W., Verhoeven, J. W. M. and Vliegenthart, R. (2017) ‘Understanding the consequences of public social media use for work’, European Management Journal, 35(5), pp. 595–605. doi:10.1016/j.emj.2017.07.006 Vayena, E., Gasser, U., Wood, A. B., O’Brien, D. and Altman, M. (2016) ‘Elements of a new ethical framework for big data research’, Washington and Lee Law Review, 72(3), pp. 420–441. doi:10.5167/ uzh-135645 Vázquez, S. et al. (2014) ‘A classification of user-generated content into consumer decision journey stages’, Neural Networks, 58, pp. 68–81. doi:10.1016/j.neunet.2014.05.026 Wang, J., Zhou, W., Li, J., Yan, Z., Han, J. and Hu, S. (2018) ‘An online sockpuppet detection method based on subgraph similarity matching’, in 2018 IEEE International Conference on Parallel & Distributed Processing with Applications, Ubiquitous Computing & Communications, Big Data & Cloud Computing, Social Computing & Networking, Sustainable Computing & Communications. Melbourne, Australia, pp. 391–398. doi:10.1109/ BDCloud.2018.00067 Wang, R., Yang, F. and Haigh, M. M. (2017) ‘Let me take a selfie: Exploring the psychological effects of posting and viewing selfies and groupies on social media’, Telematics and Informatics, 34(4), pp. 274–283. doi:10.1016/j.tele.2016.07.004 Ward, K. (2018) ‘Social networks, the 2016 US presidential election, and Kantian ethics: Applying the categorical imperative to Cambridge Analytica’s behavioral microtargeting’, Journal of Media Ethics: Exploring Questions of Media Morality, 33(3), pp. 133–148. doi:10.1080/23736992.2018. 1477047 Ward, S. J. A. and Wasserman, H. (2014) ‘Open ethics’, Journalism Studies, 16(6), pp. 834–849. doi:10.1080/1461670x.2014.950882 WeChat (2018a) WeChat – Privacy Policy. Tencent Inc. Available at: https://www.wechat.com/en/ privacy_policy.html (Accessed: 15 September 2019). WeChat (2018b) WeChat – Terms of Service. Tencent Inc. Available at: https://www.wechat.com/en/service_terms.html (Accessed: 15 September 2019).

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Weng, L., Amsaleg, L., Morton, A. and MarchandMaillet, S. (2015) ‘A privacy-preserving framework for large-scale content-based information retrieval’, IEEE Transactions on Information Forensics and Security, 10(1), pp. 152–167. doi:10.1109/ TIFS.2014.2365998 Werbin, K. C., Lipton, M. and Bowman, M. J. (2017) ‘The contextual integrity of the closet: Privacy, data mining and outing Facebook’s algorithmic logics’, Queer Studies in Media & Popular Culture, 2(1), pp. 29–47. doi:10.1386/qsmpc.2.1.29_1 Westberg, K., Stavros, C., Smith, A. C., Munro, G. and Argus, K. (2018) ‘An examination of how alcohol brands use sport to engage consumers on social media’, Drug and Alcohol Review, 37(1), pp. 28–35. doi:10.1111/dar.12493 Whiting, A. and Williams, D. (2013) ‘Why people use social media: A uses and gratifications approach’, Qualitative Market Research: An International Journal, 16(4), pp. 362–369. doi:10.1108/ QMR-06-2013-0041 Wikipedia community (2019) Wikipedia: CounterVandalism Unit, Wikipedia. Available at: https:// en.wikipedia.org/wiki/Wikipedia:Counter-Vandalism_Unit (Accessed: 26 September 2019). Wiles, R., Coffey, A., Robinson, J. and Heath, S. (2012) ‘Anonymisation and visual images: Issues of respect, “voice” and protection’, International Journal of Social Research Methodology, 15(1), pp. 41–53. doi:10.1080/13645579.2011.564423 Winter, R. and Lavis, A. (2019) ‘Looking, but not listening? Theorizing the practice and ethics of online ethnography’, Journal of Empirical Research on Human Research Ethics. doi:10.1177/ 1556264619857529 Wyner, G. A. (1996) ‘Customer valuation: Linking behavior to economics’, Marketing Research, 8(2), pp. 36–38. Yoon, Y., Polpanumas, C. and Park, Y. J. (2017) ‘The impact of word of mouth via twitter on moviegoers’ decisions and film revenues: Revisiting prospect theory: How WOM about movies drives loss-aversion and reference-dependence behaviors’, Journal of Advertising Research, 57(2), pp. 144–158. doi:10.2501/JAR-2017-022 Yu, L., Cao, X., Liu, Z. and Wang, J. (2018) ‘Excessive social media use at work: Exploring the effects of social media overload on job performance’, Information Technology and People, 31(6), pp. 1091– 1112. doi:10.1108/ITP-10-2016-0237 Zhu, T., Li, G., Zhou, W. and Yu, P. S. (2017) Differential Privacy and Applications. Cham: Springer. doi:10.1007/978-3-319-62004-6

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32 Ethics within Sponsorship Nicolas Chanavat and Guillaume Bodet

INTRODUCTION Sponsorship-linked marketing could be defined as ‘the orchestration and implementation of marketing activities for the purpose of building and communicating an association to a sponsorship’ (Cornwell, 1995, p. 15). The sponsorship represents one of the fastest growing forms of promotional activity and corporate social responsibility. In the media, the importance of sponsorship is often revealed in quantitative terms. While in 1990 global investments were around 5.5 billion euros, the International Events Group (IEG) estimates that the amount of invested expenses reached 53.4 billion euros in 2019 (International Events Group, 2019). The activity of sponsorship, which is in perpetual development, is based on different areas and many performance levels that are at the root of a diversity of managerial practices. In many markets around the world, sports account for a significant majority of sponsors’ spending (Chadwick, Chanavat, and Desbordes, 2016). Activities related to the sporting industry represent approximately 70% of the total amounts. Chanavat (2009) proposed a classification in six areas of sponsorship: sports, culture (music, art, etc.), education, social causes (charity etc.), science (environment, health, etc.), and the media.

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Sponsorship also represents an increasingly popular field in marketing research. In this context, sponsorship-linked marketing represents one of the first issues to attract sport researchers’ attention, based on its close relationship with revenuegenerating activities (Manoli, 2018). There is clear evidence that sponsorship practices have evolved, which are expressed most often by sport partnerships. According to Klincewicz (1998), three kinds of ethical issues regarding sponsorship arrangements can be highlighted. The first one is linked to the role that sponsorship has to play: whether it should be considered as exchange or philanthropy. The second matter is connected with the criteria that are taken into account when a sponsee chooses a sponsor. There can be examples of unethical conduct on both sides of the contract: using the means of manipulation by sponsor-seekers, or using the weaknesses of sponsor-seekers by potential sponsors. In this context, considering the huge increase in the prices paid by official sponsors, it is not surprising that ambush marketing practices have developed around major events (Koenigstorfer and Uhrich, 2017). Ambush marketing can be defined as ‘the practice whereby another company, often a competitor, intrudes upon public attention surrounding the event, thereby deflecting attention

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toward themselves and away from the sponsor’ (Meenaghan, 1994, p. 79). The third problem involves regarding the sponsorship as an alibi, replacing real commitment to social issues by financial engagement. Given the excesses and ethical breaches, sports organizations aim to implement alternative strategies and marketing communication tools, in order to live the myth of sports ethics and sustain the commercial potential linked to the values of sport. This chapter aims to study the key elements dedicated to ethics within sponsorship in the sport sector. The objective is to define and explain the genesis of sponsorship, to examine typical cases related to non-ethical conduct of sponsor(s) and sponsee(s) subjects, to describe and illustrate ambush marketing then examine them side by side through the academic literature. Finally, if the ethical problems examined in this chapter seem to be often accepted as natural parts of sponsorship agreements, this research suggests some idea for several stakeholders involved in sponsorship arrangements by employing ethical codes of practice, accepting other than economic values. Definition, Genesis, and Objectives of Sponsorship: The Professionalization of Sport as a Trigger Sponsoring, patronage, partnership, and event communications or communication through events are (many) terms classically used to address the phenomenon of sponsorship. This has caused some problems for scholars and generated semantic debates in schools (Chanavat, Desbordes, and Lorgnier, 2017). Sponsorship is based on various areas and many performance levels that are at the root of a variety of managerial practices. It covers several fields of activities in contemporary societies and, as mentioned above, Chanavat (2009) proposed a classification in six areas of sponsorship: sports, culture (music, art, etc.), education, social causes (charity etc.), science (environment, health, etc.), and the media. If there is still not a generally accepted definition of sponsorship, minimum agreement exists that sponsorship is based on an exchange between a sponsor and a sponsee, and follows marketing (communication) objectives by exploiting the relationship between the two. Articles published in English most frequently refer to Meenaghan’s work that defines sponsorship as ‘an investment, in cash or in kind, in an activity in return for access to the exploitable commercial potential associated with that activity’ (1991, p. 36). Therefore, sponsorship has the capacity to reach a range of goals, such as corporate image, corporate social responsibility, brand exposure, marketing sales, and effects such as image building, goodwill generation, and attitude change (Meenaghan, 2005).

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Sponsorship has become one of the rapidly growing arrangements of promotional activity, characterizing an increasingly popular field in marketing research (Chanavat and Martinent, 2019). Looking at the practice’s beginnings is interesting as it is essential in order to comprehend the development of sponsorship activities. The first initiative seems to date back to the fifth century BC in ancient Greece. Initially, it took the form of a tax paid by rich people to finance major contests and public festivities. These taxes largely contributed to fostering the economic and cultural improvement of cities such as Athens or Olympia. Paying this tax was an honor, and some citizens would even do so voluntarily. Those taxed were held in high esteem, and even had their names engraved on marble slabs. Leonidas was the first donor to Olympia whom archaeologists have identified. Around 330 BC, he supported the construction of a luxurious building meant to host official guests and prestigious visitors. The building was baptized after its sponsor, the ‘Leonidaion,’ which may be the first documented example of the use of ‘naming rights’ (Kissoudi, 2005). The word ‘philanthropy’ comes from Gaius Cilnius Maecenas, Minister Counsellor for the Emperor Augustus. Thanks to a brilliant education in Greece, the famous Roman knight developed a taste for the arts and literature and took under his protection great artists and writers such as Horace and Virgil. The term Maecenas (or patronage) is associated to his actions (Chanavat et  al., 2017). Consequently, the origin of sponsorship is situated in ancient Greece (Burton, Quester, and Farrelly, 1998). Also of Latin origin, the word sponsorship comes from sponsor/sponsoris. It means the bond, the guarantor, but additionally the godfather of a neophyte. It appears that this word was particularly developed in England, a country with a strong sports culture, which may explain why its scope has often been restricted to sports. In Europe, the beginning of sponsorship is exemplified in football by the support of FIAT to Juventus (1897), Bayer to Leverkusen (1904), Philips to Eindhoven (1913), Peugeot to Sochaux (1925), and Casino to Saint-Etienne (1933). Thus, in 1929, when Jean-Pierre Peugeot modernized his car company through centralizing it on the Sochaux (France) site, he created a professional football team, FC Sochaux. The main goal was to represent the club’s pennant (Peugeot cars) throughout France, during the games where it competed against the best teams, and to enhance the lion brand image (Dietschy and Mourat, 2006). In the 1930s, it was common for English professional football players (e.g., Stanley Matthews) to sing the praises of cigarette brands or cosmetic products for men. According to Nys (2010), the 1966

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Table 32.1 Key milestones and informative anecdotes from the history of partnership in the modern Olympic Games (International Olympic Committee, 2019; Chanavat and Desbordes, 2014) Athens 1896 Paris 1924 Amsterdam 1928

Tokyo 1964

Montreal 1976 Los Angeles 1984

Atlanta 1996 London 2012

Companies provide revenue through advertising during the Olympic Games. Advertising signage appears within view of the Olympic Games venues for the first and only time in history. Current TOP Partner Coca-Cola begins the longest continuous Olympic partnership. Concessionaires are granted rights to operate restaurants on stadium grounds. Advertising continues in the official Olympic Games programme. The IOC stipulates that posters and billboards may not be displayed on the stadium grounds and buildings. 250 companies develop marketing relationships with the Games. The new “Olympia” cigarette brand generates more than USD 1 million in revenue for the OCOG. (The tobacco sponsorship category is later banned.) With 628 sponsors and suppliers, domestic sponsorship generates USD 7 million for the OCOG. For the first time, the domestic sponsorship programme is divided into three categories. Each category is granted designated rights and product category exclusivity. The marketing programme is limited to the host country and US companies. The Games are funded entirely via private sources. The Games was the most restrictive OCOG in history. However, there are neither specific legal tools nor international agreements to prohibit ambush marketing and protect official sponsorships. We observe a proliferation of ambush cases during the London 2012 Olympics and the widespread growth of this practice, despite reinforcement of existing laws. Brands were very imaginative at the expense of official sponsors and that social networks can be powerful publicity channels.

FIFA World Cup, hosted and won by England, marked the starting point of football’s media coverage and the appeal it has continued to generate among sponsors. If the professionalization of football organizations in Europe has contributed to the development of sponsorship (Chanavat et  al., 2017), it appears that various forms of partnership innovations have been developed within the frame of the Olympic Games. Indeed, the first modern Olympic Games in Athens in 1896 might not have even been possible without a private sponsor. Georgios Averoff, a wealthy Greek architect, guaranteed 1 million drachmas to help stage the event. In addition to this sponsorship initiative, other sponsoring brands were allowed to advertise in the program and sell souvenir medals and stamps (Shani and Sandler, 1998). For instance, George Eastman, the founder of Kodak, began the company’s association with the Olympics in 1896, when he placed an advertisement for the Athens Games. Table 32.1 highlights key milestones and informative anecdotes from the history of partnerships in the modern Olympic Games. Companies are eager to associate with the emotion of sports, their media coverage, and their audiences through partnership. Consequently, sports dominate the growing global sponsorship

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market. Without going into the historical debate surrounding the genesis of sponsorship, it should be noted that, contrary to popular belief, sponsorship is not a recent idea and that professionalization of football and the Olympic Games played a significant role in the development of this practice and discipline. Once considered a simple economic contribution, sponsorship is nowadays an integral part of organizations’ marketing strategies and could be considered as one of the fastest growing platforms in marketing. It represents a mainstay of strategic marketing communications and meets the same evaluation criteria as an advertising campaign or promotion. The basis of success for a sponsorship strategy lies in the establishment of the relationship with the sponsee and the benefits it offers. While several main objectives are usually related to advertising, that is, to gain attention, to persuade, and to provoke a behavior (De Baynast and Lendrevie, 2014), sponsorship also represents an effective means of influencing the cognitive, affective, and conative responses of the customer, an idea similarly stressed by the model of Cornwell, Weeks, and Roy (2005) in their overall approach linked to the consumer in a sponsorship action. In general, sponsorship seeks ultimately to increase the sales of an organization. Nevertheless, the act of purchasing (or re-purchasing) depends on several

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variables relating to the consumer, the environment, or marketing action. Furthermore, the sponsorship objectives sought by an organization are mainly the development of loyalty toward the sponsor’s brand and the change and strengthening of the sponsor’s image. Sponsorship is predominantly considered as hot media: advertising will advocate and present the benefits of products. However, the sponsorship will also arouse emotions, values, and images. It may be used to increase credibility and brand awareness, influence its image, generate a feeling of benevolence regarding the sponsoring brand, contribute to human resource management, develop businessto-business relationships, or boost sales (Chanavat et al., 2017). Through sponsoring, brand placement, ambient marketing, social media, and other integrative approaches, brands connect with customers by being part of their experience. Sport offers singular potential in this trend due to the passion surrounding it and the demand for real-time viewing. Over the last 25 years, sponsorship has changed considerably. Sponsorship of sport has developed to become a worldwide communication platform, a driver for relationship building, and an omnipresent aspect of consumer experience. Cornwell and Kwon (2019), examined the current state of research in sponsorship and concluded that there was a surplus of research that examines audience reactions to sponsorship, but a lack of research that analyses marketing management of the sponsorship process. Simultaneously, we observed the development of management practices and new trends through several activities: naming, ambush marketing, regional sponsorship, state sponsorship, citizen sponsorship, multiple-event sports sponsorship, or crowdfunding (see Chanavat et al., 2017). In this great variety of contexts, the activity of sponsorship, which is in perpetual development, has seen the appearance of non-ethical behaviors in the sponsor–sponsee dyad, which are imputable to both sides of the particular partnership, as well as from actors that are not directly involved in the sponsee–sponsor relationship.

NON-ETHICAL PRACTICES IN THE SPONSOR–SPONSEE DYAD As defined in the previous section, the sponsorship relationship is a contract between a sponsor and a sponsee that temporarily gives the sponsor the rights to use the sponsee’s properties, mainly for marketing and communication purposes. As such, any activity that would not respect the contract and/or breach its terms can be considered as non-ethical. However, judgment of what is ethical

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or not goes beyond the perspective of the dyad’s partners as the stakeholders of both partners can also be concerned, as shown in the following subsections that deal with non-ethical practices from the sponsors and sponsees respectively.

Non-ethical Practices from Sponsors For Klincewicz (1998) the first ethical issues in relation to sponsorship deal with the nature of the activity itself as funding sports, and particularly funding professional sport, can be seen as a substitute for real engagements with social causes and issues. Even if sponsors are increasingly interested in funding corporate social responsibility (CSR) actions in relation to sport (Bretherton, 2014), one could argue that CSR initiatives more directly connected to the sponsor’s industry and/or activity would be more legitimate and justified. Furthermore, professional sports and mega sport events in particular have received a lot of criticism because of the commodification of sports, the indecent amounts of money circulating in the sport industries and the disconnected revenues professional athletes earn, the scandals associated with sports and sport athletes (e.g., doping, cheating), the social harms sports can create due to excessive passion (e.g., violence, dysfunctional behaviors, betting), negative economic impacts in the case of major sporting events, as well as negative environmental impacts. In essence, the criticism toward the sponsorship of sports could be as much associated to sponsorship as to sport in general and its silver linings. Closely related to this first issue, there is the other question raised by Klincewicz (1998) regarding the role of sponsorship and specifically whether it should be considered as exchange or philanthropy. Although the situation of professional sports and sport organizations may be different, we can wonder whether it is ethical to expect returns on investments, or at least on objectives from not-for-profit or community-based organizations that are mainly run by volunteers, and consequently rely on the leisure time that individuals are ready to dedicate to develop sports, sport and social communities, various minority groups, and individuals. The next list of ethical issues and concerns deals with the influence, and particularly the negative influence, sponsors can have either on sport organizations, their decisions, and their actions, or on sport organizations’ stakeholders. This is what Klincewicz (1998) qualified as using the weaknesses of sponsor-seekers by potential sponsors. This influence can take many forms. One form, which can be related to the previous issues mentioned above, relates to the physical presence of

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sponsors. Many fans and observers criticize the presence or the over-presence of sponsors either in physical spaces such as stadiums and arenas or on players’ shirts and sport materials that transform sport facilities into billboards and athletes into ‘sandwich board men and women.’ This is particularly problematic for die-hard fans who consider their favorite sport clubs and teams as sacred, and for many of them, displaying a sponsor’s name on a shirt was a betrayal of the club’s and team’s history and meanings. This is particularly the case for national teams and, for instance, many French rugby fans and citizens complained when the French Federation of Rugby Union (FFR) decided in 2018 to display a sponsor’s logo on the national team shirt, despite the fact that the deal had been approved by the FFR’s ethics committee.1 Although the previous issue deals with a form of commercialization, many critics have dealt with over-commercialization. ‘Charges of over-commercialization are especially prone to occur when long-established community names on stadiums are replaced by corporate names’ (Crompton, 2014, p. 17), because names are emblems of culture, heritage, and identity. For instance, Crompton (2014) mentioned the example of Newcastle FC’s stadium whose name, St. James’ Park, a 119-year-old name, was changed to SportsDirect.com@St. James’ Park, which created huge public outrage. Such name changes also concern sport clubs and teams, and can also be extended to changes of logos and shirt colors. Although the main critics will be among the most passionate and emotionally attached fans, criticism can also come from local residents and citizens when these sporting facilities, spaces, and organizations are strongly embedded within the local community culture. The third form we can identify relates to the influence sponsors can have on sports and on sporting decisions. This influence can be either indirect, for instance when sponsors push for rules to be amended to increase media exposure and audience interest, which in turn will increase interest and awareness of their brands, or more direct when they directly influence players’ selection and transfers. Crompton (2014) qualified this form as operational risks for the sport property and defined it in the following way: Operational risks may emanate from sponsors insisting on changing the rules or format of an event which may offend traditionalists whose deep passion and emotional identification with the sport or team makes them prime targets for sponsors; or from sponsors exercising undue influence on an event’s content, location, timing or participants. (p. 20)

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Although changes of sport and event rules (e.g., the introduction of tie-breaks in tennis, the introduction of Twenty20 cricket) are first of all made to satisfy media expectations and increase media audiences, for Crompton (2014, p. 2) the end goal is to please sponsors as they will ‘seek to maximize media coverage before committing an investment.’ As noted by Crompton (2014), numerous changes can be considered as successful, however, because they alter heritage and traditions, and sometimes the essence of certain sports, they offend the more traditionalist fans and followers, and consequently they might raise ethical issues. Furthermore, some of these changes can be questionable. For instance, sponsors and the media have a strong influence on sporting event schedules and we might wonder how ethical the scheduling of events is to satisfy international broadcast networks at the expense of athletes who have to sometimes compete at strange times and sometimes during difficult conditions. For instance, a regular season game of La Liga, the Spanish professional football league, was intended to be played in Miami (USA) in January 2019 but was cancelled due to ‘widespread opposition’.2 Although it was not successful, this attempt demonstrate the interests sponsors can have in altering and changing sport events to meet their own objectives. In the same vein, Crompton (2014) noted the increasing frequency of games which can be harmful for athletes’ health as another example of this form of potentially negative influence. Although there is no doubt that sponsors have some kind of influence over these decisions and choices, it is nevertheless difficult to assess the exact role they play in sport organizations’ decisions, which is a source of a lot of speculation, rumors, and myths. For instance, much has been said and written about Ronaldo’s participation and poor performance in the Brazilian national football team during the 1998 FIFA World Cup final won by France. One persistent explanation or conspiracy theory was that although he was not fit to play, Nike, the team and player’s sponsor, pressured the coach to put him on the field due to the financial stakes related to his presence.3 In the same vein, a lot of speculation has concerned the influence of sponsors on players’ transfers from one club to another. During every football transfer window market, rumors can be found in the newspapers and media regarding the influence of sponsors on persuading players to sign for a particular club they have a partnership with. For example, some media attributed a key role to Nike in the transfer of the Dutch football player Frenkie De Jong from Ajax FC to Barcelona FC at the expense of Paris St Germain (PSG) FC in July 2019, allegedly investing ‘a very important amount of money in wages’ to facilitate the deal.4

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Surprisingly, Nike was also a sponsor of PSG, which cast some doubts over the supposed role of Nike. As players’ transfers and contracts are extremely opaque, this creates important speculations and sometimes fantasies about the role sponsors can play in them. However, considering the very significant financial amounts at stake and the fact that clubs and sponsors have been punished for such practices in the past (e.g., PSG and Nike were found guilty of paying illegal wages to several players between 2000 and 2005)5, it would not be surprising to see such influences, even if they remain extremely secret. Another form of sponsors’ influence goes beyond the sponsee–sponsor dyad and concerns sport organizations’ stakeholders. One important case deals with the hosting of major sporting events and the fact that countries, to be able to host them, have to change their legislation. Some of these changes concern tax exemptions for the sport organization but many of them are made to protect sponsors from ambush marketing and indirectly satisfy sponsors (Ellis et al., 2011). For instance, Ellis et al. (2011) examined the specific case of the Olympic and Paralympic Marks Act in relation to the 2010 Winter Olympic and Paralympic Games and questioned the framing of ambush marketing as a legal issue as opposed to a predominantly business issue. Without delving into the specific legal aspect of the legislation passed, the ethical issue here lies in the fact that countries have to pass specific laws to be able to host major sporting events such as the Olympics and the FIFA World Cup to protect and accommodate sponsors. Some of these cases are particularly questionable and the appropriation of certain words and terms, and spaces, by private organizations raises serious ethical questions in relation to the fundamental principles of liberal economies. As regards the 2010 Winter Olympics and Paralympics, several small businesses such as the Olympic First-Aid Services and the Olympia Pizza and Pasta Restaurant in Vancouver were asked to change their names and association to the Olympics because the Vancouver Organizing Committee (VANOC) was ‘under an obligation to the International Olympic Committee (IOC), their (“our”) sponsors and government partners to protect the Olympic Brand’.6 This appeared particularly problematic as the terms were not trademarked at the moment of creation of the businesses, and some of them were created many years before the announcement that the Games were given to Vancouver. In the same vein, during the 2011 Rugby World Cup organized in New Zealand, protection laws upset numerous retailers who could not make any reference to the All Blacks and were threatened with legal action.7

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The sponsors’ brand protection policy put in place by certain sporting events and governments can also have consequences for athletes and raise ethical issues. In particular, prior to its change Rule 40 of the IOC’s bylaws restricted ‘athletes from mentioning personal sponsors during the Olympics and prevent personal sponsors (who were not also Olympic sponsors) from advertising their connection to the Games’.8 This rule had significant implications as it basically did not allow athletes’ sponsors to benefit very often from the pinnacle moment of the athletes’ sporting careers, and consequently could act as repulsive for potential sponsors. This rule could be seen as particularly unfair to athletes from low-profile countries, disciplines, and sports, and who struggled to make a living from their sport and/or train in decent conditions. From the perspective of athletes’ personal sponsors, being unable to benefit from the Olympics/Paralympics could be seen as unfair and unethical, even though they might have supported athletes entirely for the purpose of performing at the Olympics. Another example of possibly excessive and unethical sponsor protection relates to the Out-of-Home advertising policy of the Olympics and Paralympics that ‘is designed to secure outdoor media properties in and around (PyeongChang) sites and venues and also major transportation hubs for the official Games partners’ (International Olympic Committee, 2018, p. 126). Although it can appear legitimate for sponsors to be protected at sporting event sites, it seems less legitimate, especially from the perspective of residents/consumers or even from the sponsor’s competitors, that these protected areas are extended into the public space. This could be seen as a form of free-market restriction. As previously mentioned, several forms of what Klincewicz (1998) named using the weaknesses of sponsor-seekers by potential sponsors are not direct and easily observable, as these influences are processual and sometimes sequential. Also, they require the compliance of the sponsees to make them operational. For this reason, it is rather simplistic to attribute the responsibility for these possibly unethical practices solely to sponsors. Therefore, although these forms will not be discussed in the following section dealing with sponsees’ non-ethical practices, sponsees’ responsibility should not be completely excluded.

Non-ethical Practices from Sponsees The main unethical practice from sponsees concerns the choice of sponsors. This is what Crompton (2014) named reputational risks. For him, ‘sport organizations are increasingly expected to be

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responsive to social concerns as well as their own financial well-being. Thus, they have to be concerned about partnering with companies that could damage their reputation’ (p. 4). It is interesting that Crompton (2014) discusses the issue from a reputation perspective but not on an ethical level. At such a level, it is essential for sport organizations to choose sponsors that do not harm or have negative impacts on their stakeholders and particularly on their members. Therefore, several categories of sponsors and/or industries can be considered as risky and/or unethical: namely, tobacco, alcohol, gambling, and products high in fat, salt, or sugar (HFSS) (Crompton, 2014). Although the tobacco industry had a long history of sponsoring sport, particularly motorsport, the harmful health consequences, and associated healthcare financial costs, of tobacco consumption led several states (e.g., the USA, EU states) to ban tobacco sponsorship of sport. Although this is consensual in many countries, there are still countries allowing this type of sponsorship. The second category, which involves alcohol brands, is more controversial as regular/ excessive alcohol consumption is a source of vulnerabilities (e.g., sickness, death, accidents, injuries, violence, antisocial behavior) yet alcohol brands often seek associations with sports (Routier, Gauthier-Maltais, and Bodet, 2017). Actually, in several countries, alcohol and beer companies in particular are among the top sponsors in sports. This is problematic as numerous studies have found that there is a strong link between alcohol brand exposure via sport sponsorship, brand awareness and recall, and risky consumption and behavior (Routier et  al., 2017). Based on these findings, several countries have legislated either to regulate or even ban sponsorship from alcohol brands, as in France. However, although the French context appears strongly regulated, it does not prevent alcohol brands from managing to create associations with sport organizations (Bodet and Fuchs, 2015). As for gambling, the issue with sponsorship is that sport organizations ‘are promoting a potentially risky behaviour of gambling problems that is increasingly recognized as a public health issue’ (Crompton, 2014, p. 10). The second issue identified by Crompton (2014) in relation to sponsorship from gambling companies is that by introducing financial incentives it indirectly, if not very directly, fosters corruption. Gambling-related corruption cases have recently and quantitatively increased, creating serious problems for sport organizations and administrators and even governments. As for companies promoting HFSS products, ethical issues have been raised considering on one hand the growing obesity problems in numerous countries, particularly among youth, and on the other hand the fact that young people are direct

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stakeholders in sport organizations, either as participants or spectators. Famous cases such as those of McDonald’s and Coca-Cola, for instance, and the Olympic Games have created much debate about their legitimacy and the ethical dimension of these partnerships. Considering that the societal problem and public concern are not likely to decrease, this ethical debate is likely to intensify in the near future. To these categories identified by Crompton (2014) could be added companies belonging to sex-related industries. In 2019, a French second-division professional rugby club concluded a one-game partnership with a porn website, creating a lot of criticism and public outrage. The chairman of an opposing club was strongly irritated and commented: ‘So in France, we cannot promote alcohol and tobacco … but women’s exploitation, or even pornography in a stadium full of under-18 years old, so this is not a problem?’.9 Although, in this particular case, the sponsorship was not allowed by the professional rugby league, because of the protests it created, it is likely this issue will occur again in the near future in other sports and contexts. Beyond these categories or industries, Crompton (2014) identified other cases dealing with social responsibility issues that are more specific to certain companies than to certain industries. For instance, he listed cases where companies were accused of unethical practices (e.g., destruction of the rainforest, cruelty to animals, prisoner abuse, pollution, etc.) and used sport sponsorship partly, if not essentially, to improve their brand image. These practices are sometimes associated with sportswashing practices. The term sportswashing was first used by Amnesty International to characterize the brazen attempt from Manchester City’s Abu Dhabi owners to ‘“sportswash” their country’s “deeply tarnished image”’.10 Considering the strong positive and worldwide appeal sports can have, and the positive values that are associated with them, it is quite understandable that sponsors who do not benefit from a positive reputation may want to sponsor sports to change this situation. However, it is important for sport organizations to understand this and to be cautious when seeking sponsors because, ultimately, it will be their responsibility to their stakeholders. Numerous cases can be taken as examples. For instance, Crompton (2014) recalled the example of Bolton Wanderers FC who signed a shirt sponsorship deal with QuickQuid, a payday lender, but cancelled it eight days later due to public and fans’ protests. Obviously not all sponsorships receive the same attention and concern, particularly depending on the countries and sports, and unusual, if not unethical, associations remain widely observable. For instance, the fact that the cycling Tour

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of California has been sponsored since 2006 by AMGEN, a biotech company that produces EPO, one of the main drugs used for doping in cycling, questions the ethics of such association.11 More recently, the 2019 sponsorship agreement between Airbnb and the IOC was qualified as ‘outrageous’ by French hostels and who questioned the ‘morality’ of the deal because they consider Airbnb as an unfair competitor. French hostels even warned they would stop collaborating on the planning of the 2024 Paris Games in protest.12 This example demonstrates the difficulty of listing cases and situations since they are extremely contextual, depending on the sport organizations, the sponsors, and the countries at stake. Considering the increasing public scrutiny and possibly sensitivity to ethical issues combined with the rapid spread of information, it is likely that such cases and situations may frequently happen in the near future. The last ethical issue from the perspective of the sponsee concern the non-delivery of what is promised in the agreement. Although it may not be such an issue for professional sport organizations, it may be the case for not-for-profit organizations in despair of additional financial revenues. Many of them, either for cultural or competence reasons, can be far too focused on their own needs and inclined to over-sell or over-promise the prospective partnership and, when the deal is agreed and the new resources obtained, they can tend to be less committed to activating it and satisfying the expectations of the sponsor. This aspect is closely related to the philanthropy/exchange nature of the partnership discussed in the section dealing with sponsors’ unethical practices, and if it is not required for these types of sport organizations to transform themselves into highly professional entities, they should not pretend to be professional in the negotiations for the deal, if they know they will not be able to deliver what is promised.

TOWARD THE DEVELOPMENT OF AMBUSH MARKETING? ORIGINS, PHILOSOPHY, DEFINITION, AND ILLUSTRATIONS OF THE PHENOMENON As sponsorship has developed as a phenomenon, so too have the challenges and threats to it. In the previous section, we reviewed ethical issues involving more or less directly sponsors and sponsees. However, one particular practice, whose responsibility is not directly imputable to sponsors and sponsees, has appeared as a major concern for official sponsors and the properties with which they are associated. Indeed, considering the huge

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growth in the financial amounts invested by official sponsoring brands, it is not surprising that ambush marketing actions have developed around major events (Ellis, Parent, and Séguin, 2016). Initiated more than 85 years ago, the phenomenon of ambush marketing, also called pseudosponsorship, wild marketing, insidious marketing, pirate marketing, trap marketing, commercial ambush, or parasite marketing, shows no sign of slowing down. This practice is believed to date back to the 1932 Los Angeles Olympic Games and the Helms Olympic Bread case. Helms Bakery was the official supplier of bakery products to the US Olympic Team at the 1932 Games. Nevertheless, the brand was ambushed by Weber, a challenger, which supplied products to another nation’s team in the Olympic village. Helms vigorously defended its rights, and started a lawsuit against the US Olympic Committee, which continued for 15 years. Throughout the ongoing lawsuit, Helms prosecuted to trumpet its Olympic connection. For instance, in the program for the 1936 Olympic track and field trials, the company developed an advertisement featuring the tagline ‘Official Bakers, Xth Olympiad’ (Payne, 2012). This therefore demonstrates that if ambush marketing today has become a major concern and topic, it is not a recent phenomenon. The term ambush is described as the surprise attack on a moving foe. The notion of ambush marketing can be defined as ‘the practice whereby another company, often a competitor, intrudes upon public attention surrounding the event, thereby deflecting attention toward themselves and away from the sponsor’ (Meenaghan, 1994, p. 79). The core of ambush marketing resides in achieving conventional marketing objectives with unconventional techniques. In other words, the philosophy is to capitalize on the success of sponsorship without having the duties and taking on the intrinsic obligations of an official sponsor. It is important to highlight the fact that the association between the ambusher and the sponsee is voluntary and deliberate, and not, as might happen, the result of an error made in good faith by the customer. Ambush marketing has historically been portrayed as a tactical, parasitic activity targeted at devaluing the official sponsorship of a market rival or at intentionally confusing customers about the identity of an official sponsor. Ambush activities are often closely associated with official sponsors’ actions that customers have trouble differentiating (Brownlee, Greenwell, and Moorman, 2018). The ambush marketing actions are categorized according to their nature and practices. Overall, these actions have three goals: (1) drawing attention to the ambusher; (2) diluting the efficiency of the official partner; (3) altering the reactions of

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consumers in a favorable manner for the ambusher (Chanavat et al., 2017). Nufer (2013) proposed an approach to structure the various manifestations of ambush marketing by classifying the latter into different categories, case groups, and cases. In a first step, three basic categories of ambush marketing are distinguished: (1) direct (‘blatant’), (2) indirect (‘subtle’), and (3) dominant destructive–aggressive. Direct ambush marketing characterizes initiatives targeting the marketing rights of the event organizer or the official event sponsors without deviation. Indirect ambush uses the sporting event as the motive for the ambushers’ own marketing activities, which is why indirect ambush marketing is prevalent primarily in the area of communications. The main objective of the third category named dominant destructive– aggressive is to diminish the effectiveness of official sponsorships with predatory techniques. In a second step, these three categories are divided into case groups, in which similar cases are gathered. In the framework of direct ambush marketing, direct ambushing approaches that are motivated primarily by product policy and predominantly pursue (mainly short term) economic objectives are distinct from direct ambushing activities whose motivation and implementation are focused primarily in the realm of communications policy and which therefore prioritize (mainly medium term) psychological objectives. (Nufer, 2013, p. 57)

Within the scope of the first case group, eventassociated products are created and marketed in an unauthorized manner. The second case group involves communicative pretexts to a sponsorship that, in reality, does not exist. Indirect ambush marketing is initially further broken down into: (1) ambush marketing by intrusion and (2) ambush marketing by association. Within the scope of a sports event, ambush marketing by intrusion encompasses all ambush initiatives that can be considered as ‘capitalising on the opportunity.’ On the other hand, ambush marketing by association can be further distinguished. ‘Agenda setting’ includes all ambush marketing measures that can be subsumed under ‘positioning by topicality’ and focus on the event as a communications platform. ‘Fun ambushing’ and ‘philanthropic ambushing’ represent two distinct special cases of ambush by association. The category ‘dominant destructive– aggressive ambush marketing’ is not distinguished into any distinguishable case groups. Finally, in the third step, a total of 21 cases of ambush marketing are suggested. Figure 32.1 summarizes the observations with regard to structuring the manifestations of ambush marketing.

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While a clear-cut differentiation is not always possible between the 21 cases of ambush marketing suggested by Nufer (2013), some ambush initiatives have multiple characters and could be integrated in different cases. Obviously, this structure is flexible and open to allow for new cases to be subsequently integrated. Nowadays ambush marketing is in perpetual mutation: the content of ambush marketing appears to be flourishing in number and gaining in originality and creativity. Ambusher brands appear to see innovation and, sometimes, aggression as the route to diminish official sponsorships’ results. As these contests are played out across the sporting world, fans and customers generally seem either unaware of or unconcerned by ambushing and ambushers. Conversely, sponsors have portrayed the threat posed by ambush so seriously that sports organizations like the IOC oblige host nations to pass legislation aimed at protecting official sponsors (Chanavat and Desbordes, 2014). There are other approaches to protect against ambushers, and both sponsors and organizations seem keen to build strong fan engagement to mitigate the effects of ambushing. Chanavat et al. (2017) stressed the fact that to cope with the increase in ambush activities, sponsors and rights holders are multiplying initiatives. Thus, they (1) pressure sport organizers to protect the events; (2) link field sponsorship and broadcast sponsorship; (3) anticipate the promotions of competitors; (4) must use secure sponsorship rights; and (5) can always resort to legal action in case of deficiencies. However, this debate is not closed considering the proliferation of sponsorship contracts. In football, ambush marketing activities are very common, as the players play in a club with a collective contract with a supplier, while at the same time they have individual contracts for their boots, often provided by a rival supplier. The message is then blurred. For instance, Cristiano Ronaldo, a player for Juventus FC, wears the Adidas brand on his shirt, as it is the club’s official shirt provider. However, Portugal’s national team is bound to Nike by an individual contract. Simultaneously, the Portuguese star gets a basic annual fee of 16.2 million euros from the American sporting goods company.13 Nike, considered to be the king of ambush marketing, has claimed victory at the FIFA World Cup 2018 in Russia despite not being an official sponsor of the competition. Nike, the official sponsor of both finalist teams (i.e., the winner France and its opponent, Croatia), ambushed the official sponsor, Adidas. According to Nike, 100 goals were scored by players wearing Nike boots, including the Golden Boot winner, England’s Harry Kane; France’s Kylian Mbappe, awarded both Young Player of the Tournament and Player of the Tournament; and Croatian captain

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Ambush Marketing

Direct (« blatant »)

Primarily product-policy motivated

Primarily communicationspolicy motivated

(1) Unauthorized use of eventbrands

(4) Advertisingwith eventbrands

(2) Unauthorized use of eventmaterials

(5) Simulation of sponsorship

(3) Unauthorized cateringatthe event venue

(6) Overrreachingon lower-privilege rights in a sponsorship subcategory

(7) Advertising at the event venue

Indirect (« subtle »)

By intrusion

(8) Advertising in the geographical environment

(9) Advertising in the media environment / public relations

Agenda Setting

(14) Sports and event as the contextual leitmotif of the communications strategy

(15) Equipment sponsorship

(11) TV advertising in the context of event coverage

(16) Testimonial/celebrity endorsement

(13) Launch of products or services in conjunction with the event

Figure 32.1

By association

(10) Broadcast program sponsorship

(12) Providing services in the extended event environment

Dominant destructiveagressive

Fun Ambushing

(19) Fun Ambushing

Philantropic Ambushing

(20) Philantropic Ambushing

(21) Dominant destructiveagressive

(17) Advertising with the event location

(18) Partnership to facilitate establishing connections to the event

Systematization of the manifestations of ambush marketing

Source: Nufer (2013, p. 58)

Luca Modric. Of the 32 national teams competing in this mega sporting event, 10 were wearing Nike shirts. Over 65% of the minutes played on the pitch were by players wearing Nike football boots. In this context, Nike used online and social media, and launched a ‘Believe’ campaign which features Cristiano Ronaldo and Neymar in short films, alongside a longer standalone trailer, which generated over 100 million views and over 50 million engagements. Budweiser, Ikea, Amazon, Adidas, and Nike were the top five brands for social media engagement during the four-week tournament.14 Initiatives regarding ambush developed by Budweiser, Ikea, Amazon, etc. are more akin to parasite marketing, FIFA decided to fortify the security of the sponsors’ rights. Following up on the ambush of previous actions, FIFA launched a major worldwide campaign for awareness and prevention against ambush marketing for the benefit of trading partners, notably via their digital tools. The marketing of the

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World Cup is managed under the exclusive authority of FIFA and its organizing committee. Without its permission, it is prohibited to refer to the World Cup through logos, designations, or other marketing products and services. That is why FIFA requires nations that are candidates for the competition to adopt specific ‘World Cup’ legislation. Rights holders fight against ambush marketing when ambushers benefit by obtaining profit without a contractual agreement. However, the overreaction often involves extensive media coverage. Consequently, ambush marketing activities are proving to be increasingly visible on interactive media. Furthermore, sponsors are faced with the creativity of messages from ambushers that can cause confusion in the minds of consumers, a poor attribution, or understanding (Chanavat et al., 2017). This part of the chapter also examines one particularly striking recent example of ambush initiative regarding unethical brands practice that

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was observed in the context of the 2019 UEFA Champions League final between English Premier League rivals: Tottenham Hotspur and Liverpool. The final was interrupted for a few minutes following the incursion of a young woman, Kinsey Wolanski, onto the pitch at the Wanda Metropolitano stadium in Madrid in the first half of the game. She somehow made it past security wearing not much aside from a thong swimsuit that read ‘Vitaly Uncensored.’ The Vitaly Uncensored website is an adult site with pranks developed by the young woman’s companion, the American–Russian YouTuber Vitaly Zdorovetskiy, who disrupted the 2014 FIFA World Cup final in Brazil. If Kinsey Wolanski was quickly dealt with by stewards once she managed to get onto the pitch, the woman was efficient in advertising ‘Vitaly Uncensored’ to a worldwide audience. The Instagram model’s swimsuit was actually an efficient advertisement for the adult website. It is usually forbidden for television cameras to film people making a show of themselves in the stands, in order not to give them the visibility they do not deserve. In practice, the instruction seems to be applied to the rule. However, photos and videos of this ambush marketing action traveled all over the world and the publications related to this event – including this book chapter – are numerous. Thus the marketing consequences seem to be colossal for the site (e.g., the #Vitaly and #VitalyUncensored hashtags). Personally, Kinsey Wolanski gained hundreds of thousands of new followers on social networks. For instance, in a few hours, her Instagram account gained more than 2,000 new followers. When comparing the penalties incurred for getting onto the field and the benefits, the advertising operation is, without a doubt, a success. Aside from the woman’s brief stint in jail, all the stakeholders involved in the stunt paid out absolutely nothing for essentially placing an ad in a primetime slot. So efficient was her action that the pair hit the news again after admitting they were planning a similar stunt for the 2019 COMMEBOL Copa America in Brazil, but were arrested before she could execute it. Apex Marketing Group provides advertising and branding consulting services and customized sponsorship and brand analytics. Although Kinsey Wolanski was quickly stopped, her few seconds on the pitch are estimated, according to Apex Marketing Group (2019), worth some 3.97 million dollars. This estimate is based on the price of an advertising spot on the channels that broadcast the game in prime time and reached more than 300,000 million viewers. Ambush marketing activities are proving to be increasingly visible on interactive media such as Instagram, YouTube, Twitter, Facebook, etc. It is

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evident that new technologies have had an impact on the perception of sports events by customers. People spend a lot of time on social media platforms and this has modified the way business is done. Digital practices turn out to be at the very core of the stakeholders’ tactics in the permanently undergoing changes of the sport business ecosystem. The development of the use of social networks has consequences for sponsorship and ambush marketing operations. Notwithstanding the strengthening of the regulations to stop ambush marketing actions, this digital context seems to contribute to their performance. If sporting events are considered as social and digital platforms favoring ambush marketing, this remains something of a moot point requiring further research attention. This case is an example of an innovative form of direct ambush marketing by intrusion for an unethical brand. If sport viewers enjoy the combination of social media and sport, ambusher brands expect social media to be integrated into ambush marketing strategies. Without social media this ambush marketing activity would have never become public knowledge.

CONCLUSION The aim of this chapter was to address the question of ethics in the context of sponsorship, and which concerns both partners of the sponsorship relationship as well as the other entities, whether they are other sport organizations, sport organizations’ direct and indirect stakeholders, or rival companies and brands. The analysis of the ethical issues and responsibilities showed that they are numerous, and that beyond the sole reflection regarding the nature of the sponsorship activity itself (e.g., exchange versus philanthropy), they concern numerous stakeholders. In this context, the ethical questions should be fully integrated within the management of the brand system that corresponds to the brand governance approach (Helm and Jones, 2010; Séguin and Abeza, 2019). This network-based approach shows that brands are influenced by numerous stakeholders, and, conversely, that establishing relationships with particular stakeholders should be considered in the light of possible consequences for other meaningful stakeholders. In some cases, it will be extremely difficult to satisfactorily manage all the relationships and priority choices might have to be made. Numerous factors can be taken into consideration for establishing these priorities, but the primary factor seems to be coherent with the brand identity, which could be considered as the primary ethical consideration.

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Notes 1

2 3

4

5

6

7

8

9

10

11

12

13

14

https://sponsorship.sportbusiness.com/news/ altrad-signs-on-as-permanent-shirt-sponsor-offrench-rugby-team/ accessed January 7, 2020. https://www.bbc.com/sport/football/49647660 accessed January 7, 2020. https://www.independent.co.uk/sport/footballt h e - m y s t e r i o u s - s h a d o w - o f - t h e - ro n a l d o affair-1170160.html accessed January 7, 2020. https://www.espn.com/soccer/soccer-transfers/ story/3807304/de-jong-chose-barcelona-overpsg-after-nike-agreed-to-subsidise-wagessources accessed January 7, 2020. https://www.lemonde.fr/police-justice/article/2015/10/20/le-psg-et-nike-condamnes-poursalaires-non-declares_4793326_1653578.html accessed January 7, 2020. https://www.theglobeandmail.com/report-onbusiness/olympic-trademark-battle-snares-smallbusinesses/article22503615/ accessed January 7, 2020. www.stuff.co.nz/sport/rugby/5694476/Retailersrunning-foul-of-All-Blacks-ad-ban accessed January 7, 2020. https://www.lexology.com/library/ detail.aspx?g=7e6e025d-c232-4496accc-76f516a58602 accessed January 7, 2020. https://www.lindependant.fr/2019/02/09/ jacquie-et-michel-sponsor-de-lusc-la-colere-dupresident-de-biarritz,8005163.php accessed January 8, 2020. https://www.theguardian.com/football/2018/ nov/10/manchester-city-amnesty-internationalfootball-leaks accessed January 8, 2020. https://www.cyclingnews.com/news/amgensunlikely-partnership-with-cycling/ accessed January 8, 2020. https://www.france24.com/en/20191120french-hotels-protest-outrageous-airbnb-olympics-deal-1 accessed January 8, 2020. https://www.bloomberg.com/news/articles/2019-09-07/cristiano-ronaldo-gets-162-million-euros-from-nike-deal-spiegel accessed January 10, 2020. https://www.thedrum.com/news/2018/07/16/ nike-claims-world-cup-marketing-crown-despitenot-being-official-sponsor accessed January 10, 2020.

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transfer: Examining their impact on the institutionalization of anti-ambush marketing legislation. Journal of Sport Management, 30, 5, 473–489. Ellis, D., Scassa, T., Seguin, B., & Séguin, B. (2011). Framing ambush marketing as a legal issue: An Olympic perspective. Sport Management Review, 14, 3, 297–308. Helm, C., & Jones, R. (2010). Brand governance: The new agenda in brand management. Journal of Brand Management, 17, 8, 545–547. International Events Group (2019). International events group sponsorship report, Chicago, Author. International Olympic Committee (2018). IOC Marketing Report 2018. http://iocmarketingreport. touchlines.com/pyeongchang2018/126-1 International Olympic Committee (2019). Olympic Marketing Fact File, 2019 Edition. Kissoudi, P. (2005). Closing the circle: Sponsorship and the Greek Olympic Games from ancient times to the present day. International Journal of the History of Sport, 22, 4, 618–638. Klincewicz, K. (1998). Ethical aspects of sponsorship. Journal of Business Ethics, 17, 1103–1110. Koenigstorfer, J., & Uhrich, S. (2017). Consumer attitudes toward sponsors’ counterambush marketing ads. Psychology & Marketing, 34, 6, 631–647. Manoli, A. E. (2018). Sport marketing’s past, present and future: An introduction to the special issue on contemporary issues in sport marketing. Journal of Strategic Marketing, 26, 1, 1–5.

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Meenaghan, T. (1991). The role of sponsorship in the marketing communications mix. International Journal of Advertising, 10, 35–47. Meenaghan, T. (1994). Ambush marketing: Immoral or imaginative practice? Journal of Advertising Research, 34, 5, 77–88. Meenaghan, T. (2005). Sport sponsorship in a global age. In J. Amis & T. B. Cornwell (Eds.), Global Sport Sponsorship (pp. 243–264), Oxford, Berg. Nufer, G. (2013). Ambush Marketing in Sports: Theory and Practice. London: Routledge. Nys, J.-F. (2010). La surenchère des sponsors dans le football. Géoéconomie, 3, 54, 63–77. Payne, M. (2012). Olympic Turnaround: How the Olympic Games Stepped Back from the Brink of Extinction to Become the World’s Best Known Brand. Oxford, Infinite Ideas. Routier, G., Gauthier-Maltais, A., & Bodet, G. (2017, September 5). Alcohol, sport and ‘marketing’: A systematic review. 25th Conference of the European Association for Sport Management, Bern, Switzerland. Séguin, B., & Abeza, G. (2019). Olympic brand governance: Future research directions. In M. Winand & C. Anagnostopoulos (Eds.), Research Handbook on Sport Governance (pp. 368–383), Cheltenham, Edward Elgar. Shani, D., & Sandler, D. M. (1998). Ambush marketing: Is confusion to blame for the flickering of the flame? Psychology & Marketing, 15, 367–383.

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33 The Sales Ethics Subculture G r e g W. M a r s h a l l , O . C . F e r r e l l , V i c t o r i a B u s h , M a r k W. J o h n s t o n a n d L i n d a F e r r e l l

INTRODUCTION Sales ethics research has addressed many factors that could influence decision making. (McClaren 2013, 2015, Bush et al. 2017, Ferrell et al. 2019). Often this research addresses individual and organizational variables that could influence ethical decision making. Since the sales force and sales managers operate as boundary spanners, often external to the organization, they have the propensity to develop an ethical subculture distinct from the culture of the broader organization. An opportunity exists in sales ethics research to delineate the characteristics and influence of the subculture in ethical decision making. Knowledge about the influence of the sales subculture can provide a better understanding about sales ethics. Therefore, the focus of this review is to synthesize existing knowledge on the sales ethics subculture to advance future knowledge and research. Although research has examined the impact of organization culture on ethical decision making (cf., Ferrell et al. 2017), a review of existing research finds only four articles that address the sales subculture and ethics in depth. Ferrell et al. (2007) and Ferrell et al. (2019) developed a conceptual framework to understand the sales ethics subculture. Barnes et  al. (2006) investigated the

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role of cultural strength on sales outcomes. And Bush et al. (2017) developed a theoretical explanation of how the sales force chooses and is socialized into the subculture of the sales profession. In addition, their perspective was explored via qualitative in-depth interviews with sales professionals. To develop this review of the sales ethics subculture, participants from three of these four articles have joined together to refine and extend existing knowledge on this important topic. Overviews of these studies associated with the co-authors provide our foundation to determine future research opportunities. The findings of Barnes et al. (2006) are also integrated into our review. The overall purpose of this review is to spark future conceptual and empirical work that relates to the sales ethics subculture. We provide various theories to support the existence of the subculture. We use the disciplines of sociology and anthropology to provide frameworks that support the construct of the subculture. Homburg and Jensen (2007), although not exploring the sales ethics subculture directly, compared the different viewpoints or ‘thought worlds’ of the sales department and the marketing department. This is consistent with the concept of the sales ethics subculture and reinforces its importance.

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Our approach is to first examine the nature of organizational culture and the nature of ethical decision making. Next, the subculture construct is developed from a multidisciplinary perspective. The characteristics of the sales profession are presented to establish and support that sales units are, in fact, a subculture. Then the conceptual development and the empirical findings of the three indepth articles mentioned above that address the sales subculture are presented. Next, we provide a theoretical foundation for future sales ethics subculture research. And finally, we examine the knowledge gap that presently exists in sales ethics subculture research. We conclude this review with an overview about what we know and what needs to be accomplished to advance knowledge in this important area of organizational science.

ORGANIZATIONAL CULTURE AND ETHICAL DECISION MAKING An organizational or corporate culture consists of the shared values, norms, and artifacts that provide the blueprint for behavior directed toward the achievement of goals (Ferrell et al. 2019). Shared beliefs about how to resolve ethical issues are part of an organizational culture. Values are beliefs – often ideals – that are selected by the organizations to provide general directions for expected behavior. Examples of organizational values could include integrity, teamwork, or trust. Norms are specific expectations about what is typical or expected of a group and generally define an expected standard such as how much a salesperson can spend on entertaining a client. Artifacts represent visible information and serve as guides for ethical behavior such as a code of ethics or an organizational ethics website. Although discussed in greater detail later as it relates to the sales subculture, a general definition of subculture is that it seeks to unify a group or even a functional area such as sales or marketing with an integrated belief system for ethical behavior. Subcultures often have values, norms, and behaviors distinct from the overall corporate culture as well as from other subcultures within the same organization. Bush et  al. (2017) provided empirical evidence that ‘the sales profession evolves as its own subculture that extends beyond individual and organizational boundaries.’ The sales subculture provides a blueprint for decisions throughout a salesperson’s career. Organizational culture usually develops organically, without a plan or overt leadership, when valued individuals in the organization such as

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peers or managers support certain decisions (in our focus, decisions related to ethics). Of course, the opposite can also happen when employees are encouraged to cut corners, take risks, or ignore policies or rules to advance their careers. Leaders have the opportunity to set the tone for appropriate behavior and influence shared values through their own communication and behavior. Organizational ethics and compliance programs help establish an organization-wide integrity-based approach to the firm’s ethical culture. Corporate-level ethics programs attempt to analyze major risk areas that employees will face and provide proactive training to address these issues. Importantly, Bush et al. (2017) found that there are ethical issues unique to the sales subculture that corporate-level ethics programs do not address. For example, a sales subculture can emerge where the sales force is encouraged to take excessive risks to increase revenue virtually at all cost. Any particular functional areas of an organization may have to address risks that are not faced by the entire organization. The sales ethics subculture is less attached to the organization and especially has more freedom to establish its own values and norms due to the external role it plays in an organization. One approach to explain ethical decision making in organizations focuses on individual factors including the individual’s moral philosophy. However, research has demonstrated powerfully that organizational factors can take precedence over the individual. As such, organizational factors have a significant influence on ethical decision making within the firm (Ferrell and Gresham 1985, Ferrell 2005). Complex interactions between an individual’s personal characteristics and other organizational member assessments of ethical issues trigger attitudes toward these issues (Cohen and Reed 2006). In addition, the organization’s social network defines rewards and punishments for ethical decision outcomes that greatly direct the ethical decision-making process. Thus, most organizations focus on the development of an ethical culture through leadership, training, and compliance. Shared beliefs about resolving ethical issues are part of the organizational culture and help facilitate the behavior necessary to find solutions to ethical issues and make ethical decisions (Maignan and Ferrell 2004). Organizational factors include opportunity from the perspective of permitting or encouraging ethical behavior or limiting or stopping unethical behavior. Opportunity results from rewards for or barriers against unethical behavior. Organizational culture includes significant others such as those who have influence in the work groups such as co-workers, managers, and even subordinates.

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These significant others have been found to be more important in ethical decision making in the context of an organization than individual factors (Ferrell et  al. 2019). Effective leaders establish control and institute a code of conduct for all team members (Martin, 2015). Importantly but perhaps not surprisingly, when an individual department in the organization has a subculture not aligned with the organization’s culture there is a higher likelihood of ethical conflict. For example, a sales culture with its own identification that harbors negative headquarter stereotypes can result in increased opportunities for salesperson misconduct (Wieseke et al. 2012). It is critical that salespeople are made aware of and accept the organization’s ethical expectations to foster an ethical sales culture. Salespeople trained on their organization’s ethical values and beliefs as well as standards of conduct tend to see their organization as maintaining higher ethical values and displaying stronger organizational commitment than those not familiar with their organization’s codes and policies (Valentine and Fleischman 2004). The attitude of managers toward ethical conduct and decisions is also essential and impacts a variety of managerial functions from salesperson ethics training to how salespeople are assessed in hiring situations and performance evaluations (Schwepker and Good 2004). Leaders can be unethical, apathetic, or ethical. While these various types of leaders fall on a continuum among these labels, the concept does illustrate the importance of the impact of effective leadership. Unethical leaders do whatever it takes to achieve results if the risks of getting caught are low. The unethical leader looks for loopholes and in worst-case scenarios may even search for a way to bypass the law. Unethical leaders see ethics oversight through programs as a waste and consider them optional unless there is a high risk. Apathetic leaders are not necessarily intentionally unethical but do not embrace ethics as an overt part of their decision making. These leaders often feel no interest and are indifferent to or not concerned about ethics. They could be viewed as not wanting to know how results are achieved (ends justify means). If something goes wrong, they will blame it on others. Clearly, a linkage exists between an ethical judgment (something is either ethical or unethical), the intention to make the ethical choice, and the actual behavior of the organizational member. Importantly, an organizational culture provides direction to understand the ethical choice and whether and how one may intend to act on that choice. The intention of acting ethically does not necessarily result in ethical conduct. Ethical leadership at various management levels should provide directions for all employees,

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including the sales force, to make ethical dayto-day decisions. As the employees experience organizational pressures and opportunities, ethical leaders should empower them to take responsibility for their decisions and provide positive support and reinforcement. Stakeholder concerns, conflicts with organizational values or policies, and co-workers acting in ambiguous situations all help to determine ethical outcomes. In a very worstcase scenario, unethical conduct may actually be an overt or tacit part of required sales activities – overtly or covertly sanctioned by upper leadership! Since most firms have centralized ethics programs and training, the opportunity generally does exist to train managers to be more effective ethical leaders. Although leaders must have strong personal characteristics and moral development (Treviño et al. 2000), this is just the foundation to be an effective leader. The complexity of ethical decision making in the sales area entails more than just being a moral person and requires the knowledge, experience, and ability to handle very complex and difficult decisions (Connelly et al. 2000). Ethics training can help the sales force recognize and deal with ethical issues through systematic processes. As organizational pressures and opportunities emerge, there has to be leadership skills to manage conflicts and a reliance on the ethical culture that should exist organization-wide (Ferrell et al. 2015).

SALES AS A SUBCULTURE The culture of most organizations also has subcultures. As touched on earlier, a subculture is a cultural group that is distinct from the overall organizational culture with beliefs, interests, and patterns of behavior divergent or inconsistent with the overall organizational culture. The subcultural values, norms, and artifacts result in disagreement, and often conflict, with the overarching culture. For example, there could be an ethical culture in an organization that considers bribery unethical. But a subculture such as sales may turn to the use of bribery because of the pressure to obtain sales (Clarke et al. 2019). The broad subculture concept was developed in sociology in the 1920s. Scholars defined it as a deviance framework. That is, the framework developed to explain why certain groups engage in unethical or criminal behavior. Adapting the subculture framework to understand ethics in sales within an organization is consistent with the development of the concept (not implying that salespeople are inherently unethical or criminal,

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of course!). Although subculture has been used widely to explain ethnic differences, herein we are examining only the organizational work subculture. Anthropology adapted the subculture concept to explain distinct groups that have a unique trait such as language, physical appearance, or function as a clique. This definition is useful in understanding a sales subculture. This is because anthropology focuses on specific practices and emphasizes the historical process that sustains these practices (Anthropology 2019). Anthropology as a field is concerned with how a subculture engages in resistance to the larger group. This aspect of subculture could help understand how the sales subculture approaches tasks and activities in a different way from the broader organization. Salespeople often operate heavily external to the organization and do not have as much interaction with those organization members who work purely internally and with limited contact with customers. Most businesses have a number of subcultures. Firstly, businesses may have a corporate or overall culture different from wider society. That is, a business can be global and create a culture that is very different from the cultures of the countries where it operates. Within the business there are disciplinary subcultures, such as information technology, human resource management, and marketing. Marketing is the organizational function that creates sales through the customer contact function that is on the frontline and visible to customers (sales may argue that this characterization is inaccurate!). But regardless, within the marketing milieu the sales function often is isolated and naturally develops its own subculture. Oddly, marketing and sales sometimes are more at odds with each other than almost any other functional pairings in a firm! The nature of the interaction of salespeople with individuals internal to the organization and individuals outside the organization varies. For example, because of their unique responsibilities, salespeople communicate regularly with external customers, study competitors, and participate in business associations in a much more complex environment (Schmitz and Ganesan 2014). As the business environment becomes more global and technologically advanced a ‘revolution in sales’ of sorts is afoot (cf., Marshall et al. 2012, Singh et al 2019). The sales job today is often characterized by ‘intricate networks of cross-functional, cross-firm interactions that the salesperson needs to fully understand and lead’ (Marcos-Cuevas et  al. 2014, p. 145). These complexities are challenging because of the many and varied demands of the sales job. Even within the overall organizational frontline and marketing elements of an organization,

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sales is a subculture that may have different performance-based job requirements. As pointed out by Homburg and Jensen (2007, p. 124), sales and marketing have different ‘thought worlds.’ Barnes and colleagues (2006), were among the first to examine the strength of an organizational culture’s impact on the performance of salespeople from a subculture perspective. They acknowledged that organizational culture should be examined as a characteristic of groups instead of the total organization (e.g., Gregory 1983, Wilkins and Ouchi 1983). The sales function has long been advocated by researchers as a critical culture of its own due to its boundary-spanning role between the organization and its customers (cf., Futrell and Sager 1982). In fact, Barnes et  al. (2006), found that value congruity mediated the relationship between the strength of an organizational culture and sales performance outcomes such as role ambiguity, job satisfaction, and organizational commitment. That is, the direct impact of the strength of an organization’s culture did not have as much impact on sales outcomes without the salespeople’s perceived alignment of their own values with those of the organization. Here, ‘culture strength implies a social inertia or resistance on the part of salespeople to internal changes … the stronger the culture, the more difficult it will be to change’ (Barnes et al. 2006, p. 62). The authors suggest that more research is needed to understand what factors influence such resistance within the organization. We argue that factors beyond the organization itself influence ethical decision making of salespeople due to the unique nature of the job, yet also its commonality as a profession.

Sales as a Profession An abundant amount of research in organizational behavior and business ethics has investigated the role of organizational culture in ethical decision making. In order to substantiate sales as a subculture of an organization, it first must meet certain criteria as a profession. As defined by Abbott (1988, p. 8), ‘professions are exclusive occupational groups applying somewhat abstract knowledge to particular cases.’ The concepts of professionalism emerged in the nineteenth century in North America and Western Europe. But since medieval times people with diverse skill sets and specialized knowledge (blacksmiths, for example) were valued and identified in a specified role. In fact, guilds were the predecessors of the concept of a profession. Hundreds of years ago craftsmen and even merchants gained power by forming an association or alliance and played a similar role in

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society. This gave guild members status and was associated with being an apprentice to learn a skill. There was a need for ethical conduct and standards to maintain membership in the guild (Gardner 2016). Accounting started as a guild to standardize methods of record keeping for transactions associated with revenue (Bellis 2019). As business became more advanced and complex, accounting grew into a profession. Sociology has examined the origins of professions and how they have evolved (cf., Muzio et  al. 2013) over time. Although sales positions in organizations may not be seen by some as a profession, in truth there is strong evidence that sales does indeed meet the criteria of a profession. Despite negative stereotypes of salespeople throughout history (i.e., aggressive, pushy, manipulative), attempts have been made to elevate sales to a professional status. This is no different from other occupations that have experienced similar transformations. For example, in the 1800s, physicians were described as ‘self-designated doctors who traveled from town to town dispensing snake oils, elixirs, and tonics … and dentistry was a sideline for barbers’ (Hawes et al. 2004, p. 28). Hawes and colleagues (2004) extensively critiqued the sales discipline as a profession. The most common criterion that applies to sales and most other professions is a common body of knowledge. This particular knowledge must differentiate itself from others. Given the emergence of professional selling and sales management as a focal topic of academic research in scholarly journals such as the Journal of Personal Selling & Sales Management, as well as being featured in many other top marketing journals such as the Journal of Marketing and the Journal of the Academy of Marketing Science, clearly sales has its own body of knowledge. This is further evidenced by the many academic conferences, such as the American Marketing Association with specific tracks focused on sales as well as a sales special interest group. Additionally, many universities have courses and specific majors in selling and sales management with accompanying textbooks on the discipline. Pi Sigma Epsilon is a national student organization dedicated to connecting students with sales organizations and training via student competitions. In the practitioner realm, a plethora of common knowledge is shared in such popular outlets as Sales and Marketing Management and Selling Power as well as the many self-improvement books on sales and training programs toward building selling skills. Thus, based on this evidence we proffer that the criterion of a common body of knowledge is met and as such substantiates sales as a profession. Additionally, and particularly germane to this

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chapter, the study of sales ethics has a rich history of investigation that has been regularly featured in the Journal of Business Ethics. A second criterion for establishing a discipline as a profession includes a common skill set. This has been examined and reviewed extensively in practice and academia. As highlighted over 30 years ago by Dubinsky and colleagues (1986, pp. 192–193), salespeople: • are physically, socially, and psychologically separated from other line and staff personnel; • must be flexible and innovative because of the nature of their job; • are in a boundary-spanning role; • play multiple roles including developing and maintaining customer relationships, providing customer service, and market analysis; • must be persistent and self-motivated; • must be able to handle uncertainty and interpersonal conflict, which can increase job stress; • may reduce performance levels based on delays in tangible and recognized results from their efforts. Coupled with the rapid expansion and adoption of sales technology, such as the digitization of certain job responsibilities and artificial intelligence, the skill set of salespeople continues to evolve (Singh et  al. 2019). The variety and impact of technological advances are compelling within the sales profession and offer new challenges to ethical conduct in the profession. These unique job characteristics and skills can often lead to increased role stress, conflict, and role ambiguity for an employee in sales as well as unethical behavior (cf., Pettijohn et  al. 2008, Wotruba 1990). Further, as boundary spanners, salespeople may interact less with organizational peers and more with those outside the organization such as customers, competitors, and industry associations in a much more complex environment versus other types of jobs (Schmitz and Ganesan, 2014). In summary, sales has grown into a profession with many positions requiring extensive training and in many cases a required college degree. The sales discipline shares a common body of knowledge and specific skill set that make it a unique profession. As a profession, ethical or unethical behavior in sales has been studied extensively (cf. McClaren 2000, 2013). Much of this research has made significant contributions to understanding salesperson ethical decision making. This body of research is conceptually grounded in that decisions to exhibit any behavior, whether ethical or unethical, are made by individuals/employees. Additional insights might be discovered if those behaviors were examined within the social

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context of a professional subculture or work group (Robinson and O’Leary-Kelly 1998) that goes beyond the walls of the organization.

THE ATTRACTION–SELECTION–ATTRITION (ASA) PERSPECTIVE Individuals use information from their social environments to interpret events and understand expectations regarding their behavior and its consequences (Salancik and Pfeffer 1978). Since it has been established that sales is a profession with a unique knowledge base and skill set, it follows that members of such a profession share similar characteristics. In the work setting, Schneider (1975) developed the Attraction–Selection– Attrition (ASA) perspective. Its premise is that individuals with certain tendencies are attracted to and select into those groups that fit well with these tendencies. They typically adapt their thoughts, attitudes, and behaviors to better fit within the group. Those that adapt well are more likely to remain in the group, whereas those who do not adapt are more likely to leave the group. Thus, the ASA perspective offers a complementary conceptual framework to existing work in sales ethics that supports the notion of a unique professional sales subculture. Attraction. According to Holland’s (1973) seminal work on the theory of careers, individuals choose careers based on personality types and work environment. As chronicled by Nauta (2010), the magnitude of Holland’s work has been considered a cornerstone of counseling psychology in terms of ‘career development, assessment, and practice’ (p. 11). A person’s job behavior is often determined by the interaction between their personality and the characteristics of the work environment. Thus, ‘people search for work environments or careers that will let them exercise their skills and abilities, express their attitudes and values, and take on agreeable problems and roles’ (Holland 1973, p. 4). Individuals with similar personality types may be attracted to a sales career because a sales job has very different and unique characteristics from most other jobs. Individuals may be attracted to this type of work environment because it matches their own unique interests and attitudes. Otherwise, they will probably seek out another career. Selection. Holland (1973) classifies individuals most likely to select and succeed in a sales career

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as those with an enterprising personality type – individuals who perceive themselves as aggressive, popular, self-confident, and sociable. They use these competencies to solve problems at work or in other situations. An enterprising environment is characterized by demands and opportunities that necessitate the manipulation of others to attain goals. As evident in the previously discussed sales job characteristics, the sales job and its environment are very appealing to individuals who seek careers with many environmental demands and related opportunities. In one study, the job description of sales manager was at the top of the list for those who have enterprising personalities. (Casserly 2012) Individuals also seek out certain careers because they match their social identity – the selfconcept based on the premise that membership in a group has value and emotional significance (Tajfel 1981). The degree to which one’s social identity fits with the group can determine intended membership. An individual may also choose a career that matches their own morals and values. Thus an individual’s values should match the ethical sales climate (Mulki et al. 2009). This climate is composed of the ‘members’ perceptions, values, and behavior, and codes and norms that focus on issues of right and wrong’ (McClaren 2013, p. 109). Attrition. In part because of its unique job demands and characteristics, the sales profession has a high rate of turnover. Hoffmeister and Rocco (2012) reported that 62% of sales turnover occurs during the first two years of employment, which the authors labeled the ‘turnover danger zone.’ The main reason for sales job turnover was expectations that were not met. Thus, disconnect exists between an individual’s expectations of a sales job versus what is actually experienced on the job. Individuals who stay in the sales profession after the first two years should consequently be a more homogeneous group than those who left because they are generally experiencing similar conditions and adapting to their common environment (Schneider and Reichers 1983, Schneider 1987, Robinson and O’LearyKelly 1998). Based on the ASA perspective, the sales profession represents a subculture. This subculture reflects the aggregate perceptions of group members regarding particular aspects of the work setting. Such a group shares similar perceptions toward ethical behaviors. According to Schneider (1975, 1987), when there is a strong similarity among members’ perceptions and behavior, the

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social context is most capable of having a significant influence on member behavior. According to O’Fallon and Butterfield (2012, p. 120), ‘organizational subcultures often exist independently of the organization’s overall culture and may influence individual behavior in a manner that is markedly different from that prescribed by the overall culture.’ The ASA framework would predict that salespeople have similar perceptions of unethical behaviors regardless of individual and organization factors. Such a subculture could explain why ethical infractions in sales continue to grab headlines in the popular press.

ETHICAL DECISIONS IN THE SALES SUBCULTURE The organizational ethical culture provides formal and informal values, norms, and artifacts to resolve ethical issues. The stronger the organizational ethical culture, the more impact it can have on the sales subculture (Barnes et al. 2006). This culture will provide signals as well as enforcement on issues that could be judged as right or wrong. Often the organizational code of ethics and policies do not address specific activities and issues that the sales department faces. In fact, the ethical climate determines if issues or dilemmas have an ethical intensity level that requires a decision (Ferrell et al. 2007). A successful ethical sales subculture strives to find a good fit between the salesperson’s individual characteristics and the organization’s beliefs and values. In addition, specific sales department codes, compliance, policies, and oversight could limit or permit certain types of behavior that could be evaluated as ethical or unethical. Sales pressure such as quotas and reward systems based on sales volume can create the opportunity for the sales subculture to create informal acceptance that violates company policies or deliberately ignores misconduct if there are rewards attached to such outcomes. For example, a sales manager may say the company wants to win this account and at any cost. Under such conditions, one can readily imagine a subculture that evolves with (perhaps tacit) approval, support, and rewards for unethical behavior. The sales subculture of social networks can provide the opportunity to engage in misconduct based on the immediate job context based on the industry, competition, and what the requirements are to be successful. Research provides evidence of a tendency to not discipline top sales performers compared to salespersons that are poor

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performers (Bellizzi and Hasty 2003). This means that top performers can readily become the role models for achieving results through unethical methods. Social networks within the sales force can evolve with clues about how to bend the rules to be successful. Thus, salespeople are often more at risk to deviate from desired ethical behaviors than are other organization members by the very nature of their positions as boundary spanners (Wotruba 1990; Ferrell et al. 2007). Based on such a complex work environment, Wotruba (1990, p. 30) referred to sales as ‘a laboratory of ethical scenarios.’ Schwepker and Ingram (1996, pp. 1151–1152) acknowledged that ‘personal selling is an area of marketing that is particularly susceptible to ethical dilemmas.’ Salespeople regularly experience ethical conflicts in the performance of their duties (Dubinsky 1980). Coupled with constant performance measures and expectations, it is no wonder that salespeople struggle with internal and external pressure. This can lead to lower job performance, increases in turnover, customer dissatisfaction, and negative word-of-mouth about the selling organization and the profession as a whole (Walker et al. 1977, McClaren 2013). Unethical selling behaviors can have an impact on a firm’s reputation in the marketplace (Ferrell and Ferrell 2011). Consequently, researchers have extensively investigated the determinants of ethical and unethical behavior in a sales context.

INDIVIDUAL CHARACTERISTICS AND SALES ETHICS The role of individual characteristics as determinants of ethical decision making specifically among salespeople has been the focus of many studies over the years (cf., Chonko and Hunt 1985, Wotruba 1990, Mulki et  al. 2009). Loe et al.’s (2000) review of empirical studies on ethical decision making found that most research up to that point concentrated on individual demographic and psychographic factors. The most common individual characteristics studied were gender, moral philosophy, education, age, and nationality. The authors added that despite these categories being the most researched, ‘the findings are mixed and inconclusive’ (p. 187). For example, Dubinsky and Ingram (1984) found no significant difference between educational attainment and perception of ethical conflict. However, Borkowski and Ugras (1998) found that individuals with more education had a more utilitarian attitude in their approach to ethical problems.

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Murphy (2004) suggests that a more educated salesperson may simply be better at knowing which unethical behaviors have a lower risk of discovery and less damaging consequences. More recently, McClaren’s (2013) review echoes these mixed findings. For example, Murphy (2004) found that neither age nor education (highest level attained) was a predictor of problematic or unethical behaviors such as exaggerating claims, intentionally lessening cooperation with others, overemphasizing particular products, and setting aside responsibilities. This study did not, however, specifically address sales or ethics training as a component of their education. Román et al.’s (2002) study found that compensation and age of salespeople (but not education) were reliable determinants of ethical behavior, while Ross and Robertson’s (2003) research found that the interaction between age and compensation (size of commission) resulted in a greater likelihood of unethical behavior. More recently, Bush et  al. (2017) found no significance between gender, age, experience, or education and perceived unethical behavior. It is often viewed that individuals are unique and their personal ethical perspective determines how they make ethical decisions. Determinants such as moral issue intensity, age, gender, ethical values, and job characteristics such as tenure and background have been shown to have some impact on individual ethical decision making, but the impact in a social context is inconclusive. The body of research on individual factors indicates that organizational factors tend to have more influence on ethical decision making (Ferrell and Gresham 1985). Further, decisions in sales are often made in teams in the context of a social network that provides rewards and punishments to ethical decision outcomes (Ferrell et al. 2019).

ORGANIZATIONAL CHARACTERISTICS AND SALES ETHICS Organizational characteristics and their impact on ethical or unethical behavior have been studied extensively in sales and, overall, have shown more predictive power than individual characteristics. One characteristic form of compensation has been a key focus of study due to its performance implications. Some studies have found that compensation significantly influences the probability of salespeople engaging in unethical behavior. For example, Kurland (1996) found that salespeople were more likely to engage in unethical behaviors when they were compensated by straight

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commission. This finding was echoed by Schwepker and Good (2004), who warned that if compensation was based on high sales quotas set by sales managers, then ‘the power of the incentive strategy seems to have effects throughout the sales force and their corresponding behaviors’ (p. 176). However, based on a national sample of B2B salespeople, Bush et al. (2017) found no significant differences between straight salary, straight commission, or salary plus commission on salespeople’s perceptions of unethical behavior. Sales training, another organizational characteristic, has been found to increase the performance of salespeople (Román et al. 2002). Evidence supports the notion that training on such topics as setting goals, enhancing communication skills, and increasing product/company knowledge improved performance (Jantan et  al. 2004). Further, Attia and Honeycutt (2012) found that sales supervisors believe in the value of behavioral training methods. Ethics training programs have also been found to promote and impact behavior that is consistent with a firm’s customer orientation (Weaver et  al. 1999). Valentine (2009) found that ethics training enhances the ethical environment and satisfaction with managers and co-workers. Schwepker and Good (2004) reported that ethics training and attitudes of sales managers positively influenced ethical behaviors and performance. More recently, mentorship has also been found to have an impact on ethical behavior (Steinbauer and Renn 2014). However, Bush et  al. (2017) found no significant relationship between sales and/or ethics training and perceptions of ethical behavior. Despite this significant amount of research on individual and organizational characteristics’ impact on ethical behavior in sales, the results are still broadly mixed and inconclusive (cf., McClaren 2000, 2013).

OVERVIEW OF CONCEPTUAL DEVELOPMENT AND EMPIRICAL FINDINGS: THREE STUDIES In this section we provide an overview of three of the articles that have been published with a focus on the sales subculture represented by members of the present authors’ team. Ferrell et  al.’s (2007) article was the first to address this important topic. Bush et  al. (2017) conducted one of the few empirical studies providing evidence of the sales subculture. Ferrell et al. (2019) then utilized these findings to develop a conceptual model and propositions. These three studies provide the foundation

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for this review. There exists the need for more research to better understand the elements and resulting opportunity to manage ethics in the sales subculture.

Article 1 Summary A framework for personal selling and sales management ethical decision making

Ferrell et al. (2007) considered the importance of organizational ethical culture and examined how the sales function is dramatically different from other areas in an organization. Based on that analysis the research presented the arguments for a sales ethics subculture and developed propositions for research. Unfortunately, there is a knowledge gap surrounding the sales ethics subculture. Most of what we know about the sales ethics subculture comes from studying and learning about general individual and organizational factors that impact ethical decision making. For over 50 years of marketing ethics research, ethical culture and management style have proven to be significantly influential in the ethical decision making of those in the sales subculture. Research has also revealed that the full extent of ethical decision making in the sales subculture has not been discovered. A goal now is to unveil the process of assessing, predicting, and controlling unethical conduct in the sales ethics subculture to advance practice. The research concluded by developing four propositions around the sales ethics subculture: The first proposition in advancing knowledge in this area is to examine the existing gap between ethical judgment, intentions, and behavior. More research is necessary to understand and strengthen the linkages among these three actions and ultimately help salespeople more frequently make a cognizant ethical decision. The second proposition is to develop the sales ethics subculture by enforcing adequate sales training. This idea put into action involves training salespeople in situations unique to their environment to better equip them for the realistic decisions they will face. Further research is needed here to identify practical training tools that will be applicable to the sales subculture. The third proposition involves establishing a specific sales code of ethics to close the gap between the policies of the organization and what is actually implemented in the firm. This research requires a better understanding of the role of the sales subculture in decision making in order to more

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effectively enforce a code of ethics and reduce misconduct. The sales field holds considerable ethical risks because of the boundary-spanning role salespeople perform – that is, a salesperson must serve both their employer and the customer. The final proposition recognizes the significance that sales managers (through their informed and skilled leadership) can have in the development of individual salesperson ethical decision making. Sales management has the ability to reinforce the organizational culture by implementing controls and regulating the ethical culture. Ethical leadership is the key to fostering ethical decision making within the culture. The implications of research on the sales subculture identified the need for a specialized code of ethics and more extensive sales training to handle risks. Using existing resources, the suggested solution is to follow the Federal Sentencing Guidelines for Organizations to develop a code of ethics as well as a training battery that would be applicable to the sales organization within a firm. Many questions are still to be answered and great need still exists for further research to be conducted. And certainly challenges unique to the sales field make it harder to provide immediate solutions than perhaps is the case with many other organizational functions. However, through continuing research there is great potential to discover more and contribute to the positive advancement of the sales ethics subculture.

Article 2 Summary The sales profession as a subculture: implications for ethical decision making

Due to the inconsistent results of individual and organizational factors in explaining the ethical behavior of salespeople, Bush et  al. (2017) conducted a qualitative field study to investigate the concept of a sales subculture. Based on the ASA framework as their theoretical foundation (Schneider 1975), the authors utilized ethnographic methods to understand the ‘subjective (emic) and cultural (etic) meaning of [human] behavior’ (Cayla and Arnould 2013, p. 2). This method answered calls by academic researchers to use alternative research methods rather than heavy reliance on survey research that has been prevalent especially in sales research (cf., McClaren 2013). The goal of the Bush et al. (2017) study was to seek out individuals with a great deal of sales experience who not only understood sales ethics but were intimate with the sales profession itself

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and willing to candidly discuss ethics. Veteran sales executives were asked about how salespeople develop their own code of ethics, how corporate codes of ethics play into the sales profession, and if a universal code of ethics potentially exists across the sales profession. The responses provide rich descriptions of ethical issues that pertain to themselves as well as the subculture of sales. In-depth interviews were conducted with experienced sales executives from 19 different marketing organizations. The interviewees had extensive experience in industries such as financial services, insurance, medical equipment, pharmaceuticals, telecommunications, packaging, and computer software. The average number of years spent in a sales position was 28.2. Cumulatively, the interviewees had over 535 years of sales experience. The average age of the executives was 57. Overall, the respondents in the study were quite passionate and frank in their responses about a sales subculture. Based on their extensive experience in sales, respondents believe that the sales profession is indeed its own subculture that learns and shares common ethical values beyond the walls of the organization. Three key themes emerged from the analysis of the interviews: integrity, reputation, and respect. Integrity. Sales executives explained that salespeople develop their own code of ethics based on personal values developed early in life, the corporate culture of the organization they work for, and the sales subculture. Most of the respondents mentioned peers both internal and external to their organization. And as a starting point salespeople learn about ethics by example from others (e.g., parents, teachers, supervisors, and sales managers). For example, as a senior executive mentioned, ‘ethics develops based on situations encountered throughout life … ethics is a code of conduct for any social interaction.’ Thus, the major theme emergent here was the personal integrity a salesperson brings to the job. A surprising finding was that less than a quarter of the respondents mentioned corporate culture in developing a code of ethics, instead tending to mention a combination of personal and on-the-job experience. Commonly referred to as the ‘nature or nurture’ dilemma, most respondents mentioned that salespeople bring their own value system to the job, which is subsequently adapted to the context of the sales subculture. One director of sales described learning ethical sales conduct thus: you bring your own rudder or compass of ethics with you on the job. Salespeople are in a unique position of having very little supervision … This

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tends to make all salespeople look to their peers for direction on what is acceptable and what is not.

The above certainly highlights the unique complexities of sales ethics formation. Reputation. The majority of the interviewees reported that they believe an unwritten universal code of ethics exists that salespeople follow because of their unique job demands. A director of sales stated: I think that there is a shared experience in that we are all doing the same kind of work, making the same pitches for the same type of customers, and this leads to an unspoken understanding that we don’t want to have a bad sales rep [among us].

This personal value system was themed as sales reputation. A number of respondents mentioned that no matter what one is selling, a salesperson’s personal reputation is the most important aspect and this reputation will follow salespeople to different organizations. Thus, there does appear to be a universal code of ethics across the sales profession’s subculture that salespeople adhere to regardless of where they work. Respect. The third theme that emerged was that of respect. Based on the open-ended question of whether salespeople need their own code of ethics or if corporate codes of ethics are enough to enhance ethical decision making, the respondents’ opinions were quite divisive. Most of the respondents stated that corporate codes of ethics are important but only beneficial for ‘legal’ and ‘measurable’ situations. For example, one interviewee mentioned the Sarbanes–Oxley Act for their work in financial services. Due to the unique nature of the sales job, several sales executives mentioned that corporate codes are important but do not always apply or are not interpreted the same by salespeople. Thus a separate code was suggested as necessary to foster respect. As one VP of sales mentioned: sellers are the most directly involved with a company’s customer base and represent the entire organization. Good or bad, they reflect the entire organization … an additional code for salespeople is needed because they are unsupervised … there’s no clock to punch. It’s a whole different way of working so you need a different set of rules.

Other respondents believed completely opposite and that a code of ethics was not necessary for two reasons: (1) their own integrity is enough for the job, and (2) the pervasiveness of a perceived lack

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of ethics in the sales profession. That is, respondents believed that if one brings one’s own integrity to the job, that is all that is needed. However, some respondents stated that the pressure to perform trumps ethics. Here, even if a salesperson brings a sound moral character to the job, it quickly ‘goes out the window in order to make a sale.’ The divisive nature of responses here demonstrates again that sales is a unique subculture. In sum, although individual and organizational factors contribute to a salesperson’s ethical behavior, many other factors outside the organization also shape a salesperson’s behavior via the sales subculture. The emergent themes of the Bush et al. (2017) study provide credence that a sales subculture indeed exists and that it values integrity, reputation, and respect. These findings have implications for how salespeople learn and are socialized into the selling profession to make ethical decisions.

Article 3 A new direction for sales ethics research: the sales ethics subculture

The final research (Ferrell et al. 2019) is a framework for understanding ethical decision making in selling and sales management. This framework has three goals: provide an understanding of existing research contributions; demonstrate the usefulness of different research streams in advancing sales ethics research; and delineate a foundation for critical evaluation and future research. Ethical conflict varies across situations and relationships with individuals that are subject to change over time, making it difficult for managers to fully understand the relationship between salesperson and client. Large accounts may create more ethical pressure on salespeople as management considers critical issues such as information sharing, trust, and reward systems conflicting with ethical decisions. Ethical issue intensity, the relevance or importance of an ethical issue, is included with organizational factors because managers influence the importance of ethical issues. Managers influence the organizational ethical culture through values, norms, and informal cues that identify ethical issues. Ethical issue intensity identifies one’s cognitive state of concern about the ethical issues identified by management. And, of course, supervision has a significant impact on sales force ethics. Management modifies its evaluation of ethical practices based on performance, with lower performing individuals punished more severely than high-performing individuals.

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An organization’s ethical culture and sales subculture have a significant effect on ethical decision making. Culture comprises an organization’s values, norms, and artifacts that result in problemsolving behavior. Subculture, or ethical climate, is a combination of member perception of ethical values and the behavior of members practiced in the organization. The most positive ethical environment can be formed if cultures promote deontological ethical behavior, organizational value systems are internalized, and ethics codes are easily accessible. A firm’s overall (organizational) culture establishes a group of behaviors/guidelines for use when organization members are confronted with an ethical dilemma. A firm’s ethical climate is the underlying acceptance of the organizational culture, and it deals specifically with what individuals feel is right or wrong. This climate also affects ethical intensity, which attributes a level of concern to ethical dilemmas. When faced with an ethical dilemma, the salesperson will tend to lean more heavily on a network of relationships rather than a set of rules. As a result, individuals in the network (managers, co-workers, etc.) have a significant effect on ethical decision making because their attitudes are reflected in the salesperson’s behavior. This phenomenon makes establishing a positive ethical climate very important. A sales activity is any effort used to develop a buyer–seller interchange. Some of these activities, such as aggressive sales pitches, deceptive sales tactics, and omitted information, can create ethical dilemmas and affect the view of stakeholders. Ethical issue intensity can be triggered by a number of sales activities, and the level of intensity varies from individual to individual. The ethical climate of an organization can be managed proactively by gauging the ‘fit’ of prospective employees. If an employee’s values and beliefs coincide with the organization’s values and beliefs, the ‘fit’ is positive. A positive fit will most likely result in a decreased potential for ethical misconduct. The ethical climate can also be managed through codes, compliance, policies, and supervision. When these practices include rewards, the potential for ethical misconduct can fluctuate depending upon what type of behavior is rewarded (i.e., ethical behavior rewarded, or unethical behavior rewarded).

THEORY AND CONCEPTUAL FOUNDATIONS TO SUPPORT SALES SUBCULTURE RESEARCH Cultural anthropologists have developed competing theories of culture. There are two main

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schools of thought that may relate to understanding the sales subculture. Firstly, culture may be viewed as a part of the social system or organizational culture. Other theorists believe it is a conceptually separate, ideational system (Allaire and Firsirotu 1984). These two schools of thought can challenge approaches to research and management of ethics in the subculture. If the subculture is ideational, this means it is based on thoughts and not immediately observable. This means the subculture is an abstract ideal that evolves without clear understanding of the forces that create it. It is viewed as independent of the social system or overall corporate culture in the case of the ethics subculture. The opposing view is that the subculture is part of a socio-cultural system of the organization. It is a product of the cultural system that it is associated with or it evolved from the larger culture. In other words, does the sales subculture evolve through its own shared symbols and meanings independent of the organizational culture? The alternative view would be that the sales subculture is a component of the social system or the organizational culture. If that is true, then it should be synchronic and diachronic (Allaire and Firsirotu 1984). Synchronic means that it happens synchronal or in step with the organizational culture. Diachronic would suggest that the subculture would change over time with the organizational culture. These two schools of thought from cultural anthropology provide an important theoretical foundation for future research. They also provide questions about management and control of the ethics subculture to advance ethical conduct. ‘Does the sales subculture develop independent of the organizational culture?’ This is an important research question. A dynamic view of organizational culture is that assumptions, values, artifacts, symbols, and processes are linked by manifestations, realization, symbolization, and interpretations (Hatch 1993). This cultural dynamics model provides a framework to investigate the dynamism of organizational cultures. Hatch (1993) believes that this model provides the framework for collecting and analyzing culture data to better understand the culture or subculture. The dynamic culture model represents culture as a wheel. The nature of the research question and methodology can determine how to empirically investigate the organizational culture. This view of the sales subculture should provide new opportunities to investigate the sales subculture to better understand its structure. Barnes et al. (2006) examined the role of cultural strength in shaping sales force outcomes. Their model of cultural strength was related to value strength and value congruity. The

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finding was that a salesperson in a strong culture is personally connected to the shared values the organization supports. Hatch’s (1993) theory of organizational dynamism establishes values as a major component of this dynamism. The values are reinforced by rituals, ceremonies, stories, and heroes to provide a supportive structure for salespersons (Barnes et al. 2006). This supports Hatch’s (1993) model of symbols and processes important to the subculture. A research gap and opportunity for research is to better explain the linkage of the shared values through manifestations, realization, symbolization, and interpretations. These elements could be related to role ambiguity and role conflict included in the Barnes et  al. (2006) model. This research would also support the theory that the sales subculture is a part of the social system and not ideational or based on thoughts or unobservable behaviors. However, it would not answer the question of whether the sales subculture evolves independently or synchronic and diachronic with the organization. In sum, these conceptual and theoretical frameworks provide support for the sales subculture being an important area that needs further research. The influence of a strong subculture would challenge the research that individual factors are the predominant determinate of sales ethics and other salesperson behaviors. The creation of a strong subculture has the potential to overwhelm individual differences. This perspective is supported in the Ferrell and Gresham (1985) model for ethical decision making in marketing. Therein, significant others including peers and managers were found to have more impact on ethical decisions than the individual’s own values. Many intriguing questions remain to be addressed in sales ethics subculture research.

ONE KEY OPPORTUNITY: MORE RESEARCH ON GENDER WITHIN THE SALES SUBCULTURE As the sales subculture has been theoretically and empirically established as a viable stream of research, future research could address a number of subcultural clusters within the sales profession. This could include type and level of sales job, industry, and demographics such as ethnicity and gender. For example, according to a recent Gartner Group study on women’s representation in sales, only 20% are department heads or managers (Blum 2018). More specifically, women represent 4 of 10 entry-level salespeople, 3 of 10 in middle management, and only 2 of 10 as department

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heads or managers. In other occupations, women represent at least 5 out of 10 leadership positions in finance, communication, customer service, and HR functions. This could indicate that women may not be well assimilated into the sales subculture. Additionally, women’s earnings in the sales profession are significantly lower than men’s. According to the US Bureau of Labor Statistics (BLS) (2017), of the top 10 occupations in which women’s median earnings as a percentage of men’s are the lowest, five have the word ‘sales’ in the job title: insurance sales agents (58% of men’s earnings), real estate brokers and sales agents (64%), securities, commodities, and financial services sales agents (65%), marketing and sales managers (66%), and sales representatives (69%). Again, this is an indication that the sales subculture may have values and norms that obstruct women from advancing in the sales profession. Regardless of gender, one of the biggest challenges for sales organizations continues to be finding qualified talent. Yet, women make up over half of the potential talent pool of college graduates in the USA (BLS 2017). According to the Harvard Business Review, women also possess critical leadership skills that are perceived as more effective across the board by their peers and managers (Zenger and Folkman 2019). However, when examining leadership positions in business (BLS 2017), the sales function has the biggest gender equity gap (19%), second only to supply chain/ logistics (17%). These statistics are disturbing given the vast amount of evidence that genderdiverse companies outperform those without such a balance (Dezsö and Ross 2012). Is there something inherent as a characteristic in the sales subculture that keeps women from advancing? As sales organizations face changing employee and customer demographics, supplier diversity legislation, and international trade competition, it would seem obvious that embracing diversity initiatives should be a high priority for the sales profession. Women possess characteristics highly valued in sales, such as the ability to build trust, nurture relationships, listen, and provide recommendations (Voria 2018). As the cost of hiring and training new salespeople continues to rise in a field that has historically experienced a high degree of turnover, studies have found that women have a significantly lower propensity to leave than men (Ladik et al. 2002). And strong evidence also suggests that the addition of women to previously all-male selling teams brings inherent benefits (Shoreibah et  al. 2019). Women have also been found to be more sensitive to ethical issues in sales (Lee et  al. 2018, O’Fallen and Butterfield 2005). All of this begs the question: Are women

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not advancing in sales because they are more ethical and less likely to bend the rules? As a profession, and as discussed herein, many have lamented over the years that sales is associated with a stereotypically negative connotation, the ‘used car salesperson’ who will do anything to make a sale. However, complicating this matter is typical sales job descriptions for recruiting. These descriptions tend to include masculine language such as ‘hunter,’ ‘aggressive,’ and ‘competitive.’ Some sales organizations even prefer candidates with competitive team sports experience (Voria 2018). This sort of profiling certainly may inhibit women from entering sales as a career. And then when they do choose sales, it appears that often they are not advancing at a comparable clip to the men. Combined with more stringent and transparent corporate policies on discrimination and the almost equal representation of women and men in entry-level sales jobs, it would appear that strategic initiatives toward gaining greater gender diversity in sales leadership would be the next logical step and may even provide a competitive advantage. An increase of female representation in sales management has the potential to increase performance, enhance ethical standards, and reduce turnover. Interestingly, given the common practice of heavy reliance on objective performance metrics in sales (i.e., ‘sales volume’), criteria for performance evaluation might be presumed to be unbiased when it comes to gender. However, for the moment it appears that in general a gender undercurrent remains. More specifically, the sales occupation is built on developing long-term mutually satisfying customer relationships. And the social aspect of building such relationships is a prominent part. Inherently, this social exchange goes beyond objective measures for performance to encompass more subjective behaviors. Here, deeply engrained gender stereotypes can impact the social exchange process, whether intended or not. For example, in one study of women in B2B sales, a female sales rep mentioned, ‘I didn’t play golf before I came to this company. But I figured out real fast. If I wanted to be in the loop on things, I’d better learn’ (Morgan and Martin 2006, p. 122). It thus appears that, in order to be successful in developing client relationships, women have to ‘play the game.’ And of course this can be an obstacle for women in sales: The biggest issue is the perception that men have a greater opportunity to connect with customers on a social level. I hear time and time again the unfortunate lament ‘Men can hang out after work at the pub, or play a round of golf. Women tend to have commitments at home that hamper their flexibility to participate in these gatherings.’ (Walton 2014).

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Finally, the fallout from the ‘me too’ sexual discrimination lawsuits may also create a divide between men and women. Men may not be inclusive in informal social events to avoid potential charges of misconduct. Future research from a subcultural perspective is badly needed in order to uncover why disparity continues to exist for women versus men in sales in terms of earnings, advancement, and inclusiveness.

CONCLUSIONS This review of existing knowledge about the sales ethics subculture synthesizes existing knowledge and provides foundations for future research. Herein, participants in three of the four articles that have examined the sales subculture in depth joined together as co-authors of this chapter to advance knowledge on this important topic. The goal was to provide an overview of conceptual and empirical research that addresses the sales ethics subculture and to promote extension of knowledge by advancing ideas for future research. Herein, we define culture and a subculture in more depth than previous sales ethics subculture articles. The subculture concept was developed in sociology to explain why certain groups engage in unethical or criminal behavior. Anthropology used the subculture concept to explain resistance to a larger group. A subculture has a tendency to form unique values, norms, and artifacts. In particular, the sales subculture has more opportunity to sustain deviance from the organization because it is often external and also tends to have less oversight from the organization than many other organizational units. This review also reinforces sales as a profession. This is important in order to differentiate sales as having a common body of knowledge and behavior. The field has unique job skills and experiences in the form of role conflict and role ambiguity. In addition, prior work reveals that individuals with certain tendencies are attracted to and selected into groups they identify as compatible. Then, they adapt their thoughts, attitudes, and behaviors to fit into that group or subculture. This pattern is no doubt robust in the sales profession. Individuals in subcultures use formal and informal values, norms, and artifacts to resolve ethical issues. The sales ethics subculture can have demands and reward structures that exacerbate the tendency for ethical misconduct. Informal exceptions to bend the rules may proliferate and managers can deliberately ignore misconduct tied to desirable personal rewards. Significant others or

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social networks can evolve with clues about how to bend the rules to achieve results. And organizational factors have been found to influence decisions more than individual factors such as age, education, gender, or moral philosophies. Finally, theories from sociology and anthropology herein can provide guidance and direction for exploring components of the sales subculture that could improve understanding and managerial implications for the ethical sales subculture. One school of thought from cultural anthropology views that subculture evolves from the social system or the organizational culture. Another viewpoint is that subcultures are independent without a clear understanding of the forces that created them. A dynamic view of organizational culture is that assumptions, values, symbols, and processes are limited by manifestations, realization, symbolization, and interpretations (Hatch 1993). Taken in sum, these theories provide highly valuable springboards for conducting research to better understand the sales ethics subculture. As one possible path, dynamic changes in the subculture related to gender provide an opportunity to learn more about why women are under-represented and potentially treated differently in sales roles. Given the central role of sales to organizational success, these compelling opportunities to advance research in the field deserve attention and offer the potential for multiple benefits to organizational performance.

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34 Ethics in Public Relations Peter Neijens

INTRODUCTION Ethical issues have long been a preoccupation of the public relations field (Jackson & Moloney, 2018). This is not surprising given the often conflicting interests between public relations professionals serving their clients on the one hand and other players in the field such as activist groups and critical journalists on the other, and the thin line between just communicating the view of a client and spin or propaganda. A vast majority of public relations professionals believe that public relations suffers from credibility issues, that ethics are important, and that they increasingly experience ethical challenges and dilemmas in their daily work (Lee & Cheng, 2012; Zerfass et  al., 2012). Ethical issues have become even more prominent since the introduction of the internet and the emergence of social media, which have launched new ethical challenges such as fake news, disguised persuasion, ghost authors, dealing with customer feedback, customer tracking through data mining, and privacy. Increased polarization and greater awareness of ethnical, racial, religious, and sexual identities have also contributed to the importance of ethics (Christians, 2007).

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Public relations – ‘the management of communication between an organization and its publics’ (Grunig & Hunt, 1984) – has many aspects and comes in various shapes and sizes. The field includes organizations as diverse as powerful (multinational) corporations, government bodies, unions, non-profit organizations, activist groups, and charity organizations. The strategic communication process covers monitoring information and (public) discussions, informing, engaging with and influencing stakeholders, and advocating organizations’ positions on (public) issues, often during crises and periods of change. Stakeholders range from government, political parties, the media, financial institutions, investors, suppliers, customers, and the general public, to employees and potential employees. A variety of names are used for (different aspects of) public relations, such as strategic communication, communication management, corporate communication, organizational communication, public affairs, stakeholder relations, issue management, press offices, and information officers. Although few will disagree with the general definition of public relations given above, agencies and associations place different emphasis on the different aspects of public relations. The field is characterized by ‘a wealth of different

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perspectives’ and paradigms (Ihlen & Verhoeven, 2012, p. 160). These perspectives range from focusing on understanding audiences’ attitudes and behaviors in order to better persuade them to serve society by helping organizations participate in the public sphere and serve the needs of stakeholders such as citizens (e.g., Grunig & Hunt, 1984; Heath & Coombs, 2006; Ihlen & Verhoeven, 2012). The different perspectives are associated with different ethical norms and practices. We will discuss these later in this chapter. Ethical issues in public relations have much in common with those in other marketing instruments, in part because the boundaries between public relations, advertising, and sponsorship have been blurred, and integrated marketing communication has become very important. Public relations and advertising professionals not only collaborate on campaigns, but also often work for the same agency and were classmates at school, which contributes to similarities in thinking and doing with regard to ethical decision making. This chapter aims to add insights into and knowledge about marketing ethics by focusing on the issues that are specifically discussed in relation to public relations. In line with the distinction between normative (what ought to be) versus positive (what is) ethics (Ferrell et al., 2013), we will discuss ethical norms and ethical practices respectively.

ETHICAL NORMS IN PUBLIC RELATIONS In this section we discuss ethical norms for ethical decision making, including ethical values and codes of ethics developed by public relations associations and agencies in different parts of the world, and how these are related to conceptions of public relations.

Ethical Values Ethical decision making ‘involves making rational choices between what is good and bad, between what is morally justifiable action and what is not’ (Patterson & Wilkins, 2005, p. 4), and should be based on ‘values, which are considered guiding principles in people’s lives’ (Schwartz, 1996, p. 2). These values can be based on religious, utilitarian, legalistic, political, human-nature, dialogical, feminist, and situational perspectives (Johannesen, Valde, & Whedbeed, 2008). The list of values that should guide ethical decision

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making in public relations which are derived from these perspectives is almost endless. To name a ‘few’: accountability, appreciation, authenticity, autonomy, care, caring (including the notion of avoiding unnecessary harm), citizenship (including the notions of obeying laws and protecting the environment), collaborative decision making, commitment, consistency, credibility, dialogue, dignity, disclosure, ethical leadership, equity, fairness, honesty, humility, impartiality, integrity, interdependence, listening, loyalty, mutuality, openness, professionalism, reciprocity, reliability, respect (for the persuader, for others, for privacy, for human rights), responsibility, responsiveness, social responsibility, transparency, trustworthiness, truthfulness (e.g., Baker, 1999; Baker & Martinson, 2001; Heath & Coombs, 2006; L’Etang, 2011; Schauster & Neill, 2017; Schwartz, 1996; 2005; St. John & Pearson, 2017). Specific values were proposed for using social media in public relations; Bowen (2013) developed 15 ethical guidelines. Some of them are quite general, others are more concrete, for instance: avoid deception, paid speech should be transparently identified as such, and personal speech must be clearly distinguished from speech that is representative of the organization (see also DiStaso & Bortree, 2014). More recent developments such as fake news and inappropriate use of automated communications have triggered a broad coalition of international and national public relations associations and agencies to install a task force to explore possible enhancements to their codes of ethics.1

Codes of Ethics Professional organizations such as the Public Relations Society of America (PRSA), the International Association of Business Communicators (IABC), the International Public Relations Association (IPRA), and the British Chartered Institute of Public Relations (CIPR) as well as individual public relations agencies, have developed codes of ethics, also referred to as codes of conduct, codes of practice, corporate credos, mission statements, or values statements (Ki & Kim, 2010). There are some minor differences in meaning between these labels (for details see Murphy, 2005), but they can all be defined as ‘a written, distinct, and formal document which consists of moral standards which help guide employee or corporate behaviors’ (Schwartz, 2005, p. 27) or as ‘written and formal documents intended to increase moral resistance in the organization and to guide corporate, employee and

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other stakeholders’ behavior’ (Babri, Davidson, & Helin, 2019, pp. 1–2). See for example https:// www.prsa.org/about/ethics/prsa-code-of-ethics showing the code of ethics of the largest public relations association, the Public Relations Society of America, which views ethics as an important building block in public relations (Lee & Cheng, 2012).

Codes of Ethics of Other Public Relations Associations Taylor and Yang (2015) studied the codes of ethics of 8 international and 33 national public relations (PR) associations across the world. Their study showed three core values in the codes of the international associations: professionalism, client’s interest, and advocacy. The codes of the 33 national associations had six core values in common: (1) professionalism (e.g., duty, practice), (2) advocacy (influencing public opinion), (3) moral standards (e.g., human rights, moral principles), (4) clients’ interests, (5) expertise, and (6) relationship building. The codes of the national associations, however, did differ as well in their emphasis on particular values. Taylor and Yang (2015) found five clusters of countries with similar codes. The cluster with the USA, for instance, highlights clients’ rights, professionalism, and relationship, while the ‘European’ cluster with Germany and Belgium underline advocacy and moral standards. The authors interpreted this difference as a distinction between an ‘organization-centric’ approach to ethics with a focus on the interests of clients versus a ‘societal’ approach that emphasizes duty to society and high moral standards.

Codes of Ethics of PR Agencies The codes of PR agencies showed the same variance in foci as were found in the codes of the different national associations. In the USA resultsoriented values are emphasized more than public interest values, as shown by the study of Ki and Kim (2010) (who studied the codes of about 1,500 PR agencies). More specifically, their study found that respect for clients, service, and results were the values most frequently accentuated. On the other hand, ‘balance,’ ‘fairness,’ ‘honor,’ ‘social responsibility,’ and ‘independence’ were the least frequently mentioned. In Norway, for instance, openness, loyalty, integrity, and credibility are the most important moral issues addressed by PR agencies’ codes (Brinkmann, 2002).

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Different Ethical Values, Different Conceptions of PR Differences between codes of ethics can be linked to differing views on PR, according to Yang, Taylor, and Saffer (2016). They argue that the focus on serving clients and professionalism is associated with a management approach dominant in the USA. Emphasizing advocacy and moral standards is associated with the ‘reflective paradigm’ popular in Europe. Europeans, or at least some PR academics, perceive PR as a social activity, serving society by helping organizations participate in the public sphere and serving the needs of citizens to engage with organizations open to debating competing ideas (Ihlen & Verhoeven, 2012), and ‘factual information and not propaganda or spin, is shared with the public’ (Yang et al., 2016, p. 149).

Pros and Cons of Ethical Codes Codes of ethics can serve several objectives other than ethical behavior (Kaptein & Schwartz, 2008), such as enhancing the reputation of a company (Bowie, 1990), preventing regulations and controls by authorities (Clark, 1980) and improving the work climate (Manley, 1991). On the other hand, several objections to codes of ethics are articulated, such as the use of meaningless rhetoric (Wright, 1993), too abstract and vague (Johannesen et  al., 2008). It is also stated that the detached absolutist tone of some codes may limit influence in everyday life (Bowden & Surma, 2003), that some values are conflicting – for example, transparency vs. confidentiality (L’Etang, 2011) – and enforcement is lacking (e.g., Wright, 1993). Some authors believe that the codes are ‘window dressing,’ only created with the intention of promoting an ethical appearance rather than preventing unethical behaviors (Ki & Kim, 2010).

Ethical Decision Making Ethical values are one thing, but how should these values be applied in ethical decision making? A distinction is made between rationalist-based and non-rationalist-based moral judgment processes. In the latter, intuition and emotion dominate (Schwartz, 2016). For rationalist processes – moral reasoning – PRSA’s Ethics Decision Making Guide2 proposes six steps: (a) define the specific ethical issue and/or conflict; (b) identify internal/external factors that may influence the decision; (c) identify key values; (d) identify the public who may be affected by the decision and

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define the PR professional’s obligation to each; (e) select ethical principles to guide the decisionmaking process; and (f) make a decision and justify. Other models distinguish similar steps (e.g., Rest, 1986; Wellington, 2009), including identification of the ethical problem, assessment of moral intensity, evaluation of alternatives, and implementation of the decision. ‘In general, a mechanism for justifying the decision with an appropriate rationale is added to the analysis and decisionmaking phases’ (Farmer, 2018, p. 4). This rationale specifies how the different ethical values at stake in a decision-making process are weighted to arrive at a conclusion (Farmer, 2018) which can be based on theories of behavioral decision making, for instance (Slovic, Fischhoff, & Lichtenstein, 1977).

Managing Ethics Three types of actors may play a role in the development and enforcement of ethical decision making and behavior. In the first place: legal authorities. In the USA, the Federal Trade Commission (https://www.ftc.gov) has administered a wide variety of consumer protection laws against unfair and deceptive acts or practices. In Europe, several EU directives and national laws safeguard the consumer from misleading advertising. The General Data Protection Regulation (GDPR) (https://gdpr.eu), for instance, is Europe’s data privacy and security law which has been in force since 2018. In the second place, selfregulation: professional organizations can regulate ethical behaviors through codes of conduct. And finally, agencies can enforce ethical behavior in their organizations through rules, procedures, training, and the role of management (Brinkmann, 2002; Johannesen et al., 2008). Ethical decision making and behavior of an organization require plans and activities. ‘Ethics management is the formal, systematic, and goaldirected development of activities to improve the ethics of an organization’ (Lee & Cheng, 2012, p. 92; see also Kaptein, 1998; Wieland, 2003), and includes not only written codes but also training programs, confidants, investigation of violations, punishments, and rewards (Lee & Cheng, 2012). Some authors argue that PR professionals should expand their role and act as the corporate conscience of the entire organization and provide ethical leadership in their organization (Bowen, 2004; 2008; Fitzpatrick & Gauthier, 2001; Neill, 2017; Neill & Drumwright, 2012; PRSA, 2010; Ryan & Martinson, 1983).

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ETHICAL PRACTICES IN PR In this section we discuss empirical studies of ethical practices in PR. We show how ethics, codes of ethics, ethical training, and other aspects of ethical management function in practice. We also examine PR professionals’ knowledge of and opinions on ethics, and how individual, organizational, and other variables influence ethical decision making.

Ethical Regulations and Training in PR Agencies Several studies have examined to what extent PR organizations have formulated or implemented codes of ethics and training. Although these studies were conducted in different years and in different countries, a general tentative conclusion is that less than half of the number of organizations have developed explicit statements for ethical decision making. For instance, Ki and Kim (2010), studying the codes of more than 1,500 PR agencies in the USA, found that 40% of these provided an ethical statement on their websites, the more so the larger and younger the companies. A little more than half of the PRSA members surveyed in the study of Lee and Cheng (2012) worked for organizations with a code of ethics. The adoption of guidelines for social media shows a similar pattern: a third of them about 400 US non-profit organizations in the study of Messner (2014) had written ethical guidelines for social media engagement, and a quarter had verbally provided guidelines. His study shows that the longer and more frequent an organization was active on social media, the more likely it was to have implemented ethical guidelines. Ethical guidelines are important, but ethical training is probably even more important for the implementation of ethical decision making. The survey among PRSA members by Lee and Cheng (2012), however, showed that more than 40% had not received any ethics instruction at all – neither in their education, nor through training courses later. These findings are in line with Bowen’s (2006) survey of about 2,000 professional communicators worldwide and the study by Toledano and Avidar (2016) among professionals in New Zealand and Israel: half of the former and three-quarters of the latter believed that they were not well trained to deal with ethical issues relating to communication on social media. Also, in their study of Fortune 1000 firms, Weaver, Trevino, and Cochranet (1999) conclude that ‘the vast majority of firms have

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committed to the low cost, possibly symbolic side of ethics management (e.g., adoption of ethics codes and policies, etc.). But firms differ substantially in their efforts to see that those policies or codes are actually put into practice’ (p. 283). Studies of ethical training offered in colleges and universities showed that only one-third of these offered independent ethics courses within the PR curriculum, and only 14% of the courses offered were PR-specific (international study by Austin & Toth, 2011). In her study of US curricula, Neill (2017) observed little attention to classical theories by philosophers, decision-making models, effects of organizational culture and values, raising ethical concerns, global perspectives on ethics, and PR’s role as ethical conscience and leadership. Some studies also found that not all PR professionals believe they are responsible for ethical practices. Some prefer to ‘pass the buck’ to other parties such as parents, peers, the media, clients (‘are smart’), regulators, and society at large (Drumwright & Murphy, 2004) or attorneys (Bowen, 2008).

Ethical Knowledge and Moral Development of PR Professionals Are PR professionals aware of and do they know the code of their organization or association? Schwartz (2001) studied 57 employees of four Canadian companies and found that almost all respondents were aware of the existence of the code. The study also found, however, that most respondents had never taken the time to read the entire document. Although respondents were able to recall at least a few key provisions, many had difficulty recalling what the code in fact dealt with. The European Communication Monitor 2012, a survey among more than 2,000 communications professionals in 42 European countries, showed that 93% think that ethical codes are important, but only a minority (29%) use ethical codes to solve moral issues, because they believe that typical codes of ethics provided by the PR profession are outdated today (Zerfass et al., 2012). The ethical abilities of PR professionals were also measured in several studies using the Defining Issues Test (DIT) developed by Rest (1979), which measures an individual’s moral development. Using this test, Coleman and Wilkins (2009) evaluated 118 PR professionals from a random sample of the 400 largest PR firms. Their study showed that PR professionals scored

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seventh highest among all professionals tested, not significantly different from nurses (6th), dental students (5th), and journalists (4th), but better than business professionals, for instance. No differences were found between managers and nonmanagers, nor between men and women. Another test for measuring ethical abilities is the so-called TARES test, which asks individuals to evaluate PR messages on five criteria: the truthfulness of the message, authenticity of the persuader, respect for the one being persuaded, equity of the appeal, and social responsibility (Baker & Martinson, 2001). In addition to general ethical knowledge and abilities, it is interesting to know which views professionals have on specific ethical issues. Toledano and Avidar (2015) found that a large majority (in New Zealand) and a small majority (in Israel) did not find it okay ‘to write comments on social media without a disclaimer about the sponsor that paid them to do it,’ and almost all considered it not okay ‘to pay for distributing rumors and negative messages about organizations that compete with their client.’ ‘Support for creating an activist group to support my employer or client’s interests and pay them to post their side of the story on social media’ is considered not done by 80% (New Zealand) and 50% (Israel) of PR professionals.

Corporate-Conscience Role The study by Bowen (2008) showed that many PR professionals indeed perform the role of ethics counsel or corporate conscience in their organizations. They believed that ethics was a natural part of their jobs. A majority of the PRSA members, in particular those with more experience, also felt quite strongly that PR professionals should play an important role in acting as the ethical conscience of the organization (PRSA, 2010). A study among 30 senior (at least 10 years of experience) PR professionals by Neill and Drumwright (2012) confirmed these findings: these senior professionals believed that they can, and do, play the role of the organizational conscience. Bowen (2008) and Neill and Weaver (2017), however, found that non-senior PR professionals do not feel prepared for this role. In the study by Bowen, the professionals expressed that this role was beyond their ‘professional responsibilities, abilities or training’ (p. 284). The Neill and Weaver study among 200 young professionals (Millennials) showed the same: they did not feel prepared to offer ethics counsel.

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Ethical Behavior of PR Professionals Despite their attention to ethical norms, PR professionals are regularly accused of unethical behaviors, such as manipulation (of consumers, stakeholders, publics, the general public, and the media), deception, lying, puffery, sophistry, pandering, bribery, covert lobbying, digital misconduct such as native advertising, fake news, artificially increasing the number of ad impressions (e.g., click fraud by bots), data mining that violates consumer privacy, paying bloggers, and overbilling clients, kickbacks, and paying under the table (L’Etang, 2011; Neijens & Smit, 2006; Schauster & Neill, 2017). In the words of St. John and Pearson (2017): Much to the chagrin of people who study ethics in depth and take seriously the view that ethical inquiry is important, ethics is often distorted or ignored by individuals or organizations seeking to achieve goals deemed more important, such as preserving or bolstering one’s reputation, making money, or gaining power. (p. xii)

Behavior that is actually unethical is by its very nature not easy to investigate by means of academic research. Indications for (un)ethical behavior were found in a study in the related field of advertising by Drumwright and Murphy (2004), who studied 29 agencies in eight US cities. Their study revealed three types of professionals: morally myopic professionals (who have difficulty in seeing ethical issues), morally mute professionals (who recognize ethical issues, but remain silent), and seeing/talking professionals who recognize ethical issues and talk about them inside the agency. ‘Almost without exception, the agencies in which the “seeing, talking” professionals worked appeared to have organizational cultures and climates that encouraged moral seeing and talking’ (Drumwright & Murphy, 2004, p. 15). The authors indicated that moral myopia or moral muteness is not unique to advertising or marketing. Other indications for (un)ethical behavior were revealed in Lee et al. (2014)’s content analysis of comments on the Facebook and Twitter accounts of Fortune 50 companies. The companies were almost always respectful to their consumers, but performed really poorly on truthfulness of the message, authenticity of the persuader, equity of the appeal, and social responsibility. McCorkindale’s study (2014) showed unethical behavior such as editing and removing negative comments on social media pages of Fortune 50 companies. Only 10% of the comments on the social media pages were negative. Indications

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were found that this small number was the result of corporations ‘sanitizing’ their pages.

Factors Influencing Ethical Practices Factors influencing ethical decision making in organizations can be grouped into three types (e.g., Brinkmann, 2002; Drumwright, 2019; Ferrell et  al., 2013; Ferrell & Gresham, 1985; Ford & Richardson, 1994; Hunt & Vitell, 1986; 2006; Trevino, 1986). Firstly, factors related to the individual decision maker, such as gender, age, religion, nationality, ego strength (power to resist pressures), strength of moral character, independence, locus of control, knowledge, moral development, ethical sensitivity, and organizational consciences. Secondly, organizational factors like supervisors, colleagues, corporate culture (‘the common set of assumptions, values, and beliefs shared by organizational members’ (Trevino, 1986, p. 611)), availability and enforcement of ethical codes, corporate policy (rewards and punishments), pressures of time, and type of issue. Thirdly, external factors including competition, country-specific political, economic, and social– cultural conditions, society, industry, and professional organizations. With respect to the individual factors, a review of the empirical literature by Ford and Richardson (1994) showed that personal attributes such as gender, age, education, religion, nationality, and employment background were found to be important in some studies, but not in others. Personality, beliefs, and values, in particular Machiavellianism, were important factors in all studies in which they were tested. The ‘Canadian’ study of Schwartz (2001) introduced above showed the importance of self-interest (i.e., greed, being a star, financial distress), dissatisfaction with one’s job, and level of reimbursement. Family upbringing was important in terms of knowledge about ethics for more than half of the PRSA members in the study of Lee and Cheng (2012). Canary (2007) showed that ethical education in college and universities helped students increase their moral-reasoning abilities. With respect to organizational factors, Kaptein and Schwartz (2008) reviewed 79 empirical studies on the effectiveness of ethical codes and found that the outcomes range from largely counterproductive, ineffective, often ineffective, insufficient, not enough, not very effective, uncertain, doubtful, little impact, less effective than their proponents think, to needed, necessary, valuable, vital, invaluable, effective (see p. 112). Their explanation for these divergent findings include the use

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of different definitions of key terms, deficiencies in the empirical data and methodologies used, and lack of theory. Kaptein and Schwartz (2008) pointed to the importance of characteristics of the code (ambition, scope, and whether the code is about values and beliefs, or rules and standards) and the implementation and update processes for (comparative studies on) the effectiveness of the codes. A substantial number of studies showed the importance of ‘significant others’ for ethical behavior in organizations: namely, supervisors, mentors, peers (Ford & Richardson, 1994; Lee & Cheng, 2012; Schwartz, 2001; Stevens, 2008). Organizational ethical climate and culture, training, and education were also found to be important (Bowen, 2004; Ford & Richardson, 1994). External factors such as clients, time pressure, public debate, the media, and critical journalism also influence ethical behavior in organizations (e.g., Brinkmann, 2002). Toledano and Avidar (2016) showed that PR ethics is linked to the culture and social environment in which professionals function; in particular, the ethical opinions of their PR respondents corresponded with their nations’ position on international ranking indexes of democratic values, freedoms, and transparency.

CONCLUSION The theoretical and empirical studies discussed in this chapter show that ethical values, ethical decision making, and ethical behavior are studied widely within public relations. Taken together, the studies reveal many aspects of how the field thinks about ethical norms and how they are applied in practice. We also notice some limitations and gaps in our current knowledge (see also Babri, Davidson, & Helin, 2019; Kaptein & Schwartz, 2008, for instance). Firstly, the contributions to our knowledge on this topic come mostly from American and European scholars, and are based on interviews and surveys of communications professionals in these regions. Secondly, the studies primarily use qualitative interviews and nonrepresentative surveys, also due to substantial non-response, which hinders generation of a representative picture. A third limitation is the focus on perceptions and opinions instead of real behavior. Fourthly, many empirical studies are descriptive and lack theory. Theories and causal models that include underlying individual and organizational processes, representative samples, behavioral data, as well

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as longitudinal studies are much needed to further improve our understanding of ethical decision making and behavior in public relations, and ways to improve these.

Notes 1 2

https://www.globalalliancepr.org/madrid-meeting, accessed January 25, 2020. https://www.prsa.org/docs/default-source/about/ ethics/ethics-case-studies/ethics-case-study-ethicaldesision-making-guide.pdf?sfvrsn=8a55268f_4, accessed January 15, 2020.

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Ethics in Public RElations

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longitudinal analysis. Journal of Business Ethics, 62, 183–189. Neijens, P. C., & Smit, E. G. (2006). Dutch public relations practitioners and journalists: Antagonists no more. Public Relations Review, 32 (3), 232–240. Neill, M. S. (2017). Ethics education in public relations: Differences between stand-alone ethics courses and an integrated approach. Journal of Media Ethics, 32(2), 118–131, DOI:10.1080/2373 6992.2017.1294019 Neill, M. S., & Drumwright, M. E. (2012). PR professionals as organizational conscience. Journal of Mass Media Ethics, 27(4), 220–234. DOI:10.1080/ 08900523.2012.746108 Neill, M. S., & Weaver, N. (2017). Silent & unprepared: Most millennial practitioners have not embraced role as ethical conscience. Public Relations Review, 43(2), 337–344. https://doi.org/ 10.1016/j.pubrev.2017.01.002 Patterson, P., & Wilkins, L. (2005). Media ethics: Issues and cases. New York: McGraw-Hill. PRSA (2010). Should PR leaders serve as the conscience of an organization? Public Relations Tactics, September 2010. https://apps.prsa.org/ Intelligence/Tactics/Articles/view/8777/1020/ Should_PR_leaders_serve_as_the_conscience_of_ an_or (Accessed January 22, 2020). Rest, J. R. (1979). Development in judging moral issues. Minneapolis: University of Minnesota Press. Rest, J. R. (1986). Moral development: Advances in research and theory. New York: Praeger. Ryan, M., & Martinson, D. L. (1983). The PR officer as corporate conscience. Public Relations Quarterly, 28(2), 20–23. Schauster, E., & Neill, M. (2017). Have the ethics changed? An examination of ethics in advertising and public relations agencies. Journal of Media Ethics, 32(1), 45–60. http://dx.doi.org/10.1080/23 736992.2016.1258993 Schwartz, M. (1996). Corporate compliance and ethical decision making in Canada. Corporate Conduct Quarterly, 5(1), 6–7, 17. Schwartz, M. (2001). The nature of the relationship between corporate codes of ethics and behaviour. Journal of Business Ethics, 32(3), 247–262. Schwartz, M. S. (2005). Universal moral values for corporate codes of ethics. Journal of Business Ethics, 59, 27–44. DOI:10.1007/s!0551-005-3403-2

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Schwartz, M. S. (2016). Ethical decision-making theory: An integrated approach. Journal of Media Ethics, 139, 755–776. https://doi.org/10.1007/ s10551-015-2886-8 Slovic, P., Fischhoff, B., & Lichtenstein, S. (1977). Behavioral decision theory. Annual Review of Psychology, 28(1), 1–39. St. John, B., & Pearson, Y. (2017). Crisis communication & crisis management: An ethical approach. Thousand Oaks, CA: Sage. Stevens, B. (2008). Corporate ethical codes: Effective instruments for influencing behavior. Journal of Business Ethics, 78, 601–609. DOI:10.1007/ sl0551-007-9370-z Taylor, M., & Yang, A. (2015). Have global ethical values emerged in the public relations industry? Evidence from national and international professional public relations associations. Journal of Business Ethics, 130(3), 543–555. Toledano, M., & Avidar, R. (2016). Public relations, ethics, and social media: A cross-national study of PR practitioners. Public Relations Review, 42, 161–169. Trevino, L. K. (1986). Ethical decision making in organizations: A person-situation interactionist model. Academy of Management Review, 11(3), 601–617. Weaver, G. R., Trevino, L. K., & Cochran, P. L. (1999). Corporate ethics practices in mid-1990s: An empirical study of Fortune 1000. Journal of Business Ethics, 18, 283–294. Wellington, A. (2009). List of decision making models. Toronto: Ryerson University. Wieland, J. (2003). Standards and audits for ethics management systems: The European perspective. New York: Springer. Wright, D. K. (1993). Enforcement dilemma: Voluntary nature of public relations codes. Public Relations Review, 19, 13–20. Yang, A., Taylor, M., & Saffer, A. J. (2016). Ethical convergence, divergence or communitas? An examination of public relations and journalism codes of ethics. Public Relations Review, 42, 146–160. Zerfass, A., Vercic, D., Verhoeven, P., Moreno, A., & Tench, R. (2012). European Communication Monitor 2012. Challenges and competencies for strategic communication: Results of an empirical survey in 42 countries. Brussels: EACD/EUPREA.

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Part VII

Concluding Comments and Reflections

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35 Ethics and New Media, A DoubleEdged Sword: A Case Study of Digital Marketing Transformation in the Charity Sector Brendan James Keegan and Lee Smorthit

A DELICATE (DIGITAL) ETHICAL DANCE From the early days, digital marketing involved a tenuous link between well-intentioned marketing practices and the utilisation of data which would creep into the realms of the unethical. Web design practices involved hiding text on pages to ensure search engine rankings for phrases which did not match the content. Email marketing campaigns would regularly capture addresses which were obtained unobtrusively. Search engine results pages are regularly manipulated by website owners to achieve higher rankings. Social media introduced a plethora of ethically questionable practices whereby highly sensitive user data is gathered to develop advertising personas. The list is endless. However, for the purposes of this chapter, two key areas where ethical issues are present are pertinent to the organisations in general and to the charity sector: namely, search engine marketing and website design. In doing so, the chapter will consider the most commonly known unethical practices and subsequent considerations for marketers employing them in their campaigns.

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SEARCH ENGINE MARKETING – BLACK HAT SEO Despite the widespread appreciation for the potential of digital channels, it is also accepted that nefarious practices are evident in digital marketing. Historically, the search engine optimisation (SEO) industry has been using such practices to gain better rankings on search engines for websites (Duk et al., 2013; Keegan and Taylor, 2019). These so-called ‘black hat’ techniques have seen some attention, yet are generally unknown by website owners who employ search engine marketing agencies. A common black hat technique involves keyword stuffing whereby the website owner inserts as many keywords and phrases into the text of a web page that have little connection with the content of the page, and thus will capture a wider range of search terms. Additionally, in inserting these keywords, another tactic is to present such erroneous phrases in white text on a white background. Another technique seen through empirical research suggests that doorway pages are also created to appear in search engine results pages, but redirect visitors elsewhere. Another common attempt to gain an unfair

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advantage over competitors in search engine results pages involves linking schemes of inbound and reciprocal links with newly created websites whose only purpose is to link back to a main site. These aforementioned techniques represent a significant aspect of unethical practices within the digital marketing industry, and are reported to be rife among digital marketing strategies (Keegan and Taylor, 2019). These practices are favoured by spam websites which are not looking for longterm successes and simply wish to gather large volumes of traffic in a short period of time. Websites discovered to be enacting black hat SEO will be severely punished and even excluded from the search engine, and result in significant penalties for the brand. Search engine marketing agencies representing clients have fallen foul of such techniques without being fully aware of breaking search engine violation (Keegan and Taylor, 2019). In such cases, the search engine provider would send a notification to the owner of the website explaining how they and their brand and website will not appear in results pages for a prescribed period of time and after unethical practices cease. Hence, the ethical connotations for engaging in such practices can result in a significant outcome for brands, their audiences and the long-term success of businesses.

the checkout. The user begins the journey believing the product is a fixed price and soon discovers this is not the case. Think of low-cost airlines as an example of this technique! • The Roach Motel – where the user journey is designed so that it is extremely difficult to perform the intended task. Hidden buttons are typical of this type of technique where it is impossible to click on anything but an advert link. • The Golden Snitch – where the site encourages the user to buy because a website might run out of product in stock or it creates a false sense of missing out. But it does it in a sneaky and harmless way by being just an impartial mediator. For example, the site may suggest that another customer has purchased your item and stock might run out soon. Think of hotel booking sites as an example. See UX Planet for more dark-side techniques (https://uxplanet.org/design-ethics-vs-darkside-ux-15a703870ec6). The formal penalties for deceptive website design are not as mature as search engine penalties; however, customers may feel the need to share their bad experiences on public forums, which may affect the brands’ reputation. A regular feature for brands that engage in such practices is the generation of a website created by disgruntled customers with a URL that begins with IHATE before the brand name.

DECEPTIVE WEBSITE DESIGN Essentially, the first format of online marketing, this is a key aspect of the digital marketers’ role, making sure there is a functioning site to support the brand. Hence, the construction, design and ongoing management of a website is pivotal to a digital marketing strategy. However, a litany of deceptive website design processes have been reported and identified which are designed to trick the user into achieving a specific goal (i.e. inadvertent sign-up to mailing list). Deceptive design is sometimes referred to as the dark-side of user experience design, whereby psychology is used to trick users to a point on the website which they did not intend to visit. Examples of dark-side techniques are as follows: • Bait and Switch – where the website promises one thing, but it turns out to be something completely different. This often happens when a website is hiding keywords on a site for something which is not relevant to its products/service to gain higher search engine ranking. • The Hidden Cost – where an e-commerce website applies costs to the purchase before the end of

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ETHICAL RESOLUTION In response to growing concern regarding unethical practices by the digital marketing industry, the General Data Protection Regulation (GDPR) was established in 2016. The GDPR is explicitly clear on the legal options for obtaining, storing and usage of customer data. These directives specifically affect the following digital marketing activities: collecting or acquiring personal data; building targeting profiles; executing campaigns through first- and third-party channels; and analysing user behaviour and campaign response to support decision making (Thomas, 2019). While these legal directives are designed to protect the consumer, the digital marketing industry sees them as significant impediments to targeting customers and developing campaigns. Indeed, it is reported that small to medium-sized organisations are the ones most likely to suffer as a results of GDPR and hence may adopt black hat approaches to cover such difficulties (Kelion, 2019). Increasingly, high-profile cases of use of paid media advertising

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for political events have tarnished the ethical stance of the mainstream social media platforms. In one landmark case, over 90 million Facebook profile pages were targeted with an application called ‘thisisyourdigitallife’ which collected personal information on users against their wishes (Cadwalladr and Graham-Harrison, 2018). Considering these exemplars of unethical practices, it is understandable why a charity would attempt to avoid association with practices that might undermine its reputation. In some cases the knock-on effect on the beneficiaries of the charity might also be affected by unethical practices (IBE, 2018). To investigate further, the authors conducted a series of interviews with marketing managers of UK charities to learn more of the state of play with digital adoption in the sector. In light of these recent events, the Fundraising Regulator has been established to (https://www.fundraisingregulator.org.uk/) control further the approaches charities use in communicating with customers. The Fundraising Preference Service offers a service which gives people the ability to control the nature and frequency of marketing communications that they receive from fundraising organisations. In doing so, the extent of regulations stipulate clearly how personal data is obtained, used and stored. Specific references to digital channels of communication are listed in the Code of Fundraising Practice (https://www.fundraisingregulator.org.u k/code/all-fundraising/processing-personal-data).

THE CHARITY SECTOR In 2019, there were 167,000 registered charities in the UK, acquiring an annual income of £76 billion (Charity Commission, 2018). One in five charities are reported to be struggling to survive due to financial stresses, with more than half seeing financial sustainability as paramount to endurance (Dudman, 2017). Further, charities are set to lose a minimum of £258 million from EU funding as a result of Brexit (Ferrell-Schweppenstedde, 2017). Most do not have the finances, nor the flexibility, to manage the operational tasks to react to these risks (Murray, 2017). As such, there is an ongoing debate about the application of sophisticated digital techniques to inform strategies using data to guide the actions of decision makers in reaction to these pressures (Stringfellow et al., 2019). Pressure to demonstrate return-on-investment (ROI) from any marketing activity is now an expectation from donors for charities to demonstrate their impact to ensure donations are used effectively (Bowman and Gimson, n.d.). Money

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For Good UK notes that donors care about the impact of charities (Corry, 2014) with 58% of mainstream and 61% of high-income donors paying close attention to impact when giving money (Simmonds, 2015). This is particularly troublesome given that most charities have a limited analysis of their impact (Bowman and Gibson, n.d.). Collectively, these macro factors demonstrate a practical need to investigate the charity sector’s usage of digital marketing to assess whether charities are in the right position to address these external concerns. Alongside these practical motivations, the scarcity of academic focus on the charity sector in relation to digital marketing provides additional incentives for the research. However, despite the ongoing adoption of digital marketing techniques, there are further questions to be answered regarding questionable practices that are being reported by mainstream media, such as the Cambridge Analytica scandal. Large-scale digital advertising campaigns are coming under more scrutiny for lacking transparency, inappropriate use of customer data and unethical targeting of customers (Camillo and Camillo, 2019). In considering these unsavoury elements of the digital marketing industry, it can be argued that a charity is faced with a conundrum regarding the adoption of digital techniques. While the strongest voice in the conversation suggests digital is the way to go, it can also be viewed as a double-edged sword by senior management teams in charities. To assist in the development of a digital marketing strategy, this chapter reports on findings from a small-scale study of marketing managers within the charity sector. A foundation for digital marketing in the not-for-profit industries is offered to assist future decision makers in the sector. Then the chapter will review the pertinent arguments in the literature that consider digital marketing strategy development in the charity sector.

DIGITAL MARKETING STRATEGY DEVELOPMENT While there is no consensus on a definition for digital marketing, some make reference to achieving objectives through the adoption of digital technology (Quinton, 2012; Chaffey and EllisChadwick, 2016). Kannan and Li (2017, p. 23) cite digital marketing as: ‘an adaptive, technology-enabled process by which firms collaborate with customers and partners to jointly create, communicate, deliver, and sustain value for all stakeholders’. Contrastingly, definitions for charity marketing are not that prevalent within the

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dialogue, as discussions focus on the outcomes of the campaigns. Instead, the lack of a definition for charity marketing, compared with the plethora of definitions for digital marketing, is reflective of the disproportionate knowledge between the two subjects, highlighting a need to focus on charities to cultivate a richer understanding of their behaviours and digital activities. Organisations have acknowledged the importance of digital touchpoints and have begun taking steps towards engaging with the digital-savvy consumer by becoming visible on website and social media platforms (Mintel, 2018). More universally, brands are using digital platforms as a means to market to their target audience, with digital advertising spend estimated at £12.4 billion in the UK alone (Mintel, 2018). The array of benefits that the digital space provides continues to incentivise businesses to endorse digital transformation as they look for new means of diversification, market penetration and expansion (Chaffey and Ellis-Chadwick, 2016). Of the many advantages of digital transformation reported, one recurring factor is the affordance it gives to new ways of understanding the customer through a wealth of online analytical tools (Gonzalez, 2017). On Google Analytics alone, there are 75 standard reports an organisation can create to track performance and understand consumer behaviour (Chaffey and Ellis-Chadwick, 2016). These metrics are said to be used to measure ROI, to optimise strategy and to help with budget planning, which are all argued to contribute to the effectiveness of an organisation (Gonzalez, 2017). Hence, it would be constructive for charities to develop their digital skills to uncover how these digital tools would assist the sector in its comprehension of the target segments and the development of appropriate digital touchpoints. The digital marketing literature stresses the significance of strategy development (Chaffey and Ellis-Chadwick, 2016; Saura, et al., 2017). Saura et al. (2017, p. 5) note that strategy encompasses ‘budgetary allocations … advertising and other actions intended to publicize [sic] the brand, the products and services offered’. They articulate that to understand ‘the effectiveness of digital marketing strategies’ one ‘requires the ability to analyze and measure their impact’ (Saura et  al., 2017, p. 5). The ability to strategise effectively is, arguably, an unfair expectation of charities as ‘analytical skills and technical skills’ are emphasised to be crucial for effective performance (Royle and Laing, 2014; Saura et al., 2017), yet the charities suffer from a depravity of these skills (Goatman and Lewis, 2007; Lloyds, 2017; Amar, 2018). Therefore, it would be useful to explore charities’ opinions towards digital strategy, assessing

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whether they are using metrics to underpin their strategy, and whether they grasp the importance of the benefits they provide in terms of usable data (Flores, 2013). In doing so, insights will highlight whether the importance of strategy, and the significance of data in relation to that strategy, are as pertinent to the charity sector as to for-profit organisations (Stringfellow et al., 2019).

DIGITAL TRANSFORMATION IN THE CHARITY SECTOR The opportunities that digital adoption provides have been acknowledged by charity groups as the ‘single biggest opportunity currently offered’ (Amar, 2018). While some plan to invest in digital platforms (Dudman, 2017), most refrain due to four key barriers: access, skills, confidence and motivation (UK Government, 2017). Even where appreciation of digital transformation exists, the lack of skills and confidence undermine an understanding of digital marketing (Amar, 2018). Alongside the lack of digital skills, which 31% of individuals considered a barrier to digital adoption, 9% noted ‘not worth the investment’ (Lloyds, 2017, p. 51) and a further 24% suggested ‘no time to set up’ (Lloyds, 2017, p. 51) as an additional barrier. Bennett (2014) sought to understand how 26 not-for-profit dance companies engaged in marketing activities following a reduction in income. Despite the limited scope of his study, due to a reliance on dance charities in particular, Bennett (2014) presented some helpful revelations, claiming that the investigated companies suffered from a lack of marketing expertise and resource, resulting in an over-reliance of personal judgement, which is echoed by Lloyds (2017) and Amar (2018). Notably, one recommendation by Bennett (2014) was an undeniable need for the measurement of any marketing activities, suggesting the need for an understanding of ROI and knowing where to market in order to attract new customers. Furthermore, Corry (2014) also acknowledges an organisational need to demonstrate ROI but does not provide any more insights into which metrics are appropriate in performing this task. The adoption of digital platforms by consumers has transformed the way in which customers are now behaving (Gilliland, 2018). This generated a need to understand these behaviours in order to align business practices with a view to increasing donations (Gilliland, 2018). The need to grasp a better understanding of the customers and their behaviours was noted as particularly important by Bennett (2014). Similarly, Shaw and White

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(1999) have their own notion of what is considered to be an important metric to measure, where ‘thoughts and feelings’ were noted as relevant (Shaw and White, 1999, cited in Bennett, 2007, p. 963). However, Shaw and White’s suggested taxonomy of metrics was supplied at a time when digital transformation was not as pertinent as it is in contemporary society. Thus, there is no reference to digital metrics and there is little discussion of how the digital metrics available should be used to understand the customer. The outdated nature of Shaw and White’s research is a weakness also suffered by Hems (1999), whose research discusses how to encourage charitable giving using marketing tactics – in a strictly offline environment. Bennett’s (2014) research revealed that it was primarily financial pressures that incentivised measurement, meaning financial metrics were emphasised, so it will be useful for our understanding of charity behaviours to see whether this is the case for charities in 2019. Bennett (2014) recognises the significance of measurement within the charity sector due to his earlier work on the use of marketing metrics by fundraising charities (Bennett, 2007). In this work, Bennett sought to understand which metrics were most useful when presenting to senior management and which were important when petitioning for greater marketing budgets. He noted that this information is needed as ‘charities are under increasing pressure to justify and account for their marketing expenditure’ (Bennett, 2007, p. 960). He stresses the value of brand equity, and what it can mean for the brand. The role of the brand and brand equity is pertinent to the charity sector as charities generally offer a service, rather than a commercial product (Chad, 2013). Given the inherent nature of services, in that they are not a tangible product, they are more difficult to market (Keller, 2013), and so effective branding of a service will allow a charity’s supporter to ground the service in reality, to ‘help identify and provide meaning to the different services’ (Keller, 2013, p. 42). Keller also notes the importance of having a succinct way to measure a brand to justify the expenditure dedicated to it, despite a lack of explicit ROI. The ongoing research will set out to uncover whether charities are looking at metrics around brand equity in order to analyse the perceptions about their services, which are argued to be necessary in order to justify the lack of an explicit ROI (Keller, 2013). Within the confines of the charity sector, Bennett (2007) comments that this can be measured in terms of behavioural responses to the brand and supplies metrics such as supporter lifetime value and awareness as key. His results found that there was little motivation to measure brand equity, which he feels is suggestive

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of the fact that value is not well recognised within the sector (Bennett, 2007). Intriguingly, it is noteworthy to see that equity and the perceptions of the customer are more valued in his later work (Bennett, 2014). Hence, it would be worthwhile to consider the relevance of brand equity for contemporary charities and assess whether it is a relevant theme for charities in 2019. Within the commercial field of digital marketing, and the principal point of this study, one topical area is the importance of measurement and its influence on organisations (Flores, 2013). This is articulated by Flores when he notes that: ‘you cannot manage what you cannot measure’ (p. 9). He stresses the need for measurement to contribute to the effectiveness of organisations, which is applicable for the charity sector given the pressures to demonstrate digital impact (Bowman and Gimson, n.d.). This need to measure is prescribed by Kannan and Li (2017) as due to the complexity of the digital space and the plethora of metrics that are produced by the various platforms, media and devices. In their work, these authors provide useful solutions regarding search engine practice and discussions about social media marketing (Kannan and Li, 2017). They reference the plethora of studies from a variety of backgrounds to validate their claims. For example, the authors present a set of metrics linking cost-per-click, conversion rate and click-through rate to the practice of conversion rate optimisation (Kannan and Li, 2017). This was used originally by Skiera and Nabout (2013) who used an algorithm to demonstrate a 21% increase in ROI for both the client and an agency (Skiera and Nabout, 2013, cited in Kannan and Li, 2017). However, the study was conducted with one client and an agency which often have established teams and resources – an environment unlike that of charity organisations (Lloyds, 2017). Questions can be raised about the relevancy of their work, as it may not be likely that they are engaging with high levels of digital marketing given the level of digital illiteracy articulated by Lloyds (2017). This constraint applies to the work of Flores (2013) too, where the focus of his research is restricted to marketing agencies and research companies that do not face such challenges as lack of funding and limited resources (Everett, 2017). What is needed is a thorough understanding of the ways in which charities perceive measurement and what their approaches are to deal with the complexities of analytics. This deeper understanding is necessary to create a conceptual framework which is in line with the ways charities would like to measure their online activity. The renowned lack of a marketing-metric consensus was also the conclusion of Bruni et al. (2017, p. 344) who established that a comprehensive

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marketing dashboard is not prevalent in the majority of their sample with one interviewer noting that ‘the market is changing so rapidly that we are trying to collect as much data as possible’. Several interviewees commented that they were unsure which metrics to include, with a lack of competencies and internal processes highlighted as barriers (Bruni et  al., 2017). This is important as the research undertaken by Lamberti and Noci (2010) identified that the use of marketing performance systems and tools varied depending on the size of the company. For some of the interviewees, the lack of formalised marketing performance standards was due to the cost of implementing a complex measurement system and the inability to measure what performances they would like (Lamberti and Noci, 2010). Larger companies in the sample invested in this formalisation process over time, and thus it was more structured and organised (Lamberti and Noci, 2010). While the appropriateness of the research to the UK charity sector should not be overinflated given the fact that the research was conducted across one industry in one country, namely the tourism industry in Italy (Bruni et al., 2017), the barriers identified are synonymous with those of the charity sector (Lloyds, 2017). The significance of this work should therefore intrigue charity organisations and incentivise research into measurement more thoroughly to provide an opportunity to create a sense of consistency in metric adoption and usage. It will be useful to explore how applicable the work of Lamberti and Noci (2010) was to the charity sector in 2018. The research should assess what current measurement behaviours exist, and what charities have come to expect in terms of measurement systems. Any prevailing insights will inform the conceptual framework, improving its relevancy for the charity sector. Saura et  al. (2017) have produced a contemporary piece of work on the digital marketing environment, and the key performance indicators (KPIs) needed to understand it thoroughly. Their work was necessary given the lack of ‘consensus in the digital marketing ecosystem about which particular metrics are most useful’ (Saura et al., 2017, p. 7). Their research primarily looks at selecting metrics to demonstrate ROI, which is appropriate for the charity industry given the pressures to prove how its marketing efforts are being effective (Bowman and Gibson, n.d.). Despite its relevancy, the metrics are strictly financial and are not suitable for understanding customer and brand equity, which are becoming increasingly important (Bennett, 2014). Ewing (2009, p. 103) stresses this in his work, noting that an over-reliance on financial metrics would be detrimental as alone it is ‘no silver bullet’. He suggests that understanding more qualitative metrics such as ‘share of heart’ is

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as important as ‘share of customer’ (Ewing, 2009, p. 103). It would be useful to uncover the significance of these qualitative forms of metrics for the charity industry, to see how relevant they are for the charity sector. It is these unanswered questions that justify the need for this research in order to consolidate our understanding of the intricacies of charity behaviours in relation to measurement. What is important is identified by Saura et  al. (2017) who conclude with the fact that the digital space is continuously evolving, with new technologies emerging and new internet-based demands needing to be met. They argue that academic research into measurement needs to be constant and reflective of the more current developments in the field (Saura et al., 2017). This reinforces the justification for understanding digital marketing measurement within the confines of the charity sector as it is important for charities to cater for the new needs in order to meet demands and stay in touch with the modern audience. Spiller and Tuten (2015) divulge the complex world of digital marketing measurement, which they regard as requiring the tools to quantify marketing activities in order to understand performance. Their work focuses on integrating digital measurement into marketing education which in turn reveals how metrics can be used at each stage of the buyer journey (Spiller and Tuten, 2015). Such an overview of metrics is useful for any organisation, yet questions are raised about its relevancy as charities do not necessarily adhere to the same buyer journey as experienced by the commercial sector (Gilliland, 2018). Alternatively, Paton (2003) offers a framework designed to support the measurement of impact within the charity industry. Yet this author relies on the case study of Health Rights International (HRI) which has an annual budget of $5 million (Paton, 2003), as the basis for his work. This is less useful for small charity organisations that make up a ‘significant part’ (Everett, 2017, n.d.) of that sector due to the lack of resources noted above. Consequently, it is clear that there is a need to conduct research in the proposed field in order to comprehend digital experiences for a wider range of charities in the sector. Järvinen and Karjaluoto (2015) make digital marketing measurement the central point of their study, as they look to understand how metrics are used to understand performance within the industrial sector. The result of this study provides insightful contributions to the field, as their in-depth analysis allowed for discussions about the effects on the quality of the measurement including: skill depravity, managerial issues and organisational culture (Järvinen and Karjaluoto, 2015). However, despite their usefulness for the commercial industry, the results produced stem

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from a study conducted with three industrial organisations, all of which have unique challenges such as a ‘long-lasting selling process’, which inhibits generalisability of the results to the charity sector (Järvinen and Karjaluoto, 2015, p. 119). The ability to apply the results to charities is further hindered by the fact that they face distinctive customer behaviour challenges produced by an inherent lack of trust (Kashif et al., 2015), which are incomparable with the industrial sector. Thus, there is an opportunity, through research, to produce results that will improve our knowledge of the charity sector in order to create metric frameworks that are more aligned with the sector’s needs. Next, the chapter will briefly outline the methodology before discussing the findings.

METHODOLOGY Semi-structured interviews with 12 UK marketing managers in the charity sector were conducted. Each expert was selected based upon the proviso that they were responsible for some degree of digital marketing activity within their role and thus were in a position to comment upon the adoption of digital transformation. Participants are indicated below using an anonymous code (Bravo, Foxtrot, etc.). Data was analysed using thematic analysis (Braun and Clarke, 2006). Codes were applied to the interview transcripts and were analysed in order to identify relationships or patterns which can be used to draw conclusions.

FINDINGS: ETHICAL DIGITAL TRANSFORMATION OF THE CHARITY SECTOR Digital Marketing Strategy Development All participants have experienced some level of digital commitment, irrespective of the level in which charities have undertaken digital transformation or are in the process of investing in new platforms and digital systems. Evidently, given the overwhelming adoption of digital processes, the attractiveness of digital transformation articulated by various authors (Chaffey and Ellis-Chadwick, 2016; Gonzalez, 2017; Gilliland, 2018) has indeed resonated with the charity sector. The consideration of digital transformation as a potential solution for the needs of the sector is mirrored by participant Bravo:

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We have noticed a gap in digital service delivery. So, we feel that we could be delivering more for people who live with, or are affected by, ***. It is likely that following the website project we will focus on that. We do not know what kind of platform that might be. It could be an app, it could be something different – I’m just speculating at the moment.

This opinion supports Kaufman and Horton (2015), by confirming that charities are adapting the ways in which they offer solutions and consider digital implementation as a worthwhile resolution for charity demands. However, the findings highlight a clear disparity between organisations, with charities polarised in their opinions about the usefulness of digital transformation. On the one hand, there are organisations that are classified as large by the NCVO (2012) where ‘everything we do is digitally orientated’ (Foxtrot). For these larger organisations, there was the experience that the charity was confident with using a range of digital marketing formats. Golf noted that: ‘We have an agency called *** that we partner with, who we do our media buying with and who do our digital accounts. They do our PPC work and manage our paid for Facebook ads.’ Lloyds (2017) note this disparity in digital experiences as a key issue that ‘plagues the charity sector’, whereas Mangles (2018) also showed that charities that do invest in digital transformation show positive digital transformation and justify investment in the platform. For those who warranted digital transformation as a viable and appropriate solution for development, the key advantage is the ability to test new ideas and platforms. Golf suggested: ‘we can test so many different things, so that gives us such a huge advantage to make sure that we’re able to ensure that our channels are working the best way that we can’. Alpha explained how ‘we’re trying to build our communication channels. We have YouTube now, to try and bring in more video based content.’ Whereas, for the majority of participants interviewed, their level of confidence in digital adoption is low, which seems to be in agreement with Gilliland (2018), Lloyds (2017) and Kannan and Li (2017), participants acknowledge that: ‘In terms of digital, we are not very advanced’ (Delta), stressing that: ‘We do what we can, when we can’ (Hotel). Hotel is also quite sceptical of digital transformation, articulating that: ‘We have relatively low expectations that have been met. We haven’t seen a massive change’; Hotel’s reserved opinions about digital transformation are not reinforced by any other interviewee. Golf indicates that in its charity there is still a lot to be desired in

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terms of digital adoption as it does not ‘challenge the performance of traditional, or direct marketing’. It would appear that, from conversations with participants, the benefits of digital transformation have not overwhelmingly influenced the charity sector as Amar (2018) indicated. Given the findings above, it would be misleading to suggest that digital transformation is fundamental for all of the participating charities. The mainstream opinion of the participants stressed the value of traditional marketing, stating ‘there is still a big part to play for offline and direct marketing. It’s not going anywhere quickly’ (Bravo). Other participants commented on the value of tradition in developing their comprehension of their target audience and their ability to nurture their relationships with customers. While there is recognition about the ways in which digital websites can ‘carry on that relationship’ (Alpha), it does not compensate for the ability of traditional to ‘replace those one-to-one conversations’ (Foxtrot). Findings begin to contest the works of Gonzalez (2017) and his stress on the ability of digital platforms to provide a richer understanding of customers. In this context, the perceived value of traditional marketing, and not necessarily skills (Royle and Laing, 2014), is impeding the utility of the various digital tools available online. Another factor which deters digital adoption is ‘budgets for digital end up being quite small or simply pockets of money that are left over’ (Charlie). Additionally, Hotel commented on how ‘the jury is still out on what the turnout is in terms of financial reward’, making it difficult to justify an increase on digital spend. Hence, the findings in this area begin to contest the works of Gonzalez (2017) and Mangles (2018) who suggest that an increase in advertising spend by commercial organisations does not translate to the charity sector. Furthermore, the topic of strategy was a major question in the interview process due to the frequency of strategy within the digital marketing literature (Flores, 2013; Chaffey and Ellis-Chadwick, 2016, Saunders et  al., 2016, Saura et  al., 2017). Skills were noted as essential to making efficacious strategic decisions (Saura et al., 2017), which arguably presents problems for charities as they are said to lack digital skills (Goatman and Lewis, 2007; Lloyds, 2017; Amar, 2018). It appears that the charity sector’s most common approach to a digital strategy is that: ‘We do [have a strategy]’, however, ‘how formulated that is, is questionable’ (Echo). This is reiterated by another participant who states that ‘we do know what each platform is for without formalising it’ (Foxtrot). Only one of the participants was consciously using data within its strategy, as a means to ‘inform future marketing much more easily’ (India). This emphasises the work of Saura

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et al. (2017) by showing that their suggested use of digital analytics is likely to be advantageous to the charity sector, but most lack a digital strategy. Amar (2018), Lloyds (2017) and Goatman and Lewis (2007) are quick to point out that the dearth of digital skills is the main challenge for charities’ lack of digital adoption. Findings indicate that charities are lacking in digital skills, and also are reticent to invest in these platforms.

Digital Inhibitors in Charity Marketing With regards to the factors that are inhibiting digital transformation, the UK Government (2017) identified four barriers including: access, skills, confidence and motivation. Similarly, the Lloyds 2017 Business Index noted that 9% of those surveyed felt that digital transformation was ‘not worth the investment’ (Lloyds, 2017, participants noted that the lack of digital skills was ‘simply acknowledged within our sector’ (Echo), reiterating Royle and Laing (2014) who asserted the significance of skills as a hindrance to digital adoption. However, this was not the case for all participants, reflected positively on their digital transition: I think a lot of the time you don’t need specialist skills. We are not very advanced, particularly in terms of fundraising. But, what we do, even though we are very limited in the skills we have in the organisation, we do manage to achieve something. (Charlie)

This indicated that charities are becoming more comfortable with the digital space in contrast to Lloyds (2017). From conversations with participants, the two most prolific inhibitors to digital adoption stressed were reluctance to change and senior leadership decisions. In the former, where digital transformation had become significant and influential, there were teams of people who were ‘willing to try and use it’ even if they ‘don’t understand something’ (Delta). However, some charities’ teams are not completely on board with the digital transformation. This was the experience expressed by India who they stated that: There is a new culture of being brave and trying new things. You’ve got an organisation that has got staff that work in all different departments and specialisms, where digital may not be part of their day to day work. Like any change can be quite frightening for people. They may not get what it means. There’s obviously plenty of people at work to bring everyone up to speed. The new website is part of bringing everyone on this journey of efficiency.

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With the latter, the senior management team seemed essential for the maturity of digital transformation within the charity organisation in question. This was most concisely summarised by Foxtrot: I noticed the difference in opinion to digital as we progressed to a new CEO. The emphasis on digital changed due to the CEO and their previous experience.

While skills assuredly have an influence on charities when exercising their digital platforms and services, there are additional, more pressing factors that begin to provide examples to the barriers articulated by Lloyds (2017). Although charities appreciated the need to demonstrate ROI for their marketing efforts, the majority of participants failed to elaborate upon ROI when it came to digital activities. As Foxtrot quoted: ‘If someone questioned the time we spent on their social media, we’d be struggling to answer them.’ Another commented that ‘we paid for X, which we think resulted in this profit’ (Delta). It certainly seems that participants struggled to elaborate upon ROI in financial terms. However, the participants were quick to note that, for them, the social impact they are having on the ground would constitute their interpretation of ROI. Following their acknowledgement about the difficulty in demonstrating ROI, Delta highlighted that: Our ROI would be the amount of funding that we bring in and what we do with that. So, the number of volunteer hours, coaching hours, those kinds of things rather than cost. So, it is important that we show the benefit we are having on the ground.

Hence, an intriguing finding shows a contrast to financial ROI for digital activities and there was more attention dedicated to providing ‘[digital] services that are useful and that people can access them’ (Alpha). These findings provide greater insight into the opinions and behaviours of charities, and add depth to the work of those who invested in the research of the charity sector (Corry, 2014; Simmonds, 2015) as well as a contrast between the perceived need to demonstrate ROI by scholars (Bennett, 2014; Corry, 2014; Saura et  al., 2017). Arguably, the drive to show genuine societal impact through their online behaviours is the primary goal of using digital technology, matching donor expectations (Simmonds, 2015). As Charlie puts it: As a charity, you want the metrics that show ‘this is the good impact we’re doing as an organisation’. But you can’t forget about the sales metric that will help you bring money in to do the good stuff.

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Charities also expressed a desire to use digital technology to gain a deeper understanding of customers’ behaviour. For the majority, it was a case of ‘looking at people’s comments and how they are feeling about stuff’ (Bravo). These findings are significant as they reveal that the works of Bennett (2014), Ewing (2009), and their suggestions to measure more sentimental data that is reflective of the demands of the charity sector. In addition, thoughts and feelings were mentioned in conjunction with brand equity. This (brand equity) was the foundation of Bennett’s (2007) work, in which it was regarded as unimportant by charities during the time of writing. Predominantly, comments regarding the brand were scarce, and those who did contextualise it noted that it was ‘something we are going to start looking at’ (Foxtrot). However, for one participant, Echo, brand equity was cited as ‘crucial … It is absolutely crucial’ as the ‘charity sector has lost a lot of trust’. Given the lack of focus on brand equity within the third sector, charities have yet to use measurement to find out how the consumer is specifically viewing the organisation, meaning that there is an opportunity to help suggest metrics which can fill this void. Indeed, the predominant response in relation to metrics was often that they were too complex. This was the experience of Alpha: A manager and I were going to sit down and get our heads around Google Analytics. She did some of the online tutorials. She sat there going ‘what’, looking at me bemused. These digital people are speaking to people on a different level. When we’re using it a tinier amount of the time when we are trying to frantically pull some reports.

This view was reinforced by Golf, who was seemingly very digitally confident, when the participant stated that: ‘marketing nowadays is extremely focused on all kinds of data and digital caters to those types of marketers’. Arguably, while the existing measurement systems are advantageous to those commercial entities who have the skills, resources and time to utilise them effectively (Lloyds, 2017), charities are being alienated as it is collating ‘too much data’ (Bravo), meaning that they are ‘probably not using it to its full potential because there is so much there’ (Foxtrot). It is obvious that charity sectors are being overlooked in terms of digital technologies in this manner, reinforcing the view of Kannan and Li (2017), who state that they are less relevant for the charity industry. These findings reveal that a lack of appreciation and understanding of the charity sectors means that digital solutions are being created without their consideration. One such example of digital solutions is the elaboration of the customer journey. Participants’

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knowledge of a typical customer journey was notably absent from the conversations. As Bravo says: ‘we have everything, we really need to join up the dots to see what is most effective. That would be a great final step.’ Whereas others have slightly more advanced views on the customer journey: ‘It is not absolutely clear which actions result in donations to the charity. We can measure how many likes or shares, and things like that, but it is not clear that results in a financial benefit’ (Hotel). Accordingly, Saura et  al.’s (2017) work may have positive implications for the charity sector, as it provides a selection of KPIs that can be used to show the overarching financial impact of digital activities. This, coupled with the works of Spiller and Tuten (2015), display a comprehensive measurement system that would provide a complete set of metrics for tracking ROI. However, it is important to note that the metrics presented by Spiller and Tuten (2015) and Saura et al. (2017) do not consider consciously the social impact discussed previously. Lastly, one participant commented on how its digital measurement will be improved following greater digital transformation. Echo claimed: We wont get our digital stuff right until we implement a proper CRM system and membership portal, which we’re implementing which will give us an indication into who is engaging with us, where they came from and why.

This reveals the potential for charities that invest in digital platforms and tools and the benefits for them.. While this may seem obvious, charities are fundamentally lagging behind commercial entities in terms of digital progression, and yet there is the expectation that charities should be measuring to the same capacity as other sectors. The evidence demonstrates that digital marketing supported by effective measurement can be appropriate tools for improving their services.

Summary and the Development of the Conceptual Framework The construction of the conceptual framework stemmed directly from the analysis process, designed as a means of addressing the gaps in knowledge, by creating a matrix which could be adopted by charities and referenced when creating digital solutions for their needs. With regards to digital transformation, the analysis revealed that charities which have a positive experience with digital transformation are more likely to experiment and take advantage of the flexibility that digital platforms provide. This shifted away from

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the archetypal justifications for digital adoption such as efficiency as cited by Saura et al. (2017) and Royle and Laing (2014). Subsequently, the ability to test new ideas is noted in the framework as a justification for digital transformation, and a topic which should be measured in order to assess what is, and what is not, working. However, it is important to note that the study highlighted how an inherent lack of digital adoption fundamentally hinders an ability to measure effectively. As discussed in the report, while this may seem like an obvious consequence, charities are still pressured into being able to justify their digital activity, without the necessary tools to do so. The argument is put forth that charities need the right level of digital investment before this expectation can be fulfilled, and the literature needs to focus more heavily on digital transformation for charities in order to facilitate this change. Within the findings, participants explicated that they lacked any coherent or formulaic approach to digital strategy, and instead understood their strategic direction without necessarily noting it down. This finding began to disrupt the status quo in terms of how important strategy is perceived within commercial circles in correlation with the charity sector (Chaffey and Ellis-Chadwick, 2016; Saunders et al., 2016). As such, the framework references the need to develop a digital direction to address the lack of strategy within charity circles. The impact of digital transformation on the changing experiences of digital budgets was a talking point of the findings. It was evident that charities generally lacked sufficient budgetary allocations for their online activity. This extended to a need for metrics that show ROI in order to further justify their digital activity and improve digital budgets. This need for ROI has played a key role in both the literature (Gonzalez, 2017; Mangles, 2018) and with the construction of the framework, and is a recommended metric as it can help justify the financial benefits of digital adoption. Additionally, the significance of understanding the customer was desired by the participants. Overwhelmingly, participants held traditional marketing in high esteem, and felt that digital platforms are not as effective in building relationships with customers. What this revealed was that, while authors such as Bennett (2014) and Ewing (2009) were relevant within the charity context, it still required clear digital metrics which could be used to provide a greater understanding of the customer and thus validate the digital approach as viable to form deeper relationships. Moreover, and as an annex to the desire to understand the customer, the research divulged that charities are more frequently looking at brand equity. Here, updates were made to Bennett’s (2007) work, showing that metrics

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surrounding brand equity are more important to charities today than in 2007. As such, the framework has been designed to include brand equity, in order to appease the demands of the charity sector. More extensively, within the group of participants there was a desire to comprehend the full customer journey in order to see the process between digital activity and, ultimately, the ROI. Thus, the customer pillar will have two attached sub-pillars: thoughts and feelings and customer journey; these are recommended in order to further satisfy the requirements of the participating charities. With respect to impact, and the typical ROI, charities stressed their ambitions to ensure they understand their social impact. This focus shifted dependence on showing ROI in a financial sense as suggested by Bennett (2014), Corry (2014) and Saura et al. (2017), and led to a recommendation that metrics that are able to demonstrate social impact should be created and successively implemented by charities. Therefore, social impact holds a key position within the framework. This framework has been constructed in order to more holistically produce a matrix that can be utilised by charities in order to compensate for two prevalent digital inhibitors. Following the analysis of the findings, revelations were made regarding the key inhibitors within the third sector that limit the transformation of charity spaces into digitalsavvy epicentres. The findings endorsed the work of Lloyds (2017) and Goatman and Lewis (2007), by clarifying that the lack of skills within the sector are naturally going to impede digital development. However, the research provided new, alternative reasoning as to why charities may be lagging behind commercial entities, including: a reluctance to change, and the whims of the senior teams. The motivation for a framework such

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as the one presented in this research is needed more than ever to help evidence and thus demonstrate the sheer impact that digital transformation can have on charity organisations to incentivise change among those who are less willing, or those who hold authority. Lastly, with respect to the way in which charities or agencies should lay out their metric frameworks, the data analysis process revealed that charities are often overwhelmed by digital frameworks, and feel that they are designed in a complex and overwhelming fashion. As such, the framework recommends that the metric matrices adopted and used by charities should be simple, straightforward and focused on the aforementioned metric pillars supplied to meet the requirements of charities (see Figure 35.1).

CONCLUSIONS The chapter has established how the lack of digital adoption fundamentally hinders charities’ ability to recruit customers. Despite increasing investment in digital platforms by a wide range of sectors (Dudman, 2017; Gilliland, 2018; Mangles, 2018) there is little focus on how charities have adapted to digital change. The financial and competitive advantages of digital marketing are explored (Chad, 2013; Chaffey and Ellis-Chadwick, 2016; Mintel, 2018), yet the understanding of charity motivations for digital adoption have yet to be discussed at length. Specifically, the role of measurement, which is noted to be as extremely relevant in commercial circles (Flores, 2013), is sorely lacking from conversations within a charity context. Where

Digital transformation Why metrics? • Test new ideas • Justify digital adoption • Inform strategy and amend • Influence budget allocation Framework aesthetic + structure • Not too complex • Focus on fundamentals • Simple is best

Figure 35.1

Metric pillars Customer: • Thoughts and feelings • Customer journey Social impact ROI (financial) Brand equity

In order to address the: Identified digital inhibitors • Reluctance to change • Senior leadership team • Skills and ability

Charity measurement framework

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discussions around this topic do exist, the subjects of ROI (Bennett, 2014; Corry, 2014; Saura et al., 2017), brand equity (Bennett, 2007; Keller, 2013) and customer-centric metrics (Ewing, 2009) are particularly prevalent. Subsequently, what future research needs to explore is charity behaviours around measurement, to assess what they are undertaking, and what motivators drive these decisions. As a result, this chapter calls for more research in exposing the inhibiting factors to digital transformation, and to demonstrate whether charities are efficaciously using measurement to drive their digital marketing activities.

REFERENCES Amar, Z. (2018). Are We at a Tipping Point in Charity Digital? [Online]. Thirdsector.co.uk. [Accessed 8 May 2018]. Available at: https://www.thirdsector. co.uk/zoe-amar-tipping-point-charity-digital/digital/article/1457220 Bennett, R. (2007). The Use of Marketing Metrics by British Fundraising Charities: A Survey of Current Practice. Journal of Marketing Management, Volume 23, Issue 9–10, pp. 959–989. Bennett, R. (2014). How Small Charities Formulate Marketing Responses to Major Reductions in Income: A Study of Nonprofit Comtemporary Dance Companies. Qualitative Market Research: An International Journal, Volume 17, Issue 1, pp. 58–76. Bowman, J. and Gimson, D. (n.d.). A time for more change? Allowing charities to Be Fit for the Future. [Online] PwC. [Accessed 8 May 2018]. Available at: https://www.pwc.co.uk/industries/charities/ insights/a-time-for-more-change.html Braun, V. and Clarke, V. (2006). Using Thematic Analysis in Psychology. Qualitative Research in Psychology, Volume 3, Issue 2, pp. 77–101. Bruni, A., Cassia, F. and Magno, F. (2017). Marketing Performance Measurement in Hotels, Travel Agencies and Tour Operators: A Study of Current Practices. Current Issues in Tourism, Volume 20, Issue 4, pp. 339–345. Cadwalladr, C. and Graham-Harrison, E. (2018). Revealed: 50 Million Facebook Profiles Harvested for Cambridge Analytica in Major Data Breach. Guardian. [18th March 2018] 17, p. 22. Camillo, I. C. and Camillo, A. A. (2019). Strategic Managerial Communication in the Digital Era: Implications for Ethical-Unethical Behavior. In Handbook of Research on Strategic Communication, Leadership, and Conflict Management in Modern Organizations (pp. 360–389). Hershey, PA: IGI Global. Chad, P. (2013). Extending the Use of Marketing Orientation: Transforming a Charity into a

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Business. Australasian Marketing Journal, Volume 21, Issue 1, pp. 10–16. Chaffey, D. and Ellis-Chadwick, F. (2016). Digital Marketing: Strategy, Implementation and Practice, Sixth Edition. Harlow: Pearson Education. Charity Commission (2019) Charity Commission annual report and accounts 2018 to 2019. [Online] Gov.UK. [Accessed 8 May 2019] Available at: https://www.gov.uk/government/publications/ charity-commission-annual-report-and-accounts2018-to-2019 Corry, D. (2014). In the Charity Sector, Impact is Everything. [Online] Guardian. [Accessed 8 May 2018]. Available at: https://www.theguardian. com/voluntary-sector-network/2014/feb/24/ charity-impact-measurement-results-outcomes Dudman, J. (2017). One in Five UK Charities ‘Struggling to survive’. [Online] Guardian. [Accessed 8 May 2018]. Available at: https://www.theguardian.com/voluntary-sector-network/2017/feb/28/ one-in-five-uk-charities-struggling-to-survive Duk, S., Bjelobrk, D. and Čarapina, M. (2013, May). SEO in E-Commerce: Balancing Between White and Black Hat Methods. In 36th International Convention on Information and Communication Technology, Electronics and Microelectronics (MIPRO) (pp. 390–395). IEEE. Everett, C. (2017). How Apps and Tech Are Transforming the Way Charities Raise Money. [Online]. Guardian. [Accessed 9 May 2018]. Available at: https:// www.theguardian.com/society/2017/jun/28/ digital-technology-apps-charity-sector-fundraising Ewing, M. T. (2009). Integrated Marketing Communications Measurement and Evaluation. Journal of Marketing Communications, Volume 15, Issue 3, pp. 103–117. Ferrell-Schweppenstedde, D. (2017). UK Charities Will Lose £258m of EU Money after Brexit: Where’s the Plan? [Online]. Guardian. [Accessed 8 May 2018]. Available at: https://www.theguardian.com/voluntary-sector-network/2017/dec/07/ charities-lose-at-least-258m-after-brexit-no-government-strategy Flores, L. (2013). How to Measure Digital Marketing: Metrics for Assessing Impact and Designing Success. Basingstoke: Palgrave Macmillan. Gilliland, N. (2018). Six Charities with excellent online donation user journeys. [online]. Econsultancy. [Accessed 21 Aug. 2018]. Available at: https://www. econsultancy.com/blog/69412-six-charities-withexcellent-online-donation-user-journeys Goatman, A. K. and Lewis, B. R. (2007). Charity E-volution? An Evaluation of the Attitudes of UK Charities Towards Website Adoption and Use. International Journal of Nonprofit and Voluntary Sector Marketing, Volume 12, Issue 1, pp. 33–45. Gonzalez, M. (2017). Why Everyone Needs a Digital Marketing Plan. [Online]. Forbes.com. [Accessed

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9 May 2018]. Available at: https://www.forbes.com/ sites/forbesagencycouncil/2017/12/18/whyeveryone-needs-a-digital-marketing-plan/ #6051743826a5 Hems, L. (1999). Marketing Charity – The Challenge to Increase Individual Charitable Giving. International Journal of Nonprofit and Voluntary Sector Marketing, Volume 4, Issue 2, pp. 100–104. IBE (2018). Ethics in the Charity Sector, Business Ethics Briefing. [Online]. https://www.ibe.org.uk/ userassets/briefings/ibe_briefing_63_ethics_in_ the_charity_sector.pdf Järvinen, J. and Karjaluoto, H. (2015). The Use of Web Analytics for Digital Marketing Performance Measurement. Industrial Marketing Management, Volume 50, pp. 117–127. Kannan, P. K. and Li, H. (2017). Digital Marketing: A Framework, Review and Research Agenda. International Journal of Research in Marketing, Volume 41, Issue 1, pp. 22–45. Kashif, M., Syamsulang, S. and Hassan, A. (2015). Charity Donation: Intentions and Behaviour. Marketing Intelligence & Planning, Volume 33, Issue 1, pp. 90–102. Kaufman, I. and Horton, C. (2015). Digital Marketing: Integrating Strategy and Tactics with Values. New York: Routledge. Keegan, B. J. and Taylor, J. (2019). ‘Are You Local (SEO)? Understanding the Challenges of Local SEO Strategies. Journal of Digital and Social Media Marketing, Volume 7, Issue 3, pp. 1–11. Kelion, L. (2019). Black Hat: GDPR Privacy Law Exploited to Reveal Personal Data. BBC News, 8 August. Keller, K. L. (2013). Strategic Brand Management: Building, Measuring and Managing Brand Equity. Harlow: Pearson Education. Lamberti, L. and Noci, G. (2010). Marketing Strategy and Marketing Performance Measurement System: Exploring the Relationship. European Management Journal, Volume 28, pp. 139–152. Lloyds (2017). UK Business Digital Index 2017 – Business Resource Centre. [Online]. Resources.lloydsbank.com. [Accessed 8 May 2018]. Available at: http://resources.lloydsbank.com/insight/ukbusiness-digital-index/ Mangles, C. (2018). 100+ must-see digital marketing research statistics for 2018 Smart Insights. [online] Smart Insights. [Accessed 9 May 2018]. Available at: https://www.smartinsights.com/digitalmarketing-strategy/100-must-see-marketing-stats/ Mintel (2018). Digital Advertising – UK – May 2018. [Online]. Mintel. [Accessed 27 June 2018]. Available at: http://academic.mintel.com.ezproxy.mmu. ac.uk/display/859065/

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Murray, G. (2017). Times are Tough for Charities. That’s Why Strategy Is More Vital Than Ever. [Online]. Guardian. [Accessed 8 May 2018]. Available at: https://www.theguardian.com/voluntarysector-network/2017/dec/29/charities-rights k i l l s - s u c c e s s - c h a n g e - 2 0 1 8 - p ro f e s s i o n a l development NCVO (2016). UK Civil Society Almanac 2012/What do we mean by the voluntary sector? [Online]. Data.ncvo.org.uk. [Accessed 29 May 2018]. Available at: https://data.ncvo.org.uk/a/almanac12/ what-do-we-mean-by-the-voluntary-sector/ Paton, R. (2003). Managing and Measuring Social Enterprises. London: Sage. Quinton, S. (2012). Missing a Strategic Marketing Trick? The Use of Online Social Networks by UK Charities. International Journal of Nonprofit and Voluntary Sector Marketing, Volume 18, Issue 1, pp. 36–51. Royle, J. and Laing, A. (2014). The Digital Marketing Skills Gap: Developing a Digital Marketer Model For the Communication Industries. International Journal of Information Management, Volume 34, Issue 2, pp. 65–73. Saunders, M., Lewis, P. and Thornhill, A. (2016). Research Methods for Business Students, Seventh Edition. [e-book]. Harlow: Pearson Education. Saura, J. R., Palos-Sánchez, P. and Suárez, L. M. C. (2017). Understanding the Digital Marketing Environment with KPIs and Web Analytics. Future Internet, Volume 9, Issue 4, pp. 1–13. Simmonds, C. (2015). Proving Your Impact: What Funders Want from Charities. [Online]. Guardian. [Accessed 8 May 2018]. Available at: https://www. theguardian.com/society-professionals/2015/ nov/04/impact-funders-charities-foundationsmeasurement Spiller, L. and Tuten, T. (2015). Integrating Metrics Across the Marketing Curriculum: The Digital and Social Media Opportunity. Journal of Marketing Education, Volume 32, Issue 2, pp. 114–126. Stringfellow, R., Keegan, B. and Rowley, J. (2019). The Use of Facebook in the Recruitment of Foster Carers: A Dialogic Analysis. Journal of Public Affairs, e1869. Thomas, I. (2019). The Impact of the General Data Protection Regulation on Digital Marketing and Analytics. Applied Marketing Analytics, Volume 4, Issue 3, pp. 194–205. UK Government (2017). 2. Digital Skills and Inclusion Giving Everyone Access to the Digital Skills They Need. [Online]. GOV.UK. [Accessed 8 May 2018]. Available at: https://www.gov.uk/government/publications/uk-digital-strategy/2-digital-skills-andinclusion-giving-everyone-access-to-the-digital-skillsthey-need

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36 Marketing Ethics and Regulation of Marketing Activity: The Role of Government and Industry Lynne Eagle, Stephan Dahl, Patrick De Pelsmacker a n d C h a r l e s R . Ta y l o r

INTRODUCTION In this chapter, we examine the complex and often tense relationship between marketing and society. We note the range of criticisms levelled at the ethical stance of sectors of the marketing industry and examine the role of overarching legislation and industry-specific regulation in governing marketing activity. The industry’s response to these measures is often far from exemplary, ranging from organisations with a significant focus on lobbying to ‘defend’ the right to advertise through lip service paid to self-regulatory codes and active avoidance of the use of communications platforms that are explicitly regulated. We note, however, that a fairly robust self-regulatory system operates in many (but not all) countries to ensure ethical behaviour across industry members.

CONSUMER PROTECTION LEGISLATION The marketing industry in most countries is governed by numerous overarching consumer protection laws that apply to all sectors of society. Examples of these, together with their key provisions, are shown in Table 36.1. We stress that all

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forms of self-regulation and ethical guidelines that are discussed in later sections operate under the aegis of legislation such as these. We do not intend to provide a detailed list of all relevant legislation, but have provided examples of the key provisions of legislation across various regions.

SOCIAL ACCEPTANCE AND SOCIAL LICENCE TO OPERATE De Pelsmacker, Geuens and Van den Bergh (2020) note long-standing scepticism regarding marketers’ claims for their products and services and the potential impact of activity perceived by some sectors of markets as offensive. A growing body of research indicates that consumers are more cynical and thus less tolerant of marketers who mislead and also of marketers whose production may have harmful impacts on the environment, as was seen in the successful lobbying, led by Greenpeace, against companies such as Nestlé for sourcing palm oil from non-sustainable sources (see e.g. Coombs, 2014). It would appear that there is an implicit expectation that organisations will be able to demonstrate that they have a ‘social licence to operate’

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Table 36.1

Examples of consumer protection legislation

Country/ region

Legislation

Australia

The Competition and Consumer Act 2010

Key provisions (taken directly from the organisation’s websites)

‘is a national law that regulates fair trading in Australia and governs how all businesses in Australia must deal with their customers, competitors and suppliers. The Act promotes fair trading between competitors while also ensuring that consumers are treated fairly. The Australian Competition and Consumer Commission (ACCC) administers and enforces the Act along with state and territory regulators The Act broadly covers: unfair market practices, industry codes, mergers and acquisitions of companies, product safety, collective bargaining, product labelling, price monitoring, industry regulation – airports, electricity, gas, telecommunications’ European Unfair Commercial ‘The objective of the new EU rules on unfair commercial Union Practices Directive practices from 2005 was to boost consumer confidence (EU wide, adopted and make it easier for businesses, especially small and into legislation in medium-sized enterprises, to trade across borders. EU member countries rules on unfair commercial practices enable national such as the UK) enforcers to curb a broad range of unfair business practices. Examples of unfair business practices include untruthful information to consumers or aggressive marketing techniques to influence their choices’ New Zealand Fair Trading Act – ‘Purpose (originally released (1) The purpose of this Act is to contribute to a trading in 1986, but with environment in which – regular updates (a) the interests of consumers are protected; and since that time) (b) businesses compete effectively; and (c) consumers and businesses participate confidently (2) To this end, the Act – (a) prohibits certain unfair conduct and practices in relation to trade; and (b) promotes fair conduct and practices in relation to trade; and (c) provides for the disclosure of consumer information relating to the supply of goods and services; and (d) promotes safety in respect of goods and services’ USA The Federal Trade Purpose of FTC Act: Created the Federal Trade Commission Commission and enforcement body over deceptive Act (1914) and marketing practices and makes ‘unfair methods Wheeler Lea of competition … and unfair or deceptive acts or Amendment practices in or affecting commerce’ unlawful (1938) Purpose of the Wheeler Lea Amendment was to amend Section 5 of the Federal Trade Commission Act to proscribe ‘unfair or deceptive practices’ as well as ‘unfair methods of competition’. Made provisions for civil penalties for violations of Section 5 and deemed that deception alone (even if not deemed unfair) could be restricted by the FTC Until this amendment was passed, the FTC could only restrict practices that were unfair to competitors. This broadened the FTC’s powers to include protection for consumers from false advertising practices.[3]

499

Web link Details at: https://www.business. gov.au/products-andservices/fair-trading/ fair-trading-laws

Details at: https:// ec.europa.eu/info/law/ law-topic/consumers/ unfair-commercialpractices-law/ unfair-commercialpractices-directive_en

Act details at:http://www. legislation.govt.nz/ act/public/1986/0121/ latest/DLM5836703. html

(Continued)

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Table 36.1

(Continued)

Country/ region

Legislation

Key provisions (taken directly from the organisation’s websites)

Lanham Act

The Lanham Act, passed in 1946, was designed to From https://www.law. develop a system of trademark protection that cornell.edu/wex/ protects a trademark owner from the use of similar lanham_act marks and reduces the possibility of consumer confusion. To be eligible for a trademark, a mark must be in use in commerce and must be distinctive The Lanham Act defines a trademark as a mark used in commerce, or registered with a bona fide intent to use it in commerce. See 15 USC § 1127. If a mark is not in use in commerce at the time the application for registration is filed, registration may still be permitted if the applicant establishes, in writing, a good faith intent to use the mark in commerce at a future date. See 15 USC § 1051. Under Lanham Act registration procedures, exclusive rights to a trademark are awarded to the first to use it in commerce The US Food and Drug Administration’s mission is to https://www.fda.gov/ ‘be responsible for protecting the public health by nutrition-labellingensuring the safety, efficacy, and security of human and-education-actand veterinary drugs, biological products, and nlea-requirementsmedical devices; and by ensuring the safety of our attachment-1 nation’s food supply, cosmetics, and products that emit radiation’. In addition to approving new ethical drugs, the FDA regulates information provided on packages of food, drug, and tobacco products. The FDA oversees enforcement of the Nutrition Labeling and Education Act of 1990. The NLEA allows the FDA to require nutrition labelling of most foods the agency regulates and to promulgate and enforce nutrition content claims (e.g., low fat) The FDA also contains the Center for Tobacco Products, which was set up as a result of the Family Smoking Prevention and Tobacco Control Act of 2009 in order to monitor and enforce regulation of tobacco products. In addition, the FDA is responsible for regulation of prescription drug advertising In addition to EU Regulations, which are incorporated into German law, Germany has no overarching legal text covering all aspects of consumer protection. Rather, some basic aspects are dealt with in the civil code (Bürgerliches Gesetzbuch). Some specific aspects, such as restricted or sensitive goods, have their own laws or ordinances. These include the Law on Foodstuffs, Consumer Goods and Animalfeed (Lebensmittel-, Bedarfsgegenstände- und Futtermittelgesetzbuch), the Temporary Tobacco Act (Vorläufiges Tabakgesetz), the Law Against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb) or the Cosmetics Ordinance (Kosmetik-Verordnung)

The Food and Drug Administration

Germany

Bürgerliches Gesetzbuch

Web link

(Continued)

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501

Table 36.1

(Continued)

Country/ region

Legislation

Key provisions (taken directly from the organisation’s websites)

France

Consumer Act (Code de la Consumation)

Spain

Ley general para la defensa de los consumidores y usuarios (LGDCU)

The Consumer Act (Code de la Consumation/loi https://www.legifrance. Consumation) provides the main fundament for gouv.fr/affichCode.d French consumer protection law, dealing with o?cidTexte=LEGITEX issues such as fraud and falsifications, misleading T000006069565&da advertising and failure to comply with the rules on teTexte=20200219 credit. Contrary to other countries, French law allows for criminal as well as civil penalties to be applied As a member country of the EU, EU Regulations https://www. are incorporated by national and autonomous boe.es/eli/es/ parliaments into the appropriate legislation, the rdlg/2007/11/16/1/ most important of which is the Law for the Defence con of Consumers and Users (LGDCU). The LGDCU details the general right to consumer protection enshrined in the Spanish constitution (articles 51 (1) and (2)). Because of the devolved administration within Spain, regulations may vary from autonomous community to autonomous community with additional regulations based on local regulations

(SLO). This term originated within the resource extraction sector in relation to environmental impacts, and the agricultural sector in relation to water use (Hall, Lacey, Carr-Cornish, & Dowd, 2015; Paragreen & Woodley, 2013; Shepheard & Martin, 2008). While there is some criticism of the lack of precision in SLO definitions, there is consensus that it reflects community acceptance of a specific project, such as windfarms as part of global moves towards renewable energy (Hall, Hicks, Lane, & Wood, 2019). It appears to also now be extending to the textile industry (Walters & Gozin’a, 2019). Ethical aspects of this sector are examined in detail Chapter 23, Consumer and Marketing Ethics: A Case of the Fashion Industry.

INDUSTRY RESPONSE TO CURRENT AND POTENTIAL FUTURE LEGISLATION In relation to marketing communication, the industry has long held the position that if a product is legal to sell, it should be legal to advertise, even for potentially harmful products such as tobacco and alcohol (Blakeney & McKeough, 1984; Carr-Gregg & Gray, 1990; Eagle, Bulmer, De Bruin, & Kitchen, 2006). Somewhat naively, a second argument long put forward by the industry in relation to advertising to children proposes that ‘advertising is a fact of life and the sooner children become familiar with it and learn to treat it with the scepticism it sometimes demands, the better equipped they will be to face adult life’ (Eagle, Bulmer, de Bruin, & Kitchen, 2005).

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Web link

Societal pressure and government policy development indicate a lack of acceptance of the industry’s stance and its lack of recognition of potential harm. While the marketing of products that may potentially harm is examined in detail in the next chapter, we now provide some examples of the specific regulatory challenges as they relate to some product categories, specifically tobacco, alcohol and marketing to children.

Tobacco Over time, increasing restrictions have been placed on tobacco promotion, culminating in total bans in some countries (Hiilamo & Glantz, 2017). The tobacco industry in particular has a long history of evading restrictions by developing promotional activity outside of mass media, using digital platforms, especially Internet-based social media platforms such as Facebook and YouTube that are far less tightly regulated than traditional mass media (Elkin, Thomson, & Wilson, 2010; Ribisl & Jo, 2012).

Alcohol Within the alcohol sector, there have been repeated calls for increased prices to restrain demand (Sharma, Sinha, & Vandenberg, 2017). There are also concerns that restricted access and higher prices may trigger substitution effects whereby alcohol consumption may fall but be replaced by an

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increase in the use of illicit drugs (Granger & Price, 2016). This is an area where there is a clear need for trans-disciplinary research to inform the development of effective policy and regulatory action. The alcohol industry takes the stance that it is being socially responsible in its marketing and that it deserves credit for some of its initiatives. This has been criticised as merely providing ‘the illusion of righteousness’ (Yoon & Lam, 2013, p. 630). The use of drinking moderation messages is seen as an illustration of this, given that they do not require any substantial change to ongoing marketing strategies and tactics (Baggott, 2010). Warning labels are also criticised as also being a largely symbolic strategy, requiring minimal change in marketing activity in return for positive public relations value in claiming responsiveness to societal concerns (Jessop & Wade, 2008). More seriously, warnings on labels and via mass media may in fact be counter-productive, producing ‘unintended effects that are the opposite of what was intended due to a combination of defiance, denial and peer pressure (Shorey-Fennell & Magnan, 2019), that is reactance to attempts to ‘control’ behaviour (Ringold, 2008). Unfortunately research-based recommendations regarding strategies to improve the effectiveness of warning messages appear to have been ignored by both industry and policy makers (Armitage & Arden, 2016; Hassan & Shiu, 2018).

Children and Obesity Advertising to children has also been increasingly restricted, with calls for increased restrictions (Boyland & Tatlow-Golden, 2017). Increasing levels of obesity worldwide have led to more recent focus on whether advertising of foods deemed to have low nutritional value (high in sugar, fat and/or salt) (Hardy, 2013) should be subject to more restrictions than currently exist, or outright bans. The industry’s response to date has largely centred around the establishment of the Children’s Food and Beverage Initiative (CFBAI). This organisation has been subject to considerable criticism with claims that marketers who had pledged to abide by the CFBAI guidelines were repeatedly breaching it (Campbell, 2016). Further, it has been noted that the CFBAI guidelines are not consistent with the World Health Organization’s Nutrient Profile Standards (Wootan, Almy, Ugalde, & Kaminski, 2019). Thus, many have called for a stronger enforcement mechanism than currently exists and for more consistent guidelines across organisations.

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REGULATION IN THE DIGITAL AGE Enforcing regulations across the industry is increasingly difficult (Nicholls, 2012) due to the proliferation of communications platforms and a lack of a precise definition of what constitutes advertising or marketing communication, in the digital age. For example, mobile phone apps (van Noort & van Reijmersdal, 2019), advergames (Dahl, Eagle, & Báez, 2009; Quilliam, Lee, Cole, & Mikyoung, 2011), product placements, and other forms of advertising integrated in content (for instance, native ads on social media) now proliferate across a range of platforms (for a detailed critique of this latter sector, see Eagle & Dahl, 2018). Additionally, it has been observed that there are frequent references to alcohol consumption in popular music (Primack, Nuzzo, Rice, & Sargent, 2012) and movies (Gosselt, Van Hoof, & Kokkeler, 2018; Mejia et  al., 2019). Similarly, one study showed that 75% of top-rated US TV shows featured alcohol use (Brown & Bobkowski, 2011). Thus, concerns about appropriate portrayals of alcohol consumption persist. Similarly, smoking portrayals in entertainment media such as movies are another area of concern, especially in relation to young people (Dalton et al., 2009). These portrayals are seen by some as normalising tobacco use and portraying smoking as aspirational behaviour (Leonardi-Bee, Nderi, & Britton, 2016). It has been suggested that there is a policy vacuum regarding Internet-based promotional activity that should be addressed to ensure that the intent of the WHO Framework Convention on Tobacco Control (FCTC), which aims to reduce the demand for tobacco products and relevant legislation and regulation, is applied to all communications channels (Elkin et  al., 2010). Note that the FCTC is a Treaty which has been signed by 168 countries (https://www.who.int/fctc/text_download/en/).

INDUSTRY LOBBYING ORGANISATIONS In many countries, marketing industry organisations exist to provide a collective voice in dealings with a range of stakeholders. This includes substantial lobbying against increased legislation and regulation, with some organisations stating among their objectives that they aim to ‘Defend the right to promote and advertise’ and ‘champions and defends marketers’ interests’ (see Table 36.2). Although we have already noted concerns with the lack of real engagement with actual and potential adverse effects from marketing some products, a

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Table 36.2

Industry organisations with specific lobbying focus

Country/region Organisation Australia

European Union

Global

New Zealand

New Zealand

Primary objectives

Australian ‘is the peak national body championing the interests Association of Australia’s advertisers. We exist to inspire and of National promote responsible, innovative and respected Advertisers marketing, through a commitment to sustainable (AANA) industry collaboration’ European Advertising ‘The European Advertising Standards Alliance (EASA) Standards is the single authoritative voice on advertising selfAlliance regulation issues and promotes high ethical standards in commercial communications by means of effective self-regulation’ Federation of ‘[The] aim of FEDMA is to promote and protect the European Direct European data driven marketing industry by creating and Interactive greater acceptance and usage of, and confidence Marketing in direct and interactive marketing by European consumers and business communities. Moreover, FEDMA develops ethical standards for the industry to ensure greater conusmer (sic) trust’ Note: Many national organisations are themselves accredited lobbyists at the EU and members of an EU-wide lobbying organisation World Federation of ‘WFA helps its members to improve the effectiveness Advertisers and efficiency of their marketing communications through benchmarking and the sharing of knowledge, experiences and insights, provides a unique global network of marketers who help each other navigate the fast-changing marketing landscape, and takes a global leadership role on key marketing issues which affect its members WFA champions and defends marketers’ interests, helps set standards for responsible marketing communications worldwide, and encourages leadership initiatives, which go beyond compliance with existing industry standards’ Association of ‘ANZA represents NZ advertisers. We champion the New Zealand needs of marketers through advocacy. We speak Advertisers with one voice on their behalf to all stakeholders including agencies, regulators, platform owners and government’ Commercial ‘is an incorporated body representing the interests Communications of members on issues affecting the advertising Council (New industry and agencies. Our Purpose: To champion the Zealand) contribution the creative thinking of our members makes to New Zealand business and society The Commercial Communications Council (Comms Council) is the industry association representing the interests of marketing communication agencies The Comms Council mandate is to: 1. Defend the right to promote and advertise; 2. Future-proof agencies; 3. Recognise industry and agency achievements’

Web link Details at: http://aana. com.au/

https://www.easaalliance.org/

https://www.fedma.org/

https://wfanet.org/ about-wfa/whowe-are

https://www.anza.co.nz/

https://commscouncil.nz/

(Continued)

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504

Table 36.2

The SAGe hAndbook of MArkeTinG eThicS

(Continued)

Country/region Organisation

Primary objectives

USA

The American Association of Advertising Agencies

USA

Association of National Advertisers

France

Various

The American Association of Advertising Agencies, commonly referred to as the 4As is a trade association for advertising agencies. It was founded in 1917 and has more than 700 member agencies The goal of the 4As is to ‘foster, strengthen and improve the advertising agency business; to advance the cause of advertising as a whole; and to aid member agencies in operating more efficiently and profitably.’ Functions include lobbying, marketing research, and training and development An industry association of a large group of companies engaged in marketing. The association’s goals are to: ‘safeguard essential values in advertising as a positive economic force; to enhance the science of advertising and marketing to benefit advertisers and consumers; to improve efficiency in marketing goods and services through responsible advertising; and to promote the common interests and welfare of its members’ Lobbying in France is overseen by the High Authority for the Transparency of Public Life (Haute Autorité pour la Transparence de la Vie Publique), which maintains a public record system of lobbying organisations (‘le Repertoire’), similar to the European Union lobbying information system. Organisations such as the ARPP (self-regulatory organisation) as well as many companies and agencies are directly accredited and are therefore able to lobby French lawmakers Note: other EU countries, such as Germany and Spain do not operate official Lobby registers, although such initiatives are under consideration

further concern is that these organisations are often instrumental in developing and maintaining the self-regulatory codes in their countries and also in the bodies that adjudicate on complaints made in regard to specific advertisements. The strengths and weaknesses of self-regulation is discussed in the next section.

CODES OF ETHICS AND ETHICAL PRINCIPLES We noted in Chapter 1 that ethical codes are not a panacea. They do, however, provide some guidance for industry members. In this section, we therefore provide an extensive, but not exhaustive, list of specific ethics codes issued by various marketing organisations and the key principles they

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Web link

https://www.hatvp.fr/ le-repertoire/

claim to espouse. The list in Table 36.3 has been adapted from Eagle (2008) and more recent work by the Social Marketing Ethics Expert Panel.

Self-regulation Below the ‘layer’ of broad legislation, the industry is, in many countries, self-regulating, with the various communication industry sectors, including advertisers, advertising agencies and the media, having cooperated in drawing up specific regulations or codes of practice. Self-regulation is industry-driven guidelines that are undertaken by members of the marketing and advertising community. This can include industry trade associations, groups of companies, and media groups. In some countries, consumer organisations, academics and members of the public may also serve on the relevant organisations. Under self-regulation,

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Table 36.3

505

Examples of ethics codes and principles

Organisation

Web address

Ethical principles

The Ethics Codes Collection American Marketing Association Australian Association of National Advertisers Australian Marketing Institute

http://ethicscodescollection.org/ https://www.ama.org/AboutAMA/ Pages/Statement-of-Ethics.aspx http://aana.com.au/self-regulation/ codes/ www.ami.org.au/iMIS15/AMI/About_ Folder/OUR_PURPOSE.aspx

See individual ethics codes within the collection Ethical values: honesty, responsibility, fairness, respect, transparency, citizenship Principles implied rather than explicitly stated

Canadian Marketing Association

https://www.the-cma.org/regulatory/ code-of-ethics

Chartered Institute of Marketing Direct Marketing Association

https://www.cim.co.uk/media/1542/ code-of-professional-conduct.pdf https://thedma.org/wp-content/ uploads/DMA-Ethics-Guidelines.pdf

European Association of Communication Agencies International Chamber of Commerce

www.eaca.eu/wp-content/ uploads/2016/06/code-of-ethics.pdf https://iccwbo.org/publication/ icc-advertising-and-marketingcommunications-code/

Global Code of Conduct for www.globalcodeofconduct.org/ Research in Resourcewp-content/uploads/2018/05/ Poor Settings Global-Code-of-Conduct-Brochure. pdf

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Values: shaping the future together, being accountable, learning and evolving, high standards Ethical principles: personal information practices, truthfulness, campaign limitations, professionalism Professional skills and integrity DMA member principles: 1. Is committed to customer satisfaction, good corporate citizenship, and responsible environmental, community and financial stewardship 2. Clearly, honestly and accurately represents its products, services, terms and conditions 3. Delivers its products and services as represented 4. Communicates in a respectful and courteous manner 5. Responds to enquiries and complaints in a constructive, timely way 6. Maintains appropriate security policies and practices to safeguard information 7. Provides information on its policies about the transfer of personally identifiable information for marketing purposes 8. Honours requests not to have personally identifiable information transferred for marketing purposes 9. Honours requests not to receive future solicitations from its organisation 10. Follows the spirit and letter of the law as well as DMA’s Guidelines for Ethical Business Practice Core values: integrity, respect, fairness, trustworthiness, professional excellence Basic principles: legal, decent, honest and truthful. Decency and honesty, social responsibility, truthfulness and substantiation, identification and transparency, marketer identity, fair competition, children and teens, data protection and privacy, responsibility Fairness, respect, care, honesty

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peers develop and enforce code in the interest of promoting responsible advertising practices (Andrews & Shimp, 2018). A major regulatory body in each country, usually accorded a title such as Advertising Standards Authority, oversees the processes by which advertising conforms to both the letter and the spirit of the relevant codes in that country. Supporting this structure, joint industry bodies may exist, to maintain consistent advertising standards across specific media such as TV channels. There are ongoing attempts to ensure consistency of regulatory provisions across borders, such as EU-wide initiatives. Self-regulation is claimed by the marketing industry to be the most efficient tool for curbing excesses and illegality in advertising but it is subject to sustained criticism for lack of proven effectiveness compared with legislation. Many self-regulatory mechanisms for dealing with marketing communication were developed at a time when mass media dominated. More recent research suggests that new, electronic media forms such as advergames, which comprise embedded commercial messages within the content of retail-accessible video games and online electronic games and reflect the growing blurring between entertainment and persuasion, fall outside the existing self-regulatory provisions (Kelly, Vandevijvere, Freeman, & Jenkin, 2015). Evidence of double standards between traditional and digital media advertising has been identified. For example, the majority of advergames would not comply with the regulations imposed on mass media if these regulations were to be extended (Dahl et al., 2009).

This raises the question of what selfregulation can potentially achieve versus what it is currently achieving, and where there are significant weaknesses or failures, what changes to prevailing self-regulatory models should be investigated. The often heated debate regarding the effectiveness of self-regulation is often based on a philosophical perspective such as claims that self-regulation of alcohol advertising has been an almost complete failure (Hastings et al., 2010). It is claimed that self-regulation in this and other industry sectors is used to ward off possible restrictive government-imposed legislation (Jones & Donovan, 2002). Specifically in the context of alcoholic drinks targeted at young drinkers, it could be argued that self-regulation codes could be used by the industry to gain publicity for brands seeking to portray a rebellious image, and which could benefit from the public naming and shaming strategies used by some regulators. Alcohol is not the only sector in which selfregulation is claimed to be a failure. The US-based Children’s Food and Beverage Advertising Initiative (CFBAI), a voluntary self-regulation programme aimed at food marketers, was introduced in 2007 with the aim of encouraging healthier dietary choices, particularly among young children. However, recent research has identified that companies that had joined the initiative were actually more likely to promote unhealthy food options via Internet-based platforms than were non-members (Quilliam et  al., 2011). Similar criticisms have been levelled at the Australian Responsible Marketing to Children Initiative, with evidence that some companies are circumventing the measures contained in the Initiative (King et al., 2011).

Self-regulatory Codes The merits of self-regulation have been vigorously debated for decades, although the amount of debate declined in the early years of this century, only to revive in more recent years with a new emphasis on the challenges of regulating activity across borders, particularly in relation to digital formats. Table 36.4 summarizes the main arguments put forward for and against self-regulation principles. Boddewyn, in a seminal paper (1989, p. 19), reflected the ambivalence of many engaging in the debate towards industry versus governmental regulation of activity. She observed that ‘it is too readily assumed that if the market fails, only government regulation can correct its shortcomings’ and that ‘there are readily observable limits to what regulation, as a form of societal control, can achieve’.

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COMPLIANCE ISSUES The marketing communication industry’s primary aid to compliance with self-regulatory provisions has been a combination of an industry-led pre-vetting facility (mandatory for some product categories) in order to ensure that all advertisers meet all legislative and regulatory provisions. A common outcome of the vetting when a questionable practice is occurring is that the advertiser is told to modify the ad in some way. Failure to comply with vetting where it is compulsory will result in the media refusing to carry un-vetted advertising. Prevetting will not, however, provide a complete defence in the event of a complaint. Any individual, company or organisation may lodge a

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Marketing ethics and regulation of Marketing activity

Table 36.4

507

Overview of arguments for and against self-regulation: traditional media

For

Against

Provides industry-specific expertise that legislators do Many decisions regarding problematic advertisements not have. More effective than legislation which lacks come too late (Boddewyn, 1989) – if an advertisement ‘nuances derived from an intimate knowledge of is found to be in break of regulatory codes and it is business problems and concerns’ (Boddewyn, 1989, p. ordered withdrawn after a campaign is completed, there 20) and more flexible as it can be adapted to deal with is effectively no sanction effect at all new media and easily revised/updated to accommodate new issues, whereas legislation may take a considerable time to be enacted Legislation may be followed to the letter; technicalities may Penalties are often minor, if they are imposed at all (Kerr & allow the spirit of the legislation to be avoided. With Moran, 2002); the regulatory provisions are a ‘toothless self-regulation, advertisers cannot use technicalities to tiger’ (Howarth, 2004, p. 62). As such, self-regulation evade action is self-serving, benefiting marketing industry members rather than the public (Sharma, Teret, & Brownell, 2010) Self-regulation has lower implementation costs as costs Free-rider problems may occur as not all advertisers are met by industry with no costs to the complainant or fund the system (Ogus & Carbonara, 2000; Parsons & taxpayers (public goods) (Boddewyn, 1989) Schumacher, 2012) Less adversarial (Jones & Donovan, 2002; Sharma et al., Some factions within the industry may attempt to 2010) hijack the self-regulatory process for their own ends including using the process to make complaints against competitors (Crawford & Spence-Stone, 2012; Harker, 2004) Allows members of the public and small companies to challenge the actions of larger companies without incurring substantial costs. The costs of formal litigation may otherwise prohibit action (Jones and Donovan, 2002) Source: Table adapted and expanded from Schumacher et al. (2005) and Eagle (2015)

complaint about any advertisement that they have seen. Complaints are generally heard by an independent Complaints Board. In the event that the Board rules that there has been a breach of the Codes of Practice, the advertiser, agency and media are requested to withdraw the advertisement. Advertisers may also be required in some countries to run ‘corrective advertising’. However, the process is designed to cut down on ads following questionable practices getting through the process, making corrective advertising relatively rare.

New Media Many traditional marketing organisations also cover online activities, for instance the Advertising Standards Authority also covers advertising on the Internet, smartphones and tablets, claims on companies’ own websites, and commercial e-mail and text messages (for examples, see Tables 36.5 and 36.6). Similarly, the German Werberat

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(Advertising Council) claims it’s ‘regulations … are, insofar as not expressly media-specific provisions are made, to all forms of publication, to all commercial communication in and by means of telemedia’ (Werberat, 2011). In addition to the regulations applicable to advertising in traditional media, online communication often also faces additional regulations. For instance, the EU-wide General Data Protection Regulation (GDPR) regulates the way organisations can track, contact and engage with individuals, and gives individuals significant power to challenge, review and force companies to delete personal data. Examples of other legislation include the Law on Telemedia (Telemediengesetz), which stipulates that each commercial or organisational online presence created in Germany has to disclose full contact information of the organisation and person responsible, including full disclosure of the person’s/organisation’s address. The main issue with national legislation is that the implementation of this on a cross-border level

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European Advertising Standards Alliance

International Chamber of Commerce

Advertising Standards Authority (comprising representatives from industry organisations and members of the public)

Deutscher Werberat

EU

Global

New Zealand

Germany

France

Advertising Standards Canada

Canada

Wetbewerbszentrale – Zentrale zur Bekämpfung unlauteren Wettbewerbs e.V. Autorité de régulation professionnelle de la publicité (ARPP)

‘Ad Standards administers a national system of advertising self-regulation. The self-regulation system recognises that advertisers share a common interest in promoting consumer confidence in and respect for general standards of advertising’ ‘Ad Standards is the national, not-for-profit, advertising self-regulatory body Through responsible industry self-regulation, we foster community confidence in Canadian advertising. By administering the Canadian Code of Advertising Standards and offering advertising preclearance, we ensure the integrity and viability of Canadian advertising for all consumers. In 1957, Ad Standards was created by the Canadian advertising industry to support advertisers and consumers. We regularly offer educational industry seminars and presentations to help advertisers produce truthful, fair and accurate advertising’ ‘EASA promotes responsible advertising in commercial communications by means of effective self-regulation, while being mindful of national differences in culture, as well as legal and commercial practice’ Note: Country-specific organisations such as the UK ASA are members of this alliance

Ad Standards

Australia

‘Through a unique mix of advocacy, solutions and standard setting, we promote international trade, responsible business conduct and a global approach to regulation, in addition to providing market-leading dispute resolution services. Our members include many of the world’s leading companies, SMEs, business associations and local chambers of commerce’ ‘The three main objectives are: 1. To seek to maintain at all times and in all media a proper and generally acceptable standard of advertising and to ensure that advertising is not misleading or deceptive, either by statement or by implication 2. To establish and promote an effective system of voluntary self-regulation in respect to advertising standard 3. To establish and fund an Advertising Standards Complaints Board’ ‘The German Advertising Standards Council (Deutscher Werberat) is the self-regulatory body of the advertising industry. The institution ensures that advertising is legally permissible and does not exceed ethical boundaries’ The Centre for Protection against Unfair Competition (Wettbewerbszentrale) complements the Werberat in that it enforces issues of unfair commercial practices by applying unfair competition law. Both are members of the EASA The goal of the ARPP ‘is to maintain high standards in terms of legal, honest, and truthful advertising, which is in the interest of both the consumers and the advertisers. Its mission is to uphold the balance between creativity as well as the advertisers’ freedom of expression and the responsibility and respect due to consumers’

Primary objectives

Country /region Organisation

Table 36.5 Industry organisations involved in developing/implementing self-regulatory provisions

https://www.arpp.org/the-arpp/

www.wettbewerbszentrale.de/

www.werberat.de/

https://www.asa.co.nz/

https://iccwbo.org/about-us/who-we-are/

Details at: https://www.easa-alliance.org/

https://adstandards.com.au/about

Web link

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USA

UK

Spain

The Asociación para la Autorregulación de la Comunicación Comercial (Autocontrol) is the ‘independent advertising self-regulatory organisation in Spain … It is comprised of advertisers, advertising agencies, media and professional associations and its goal is to work for responsible advertising: truthful, legal, honest and loyal’ Advertising Standards Authority ‘The Advertising Standards Authority (ASA) is the UK’s independent advertising regulator. (UK)/Committee of The ASA makes sure ads across UK media stick to the advertising rules (the Advertising Advertising Practice Codes).The Committee of Advertising Practice (CAP) is the sister organisation of the ASA and is responsible for writing the Advertising Codes. The ASA and CAP are committed to regulating in a way that is transparent, proportionate, targeted, evidence-based, consistent and accountable We respond to concerns and complaints from consumers and businesses and take action to ban ads which are misleading, harmful, offensive or irresponsible. As well as responding to complaints we monitor ads to check they’re following the rules. We also conduct research to test public opinion and identify where we need to take action to protect consumers We’ve been administrating the non-broadcast Advertising Code for over 50 years and the broadcast Advertising Code for over ten. Our remit was further extended in 2011 to include claims made by companies on their own websites and in social media spaces under their control’ Federal Trade Commission ‘The FTC is a bipartisan federal agency with a unique dual mission to protect consumers and Created by the Federal Trade promote competition. For one hundred years, our collegial and consensus-driven agency Commission Act of 1914, the has championed the interests of American consumers. As we begin our second century, US Federal Trade Commission the FTC is dedicated to advancing consumer interests while encouraging innovation and was passed with the goal of competition in our dynamic economy regulating unfair methods of The FTC develops policy and research tools through hearings, workshops, and conferences. competition. It created the We collaborate with law enforcement partners across the country and around the world FTC, a government agency to advance our crucial consumer protection and competition missions. And beyond our charged with regulating borders, we cooperate with international agencies and organizations to protect consumers unfair acts or practices that in the global marketplace affect commerce The FTC protects consumers by stopping unfair, deceptive or fraudulent practices in the marketplace. We conduct investigations, sue companies and people that violate the law, develop rules to ensure a vibrant marketplace, and educate consumers and businesses about their rights and responsibilities. We collect complaints about hundreds of issues from data security and deceptive advertising to identity theft and Do Not Call violations, and make them available to law enforcement agencies worldwide for follow-up. Our experienced and motivated staff uses 21st century tools to anticipate – and respond to – changes in the marketplace’

Autocontrol

Details at: https://www.ftc.gov/about-ftc/whatwe-do The Federal Trade Commission polices unfair and deceptive advertising. As Andrews and Shimp (2018, p. 68) observe: ‘Under current deception policy, the FTC will find a business practice deceptive if “there is a representation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstance to the consumer’s detriment”. As such, to be deemed deceptive, the ad must be misleading, must be deceptive to a reasonable (rather than ignorant) consumer, and must be material’ The FTC definition of unfair advertising has evolved over time. The current definition defines unfair advertising as Acts or practices that cause or are likely to cause (1) substantial injury to consumers, which is (2) not reasonably avoidable by consumers, and (3) not outweighed by countervailing benefits to consumers of competition

Details at: https://www.asa.org.uk/about-asa-a nd-cap/about-regulation/about-the-asa-and-cap. html

www.autocontrol.es/

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Advertising Standards Canada. The Canadian Code of Advertising Standards European Advertising Standards Alliance. Ad Standards

Canada

Germany

Deutscher Werberat Werbekodex des Deutschen Werberats

Australian Association of National Advertisers

Australia

European Union

SRO

Country

Web link

‘Advertising codes are designed by the local ad ecosystem in consultation with stakeholders. This makes sure they reflect the relevant cultural, business, legal and economic contexts. Codes are updated on a regular basis to make sure that ad standards respond to any new developments in ways and means of advertising The foundations of all Ad Standards Codes are based on the principles that: • Advertising is legal, decent, honest and truthful; • Ads are prepared with a due sense of social responsibility; • Ads conform to the principles of fair competition; • Ads don’t impair public confidence in advertising’ The competence of the Advertising Council is cross-media and applies to all forms of commercial communication – online and offline Commercial communication must respect the generally accepted basic values of society and the prevailing notions of decency and morality. It must always be based on fairness in competition and responsibility towards society. In particular, advertising may: • not abuse consumer confidence and not take advantage of lack of experience or knowledge • not cause physical or psychological harm to children and adolescents • not incite or condone any form of discrimination based on race, descent, religion, gender, age, disability or sexual orientation or the reduction to a sexual object • not incite or condone any form of violent, aggressive or antisocial behaviour • not create fear or instrumentalise misfortune and suffering • not encourage or condone any behaviour that endangers the safety of consumers In addition to the overarching code, there are nine focus areas which have additional codes, ranging from advertising with celebrities, use of vehicle and traffic sounds in advertising or advertising to adolescents and children

Code available from: https:// www.werberat.de/ werbekodex/

Codes available at: https:// www.easa-alliance.org/ ad-standards/what-are-adstandards/codes

‘The Codes are platform and technology neutral and evolve and adapt to keep pace with changing http://aana.com.au/selfconsumer expectations’ regulation/codes/ ‘The Code of Ethics is the cornerstone of the AANA self-regulatory system and is supplemented by a Code of Advertising and Marketing to Children, Food and Beverages Code, Environmental Claims Code and Wagering Advertising & Marketing Communication Code. The self-regulatory system is underpinned by an independent, transparent and robust complaints handling system administered by Ad Standards’ ‘The Code is the Canadian advertising industry’s principal instrument of self-regulation’ Code available at: https:// adstandards.ca/code/

Principal aims

Table 36.6 Examples of self-regulatory organisations (SROs) and their codes

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International Chamber of Commerce CC Advertising and Marketing Communication Code

Autorité de régulation professionnelle de la publicité Code ARPP

Advertising Standards Authority

Commercial Communications Council (New Zealand)

Global

France

New Zealand

New Zealand

(Continued)

‘This Code reflects ICC strategic priorities around fostering growth, innovation, the digital economy, Codes available at: https:// and sound governance. It specifically responds to the priority for promoting the rule of law and cms.iccwbo.org/content/ sound governance, notably by: uploads/sites/3/2018/09/icc• shaping a predictable and clear international regulatory environment for companies to conduct advertising-and-marketingbusiness in a sustainable and responsible way communications-code-int. • developing voluntary rules and self-regulatory instruments to help companies meet their legal pdf obligations and to promote good business practice • contributing to building a coherent international regulatory framework for world business’ Based on the ICC Code (see Global), the ARPP code is divided into a ‘transversal’ part, with https://www.arpp.org/nousrecommendations about general advertising rules and behaviour, including in areas such as consulter/regles/regles-deidentification of advertising, sustainable development, digital communication, etc. This section deontologie/ is complemented by a second part, which offers sector-specific recommendations, such as advertising of alcohol, cosmetics, gambling, occult sciences, etc. ‘The purpose of the Advertising Standards Code (Code) is to ensure that every advertisement is a responsible advertisement All advertising must be legal, decent, honest and truthful and respect the principles of fair competition, so that the public can have confidence in advertising The Principles and Rules set out in this Code are the standards expected in all advertising. Other ASA Codes may also be applicable and many sectors have their own specific advertising requirements – these must also be taken into account’ Note: ‘The Codes are developed by the ASA Codes Committee, which includes advertiser, agency, media and public representatives, and in consultation with industry and public sectors’ ‘The Code has been developed as part of the Comms Council Executive Board’s long-term Code available at: https:// programme to more clearly demonstrate the value member agencies make to New Zealand commscouncil.nz/about/code business and society. Our objective in creating the code is to provide an overt and publicly stated set of guidelines for members to operate within as part of a broader process of repositioning perceptions of the industry The code outlines a set of broad principles that our members support and covers a range of areas including; • Support of society, consumers, self-regulation and employees • Support of the Comms Council’s work • Public criticism of the industry • Relations with clients • Relations with the media, and suppliers • Relations between member agencies’

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SRO

Autocontrol: Advertising Code of Conduct and Sectoral Codes of Conduct (Código de Conducta Publicitaria and Códigos de Conducta Sectoriales)

Committee of Advertising Practice (UK)

Country

Spain

UK

Table 36.6 (Continued) Web link

Developed based on the ICC Advertising and Marketing code (see Global above). The main code of Codes available from: https:// conduct deals with generally applicable codes of conduct, including sanctioning of marketing www.autocontrol.es/ materials contravening the code codigos-de-conducta/ The general code deals with aspects such as misleading advertising, comparisons, general marketing campaigns targeting children and adolescents and data protection related to the processing of personal information as part of marketing campaigns In addition to the general code, there are 21 additional codes applicable to specific sectors, ranging from online advertising/marketing activities (Código Éthico Confianza Online’) to a Code of Good Practice of the Pharmaceutical Industry (‘Código de Buenas Prácticas de la Industria Farmacéutica’), the Self-Regulation Code of Advertising of Spirits and Alcoholic Beverages (Código de Autorregulación Publicitaria de Espirituosos España.) and the related code for advertising for beer (Código de Autorregulación Publicitaria de Cerveceros de España) ‘Self-regulation means that the ad industry has voluntarily established and paid for its own Code available at: https:// regulation. Co-regulation sees the ASA given responsibility on a day-to-day basis for regulating www.asa.org.uk/codes-andthe content of broadcast (TV and radio) ads under contract from Ofcom rulings/advertising-codes. Self-regulation of non-broadcast advertising html The self-regulation system works because it is powered and driven by a sense of corporate social responsibility amongst the advertising industry. Advertisers have an interest in maintaining the system because: • Making sure that consumers are not misled, harmed or offended by ads helps to maintain consumer confidence in advertising. Advertising that is welcomed by consumers is good for business • It maintains a level playing field amongst businesses. It is important for fair competition that all advertisers play by the same rules • Maintaining self-regulation is much more cost-effective for advertisers than paying the legal costs of a court case The role of the industry is to write the Advertising Codes, help advertisers to stick to the rules and to pay for the system However, the industry does not administer its own rules. That’s why it established the ASA as the independent body that investigates complaints and rules on whether ads should be changed or withdrawn The ASA is in the forefront worldwide of the challenge to regulate rapidly evolving advertising techniques including online behavioural advertising, native advertising and influencer advertising (e.g. in social media platforms like YouTube, Instagram and Twitter) The Advertising Codes reflects the law, which means that, where appropriate, they reflect the standards required in law, e.g. misleading advertising. The advertising industry has chosen to add this extra layer of rules that sit alongside and on top of law not only to make further laws unnecessary, but also as a public demonstration of its commitment to high standards in advertising’

Principal aims

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https://bbbprograms.org/ about-us

https://bbbprograms.org/ programs/cfbai/cfbai-coreprinciples

‘BBB National Programs (BBB NP) fosters trust, innovation, and competition in the marketplace through the development and delivery of cost-effective third-party self-regulation, dispute resolution and other programs. BBB NP is the national self-regulatory unit of the former Council of Better Business Bureaus (CBBB)’

‘The Children’s Food and Beverage Advertising Initiative (CFBAI) is a voluntary self-regulation program created to improve the landscape of food advertising directed to children under the age of 12. Participants, who represent most of the child-directed food advertising expenditures in the US and most of the advertising on children’s TV programs, pledge to follow CFBAI’s Core Commitments. This means that they advertise only those foods or beverages that meet the Uniform Category-Specific Nutrition Criteria or do not advertise foods to children at all. Foods advertised by CFBAI participants now are lower in calories, sugar, sodium, and saturated fat, and provide more food groups and beneficial nutrients. Currently 18 leading US food and beverage and restaurant companies participate in CFBAI’ ’The Advertising Commitment Participants agree to depict only foods that meet CFBAI’s Uniform Nutrition Criteria in advertising primarily directed to children under age 12 CFBAI covers the following child-directed media: • TV • Radio • Print • Internet/digital media, including ° Company websites ° Third-party websites ° Video and computer games ° DVDs and other video formats ° Mobile apps ° Word of Mouth ° Interactive games • Licensed characters, celebrities, and movie tie-ins in covered media • Product placement in child-directed program/editorial content to promote the sale of foods is not allowed’ Note: Similar initiatives have been established in other countries such as Australia’s Responsible Marketing to Children Initiative

Note: Additional resources regarding SRO at: https://icas.global/wp-content/uploads/2017_Global_SRO_Factbook.pdf

Council of Better Business Bureaus Note: from late 2019, The Advertising Selfregulatory Council (ASRC) was absorbed into the BBB USA but with claimed Children’s Food and global industry Beverage Advertising reach through Initiative (CFBAI) participation of Under auspices of BBB multinational firms

USA

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is virtually impossible. Nevertheless, national legal bodies like to emphasise their competence in the field. For instance, a German court sentenced an Australian national who published Holocaust-denial material on a website hosted in Australia. The judgment was based on German law, which punishes publishing materials denying the Holocaust. Despite a valid judgment, the individual could not be extradited upon a visit to the UK to Germany using a European Arrest Warrant; thus the judgment could not be enforced either in the country of residence or in other EU member-states. Therefore, the judgment could only be enforced if the person touches German soil (http://news.bbc.co.uk/2/hi/ uk_news/7741288.stm).

Self-regulation by Individual Trade Associations and Media Groups In some industries, especially those prone to controversy, members of the industry itself band together to promulgate guidelines and/or codes. This is especially true of industries that are prone to controversy, such as liquor and some products promoted to children (Belch & Belch, 2018). A good example is the Distilled Spirits Council of the United States (DISCUS), which consists of hard-liquor marketers. There are numerous guidelines for advertising in the code, aimed at not targeting youth, not using sexual appeals, and not encouraging drinking games, among several others. For more details of the Code of Responsible Practices for Beverage Alcohol Advertising and Marketing, see https://www.distilledspirits.org/ code-of-responsible-practices/ Other industries that have significant selfregulatory codes include the US Brewer’s Association, the Toy Industry Association, the Motion Picture Association of America, the Wine Institute and the EU Pledge, an initiative of the EU and the food industry. See their respective websites for more information. In general, media (whether traditional or electronic) have the right to maintain advertising review processes and reject any ad they regard as objectionable, with the exception of political ads (Belch & Belch, 2018). Often these restrictions related to product categories or ads deemed offensive. Until 1982, the National Association of Broadcasters maintained codes for radio and television. However, once that code was suspended, individual media companies took over screening of ads. The four major TV networks maintain their own review processes, which are

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particularly rigorous (Belch & Belch, 2018). Other media sectors also provide guidance for potential advertisers – see, for example: Outdoor Advertising Association of America (https://oaaa.org/AboutOAAA/WhoWeAre/ OAAACodeofIndustryPrinciples.aspx)

When Trying to Do Good May Actually Do Harm As we noted in Chapter 1, given that social marketing activity aims to change behaviours in ways that benefit individuals, communities and/ or society at large, it surprises those new to the sector and those outside the sector that ethical issues can arise. However, there is a growing body of literature that documents ethical issues and unexpected impacts of interventions, including issues regarding targeting, segmentation, consequences of focusing on easy-to-reach or influence groups rather than those with the greatest need. Ethica issues also arise in relation to meeting and the needs of low-literacy groups and minority groups and cultures (Domegan, Davison, & McCauley, 2010; Newton, Newton, Turk, & Ewing, 2013) (Cho & Salmon, 2007; Domegan et al., 2010; Eagle, 2008; Newton et  al., 2013). Communications strategies also present ethical challenges, such as the impact of fear appeals or other ‘execution techniques that may impact negatively on vulnerable audiences’ (Donovan, Jalleh, Fielder, & Ouschan, 2009, p. 5). These issues are discussed in greater detail in a later chapter but have been briefly noted here (Table 36.7) as the challenges of this sector are often overlooked in discussions of ethical issues in the wider marketing context.

CONCLUSION The marketing industry has made multiple attempts to establish and operate a credible selfregulatory system for its members. There are myriad challenges to enforcement efforts, including attempts by some marketers not to follow the spirit of the intended mechanisms (such as running promotional activity on less regulated media channels even though it would be prohibited on more mainstream channels), a lack of consistent regulatory coverage or enforcement across countries and, in some countries, a complete lack of any coherent regulatory system.

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Table 36.7

515

Unintended effects of health communication campaigns

Effect

Definition

Obfuscation Dissonance

Confusion and misunderstanding of health risk and risk prevention methods Psychological discomfort and distress provoked by the incongruence between the recommended health states and the audience’s actual states Boomerang Reaction by an audience that is the opposite to the intended response of the persuasion message Epidemic of Unnecessarily high consciousness and concern over health produced by the pervasiveness of risk apprehension messages over the long term Desensitization Repeated exposure to messages about a health risk may over the long term render the public apathetic Culpability The phenomenon of locating the causes of public health problems in the individual rather than in social conditions Opportunity cost The choice of communication campaigns as the solution for a public health problem and the selection of certain health issues over others may diminish the probability of improving public health through other choices Social reproduction The phenomenon in which campaigns reinforce existing social distributions of knowledge, attitudes and behaviours Social norming Social cohesion and control accompanying marginalization of unhealthy minorities brought about by campaigns Enabling Campaigns inadvertently improve the power of individuals and institutions and promote the images and finances of industry System activation Campaigns influence various unintended sectors of society, and their actions mediate or moderate the effect of campaigns on the intended audience Source: Reproduced from Eagle et al. (2013, p. 95). Originally adapted from Cho and Salmon (2007)

REFERENCES Andrews, J. C., & Shimp, T. (2018). Integrated Marketing Communications, 10th edition. Boston, MA: Cengage. Armitage, C. J., & Arden, M. A. (2016). Enhancing the effectiveness of alcohol warning labels with a self-affirming implementation intention. Health Psychology, 35(10), 1159. Baggott, R. (2010). A modern approach to an old problem? Alcohol policy and New Labour. Policy and Politics, 38(1), 135. Belch, G., & Belch, M. (2018). Advertising and Promotion: An Integrated Marketing Communications Perspective (11th Edition). New York: McGraw Hill. Blakeney, M., & McKeough, J. (1984). The right to advertise: The cigarette debate. Media Information Australia, 31(1), 42–46. Boddewyn, J. J. (1989). Advertising self-regulation: True purpose and limits. Journal of Advertising, 18(2), 19–27. Boyland, E., & Tatlow-Golden, M. (2017). Exposure, power and impact of food marketing on children: Evidence supports strong restrictions. European Journal of Risk Regulation, 8(2), 224–236. Brown, J. D., & Bobkowski, P. S. (2011). Older and newer media: Patterns of use and effects on

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37 Concluding Comments Regarding the Challenges of Marketing Ethics P a t r i c k D e P e l s m a c k e r, L y n n e E a g l e , S t e p h a n D a h l a n d C h a r l e s R . Ta y l o r

INTRODUCTION In what follows, we give an overview of the insights, considerations and suggestions that were discussed in this book. We do this from the perspective of four stakeholder groups. Firstly, there is still a lot of work for academics, in terms of both theory building and empirical research. Secondly, we summarise what, in terms of ethics, the priorities are for the marketing sector, both companies and industry organisations. Next, there are a lot of things public policy can do to advance the ethical quality of marketing, from awareness building to regulation. Finally, education and training play an important role in developing ethical attitudes and behaviour. As to the latter, we review what is known about current teaching practice and discuss what should change or be added. For each stakeholder group, we organise the discussion around the major topics they need to address to make marketing more ethical.

RESEARCHERS: THEORY BUILDING AND EMPIRICAL RESEARCH Several authors stress the need for giving ethical considerations a more prominent role in extant

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theories, refining theories of ethical behaviour, or even developing new theories and conceptual frameworks in which ethical factors are central. Not surprisingly, there is also the call to empirically test these models. Examples of theories that could be extended and refined are the resource-based view theory and the service-dominant logic. Several academics argue that the majority of the theories and concepts that study ethical challenges originate from psychology and sociology, while these or other general models should be enriched with insights from other potentially relevant theories and established consumer ethics theories, such as justice theory, cognitive dissonance theory and social learning theory, besides traditional ethical approaches such as utilitarianism and deontology. Indeed, marketing’s increasing shift to a holistic responsibility for the customer experience underlines the need for a stronger interdisciplinary approach for marketing ethics. Models have also been proposed to identify and test the determining factors of sustainable marketing practice, how decision makers prioritise among strategic angles such as shareholders, customers, and social and ecological sustainability, and which marketing tools are most suitable to develop and create a holistic approach to sustainable marketing practice. Besides adapting and extending general theories, there is also the call for revising or

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developing new conceptual frameworks that deal with specific marketing- or consumer-behaviourrelated phenomena with ethical ramifications. For instance, given the increasingly international and cross-cultural nature of business, there is a need to develop and test a model to explain the determining factors of ethical behaviour in these contexts and their boundary conditions. Another example is revisiting traditional communication effects models such as the persuasion knowledge model, or the determinants of advertising literacy in children and teenagers, in the ethically challenging context of contemporary integrated, interactive and personalised advertising formats. There is also the call to develop and test a model that explains the drivers and ethical ramifications of CSR strategies, integrating the various partial frameworks (institutional, organisational and individual) that are used now into one model in which socially responsible behaviour and marketing ethics are the central focal variables. One other major concern is the need to develop more thorough insights into the drivers of ethical behaviour of the sales force subculture in companies, drawing upon disciplines such as sociology and anthropology. Finally, one marketing activity in which the ethical quality is heavily debated is public relations. There is a general feeling that there is a lot of room for improvement in conceptualisation, theorising and properly testing the determinants of (un)ethical PR attitudes and behaviour, their consequences, and how to make the PR profession more ethical. An overall concern is the pressing need for developing accurate definitions and robust operationalisations of concepts related to marketing ethics. Additionally, most ethical research has been carried out in Western capitalist free-market countries, most notably the USA. There is a need for more theory development and empirical research in other economical, political and cultural contexts. One particular focal point is academic research itself. Many researchers engage in questionable research practices, which, in itself, is unethical. They operate in a grey area that is sometimes considered acceptable within the research community and, in that way, contribute to ongoing ‘sloppy science’. It is important to remind researchers they are the system, not the victim of a ‘publish-orperish’ system. Apart from ethical research guidelines, academics also need to think about making the system less inviting for unethical practices, and behave accordingly. Other aspects that make it increasingly challenging to do marketing research ethically are the availability of a massive amount of personal potentially privacy-invading data, and the need for research that really matters in an era in which sustainability, global social responsibility

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and climate change are increasingly higher on the agenda. Marketing research may never have been as useful as it is today to move the market towards urgently needed sustainable business and consumer practices, and towards developing a mentality and responsibility to generate trustworthy and truthful insight while respecting the consumer.

MARKETERS: DEVELOPING A MORE ETHICAL ATTITUDE AND SELFREGULATION Two main areas of interest can be distinguished: developing a more ethical attitude in companies, and organising self-regulation by the marketing industry, with particular areas of interest such as increasing the focus on sustainability, and ethical issues in an international and cross-cultural environment.

Developing a More Ethical Attitude Marketing is not just a management function. Everyone in a company needs to be aware of marketing ethics. However, marketing managers especially need to consider value creation and value destruction in everything they do. The latter will often be related to ethical concerns. Marketing managers need to identify systematically the negative ethical consequences of their strategies and actions. For example, including privacy concerns throughout an innovation process of data-driven services protects against future harmful use of data. Another example is avoiding stereotypical representation of consumer groups in marketing materials. Marketers should, for instance, also consider the negative consequences of the ‘sex sells’ notion and exposing individuals to sexualised and objectified images that promote the derogatory treatment of people, especially women, avoid stereotypical representation of LGBT individuals, or the (mis)use of the LGBT community as a progressive ‘anchor point’ (pinkwashing). Awareness of ethical concerns and transparency around market activities with non-customer stakeholders such as citizens, communities or governmental organisations are also good practices of ethical marketing. Firms might also develop formal codes of conduct and protocols for their marketing activities, for instance interactions with vulnerable customers and employees. They should also include ethical perceptions and considerations in their daily

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work (e.g. in its social media activities) and preparation for extraordinary situations (e.g. in its crisis management plans). Marketing managers could map the ethical concerns and the related risks in the relations with the major stakeholders and actively manage their conflicts. Companies might also participate in the development of industry schemes or legal regulations to determine ethical, moral and legal standards in marketing practices. Marketers should also increase the focus on sustainability. For a long time, marketing and sustainability were commonly seen as irreconcilable because marketing was all about selling more, while sustainability is, at least in part, about consuming less or differently. And, indeed, sustainable marketing is still a relatively peripheral concern for marketers, both in practice and in theory. However, worldwide grassroots movements concerned with sustainability, such as Global Youth Climate Strikes that began in late 2018, signal a growing interest in encouraging sustainable behaviours, and Millennials show far greater concern for and question sustainable practices when making purchase decisions (Bollani et  al., 2019). Consequently, marketers increasingly recognise the centrality of sustainability and the acknowledgement of a firm having more responsibilities than just responsibilities to shareholders. However, instead of merely avoiding ‘greenwashing’, sustainable marketing needs to become mainstream, and the marketing community has to explore new ways of marketing to make sustainability marketing genuinely transformational, using a whole systems approach, and understand that both human agency and a wide range of marketing system structures, and importantly their interactions, need to be critically considered. The ultimate goal should be to put proceedings in place that can effectively address current externalities of marketing systems, such as pollution of the natural environment and climate change. Another thing marketers should be thinking of is developing a new set of business models and marketing tools that are able to promote less environmentally harmful consumption, share solutions, but also dare to promote less consumption. The world economy continues to become increasingly global, and more and more companies market their products internationally. This poses a number of specific ethical challenges. In general, international marketers should understand different cultures and become sensitive to cross-cultural ethical values and learn to cope with them. First of all, ethical marketing in a cross-cultural context makes sure that marketing campaigns are appropriate within a specific cultural context and do not risk harming the groups involved. Marketers should communicate with other cultures or ethnic

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minorities in a manner that is sensitive to their history, values and practices, and need to be sensitive to taking factors into account such as historical discrimination, poverty, lack of economic opportunity, lack of access to healthcare, and other socio-economic factors. Marketers should seek to promote products that have the potential to truly benefit members of these groups and avoid promoting products aggressively that may only further exacerbate existing problems within those communities. Cross-cultural marketing should pay careful attention not to use negative stereotypes or misleading portrayals, even if positive, of cultural groups in developing marketing campaigns interculturally. Cross-cultural marketing should make efforts to promote products or services in a transparent, respectful, fair and culturally sensitive manner. In order to operate ethically and successfully in foreign markets, international marketing managers should first enhance those dimensions in their organisation that will improve their ethical conduct. For example, companies could organise reputation audits in the markets where they operate, and correct any ethical image-distorting acts. It would also be useful to encourage ethical leadership among international marketing people and ensure that they set role models for their staff. It is thus vital to establish both formal and informal mechanisms to safeguard embedding ethical concerns in international marketing activities.

Self-regulation by the Marketing Industry Individual actions by companies or by marketing departments of companies will often not be enough to install industry-wide ethical marketing behaviour. The marketing community as a whole should also put in place ethical codes and protocols. In many countries, advertising self-regulation organisations, patronised by the advertising industry, have developed and/or use codes for marketing communications to ensure ethical practices of their members. These codes include principles of honest, non-misleading, non-deceptive and transparent communication, how to communicate ethically with vulnerable target groups such as children and the elderly, or how to avoid stereotyping and disrespectful treatment of individuals. Nevertheless, there is still a lot of work to do. Many marketers ‘hide’ behind the conviction that stereotyping merely mirrors the values that already exist in society, and that advertising has a negligible effect on these values. However, considering the potentially negative effect of, for instance, gender or ethnic stereotyping on the efforts of

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society to stimulate equality and equal opportunities, and on mental and physical health, the marketing industry should nevertheless take some responsibility for stereotyping and its outcomes and keep on developing guidelines and codes to discourage it. No doubt, one of the major ethical challenges is the access that companies have to data that is used to personalise marketing communications. This data is gathered by both the company and intermediaries, such as social media. The ethical concerns with respect to the latter are very worrying. Social media and search engines serve as a first party in their own context, yet simultaneously provide third-party services in another. By merging first-party data with third-party data, the potential privacy risks thus increase. Since the online tracking industry is evolving at such a high pace, it is impossible for legislators to regulate these practices timely and adequately. It is thus clear that complying with the law is not the only aspect that companies need to consider while handling personal data. They also have the obligation to develop and live by ethical codes of conduct regarding the collection and use of personal data and the related privacy issues. This would also be in the best interest of the companies, since ethical procedures could enhance advertisers’ trustworthiness. Trust-building and ethical strategies could be increased by means of transparency and increased control by consumers. Increased transparency relates to being honest and open about tracking activities, in such a way that it is accessible for everyone. Increased control relates to empowering (potential) customers to decide for themselves how they want their data to be collected, stored, processed, exchanged and used. By increasing transparency and control, companies contribute to an ethical obligation they have towards users: helping them improve their online privacy protection knowledge and behaviour. Additionally, the advertising industry should develop best practices for the appropriate disclosure of all advertising formats, especially with respect to novel online integrated and/or interactive advertising formats (brand placement, native ads, etc.), for instance by developing a clear and uniform cue across media and advertising formats to signal content as advertising. This is especially important to help vulnerable target groups, such as children. The advertising industry could develop easy-to-use tools to enable parents to monitor and/ or restrict their children’s advertising exposure and protect their privacy, and facilitate the development of advertising literacy among children, parents and teachers, for instance by developing or assisting in the development of awareness and educational materials.

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Besides marketing communications, also other aspects of marketing would benefit from ethical corporate and professional codes of conduct. For instance, business-to-business marketing, and more specifically salespeople, face ethical challenges and dilemmas, such as opportunism, the giving and receiving of gifts, and plain bribery and corruption. Since business is increasingly global, these codes should take cross-cultural perceptions and behaviour into account. There are a number of specific industries that are particularly vulnerable for ethical issues. Examples are the tourist, fashion, financial, pharmaceutical and healthcare industries, and industries selling unhealthy products, but also social profit organisations. The tourism industry is vulnerable for ethical misbehaviour in several ways. It should strive for the good of the destination, which includes equity and fairness in distribution of costs and benefits, recognition of diverse inhabitants and cultural groups, equal respect and equal dignity of human beings, and the ecological footprint of the industry. The industry could develop global codes that are guided by ethical principles grounded in justice, responsibility, care, sustainability and good governance, including inclusiveness in planning and decision making on destination development and marketing, and regulation of tourism. This will require new multistakeholder governance mechanisms and a greater responsibility by not only tourism marketers, but also governments, tourists and residents. The fashion industry is a global and complex industry that faces many issues related to both marketing and consumer ethics that need to be addressed. As to the latter, the fashion industry, together with public policy, have the responsibility to raise awareness about consumer materialism, counterfeit fashion consumption, fair trade concerns, social marketing issues, and promotion of impossible lifestyles, among others. The Ethical Fashion Forum (https://the.ethicalfashionforum.com/about-1) defines a number of criteria for ethical fashion: counteract fast fashion and its damaging impact; promote fair wages, working conditions, worker’s rights and ensuring sustainable livelihoods; reduce their ecological footprint (avoid harmful substances, such as toxic pesticide, use eco-friendly material, reduce water usage, recycle, incorporate energy efficiency, and support sustainable standards for fashion); raise awareness on ethical behaviour; and promote animal rights. Although a number of initiatives have been taken to advance the ethical quality of the fashion industry, the industry still has a lot to do in terms of taking care of these ethical principles. Marketing of financial products is another area that requires special attention to ethics. Besides

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fulfilling economic and legal responsibilities, financial companies also have to embrace their ethical responsibilities to staff, customers and the community, and develop or fine-tune ethical industry codes. Several ethical issues and dilemmas should be covered in these codes. For example, is it ethical to damage shareholder returns by terminating an employee who refuses to work as a team member and thereby harms overall productivity, but instead works to maximise their own bonus? In that way, businesses are more likely to provide better long-term outcomes for the business, its stakeholders and for society as a whole. The pharmaceutical and healthcare industries also face several ethical issues. These include privacy considerations, as modern technology facilitates increased targeting using personal data, but also issues related to fair pricing. Pharmaceutical companies develop risk-intensive innovative products, and therefore there is an increased need for well-founded ethical guidelines on acceptable profit margins and prices. Another ethical issue is related to ethically acceptable access of the poor worldwide to medication. Although individual companies have taken initiatives in this direction, there is still a long way to go, because these efforts are not laid down in formal ethical codes and rely too much on individual donor companies. The regulations with respect to the promotion of medication and the codes of conduct for sales representatives need constant monitoring and finetuning. Additionally, mHealth and eHealth have gained in importance, but several ethical concerns prevent eHealth/mHealth from gaining momentum, such as fears of data breaches and the loss of privacy, given the sensitive nature of health-related data. E-marketers need to develop ethical charters in which it is clearly indicated which purposes the data serves and who receives access to this kind of information. And then there is a whole range of industries that market legal but harmful products, such as soft drinks, tobacco, alcohol and confectionery. Apart from formal regulation, the biggest challenge, and probably the most effective action, would be to instil a sense of ethics, community responsibility and fair play into those industries that market products that harm, by bringing ethics to the forefront of business practice and culture. Finally, as to social profit organisations, the marketing community should reflect upon ethical codes of conduct with respect to, for instance, fundraising techniques and persuasive techniques of cause-related marketing. These organisations and their marketers rely on public trust as a form of licence to achieve a social good. They cannot ignore the ethical dimensions of their actions.

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Public Policy: Improve Regulation and Build Awareness With respect to public policy, there are two main challenges: improve regulation to enforce a more ethical marketing practice, and to build awareness with consumers to make them less vulnerable to unethical practices and aware of the importance of more ethical consumption.

Improve Regulation to Enforce a More Ethical Marketing Practice Obviously, everything that was discussed in the previous section on self-regulation could also be enforced by the government and public policy. In fact, in most markets, ethical practices are monitored by means of a combination of regulation and self-regulation. This makes sense. On the one hand, governments have to lay the regulatory groundwork for ethical marketing and business. One reason for this is that it is unlikely that the marketing industry will take collective action to self-regulate all potentially unethical behaviour. On the other hand, some marketing practices evolve at such a fast pace that legislation is too slow to follow, and self-regulation is an efficient way to tackle ethical issues faster and in a more flexible way. Additionally, various ethical challenges related to marketing practice are often a joint responsibility of public policy, marketers and the marketing industry and education. There are several areas in which public policy should make (greater) efforts to enforce more ethical marketing practices. One example is protecting children and teenagers. Despite existing public policy initiatives to protect minors against potentially misleading and deceptive advertising, there still exists a lack of regulation on novel and especially online integrated and/or interactive advertising formats, and public policy could do more to impose rules and restrictions on the advertising and media industry to target children and teenagers in a more fair and ethical way. Public policy could also enforce the use of a clear and transparent advertising disclosure cue that is uniform across media and advertising formats. More measures could also be taken to reduce or avoid stereotyping based on gender, ethnicity or sexual orientation, or the disrespectful portrayal of people in advertising. While in many countries there is some advertising regulation about, for instance, health and beauty claims, respect for people and stereotyping, much more could be done to regulate effectively and monitor unethical advertising practices. Public policy could also put in place

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regulation that limits the way greenwashing can be used in marketing to sell more sustainable products. Given the fast evolution of techniques to collect personal information online and use it for marketing purposes, public policy should continuously monitor and adapt privacy regulations to protect consumers from the harmful consequences of big-data-based marketing practices. This is, for instance, vitally important in the pharmaceutical industry, due to the sensitive nature of the data collected and used. An area that requires ongoing reflection is the monitoring and regulation of marketing of legal products that are (potentially) harmful for consumers, such as tobacco, alcohol and products containing too much salt, sugar or fats. Existing regulation is insufficient and several common unethical practices can be identified, such as targeting vulnerable and easily influenced groups, such as children, young adults and low-income market segments, using unregulated marketing elements to circumvent regulations designed to protect consumers, promoting the health characteristics of certain harmful products to reduce the motivational barrier to consumption, bulk buy discounting and larger pack sizes that habituate larger purchases and increase individual consumption, political lobbying, PR and CSR initiatives to inhibit regulation, and appearing to behave ethically through industry self-regulation while consistently breaching marketing standards and legislation. It will always be difficult to set regulation where the product is essentially legal and may only cause harm in circumstances of high consumption. However, that should not stop public policy to strengthen and/or refine regulation to make the marketing (tactics) of marketers of these products more ethical. This is warranted because of the harm that products like sugar, alcohol and tobacco cause and their addictive habit-forming nature. Regulations that could be considered are banning promotions such as bulk buy discounts that are specifically designed to encourage greater consumption and promote habit-forming consumption; impose standardised pack sizes with uniform price per volume/amount; banning communications that seek to reduce the perceived harm of consumption, or that suggest healthier dimensions; or banning advertising, and even branding, of certain products altogether (as is done for tobacco products in several countries).

Build Awareness with Consumers Public policy could also contribute to more ethical marketing practices by means of awareness campaigns about marketing tactics and their effects on

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consumer behaviour that develop knowledge and vigilance with consumers. This, in turn, can lead to increased consumer advocacy and pressure upon the marketing community to behave more ethically, and on public policy to regulate more properly. For instance, as a result of consumer pressure, the USA, Canada and Europe have restricted the use of hundreds of chemicals in cosmetics. This type of consumer advocacy may also motivate professional bodies to take action to self-regulate rather than being compelled to conform to legislation. Consumer activism is expected to become a growing force that will affect how governments and commercial organisations perceive marketing ethics. Ongoing advocacy and consumer pressure may also help by keeping awareness of ethically questionable products and practices high via the media and lobbying of regulators. More particularly, public policy could launch campaigns to raise awareness about consumer materialism, counterfeit fashion consumption, fair trade concerns, social marketing issues, and impossible lifestyles, or to promote less environmentally harmful consumption, sharing solutions, and less consumption. To enable parents to cope with their children’s Internet use and online advertising exposure, it is crucial to develop initiatives to increase parents’ advertising literacy. Educating parents about the power and the potential deceptive and implicit effectiveness of online advertising formats is a necessity, for example recognising social media product placement and influencer marketing activities, which may not be easily distinguishable from non-commercial online content. Raising the advertising literacy of parents may be done by means of public policy campaigns, supported by the advertising industry or media, or by organising workshops, especially for less welleducated parents. Similar campaigns could also be used to build up individual’s digital health literacy, a complex challenge that is likely to evolve even further with time.

EDUCATORS: TERTIARY EDUCATION COURSES AND CURRICULA AND PROFESSIONAL TRAINING There are several areas in which the educational system plays a crucial role in developing sensitivities and skills that can lead to a more ethical marketing practice. For instance, improving children’s advertising literacy is a responsibility for the educational system. Primary and secondary schools should develop educational materials on

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advertising literacy and use them in class. Also, teachers and policy makers should be educated about how contemporary advertising formats work and why these advertising formats are effective. At the other end of the educational spectrum, doctoral students should continue not only to be trained in procedural ethics (basically, ‘here is what you should and shouldn’t do’), but also to be socialised to behave ethically during the whole doctoral research trajectory (‘do the right thing’). But, obviously, it is most important to develop genuine knowledge about ethics and develop ethical attitudes and behaviour in business and marketing practice, and to educate properly tertiary students, the (marketing) managers of tomorrow and current marketing professionals. In what follows, we discuss a number of aspects of this challenge: formal tertiary education, the role of accrediting bodies, professional development, and the effectiveness of ethical education and training.

FORMAL TERTIARY EDUCATION The majority of existing ethics education draws on case study analysis to identify ethical issues and to enable students to assess alternative courses of action, since research indicates that this approach is more effective than traditional lecture-based teaching methods (Mulhearn et al., 2017). While organisational and social influences are often acknowledged in case-based teaching material (Baker, 2014), strategies to counter negative external influences do not appear to have been systematically developed or to have been subject to empirical evaluation of their relative effectiveness. There has been debate for decades regarding whether ethics should be taught as a standalone course, focusing on either broad business ethics or specific marketing ethics, or whether it should be a consistent theme running through all courses within a business programme (Ferrell & Keig, 2013). A large body of research was conducted in the early years of this century in response to the focus required by accrediting bodies (see e.g. Loe & Ferrell, 2001; Spain, Engle, & Thompson, 2005). These accrediting organisations indicate that ethics should be ‘integrated into the design, delivery and assessment of all programmes’ (EFMD: European Foundation for Management Development, 2019, p. 18), but do not require specific stand-alone ethics subjects, leaving decisions to the individual institutions (Hartman & Werhane, 2009). Including content in existing subjects is attractive in terms of the utilisation of existing resources. However, the evidence is

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that this results in a-theoretical, superficial and incomplete coverage of the topic (Baetz & Sharp, 2004; Rozensher & Fergensen, 1999; Spain, Engle, & Thompson, 2005). In an early study, Cooper (1994, p. 1) asserts that the reality is that the concept of integrating ethics throughout the curriculum just doesn’t work in practice. What really happens is that ethics is given lip service and the lecturers tend to concentrate in what they specialise in best, such as auditing, management accounting or accounting theory. A separate subject in ethics provides a focus for students to develop a framework for tackling ethical issues, with the support of a group of trained and committed staff.

More recent research indicates that the subject of stand-alone ethics ‘fast tracks students along the reality curve inevitably traversed by business practitioners exposed to the intricacies of the modern business environment. Integrated ethics education is less likely to achieve this focus’ (Jonson, McGuire, & O’Neill, 2015, p. 488). At the same time, it has long been advocated (Bok, 1974; Buff and Yonkers, 2004; Cooper, 1994; Martin, 1981; Parmental, 1989) that greater impact is achieved through a stand-alone ethics course, reinforced by consistent treatment in related, subject-specific papers. Somewhat depressingly, it has been noted that only a minority of Australasian universities make ethics subjects compulsory (Rundle-Thiele & Wymer, 2010). Where the majority of ethics offerings remain elective, students may not appreciate the importance of such subjects – and may not do so until they have been in employment for some time (Barnett, Dasher, & Nicholson, 2004). The reinforcement of ethical dimensions in other modules is important; failure to do so may send a signal that ethics is not, in fact, operationally important. To be perceived as relevant to the rest of students’ study programmes, it is necessary to apply theoretical concepts to situations that students are likely to encounter in their working lives (Murphy, 2004). This view is endorsed by Buff and Yonkers (2004) who stress that the use of real-world situations to provide relevant context allows students readily to appreciate the real-world, as opposed to the theoretical, consequences of alternative courses of action. It has been suggested that too much emphasis is placed on analysis of ethical wrongdoing and that the addition of positive ethics, illustrating the long-term benefits of ethical behaviour (Dent, 2017). As awareness of ethical perspectives other than those of the Global North increase, there is a need to upskill teaching staff so that they can adequately address these challenges in their teaching

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activity. However, it must be stressed that realistic objectives can only be to heighten awareness of these dimensions and provide tools for dealing with difficult or controversial decisions rather than to expect that a major, permanent change in personal values and behaviours can be achieved.

ROLE OF ACCREDITING BODIES There is an increasing focus for tertiary educators on international accreditation as a form of quality assurance in higher education (Elliott, 2013). As part of the accreditation process, ‘Accreditation bodies such as AMBA, EQUIS and AACSB have for a number of years required business schools to demonstrate that issues relating to ethics and sustainability have been addressed in the curriculum’ (Baden & Higgs, 2015, p. 539). The increased focus on ethics education is not a recent phenomenon and has largely been driven by repeated corporate malfeasance and ethical lapses identified as a result of public exposure of this wrongdoing. In the early years of this century, the AACSB set up a specific task force to review key issues regarding ethical responsibilities of business along with leadership and governance issues: The Ethics Education Task Force was established by the AACSB board of directors on the premise that the crisis in business ethics is not only a challenge for companies but also an opportunity to strengthen management education. At issue is no less than the future of the free market system, which depends on honest and open enterprise to survive and flourish. (AACSB International, 2004, p. 7)

However, beyond urging educational institutions to ‘contemplate their current approaches to ethics education and to explore methods to strengthen this vital part of the curriculum’ (p. 7), no practical advice or resources were provided. In its Accreditation Standards, the AACSB acknowledges ethics as a core value, but also states that: ‘There is no uniform measure for deciding whether each criterion has been met. Rather, the school must demonstrate that it has an ongoing commitment to pursue the spirit and intent of each criterion consistent with its mission and context’ (AACSB International, 2018, p. 5). Also, the EFMD provides guidelines for addressing ethics and sustainability in courses: ‘Ethics, responsibility and sustainability should be integrated into the design, delivery and assessment of all programmes offered by the School’ (2019, p. 18). Its accreditation criteria (i) Ethics, Responsibility and Sustainability (p. 19) require

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those business schools seeking accreditation to respond to the following: • Describe how ethics, responsibility and sustainability are integrated into the design, delivery and assessment of the School’s degree programmes. • Are there programmes that specifically address questions of ethics, responsibility and sustainability? Describe their orientation and content. • How are ethics, responsibility and sustainability integrated into the other programmes? Describe their content. The Association of MBAs (AMBA), a British accreditation body that had previously focused only on postgraduate programmes, especially MBAlevel programmes, launched a Business Graduates Association (BGA) in 2019, in direct competition with the AACSB and EQUIS. The organisation aims to accredit business schools in their entirety and has stated that schools will have to prove their commitment to ethics to receive accreditation (Lister, 2019). How the effects and effectiveness of this can and should be measured remain unclear. Ethics education alone can neither change individuals nor counter external influences such as workplace culture or social influences. This is acknowledged by the accrediting bodies: To be sure, business schools cannot be expected to assume total responsibility for ethical debacles in corporations and throughout the business world. Education is hardly the sole determinant of human behavior, and responsibility for ethics education is not the exclusive province of business schools. Nonetheless, ethics education has always been part of business curricula; and AACSB International accreditation standards have long mandated that ethics be taught as part of management degree curricula. (AACSB International, 2004, p. 8)

The ‘lack of specificity in these guidelines as to how, what, and where business ethics should be taught has led to stark differences in approaches and content’ (Medeiros et al., 2017, p. 245). This goes some way towards explaining the finding that ‘Various studies exploring business students’ attitudes and beliefs about decision and behavioural ethicality have produced inconsistent results’ (Aguirre et al., 2017, p. 121).

PROFESSIONAL DEVELOPMENT What is currently done to provide ongoing support for professionals that have transitioned into the

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workplace? In the USA, businesses have been encouraged to develop and implement ethics and compliance programmes, coupled with appropriate staff training. It is somewhat ironic that a significant investment in business ethics teaching resources, distributed free worldwide to any institution requesting them, was made in the early 1990s by the Arthur Andersen Organisation, at the time one of the world’s five largest accounting and audit organisations. This organisation was the auditor for Enron, a major US-based company whose unexpected collapse in 2001 was a major business scandal as a result of which the Arthur Andersen Organisation itself was destroyed as an entity (Albeksh, 2016; Pamungkas, Ghozali, & Achmad, 2017). Some business professions, such as accounting, include ethics within ongoing professional programmes mandated by global accounting organisations (De Lange, Jackling, & Suwardy, 2015; Murphy, 2017a), but this is not a requirement across other business sectors such as marketing. Ethics is not a mandatory component of organisations for marketing professionals, although some offer elective online ‘on-demand’ courses (see e.g. the Canadian Marketing Association: https://www.the-cma.org/educationevents/professional-development/on-demandcourses/ethics). In addition, the American Marketing Association (AMA) indicates that it includes ethics as a component of its training in its Professional Certified Marketer programme (see https://www.ama.org/certifications/#) in various areas such as digital marketing, sales management, content marketing and marketing management. While the AMA does have its own Code of Conduct and Statement of Ethics (see https:// www.ama.org/codes-of-conduct/) there is not a separate certification or ongoing training programme in marketing ethics. The courses offered by the Chartered Institute of Marketing (UK) do not generally offer ethics modules, except for the ISM Certificate of Sales and Marketing, which is for sales personnel (https://www.professionalacademy.com/professional-qualifications/cimmarketing-qualifications). Apart from that, there are several private initiatives that offer training courses for professionals (e.g. https://www.kantola.com/Managing-Ethics-Code-of-ConductTraining-for-Managers-PDPD-427-K.aspx). An issue receiving increasing prominence is sustainability. In the chapter on sustainable marketing, issues relating to the need to educate students and practitioners alike on the implications of the drive towards greater sustainability for marketing strategy and their ethical dimensions are discussed. We share the concerns raised in that chapter regarding the apparent low priority given to this within business schools. This is somewhat

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surprising, given the emphasis noted earlier that is now placed on sustainability-related content by some of the accrediting bodies.

EDUCATION AND TRAINING EFFECTS AND EFFECTIVENESS Like many other areas of business ethics, research into educational activity and its effectiveness is underdeveloped. There is an identified need for research investigating the effectiveness of current ethics education, in both the short and longer term, with both longitudinal and cross-country/cross-cultural studies having significant potential benefits for marketing overall. Evaluations of ethics courses has, to date, been primarily based on ‘reaction criteria’ such as course liking (Turner et  al., 2018). Much of the research, the bulk of which has been conducted in developed countries, reflects the Global North perspective, in spite of growing recognition of differences in perspectives between North and South (Karam, Sidani, & Showail, 2015). The body of research available has focused on the attitudes of teaching staff (see e.g. Beggs & Dean, 2007; Nicholls, Hair Jr, Ragland, & Schimmel, 2013) or students’ perceptions (see e.g. Aguirre et  al., 2017; Chiu & Fischer, 2018; Fraedrich, Cherry, King, & Guo, 2005), either before or after completing ethics courses rather than actual behaviours, particularly when students transition to the world of work. It is acknowledged that ethics education can increase awareness of, and sensitivity to, ethical issues and develop critical thinking skills (Chiu & Fischer, 2018; Ferrell & Keig, 2013) with modest, positive, short-term pre-post changes achieved (Mulhearn et  al., 2017). However, it is unknown if the changes persist in the longer term and debatable as to whether teaching impact is sufficient in itself to enable individuals to withstand external pressures to make ethically dubious decisions (Comer & Schwartz, 2017; Hedberg, 2017). While many organisations have included ethics within staff training, the effects and effectiveness of this have not been extensively examined (Medeiros et  al., 2017). Further, where studies have been conducted, shortcomings in content, delivery and assessment are evident, with concerns extending to the long-term impact of such training (Weber, 2015). The challenges of delivering ethics courses or integrating ethics into other courses, with both short- and long-term effects, extend beyond tertiary marketing educators to include those providing workplace-based professional development programmes with content relevant to marketing ethics.

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CONCLUSION: THE WAY FORWARD At the beginning of this chapter, we noted that academics should develop and test new theoretical frameworks in which marketing ethics plays a central role, and enhance existing frameworks to put more emphasis on marketing ethics. Indeed, there are recommendations for more research into the sources and drivers of unethical behaviour (Kish-Gephart, Harrison, & Treviño, 2010). We suggest that this could usefully be extended to include the factors leading to ethical decision making. The marketing sector would benefit from including theoretical concepts from other disciplines, such as theories of social cognition, and to integrate them with more specific theories of ethical decision making (Sparks & Pan, 2010). Future research should indeed endeavour to be transdisciplinary, extending beyond the current focus on marketing ethics to include what can be learned from other disciplines (Mulhearn et  al., 2017). Concerns have been evident for some time regarding terminology, especially where concepts are claimed to be theories, yet lack four basic criteria identified as required for theories: that is, conceptual definitions of terms, domain limitations within which the theory applies, sets of relationships between variables, and specific predictions (Wacker, 1998). We note calls for both rigorous testing and replication of studies on marketing ethics: ‘Theory is rarely applied or tested with sufficient precision to allow theoretical conclusions to be drawn’ (Michie et al., 2008, p. 26), a criticism echoed more recently in which frustration at the lack of progress is evident (Rundle-Thiele et al., 2019). There is a clear need for research in the area of marketing ethics, which should occur across a range of sectors, cultures and countries. This is increasingly important given recognition of the complexities of international activity and the need for theories to be able to move from being primarily descriptive to predictive (Javalgi & La Toya, 2018; Murphy, 2017b). While the value of this has been discussed in the academic literature, with claims such as ‘A focus on the theoretical foundations of ethical decision making is useful not only for social responsibility decisions, but also managerial decisions’ (Ferrell et al. 2013, p. 58), it is necessary to demonstrate the utility of strong theory to real-world activity. This is a prerequisite to develop state-of-the-art and relevant tertiary programmes and professional training in marketing ethics. In order to ensure a strong real-life angle, a closer collaboration between business and educators is called for (Sigurjonsson, Arnardottir,

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Vaiman, & Rikhardsson, 2015), which is consistent with recommendations from EQUIS for demonstration of a connection between tertiary institutions and real-world business practice (EFMD, 2019), but no clear direction as to how this might best be achieved or how to evaluate its impact. In order to improve the outcome of ethics education and training, engagement with stakeholders such as employers is required to determine current perceptions of the value of formal ethics education, what ethics resources are currently used in the workplace and what would be valued if additional resources for practitioners were developed. There is also a need to ensure that teaching and training staff have the skills to teach cross-country and cross-cultural ethics effectively. There would be value in investigating perceived skills and weaknesses among these staff and their preferences regarding what upskilling is needed, together with their preferences for how this might be provided.

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Index Page numbers in bold indicate tables and in italic indicate figures. 4As of marketing (alternative to 4Ps), 14 4Ps of marketing, 14, 14 see also marketing mix AACSB International, 527 Abbott, A., 460 Aboriginal and Torres Strait Islander people, 157, 162, 309, 347 Abosag, I., 241 Access to Medicine Foundation, 335 accreditation bodies, 527 activism, consumer, 275–6, 279–81 Ad Standards Authority, Australia, 7, 510 Adidas, 453 advergames, 109, 110, 504 advertising literacy, 110, 521, 525–6 advertising networks, 416 Advertising Self-regulatory Council (ASRC), US, 7, 515 Advertising Standards Authority (ASA), UK, 7, 8, 151, 231–2, 511 Advertising Standards Authority, New Zealand, 510, 513 Advertising Standards Canada, 510, 512 Advertising Standards Complaints Board, New Zealand, 330 African Americans, 141, 147, 149 Agag, G., 52 age stereotyping, 147, 149–50 ageism and aging, 174, 189 Agenda 2030, 360 Aguinis, H., 295, 296, 297 Aguirre, G., 527 Air New Zealand, 158 air pollution, 198, 388 Airbnb, 61, 451 airbrushing, 174 airline industry, 158, 231, 240, 388 Alberta Council for Global Cooperation, 147 alcohol, 141, 190, 343–5, 348, 450, 503–4, 508, 516 Alcohol Beverages Advertising Code, Australia, 343–4 Alessio, J. C., 276–7 Alevizou, P. J., 229 Ali, M., 131 Al-Khatib, J. A., 22, 33 All European Academies (ALLEA), 83 Allaire, Y., 468 Allen, D. B., 292

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Allure magazine, 174 Allwood, J. M., 217 Almond, B., 282 Alshurideh, M., 63 alternative trading organisations (ATOs), 229 Amar, Z., 490, 494 Amazon, 177, 185, 208 ambush marketing, 444–5, 451–4, 452 American Association of Advertising Agencies, 506 American Marketing Association (AMA), 7–8, 83, 461, 507, 528 American Medical Association (AMA), 332, 430 American Red Cross, 249 Amnesty International, 450 Andreasen, A., 250–1 animal welfare, 355, 356–7, 356 anti-brand activism, 278 anti-consumption movements, 12, 77, 279–80, 358 anti-hawking laws, 308 Antón, A. I., 416 Apex Marketing Group, 454 Apple, 58, 255, 426, 434 Aquinas, Thomas, 401, 402 Aquino, Y. S. J., 175 Argandoña, A., 64 Aries, P., 130 Aristotle, 401, 402, 407 Armstrong, G., 261–2 Armstrong, R. W., 22, 32, 47 Arnould, E., 465 Arora, N., 412 Arthur Andersen Organisation, 528 artificial intelligence (AI), 62–7, 68, 369, 374–5 Asian Americans, 142–3, 147, 149 Askland, A., 65 assertiveness dimension, 47, 52, 53 see also cultural dimensions Association for Consumer Research (ACR), 77–8 Association of Fundraising Professionals (AFP), 253 Association of Internet Researchers, 425 Association of MBAs (AMBA), 527 Association of National Advertisers, US, 506 Association of New Zealand Advertisers (ANZA), 505 Atlantic, The, 309 Attalla, A., 230 Attenborough, Sir David, 361 Attia, A. M., 464 Attraction–Selection–Attrition (ASA) perspective, 462–3

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Index Aubrey, J., 96 Auger, P., 22–4 Aurifeille, J., 22, 33 Australia alcohol, 343–5, 348 breast implant ban, 176 codes of ethics, 7 confectionery and soft drinks, 340–3, 342, 348 consumer protection legislation, 501 cultural appropriation, 157, 158, 162, 164 data protection regulations, 425 ethical investing, 307–8 financial product marketing, 302–3, 304, 305–6, 308, 309–10 food waste, 360 fundraising standards, 254 gift cards, 302–3 industry lobbying organisations, 505 non-communicable diseases (NCDs), 340, 341, 343, 345 obesity, 340, 341 self-regulation, 510, 512 tobacco, 345–8, 345, 346, 348 women farmers, 177 Australia Council Protocol, 164 Australia has Privacy Principles (APP), 425 Australian Association of National Advertisers (AANA), 305, 341, 505, 507, 512 Australian Association of Social Marketing (AASM), 251 Australian Banking Association (ABA), 310 Australian Competition and Consumer Commission (ACCC), 341 Australian Consumer Law, 302–3 Australian Marketing Institute, 507 Australian Public Service Commission, 10–11 Australian Responsible Marketing to Children Initiative, 508 Australian Securities and Investment Commission (ASIC), 305–6, 310 Autocontrol, Spain, 511, 514 Auton, F., 329 Autorité de régulation professionnelle de la publicité (ARPP), France, 510, 513 Averoff, Georgios, 446 Avian Influenza, 356 Avidar, R., 478, 479, 481 Aykol, Bilge, 20–31 Babri, M., 476–7 Bächle, T. C., 369, 372, 373 Badger Sportswear, 278 bait advertising, 306 Baker, Bill, 282 Baker, S. M., 129, 140 Balebako, R., 417 Bali, 263 Ballantine, P., 227–8 Ballantyne, A. G., 7

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531

Banghart, S., 429 Bangladesh, 320, 390 Bank of America, 305 Banks, G. C., 85 Bannister, K., 162, 164 Bano, S., 172–3 Barclays Bank, 307 Bareket-Bojmel, L., 427 Barnes, J. W., 457, 468 Barrera, A., 405 Barry Callebaut, 231 Basak, R., 428 BASF Group, 244 Basu, A. K., 358 Batdorff, J., 427 Bauer, J., 296, 297 BBB National Programs, US, 7 Beach, S. S., 177 Becker, L. B., 330 Bedeian, A. G., 85 behavioral microtargeting, 426 Belgium, 477 Belk, R., 316 Bellman, S., 51 Beltramini, R. F., 4 Belz, F.-M., 227, 228, 231, 234 Bennett, R., 249, 253, 254, 490, 491, 495, 496, 497 Berle, A. A., Jr., 289 Bermuda, 266, 267–8, 267 Berndt, E. R., 331 Berry, J.W., 186, 188 Berry, M. J., 414 Bessenoff, G., 96 Best Face rule, 126, 127 Better World MBA Ranking, 207 Bhatnagar, N., 15 Bhattacharya, J., 331–2 Bing, 416–17, 427, 434 Biosphere Institute of the Bow Valley, 269–70, 270, 271 Bishop, J., 430 Bjorklund, D. F, 132 Black, I., 94 black hat techniques, 487–8 Black Lives Matter movement, 282 Blascovich, J., 147 Block, W., 405 Blomstrom, R. L., 292 Bloom, P. N., 255 Bloomberg, 208–9 Blumenthal, L., 205 Blythe, J., 136 Boddewyn, J. J., 508 Bodet, Guillaume, 444–54 body image issues, 148, 189, 321 see also female sexualisation and objectification; idealizations of physical appearance Body Shop, 62 Bolmsjö, I., 69

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532

The SAGe hAndbook of MArkeTinG eThicS

Bone, P. F., 385 Bontis, N., 51 Borgida, E., 98 Borkowski, S. C., 463 Botsman, R., 318 Bourdieu, Pierre, 227 Bovine Spongiform Encephalopathy (BSE), 355–6 Bowen, H. R., 289, 290, 292 Bowen, S. A., 476, 478, 479 Bowleg, L., 98 boycotts, consumer, 27, 28, 281, 358 boyd, danah, 427 BP, 232 Bradshaw, A., 198 Braga, S., Jr., 233 Bragge, J., 412 brand management, 392–6 anti-brand activism, 278 brand deception, 393–4 brand placements, 15, 109, 504 brand protection policies, 449 brand tribes, 395 cause-related marketing, 282–3, 321 consumer boycotts, 27, 28, 281, 358 corporate social marketing, 254–6, 278 counterfeiting issues, 394–5 fairwashing, 357 greenwashing, 5, 218, 219, 231–3, 321, 393, 522 luxury brands, 393 McDonaldization, 393 organic washing, 393–4 pinkwashing, 191, 521 power issues, 392–3 sportswashing, 450–1 see also intellectual property rights Brass, D. J., 64 Brazil, 191 breast implants, 176 Brenkert, G. G., 128 Brennan, Ross, 238–46 bribery, 22, 23, 27, 62, 241, 304 cultural perspectives, 51, 53 pharmaceutical industry, 329 religious perspectives, 48–9, 53 British Code of Advertising, Sales Promotion and Direct Marketing, The, 8 British Medical Association, 175 British Sociological Association, 425 Brito, R., 113 Brotman, Jeff, 201 Brown, M. E., 25 Bruckman, A., 79 Brundtland Commission, 196, 261, 262, 319 Bruni, A., 491–2 Brunk, C. G., 163 Brusseau, J., 429 Buchholtz, A. K., 390 Büchi, M., 420

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 532

Buddhist perspectives, 45, 48–50, 52–3 Buff, C. L., 526 Buijzen, M., 111, 112, 113, 117–18 Bureau of Labor Statistics (BLS), US, 469 Bürgerliches Gesetzbuch, Germany, 502 Burroughs Wellcome, 405 Burton, Suzan, 301–11 Bush, Victoria, 457–70 business ecosystem theory, 65 Business Roundtable, US, 11–12, 200, 209, 335 business-to-business marketing, 238–46, 523 bribery, 241 buyer–seller relationships, 239–40, 241–2, 245 codes of conduct, 241, 243–4, 245 competition regulation, 240 deception, 242 environmental sustainability, 244–5 ethical relativism, 245 gifts and hospitality, 240–1, 243–4, 329 informal social networks, 245 opportunism, 242 relationship spectrum, 239 trust, 240, 242 Butterfield, K. D., 463 buying–shopping disorder, 317 Byun, S.-E., 189 C40 Cities, 278 Cadbury, 230 Cahn, A., 413 Čaić, Martina, 58–71 Calfee, J. E., 4 California Consumer Privacy Protection Act, 4 California Health Care Foundation, 332 Camacho-Otero, J., 217 Camadan, F., 431 Camargo, B. A., 264–5 Cambridge Analytica, 4, 419, 426, 489 Camelot, 306 Canada breast implant ban, 176 cosmetics industry regulation, 177 food waste, 360 self-regulation, 510, 512 tourism in Canmore, Alberta, 269–70, 270, 271 Canadian Marketing Association, 507 Canary, H. E., 480 Cangarli, B. G., 47 Cannella, A. A., Jr., 52 Cape Town Declaration, 260 Capella, M. L., 91, 92, 93, 332 carbon offsetting, 232 Cargill Corporation, 231 Carnegie, Andrew, 292 Caron, S. L., 189 Carrigan, M., 137, 230, 234 Carroll, A. B., 290–1, 303, 304, 309, 310–11, 390 Carson, R., 355

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Index

Carvalho, S. W., 390 Cassileth, B., 140 Cauberghe, V., 118 cause-related marketing, 254, 277–8, 282–3, 321, 524 Cavusoglu, L., 315, 320 Cayla, J., 465 Chae, Y.-G., 117 Chamberlain, K., 330 Chan, T. S., 32 Chanavat, Nicolas, 444–54 Chandon, P., 391 Chanel, Coco, 175 Chapman, K., 343 charity marketing see digital transformation in charity sector; non-profit marketing Chartered Institute of Marketing (CIM), 226, 507, 528 Chartered Institute of Procurement & Supply, 243 Chartered Institute of Public Relations (CIPR), UK, 476 Cheeks, F. E., 291 Chellappa, R. K., 411 Chen, S., 432 Cheng, I.-H., 478, 480 Cherrier, H., 233 Chhabra, D., 262 Chia, S. C., 175 Child, J. T., 428 children advertising literacy, 110, 521, 525–6 advertising regulation, 118–19, 341, 343, 503, 504, 508, 515, 516 harmful product marketing, 341, 342–3, 503, 508 obesity, 341, 342, 504 vulnerability, 128–33, 140 see also parental mediation of online exposure Children’s Advertising Review Unit (CARU), US, 118 Children’s Food and Beverage Initiative (CFBAI), 504, 508, 515 China air pollution, 198 body image, 174, 175 counterfeit products, 394 data protection regulations, 425 exploitative labour, 278 food sector, 354 product safety issues, 390 Western characters in advertising, 5 Chonko, L. B., 6 Christian perspectives, 44, 48–50, 52–3, 401 circular economy, 215–22, 386, 388 consumption reduction, 216, 220–1 ethical marketing of, 218–19 greenwashing and, 218, 219 promises and problems, 216–17 rebound effects, 221–2 recycling and recycled materials, 215, 216, 217, 219, 220 regulation of terminology use, 219–20 sustainable consumption, 217–18

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 533

533

Clapham, A., 282 Clark, S. C., 427 Clarke, L. H., 174 Clay, D., 96 Clayton Act, US, 48 ClearView, 308 climate change, 255, 265–6, 271, 278 climate justice, 266 Coca-Cola, 109, 199, 282, 450 Cocoa Life label, 230 Cocoa Plan label, 230, 358 Code de la Consumation, France, 503 code switching, 5 codes of conduct business-to-business marketing, 241, 243–4, 245 digital marketing and social media, 434–5 financial product marketing, 303, 303, 310 marketing research ethics, 83 codes of ethics, 7–9, 83, 506–8, 507, 522–3 Costco, 203–4 fundraising, 253 public relations, 475, 476–7, 478 sales ethics subculture, 465, 466–7 self-regulatory, 9, 508, 510–11, 512–15 tourism, 264 Codex Alimentarius Commission, 355 cognitive dissonance, 172 Cole, S., 263 Coleman, R., 479 collaborative consumption, 318 collectivism, 28, 34, 46, 47, 50, 51–2, 53, 137 Collingwood, R. G., 399–400 Colombia, 264–5 colour-caste systems, 174–5 Commercial Communications Council, New Zealand, 505, 513 Committee of Advertising Practice (CAP), UK, 8, 232, 511, 514 Committee on Publication Ethics (COPE), 83 Commonwealth Bank of Australia (CBA), 306, 308 communication effects models, 521 communication privacy management (CPM) theory, 428 communicative ethics, 295–6 Compassion in World Farming (CIWF), 355 Competition and Consumer Act, Australia, 501 competition policy, 240 compulsive buying behavior, 317 Coney, S., 330 confectionery and soft drinks, 340–3, 342, 348 consequentialism, 8, 197, 401 consumer activism, 275–6, 279–81 consumer boycotts, 27, 28, 281, 358 consumer culture theory, 64 Consumer Financial Protection Bureau (CFPB), US, 305, 306 consumer protection legislation, 500, 501–3 Content Based Image Retrieval, 427

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534

The SAGe hAndbook of MArkeTinG eThicS

Contingency Model, 7 cookies first-party, 413–14, 415–16, 418–19 third-party, 413–14, 416–19 Coombe, R. J., 157 Cooper, B.J., 526 Cooper, M., 98 Co-operative Group, UK, 228, 229, 357 cooperative movement, 279 copyright see intellectual property rights core competency theory, 63 Corey, R. J., 385 Cornwell, B. T., 446, 447 Corona, 392 corporate brand activism, 278 Corporate Knights, 207 corporate social responsibility (CSR), 5, 11–12, 196, 289–98, 521 corporate hypocrisy, 295–6 corporate social marketing, 254–6, 278 corporate social performance model, 290–1 criticism of, 296–7 definitions, 291–2 distrust of motives, 297 enlightened self-interest model, 290, 294 ethical justification, 292–4 ethical obligations, 294 evolution of concept, 289–91 fashion industry, 320–1 Friedman’s position on, 290, 291 future directions, 297–8 human capabilities approach, 293–4 human rights theory, 293, 294 lack of definition and standards, 296 LGBT community and, 191 Machiavellian motivation, 297 marketing research into, 294–6 moral development theory, 294 pyramid model, 303, 304, 309, 310–11 rationale for, 296 self-moralizing corporation model, 291 social contract theory, 293 sponsorship and, 447 stakeholder theory, 293 strategic management stakeholder model, 291 tourism industry, 261 voluntarism, 296–7 well-being marketing, 294 corruption pharmaceutical industry, 328–9 see also bribery Corruption Perception Index (CPI), 51 Corry, D., 490, 497 cosmetic fillers, 176 cosmetic surgery, 171, 175–6 cost theory of value, 402 Costa Coffee, 361 Costco, 201–7, 202

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 534

Council of Better Business Bureaus, US, 515 counterfeit products brand management and, 394–5 fashion, 317–18, 394–5 pharmaceuticals, 389 covert marketing, 15 Craig, S. L., 191 Cressey, D. R., 86, 86 Crompton, J. L., 448, 449–50 cross-cultural marketing ethics, 136–45, 522 background, 137–8 cultural biases, 142–3 ethical marketing considerations, 144–5 intercultural communication, 138–9 intercultural misunderstanding, 143–4 moral relativism versus moral universalism, 137–8 normative foundations, 137 pseudo-conflict, 139 stereotypes, 142–3 vulnerable populations, 139–42 see also cultural perspectives; ethical international marketing strategy Crowston, K., 432 Cude, B., 411 Cull, Michelle, 301–11 cultivation theory, 172 cultural appropriation, 155–65 by academics, 160 consumers’ role, 164 definitions, 156–7 ethical responses, 162–3 ethicality, 160–2 freedom of speech and, 157, 159, 165 future directions, 163–4 harm, 161–2 human genetic patents, 159–60 intellectual property rights and, 157, 158–60, 163, 164, 165 knowledge appropriation, 158 legality, 158–60 medicinal knowledge, 157, 158, 160 offence, 162 subject appropriation, 157 thematic appropriation, 157–8 types of, 157–8 cultural biases, 142–3 cultural dimensions, 28, 34, 46–8, 50–2, 137 cultural perspectives, 5, 6, 43, 46–8, 50–2, 53–4, 84–5, 522 cultural relativism, 245, 393 cultural sovereignty, 163 culture jamming, 280 customer data deception, 426 cyberbullying, 117, 431 Daems, Kristien, 107–19 Daft, R. L., 26 Dahl, D., 94

31/08/20 6:09 PM

Index

Dahl, Stephan, 3–15, 184–92, 343, 500–16, 520–9 Dakhli, M., 315, 320 Dangelico, R. M., 385 Danone, 386, 392, 394 dark-side techniques, 488 data harvesting, 368, 374 data mining, 414 data protection regulations, 4, 372–4, 415, 418–19, 425, 478, 509 database marketing, 413 Davidson, A., 317 Davies, I. A., 317 Dávila-Rodríguez, M. A., 266 Davis, K., 290, 292 Day, G. S., 239 Day, R.S., 331 The Day Chocolate Company, 357 de Man, R., 217 De Maria, W., 84 De Meulenaer, S., 52 De Pelsmacker, Patrick, 3–15, 107–19, 234, 500–16, 520–9 Dean, J., 253 deceptive advertising, 23, 51, 393–4 brand placement as, 15 fairwashing, 357 financial products, 305–6 greenwashing, 5, 218, 219, 231–3, 321, 393, 522 organic washing, 393–4 pinkwashing, 191, 521 sportswashing, 450–1 decision theory, 13 deepfake images, 427–8 Defining Issues Test (DIT), 479 DeJong, W., 331 deontology, 8, 45, 197 Deterding, S., 375 Deutscher Werberat, 509, 510, 512 Devinney, T., 297 Dhanesh, G. S., 6, 433 Dhoest, A., 188, 192 Di Benedetto, C. A., 320 dialogic ethics, 435, 436 Dias, P., 113 DiClemente, R., 99 Diehl, Sandra, 367–76 Difference Principle, 163 differential privacy, 434 diffusion of innovations theory, 433 digital health, 367–76, 524 artificial intelligence, 369, 374–5 benefits, 369–70 data harvesting, 368, 374 data privacy, 372–4 digital health literacy, 372 equal access, 371–2 gamification, 375 health apps, 368–9, 370–1

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 535

535

increasing relevance of, 368 information asymmetry, 371–2 information transparency, 373 privacy paradox, 373–4 purpose limitation, 373 quality and effectiveness, 370–1 virtual reality, 375 wearables and fitness trackers, 369 digital marketing and social media, 15, 58, 60–1, 424–36, 523 advertising networks, 416–17 alcohol promotion, 342 ambush marketing and, 453–4 antisocial behaviour, 430–1 black hat techniques, 487–8 blurred boundaries, 426–30 boundary management, 427, 428, 429–30 Cambridge Analytica scandal, 4, 419, 426, 489 codes of conduct, 434–5 confectionery and soft drinks, 342–3 covert marketing, 15 cultural perspectives, 52 customer data deception, 426 cyberbullying, 117, 431 dangerous selfies, 431–2 dark-side techniques, 488 data protection, 4, 372–4, 415, 418–19, 425, 478, 509 deceptive website design, 488 defined, 412 demographic identifiers, 424 differential privacy, 434 earned media, 432–3 ethical campaigning, 6, 12 future directions, 435–6 influencers, 15, 433–4 LGBT community, 191–2 marketing research, 79, 81–2, 425 #MeToo movement, 5, 91, 470 online images, 427–8 online public shaming, 428 personally identifiable information (PII) disclosure, 129 pharmaceutical industry, 332–3 privacy issues, 82, 332–3, 415–16, 425, 427, 428–30, 434, 521, 523 privacy paradox, 428–30 professional and personal identities, 427, 429–30 psychographic data, 424 public relations, 476, 478, 479, 480 regulation, 4, 372–4, 415, 418–19, 425, 478, 509–16 search engines, 416–17, 420, 427, 487–8, 523 slacktivism, 280 sponsored posts, 109 strategy development, 489–90, 493–4 tobacco promotion, 347, 503 tourism and, 264

31/08/20 6:09 PM

536

The SAGe hAndbook of MArkeTinG eThicS

trolling and vandals, 430–1 user-generated content (UGC), 432–3 webographic data, 424 see also digital health; parental mediation of online exposure; personalization in digital marketing digital transformation in charity sector, 489–98 conceptual framework, 496–7, 497 digital inhibitors, 494–6 digital marketing strategy development, 489–90, 493–4 Dillette, A., 263 direct marketing, 413 Direct Marketing Association, 507 disability, 150, 176 Distilled Spirits Council of the United States (DISCUS), 9, 516 distribution practices cultural perspectives, 52 religious perspectives, 49–50 unethical, 22, 23, 35, 49–50, 52 distributive justice, 8, 61, 163 diversity, 5 divine command theory, 45 DocMartins, 185 Domeisen, N., 319 Donaldson, M., 132 Donthu N., 51 Dow Chemical, 199 Dow Jones, 208 Dredge, D., 264 Dreher, Beil, 204 Drumwright, M. E., 479, 480 Dubinsky, A. J., 461, 463 Duggan, L., 188 Duthler, G., 433 Eagle, Lynne, 3–15, 169–77, 330, 500–16, 509, 520–9 earned media, 432–3 Eastman, George, 446 EasyJet, 231–2 eating disorders, 148, 169, 189, 321 Echtner, C. M., 266 Eckhardt, G. M., 318 eco-friendly products, 12–13, 198–9, 227, 228–9, 244 economic conditions, ethical international marketing strategy and, 27, 34 ecotourism, 13, 262, 263, 264 education and training, 525–8 see also ethics training Edwards, E. A., 317 Edwards, J. B., 320 Egberts, K., 342 egoism, 8 eHealth see digital health eHealth Barometer, 374 Ehrenberg, A. S. C., 169 Eisend, Martin, 146–51

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 536

elaboration likelihood model (ELM), 128 Elbeltagi, I., 52 Elegido, Juan Manuel, 399–408 Elkington, J., 389 Ellen MacArthur Foundation, 361 Elliott, R., 133 emotional appeals in advertisements, 49, 253 Employee Free Choice Act, US, 205 Enderle, G., 294 Enron, 528 environmental issues see climate change; sustainability Environmental Protection Agency (EPA), US, 319, 356 Epstein, E. M., 290 EQUIS, 527, 529 Erikson, K. T., 77 Esty, D. C., 387 Eteokleous, Pantelitsa, 20–31 ethical attitude, developing, 521–2 ethical codes see codes of ethics Ethical Consumer, 228, 280–1 ethical consumption, 12 consumer activism, 275–6, 279–81 Fairtrade, 62, 229–31, 233, 357–8, 405 food, 358–60 Ethical Fashion Forum, 321–2, 523 ethical frameworks, 7–9, 8 ethical imperialism, 393 ethical international marketing strategy, 20–31, 522 conceptual model, 24–9, 24, 34–5 defined, 35 external drivers, 22, 24, 26–8, 34 future research directions, 30–1 implications of model, 30 internal drivers, 22, 24–6, 24, 34 outcomes of, 22–4, 28–9 reputational competitive advantage and, 21, 28–9 unethical practices, 22, 23, 35 see also cross-cultural marketing ethics ethical investing, 307–8 ethical leadership, ethical international marketing strategy and, 25, 34 ethical organizational culture, ethical international marketing strategy and, 26, 34 Ethics Codes Collection, 507 ethics training public relations, 478–9 salespersons, 458, 459, 464, 465 ethnic minorities see cross-cultural marketing ethics ethnic stereotyping, 147, 148–9 Etihad Airways, 240 Eurobarometer, 281 European Advertising Standards Alliance (EASA), 7, 505, 510, 512 European Association of Communication Agencies, 9, 507 European Communication Monitor, 479 European Data Protection Board (EDPB), 374 European Federation of Food Banks, 359

31/08/20 6:09 PM

Index

European Food Safety Authority (EFSA), 356 European Foundation for Management Development (EFMD), 527 European Media Literacy Week, 118 European Social Marketing Association (ESMA), 251 European Union Action Plan for a Circular Economy, 386 codes of ethics, 7, 83 consumer protection legislation, 501 corporate social responsibility (CSR), 292 cosmetics industry regulation, 177 EU Pledge, 118, 516 food poverty, 359 food safety issues, 355, 356, 357 food waste, 360–1 General Data Protection Regulation (GDPR), 4, 373, 415, 418, 425, 478, 488, 509 greenwashing regulation, 232 industry lobbying organisations, 505 product disposal, 219, 388 product durability and reparability, 386 self-regulation, 510, 512 Evangelopoulos, N., 435 Evans, D. M., 227 everyday ethics, 69 Ewing, M. T., 495, 496 experience marketing, 64 Extinction Rebellion movement, 362 Facebook, 58, 83, 429, 480, 489 Cambridge Analytica scandal, 4, 419, 426, 489 deepfake detection, 428 harmful product marketing, 342, 503 LGBT community, 192 personalized marketing, 417–19 regulating antisocial behaviour, 431 sponsored posts, 109 terms of service, 434 Facebook Pixel, 417, 418 Fagnot, I., 432 Fair Trading Act, New Zealand, 501 Fairtrade, 62, 229–31, 233, 357–8, 405 fairwashing, 357 fake products see counterfeit products Fan, H., 411 Farmer, Y., 478 farmers, portrayal of, 176–7 Farrell, B. H., 260 fashion industry, 315–22, 523 animal-based materials, 319, 320 body dissatisfaction and, 321 collaborative consumption, 318 consumer activism, 280–1 corporate social responsibility (CSR), 320–1 counterfeit products, 317–18, 394–5 eating disorders and, 321 ethical fashion, 315, 319–20, 321–2 ethical gap, 318–19

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 537

537

fast fashion, 316, 318 garment factory fires, 320, 390 greenwashing, 321 materialism, 316, 317 modern slavery, 278 online shopping, 320 overconsumption, 316–17 retail therapy, 317 slow fashion, 318 sustainability, 228, 316, 318, 319, 320, 321, 386–7 sweatshop practices, 6, 279, 280, 318, 319, 321 Fassin, Y., 392 Fasteau, M. F., 173 Fearnley-Whittingstall, Hugh, 358, 361 Federal Food Donation Act, US, 360 Federal Trade Commission (FTC), US, 15, 48, 50–1, 332, 478, 501, 511 Federation of European Direct and Interactive Marketing (FEDMA), 505 Feeding America, 359 Feinberg, J., 164 Feldman, J., 174 female sexualisation and objectification, 91–101, 521 as controversial advertising, 92 effects on sexual relationships, 97–100 effects specific to female consumers, 95, 96–7 effects specific to male consumers, 95–7, 98–9 future research directions, 100–1 gendered differences in consumer responses, 93–5, 94 literature search, 92–3 objectification theory, 95, 96, 100 self-objectification and, 95, 96, 100 see also idealizations of physical appearance Fennell, D. A., 262 Ferrell, Linda, 163, 457–70 Ferrell, O. C., 163, 457–70, 529 Ferrero Group, 387 FIFA International Soccer game, 109 FIFA World Cup, 62, 445–6, 448, 449, 453 Fikkers, K. M., 117 financial product marketing, 301–11, 523–4 context, 301–2 future directions, 310 market rigging, 307 misleading or deceptive advertising, 305–6 misrepresentation, 307–8 mis-selling, 304, 308 payday lending, 308–9 predatory sales, 308–9 regulation and codes of conduct, 302–3, 303, 304, 309–10 significance of unethical practices, 303–5 Firsirotu, M. E., 468 Firth, Livia, 315 Fisher, J., 243 Fisk, George, 198 fitness trackers, 369

31/08/20 6:09 PM

538

The SAGe hAndbook of MArkeTinG eThicS

five-capital approach to capitalism, 199–200, 199 FleishmanHillard, 282 Fletcher, K., 318 flexitarianism, 358 Flokk, 244 Flores, L., 491 Fogg, M., 315 Font, X., 262 Font Vivanco, D., 221 Food and Drug Administration (FDA), US, 177, 330, 331, 332, 356, 502 food ethics, 354–62 animal welfare, 355, 356–7, 356 confectionery and soft drinks, 340–3, 342, 348 Fairtrade, 62, 229–31, 233, 357–8, 405 fairwashing, 357 food consumption, 358–60 food poverty, 359–60 food production, 354–8 food safety issues, 355–6, 356, 357 food waste, 360–1 foodbanks, 359–60 labelling schemes, 219, 356–8, 356, 391 meat consumption, 357, 358–9 nutrition information, 391 organic food, 219, 357, 359 packaging and plastics, 361–2 social supermarkets, 359–60 supply chain issues, 357–8 vegetarianism and veganism, 358–9 Food Standards Agency (FSA), UK, 356 football sponsorship, 445–6, 448–9, 450, 453–4 Ford, Henry, 292 Ford, R. C., 480 Foreign Corrupt Practices Act, US, 49, 241, 245, 304 Forest Stewardship Council (FSC), 228–9 Fortenberry, B., 268 Fox, A. K., 129 Framework Convention on Tobacco Control (FCTC), 504 France breast implant ban, 176 consumer protection legislation, 503 corporate social responsibility (CSR), 291 food waste, 360 industry lobbying organisations, 506 product management, 386, 388, 391, 394 self-regulation, 510, 513 social supermarkets, 359 sponsorship, 448, 450, 451 Frankental, P., 294, 297 Fraser, C., 33 Freberg, K., 433 Fredrickson, B., 96 Freeman, R. E., 293 Friedman, Milton, 11, 290, 291 Friege, H., 217 Fulmer, I. S., 242

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 538

fundraising, 250, 252–4, 524 Fundraising Regulator, UK, 253–4, 489 fur industry, 319 future orientation, 47, 51, 53–4 Gabriel, Y., 279 Galanti, Richard, 205, 206 Galli, F., 359 gambling sponsorship, 450 gaming advergames, 109, 110, 504 in-game advertising, 109–10 gamification in digital health, 375 Garðarsdóttir, R. B., 316 garment factory fires, 320, 390 Garrett, T., 60, 162 Garthwaite, K., 360 Gbadamosi, A., 231 Geipel, A., Jr., 159 Gendall, P., 330 gender egalitarianism, 47 inequality, 255 parental mediation of online exposure and, 114, 116 sales ethics subculture and, 468–70 stereotyping, 5, 52, 146, 147, 148, 150 see also female sexualisation and objectification General Data Protection Regulation (GDPR), EU, 4, 373, 415, 418, 425, 478, 488, 509 General Electric (GE), 219, 302 General Motors, 294 genetically modified organisms (GMOs), 355 Germany, 291, 477, 502, 509–16, 510, 512 Geyer, R., 217 Giano, Z., 191 gift cards, 302–3 gifts and hospitality, 240–1, 243–4, 329 Gill, R., 189 Gilliland, N., 493 Gilstrap, C., 435 Ginder, W., 189 Glavas, A., 295, 296, 297 Global Code of Conduct for Research in ResourcePoor Settings, 507 Global Code of Conduct for Research in Resource-Poor Settings, 507 Global Code of Ethics for Tourism, 264 global financial crisis (2007–2008), 304 global warming, 266 see also climate change Global Youth Climate Strikes, 234, 522 GLOBE study, 47–8, 51, 53–4 Goatman, A. K., 494, 497 Goffman, E., 427 Goldfarb, A., 434, 435 Goldman, J., 333 Gonul, F. F., 331

31/08/20 6:09 PM

Index

Gonzalez, M., 494 Good, D. J., 464 Google deepfake detection, 428 personalized marketing, 416–17, 418, 419, 426 terms of service, 434 Google Analytics, 490 Gordley, J., 401 Gore, Al, 199 Gower, Karla K., 289–98 Gran Turismo game, 109–10 Green & Black’s, 230 green buying intention, 50 green marketing, 12–13, 226, 227–8, 233–4, 244 Greenland, Steven, 339–49 Greenpeace, 6, 206, 232, 500 greenwashing, 5, 218, 219, 231–3, 321, 393, 522 Gresham, L., 468 Gretzel, U., 266 Grimwood, B. S. R., 265 Grindr, 192 Grotius, Hugo, 401 Grunert, K.G., 229 Grunig, J. E., 474 Guðnadóttir, U., 316 Guest, E., 174 Gupta, A., 389 Gurman, T.A., 371 Gutierres, S., 98 H&M, 149, 220, 228 Hafenbradli, S., 295 Hainmueller, J., 230 Håkansson, H., 239 Hampel Commission, UK, 296 Handelman, J. M., 279 Handy, F., 249 Hanlon, Annmarie, 424–36 Hanly, K., 405 Hanson, D.G., 226 HARKing (Hypothesizing After the Results are Known), 85 harmful products, 13, 339–49, 524 alcohol, 141, 190, 343–5, 348, 450, 503–4, 508, 516 children and, 341, 342–3, 503, 508 common unethical practises, 348 confectionery and soft drinks, 340–3, 342, 348 LGBT community and, 141, 190 marketing regulation, 118, 341, 343–4, 345–6, 345, 347, 349, 503–4, 516 non-communicable diseases (NCDs) and, 339–40, 341, 343, 345 pricing ethics, 341–2, 344–5, 347, 348 promotion, 342–3, 344–5, 347–8 sponsorship, 450 in-store placement, 341, 342 sugar tax, 342

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 539

539

tobacco, 141, 190, 345–8, 345, 346, 348, 450, 503, 504 vulnerable populations and, 118, 141, 190, 341, 342–3, 347, 348 Harney, A., 390 Harper, B., 96 Harrison, R., 355 Hart, J., 156 Harvard Business Review, 469 Harvey, David, 259 Hatch, M., 468 Hawes, J. M., 461 Hawkins, N., 96 Hawkins, R., 261 Hawkins, T. G., 242 Hay, Rachel, 169–77 Hayes, B., 63 health breast implants and, 176 cosmetic fillers and, 176 cultural appropriation of medicinal knowledge, 157, 158, 160 food nutrition information, 391 food poverty and, 360 food safety issues, 355–6, 357 infant formula and, 143 non-communicable diseases (NCDs), 339–40, 341, 343, 345 obesity, 176, 339, 340, 341, 342, 360, 450, 504 skin-whitening products and, 142, 170, 175, 177 tanning and tanorexia, 170, 175 vulnerability and, 140 see also harmful products Health Information Technology (HIT), 368 Health Rights International (HRI), 492 healthcare, 13, 524 interdisciplinary approach, 67–9 long-term care, 67–9 medical and surgical tourism, 389 PrEP provision for HIV prevention, 190–1 product safety issues, 389 unintended effects of campaigns, 517 see also digital health; pharmaceutical industry Hebberts, Lucy, 91–101 Heirman, W., 431 Heller, M., 361 Helms Bakery, 451 Helsper, E. J., 114, 117 Helyar, J., 204, 205 Hemphill, T. A., 334 Hems, L., 491 Hertel, S., 230 Hicks, R. L., 358 Higg Index, 320 Higgins, E. T, 317 Higgins, M., 254 High, Stanley, 279 high-pressure sales tactics, 51–2

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540

The SAGe hAndbook of MArkeTinG eThicS

Hill, R. P., 140 Hilton, B., 318, 394 Hine, R., 96 Hitchcock, D., 387 Hobbes, Thomas, 400 Hockett, R. C., 402, 405 Hoek, J., 330 Hoffman, A. J., 208 Hoffmeister, D. C., 462 Hofstede, Geert, 28, 34, 46–8, 137 Holland, Janet, 98 Holland, John L., 462 Holocaust-denial material, 516 Holt, D., 278 Holzinger, I., 292 Homburg, C., 457, 460 homelessness, 129 homonormativity, 187–8 Honeycutt, E. D., Jr., 464 Hong Kong, 304, 307, 308 Hopkins, M. S., 200 Horton, C., 493 House, Robert, 47–8 Hoy, M. G., 129 Hriscu, A., 315 Hudders, L., 118 Hudson, Z., 333 Hudson M., 84–5 Hughes, M., 132 Huh, J., 330 Huhmann, B. A., 92 Hult, G., 208 human capabilities approach, 293–4 human capital, 199 Human Development Index, 294 human ecology theory, 65 human genetic patents, 159–60 human rights, 252, 262, 359 human rights movement, 276, 281–3 human rights theory, 293 human trafficking, 278 humane orientation, 47, 48, 51 Hunt, S. D., 6, 63 Hunt, Tim, 428 Hunt, Todd, 474 Hunt–Vitell theory (HVT), 7, 60 Husted, B. W., 292 Hwa, Y., 49 hypocrisy, corporate, 295–6 idealism, 45 idealizations of physical appearance, 169–77 ageism and aging, 174, 189 airbrushing, 174 beauty trends, 170–1 breast implants, 176 concepts and theories, 171, 172, 173 cosmetic fillers, 176

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 540

cosmetic surgery, 171, 175–6 cultural and social influences, 174 disclaimers/warnings, 176 fair skin and skin-whitening products, 142, 170, 174–5, 177 idealized female beauty, 173 idealized masculinity, 172–3 LGBT community, 189 portrayal of disabilities, 176 portrayal of farmers, 176–7 shame and guilt, 176 tanning, 170, 175 see also female sexualisation and objectification India, 6, 142, 175, 320, 358 indigenous peoples see cultural appropriation individual ethics corporate influence on, 5–6 individualism, 46, 50, 51, 52, 137 industry lobbying organisations, 504–6, 505–6 infant formula, 143 influencer marketing, 15, 433–4 influenza, 356 information privacy, 51 Ingram, T. N., 463 initial coin offerings (ICOs), 306 Innospec Ltd, 241 Instagram, 15, 418, 432, 433, 454 Institute for Supply Management, US, 243, 245 institutional review boards (IRBs), 83 institutional settings, ethical international marketing strategy and, 26–7, 34 intellectual property rights, 392, 394 cultural appropriation and, 157, 158–60, 163, 164, 165 cultural perspectives, 50 Interactive Advertising Bureau (IAB), 15 intercultural marketing see cross-cultural marketing ethics interdisciplinary approach to marketing ethics, 58–71 evolution of marketing ethics, 59–61, 61 healthcare, 67–9 integrative framework, 62, 66 robotics, 62–7, 68 service-dominant (S-D) logic, 58, 61–2, 63–5, 69–71, 70 theoretical and managerial implications, 69–71, 70 interested communication, 126 International Association of Business Communicators (IABC), 476 International Chamber of Commerce (ICC), 118, 507, 510, 513 International Conference on Responsible Tourism in Destinations (ICRT), 260 International Events Group (IEG), 444 international marketing ethics see cross-cultural marketing ethics; ethical international marketing strategy International Olympic Committee (IOC), 446, 449, 451

31/08/20 6:09 PM

Index

International Organization for Standardization (ISO), 229, 385 ISO 14001, 387 ISO 26000, 208 International Public Relations Association (IPRA), 476 International Social Marketing Association (ISMA), 251 International Statement of Ethical Principles in Fundraising, 253 internet see digital health; digital marketing and social media; parental mediation of online exposure; personalization in digital marketing Internet of Things (IoT), 374–5 intersectionality, 188 invisible hand, 44 Ireland, 118 Islamic perspectives, 5, 44–5, 48–50, 52–3 Israel, 191, 478, 479 Italy, 360 Jackman, Molly, 83 Jackson, T., 218, 316 Jamal, Tazim, 259–71 Jamrozy, U., 269 Jansson, Johan, 215–22 Jansz, J., 112, 113 Japan, 47, 175, 291 Järvinen, J., 492–3 Javalgi, R., 137 Jax, K., 65 Jenner, Kendall, 282 Jennings, B., 197 Jensen, O., 457, 460 Jerslev, A., 174, 433 Joergens, C., 319 John, L. K., 85 Johnson, H., 306 Johnson, J. L., 393 Johnson, K. K., 317 Johnston, Mark W., 457–70 Jones, E., 219 Jones, P., 234 Jones, T. M., 65 Jonson, E. P., 526 Joyner, B. E., 295 Jurassic World (movie), 109 Kamin, Tanja, 275–83 Kanerva, Lauri, 83 Kanevska, Sofiia, 146–51 Kang, H., 117 Kang, M., 317 Kannan, P. K., 489, 491, 493, 495 Kant, Immanuel, 8, 163 Kaphingst, K. A., 331 Kaptein, M., 480–1 Karaibrahimoglou, Y. Z., 47 Karaosmanoglu, E., 295 Karjaluoto, H., 492–3

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 541

541

Karst, H., 265 Kates, S. M., 188 Kato, K., 265 Katz, E., 433 Kaufman, I., 493 Kaufman, M., 173 Kaufman-Scarborough, C., 129 Kaul, A., 331 Keegan, Brendan James, 487–98 Keene, J. R., 116 Keith, A., 332 Keller, K. L., 491 Kemper, J. A., 227–8 Kennedy, Ann-Marie, 140, 155–65 Kennedy, E. J., 63 Kenrick, D., 98 Keyton, K., 97 Khamis, S., 433 Ki, E.-J., 478 Kim, Hye Kyung, 114 Kim, Hyosun, 332 Kim, S.-Y., 478 Kirchherr, J., 216, 217 Kit Kat, 279 Klein, Naomi, 392 Klincewicz, K., 444, 447, 449 Kocieniewski, D., 204–5 Kodak, 446 Koehn, D., 404 Kohlberg, Lawrence, 294 Koinig, Isabell, 367–76 Kokolakis, S., 415 Korhonen, J., 215, 216, 217 Kotler, P., 60, 198, 248, 250, 251, 261–2, 277 Kozinets, R. V., 79, 81, 279 Kozlowski, A., 321 Kozup, J., 306 Kreiner, G. E., 427 Kreitner, R., 402, 405 Kruse, L. M., 82 Kubacki, Krzysztof, 248–56, 275–83 Kumar, S., 430 Kuring, J., 97 Kurland, N. B., 464 Kwon, Y., 447 Kyle, M. K., 327, 327 labelling schemes ethical fashion, 320 food, 219, 356–8, 356, 391 sustainability, 228–9 Laczniak, G. R., 60, 161, 163–4, 250, 292, 297 Laing, A., 494, 496 Lallmahomed, A., 387 Lam, Regan, 301–11 Lamberti, L., 492 Lamberton, C., 425 Lambrecht, A., 416, 417

31/08/20 6:09 PM

542

The SAGe hAndbook of MArkeTinG eThicS

Lang, T., 279 Lanham Act, US, 502 Lassar, W., 94 Laterza, V., 426 LaTour, M., 94 Laursen, K., 392 Lauterborn, B., 14 Lavis, A., 435 Law, John, 304 Lawo-Sukam, A., 264–5 Lawton, L., 63 Lazarsfeld, P., 433 Leary, J., 306 Lee, A. M., 480 Lee, S. T., 478, 480 Lee, Seunghoon, 259–71 Lee, S.-J., 117 Leeflang, P. S., 414 Lehman Brothers, 307 Leonard, C., 133 Leonidou, C. N., 22, 33, 234 Leonidou, Leonidas C., 20–31, 47 Levine, Marne, 431 Levy, S. J., 248, 250 Lewin, Kurt, 6 Lewis, B. R., 494, 497 Lewis, L. S., 330 Ley general para la defensa de los consumidores y usuarios (LGDCU), Spain, 503 LGBT community, 5, 184–92, 521 ageism, 189 body image issues, 189 corporate social responsibility (CSR) and, 191 criticisms of targeted marketing, 185, 188 effects of targeted marketing, 188–90 homonormativity, 187–8 intersectionality, 188 lesbian under-representation, 186–7, 189 LGBT tourism, 185 lifestyle-based marketing, 185 myth of affluent gay male, 189–90 pinkwashing, 191, 521 PrEP provision for HIV prevention, 190–1 Project SCUM, 141, 190 representation in marketing, 185–8 smoking and alcohol, 141, 190 social and historical context, 184–5 social marketing campaigns, 185, 190 social media and, 191–2 stereotyping, 150 Li, E. P., 174 Li, H., 489, 491, 493, 495 LIBOR scandal, 307 Lim, S. J., 390 Lim, W. M., 197 LinkedIn, 429, 431 Linoff, G. S., 414 Liobikiene, G., 50

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 542

Litvin, S. W., 432 Liu, Y., 316 Livingstone, S., 112, 114, 117 Lloyds Bank, 490, 491, 492, 493, 494, 497 lobbying, 504–6, 505–6 Locke, John, 401 Lodhia, A., 172 Lolk, Christian, 326–35 long-term orientation, 28, 34, 46, 50, 51–2, 53, 137 L’Oréal, 278 Louis Vuitton, 386 Lovins, Amory, 197, 199–200 Low, David, 339–49 Loxley, A., 427 Lunde, M. B., 197 Lunde, M.B., 234 Luo, W., 175 Lusch, R., 201 luxury brands, 393 Lužar, Karmen, 339–49 Lynch, T., 406 Lyon, A., 328 Lyon, S., 230 McAlexander, J. H., 395 McArthur, L. Z., 148 McCabe, S., 262 McCarthy, J., 14, 14 McCartney, Stella, 228 McClaren, N., 462, 464 McCorkindale, T., 480 McDonagh, P., 233, 234 McDonald, S., 233 McDonaldization, 393 McDonald’s, 230, 450 McEachern, Morven G., 354–62 McFadyen, M. A., 52 McGowan, J. J., 290 machine ethics, 67 Macias, W., 330 McInroy, L., 191 McKenzie, M., 265, 270 McKinley, N., 97 McLean, B., 309 McNeil, M., 32 McNeill, D., 335 McNulty, P. J., 291 Madden, M., 82 Madoff, Bernie, 301–2 Magrizos, Solon, 91–101 Mahayana Buddhism, 45 Mahr, Dominik, 58–71 Main, K. J., 330 Maitland, I., 405 Makkar, Marian, 155–65 Malle, B. F., 67 malt liquor, 141 see also alcohol

31/08/20 6:09 PM

Index

Manchiraju, Srikant, 315–22 Mander, J., 291 Mangles, C., 493, 494 manipulative sales tactics, 51–2 Manning, R., 332 M¯aori people, 84–5, 157, 158, 159 Marine Stewardship Council, 206 Market Research Society (MRS), UK, 303, 303 market rigging, 307 market segmentation, 136 marketing ethics, definitions, 3–4, 60 marketing mix, 14–15 cultural perspectives, 50–2, 53–4 religious perspectives, 48–50, 53 unethical practices, 22, 23, 35, 48–54 marketing research ethics, 74–88, 75, 521 anonymity, 79, 81 basic guidelines, 75–6 cloaking, 79, 82 codes of conduct, 83 confidentiality, 79, 81 data manipulation, 85, 87 debriefing, 80 deception, 80 fabrication, 79 fraud and research misconduct, 85–7, 86 HARKing (Hypothesizing After the Results are Known), 85 informed consent, 76–9 peer review, 87 pre-registering research, 86–7 privacy, 79, 81–2 procedural ethics, 83, 88 projective techniques, 80 research community, 83 research participants, 74–82 society, 83–5 trust, 79–80 Markham, A., 79 Markopolos, Harry, 302 Mars, 357 Marshall, Greg W., 457–70 Martin, K. D., 393 Martinez, L. F., 319 Marwick, A. E., 427 masculinity, idealized, 172–3 masculinity/femininity dimension, 28, 34, 46, 47, 50, 51, 53, 137 Mason, C., 294 Masur, P. K., 429 Mataatua Declaration, 165 materialism, 316, 317 May, J. D., 126 Mayo, M., 138 Means, G. C., 289 Medeiros, K. E., 527 Media Smart, 118 medical sales representatives (MSRs), 327–8

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 543

543

medications see pharmaceutical industry medicinal knowledge, cultural appropriation of, 157, 158, 160 Meel, M., 389, 390 Meenaghan, T., 444–5, 451 Megaw, N., 308 Mehta, K., 343 Melé, D., 64 Mello, S., 176 Mendoza, K., 113 Menon, A., 296 Mens, C., 111, 112, 113, 118 menthol cigarettes, 141 see also tobacco Merkin, R., 51 Merrill, H. E., 289 Mesch, G. S., 117 Messner, M., 478 #MeToo movement, 5, 91, 470 metrosexuality, 172–3 mHealth see digital health Michel, C., 400–1 Micheletti, Michele, 280 Michie, S., 6, 529 Microsoft, 434 Middleton, V. T. C., 261 Mikeska, J., 112–13 Milburn, M., 98 Mills, Charles Wright, 276 Minchow-Proffitt, H., 435 Min-Dong, P. L., 291 Minibonds, 304, 307, 308 Mirivel, J. C., 328 misrepresentation see product misrepresentation mis-selling, financial products, 304, 308 Mississippi Company, 304 Mitchell, V. W., 172 Mittal, B., 94 mobile phones, 109, 112, 115, 115, 117, 127, 504 see also digital health modern slavery, 278 modernism, 43–4 Molina, Luis de, 405 Monnot, Elisa, 385–96 Monroe, Marilyn, 172 Moons, I., 13, 107–19 Moradi, B., 97 Moraes, Caroline, 91–101 moral relativism, 8, 44, 45, 137–8, 245 moral universalism, 137–8 Morris, L. A., 331 Morry, M., 94 Mott-Stenerson, B., 92 Mukonza, C., 234 Mulder, T., 374 Muniz, A. M., 395 Murphy, P. E., 3, 4, 21–2, 60, 137–8, 292–3, 294, 297, 392, 480

31/08/20 6:09 PM

544

The SAGe hAndbook of MArkeTinG eThicS

Murphy, W. H., 464 Myers, D. G., 316 Myers, J., 97

Nudies Jeans, 220 Nufer, G., 452–3, 452 Nys, J.-F., 445–6

Nabout, N. A., 491 Nairn, A., 129–30 Narayanan, S., 331 Nass, C. I., 67 Nathan, S. K., 252 Nathanson, A. I., 113 National Association of Broadcasters, US, 516 national culture, 28, 34, 46–7 native advertising, 4, 15 Native Americans, 141, 158, 163 natural capital, 199 Nauta, M. M., 462 Ndubisi, N. O., 51 Neijens, Peter, 474–81 Neill, M. S., 479 Nestlé, 5–6, 143, 230, 357, 358, 386, 500 Nestle, M., 355, 356 networking theory, 64 new institutional economics, 64 New York Times, 220, 335 New York Times Magazine, 290 New Zealand consumer protection legislation, 501 cultural appropriation, 157, 158, 159 financial product marketing, 307–8 industry lobbying organisations, 505 M¯aori ethical framework, 84–5 pharmaceutical industry, 329, 330, 331, 335 public relations, 478, 479 self-regulation, 510, 513 Nezlek, J., 94 Ng, G., 173 Nicholas, G., 162, 164 Nicholls, A., 357 Nicholls, J., 207 Nicholson, G., 309 Nike, 185, 199, 279, 280, 448–9, 453 Nikken, P., 112, 113, 117 Nill, A., 159 Nishiyama, K., 51 Noci, G., 492 Nölke, A.-I., 186, 187, 188, 189 non-communicable diseases (NCDs), 339–40, 341, 343, 345 non-profit marketing, 248–56, 524 cause-related marketing, 254, 277–8, 282–3, 321, 524 corporate social marketing, 254–6, 278 fundraising, 250, 252–4, 524 social marketing, 13–14, 14, 250–2, 262, 263, 277–8 see also digital transformation in charity sector Norway, 477 Norwegian National Committee for Research Ethics in the Social Sciences and the Humanities (NESH), 82

Oates, Caroline, 226–34 obesity, 176, 339, 340, 341, 342, 360, 450, 504 objectification see female sexualisation and objectification objectification theory, 95, 96, 100 O’Cass, A., 316 Odekerken-Schröder, Gaby, 58–71 O’Fallon, M. J., 463 O’Guinn, T. C., 395 oil industry, 232 Oliver, Mathieu Alemany, 74–88 Ollier-Malaterre, A., 429 Olympic Games, 445, 446, 446, 449, 451 one-to-one marketing, 413 online marketing see digital marketing and social media; parental mediation of online exposure; personalization in digital marketing online public shaming, 428 online retailing, 52 Onyas, W. I., 357 Opal, C., 357 opinion leaders, 433 opportunism, 242 Ordoñez, I., 386 Oreo: Twist, Lick, and Dunk game, 109 organic food, 219, 357, 359 organic washing, 393–4 organizational control, ethical international marketing strategy and, 26, 34 organizational culture, 458–9 see also sales ethics subculture Origin Materials, 386 O’Sullivan, D., 371 Outdoor Advertising Association of America, 516 Outfox the Market, 232 Oxfam, 229

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 544

packaging, 361–2, 386, 388, 391 see also labelling schemes Packard, V., 130 Padilla-Walker, L. M., 111 Painter-Morland, M., 207 Palenquera women, Colombia, 264–5 Palihawadana, D., 295 Pallab, P., 51–2 palm oil, 5–6, 279, 387, 500 Palmer, Daniel E., 136–45 Panteqi, Mivena, 43–54 parasite marketing, 453 Parboteeah, K. P., 48 parental mediation of online exposure, 107–19 active mediation, 111–12, 113, 114, 115, 116, 117, 118 advergames, 109, 110

31/08/20 6:09 PM

Index

age of child and, 114 brand placements, 109 children and online advertising, 108–10 children’s advertising literacy, 110 children’s screen time, 107, 108–9 co-viewing, 111, 113, 115, 116, 116, 118 cyberbullying and, 117 deference, 111, 112, 114 determinants of, 112–16, 115, 116 effects of, 116–18 evaluative mediation, 111, 118 factual mediation, 111, 118 in-game advertising, 109–10 implications, 118–19 internet literacy and, 113–14 media device type and, 115–16, 115, 116 mediation strategies, 110–12 parental style and, 112–13 parent’s gender and, 114, 116 public policy and, 118–19 restrictive mediation, 111–12, 113, 114, 115, 116, 117, 118 socio-economic status and, 114 sponsored posts, 109 Parguel, B., 393 Parguel, Béatrice, 385–96 Pasquini, L. A., 435 Patagonia, 220, 233, 319 patents, cultural appropriation and, 159–60 Paton, R., 492 Patterson, P., 476 Paul, P., 28 payday lending, 140–1, 308–9 Payment Protection Insurance (PPI), 304, 308 Payne, D., 295 Pearson, Y., 480 Peattie, K., 12, 14, 227, 228, 231, 233, 234 Peattie, S., 14 Pedigo, K., 32 peer review, 87 Peloza, J., 295 People for the Ethical Treatment of Animals (PETA), 319, 355 PepsiCo, 110, 282 Peretti, Jonah, 280 performance orientation, 47–8, 51 peripheral information processing, 128 Perrone, A., 401 personality types, sales careers and, 462 personalization in digital marketing, 411–20, 523 burning pixel, 417 data mining, 414 data protection regulations, 415, 418–19 database marketing, 413 defined, 411 ethical implications, 415–16, 418–19 first-party cookies, 413–14, 415–16, 418–19 frequency caps, 417

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 545

545

future directions, 419–20 online behavioral advertising, 417, 418, 426 privacy issues, 415–16, 523 retargeting, 417, 418, 420 search engines, 416–17, 420, 523 social networking sites, 417–19, 420 third-party cookies, 413–14, 416–19 Persson, M., 429–30 persuasion knowledge model, 521 pesticides, 355 Peters, B. G., 11 Peterson, Mark, 196–209 Petrison, L. A., 413, 415 Petronio, S., 428 pharmaceutical industry, 13, 326–35, 524 corruption, 328–9 counterfeit products, 389 direct-to-consumer (DTC) advertising, 329–32, 335 gifts, 329 high-prescribing incentives, 329 obscuring risks and side effects, 328–9 off-label promotion, 328 orphan drugs, 334 pricing issues, 331–2, 333–5, 404–5 privacy issues, 332–3 safety issues, 389 sales practices, 327–9 stakeholders, 327, 327 philanthropy, 254, 445, 447 Philippines, 158 Phillips, J., 390 Piaget, Jean, 131, 132 pinkwashing, 191, 521 planned obsolescence, 386, 387 plastic waste and pollution, 6, 361–2 Plastics Pact, 361–2 Poels, Karolien, 411–20 political behavioral targeting, 426 political consumerism, 279, 280 pollution air, 198, 388 plastic, 6, 361–2 Polonsky, M. J., 254 Poole, M. S., 411 postcolonial theory, 266 post-modernism, 44 power distance, 28, 34, 46–7, 50, 51, 52, 53, 137 Prasad, A., 292 Prasad, P., 266 Pratarelli, M. E., 65 predatory pricing, 23, 48, 49 predatory sales practices, financial products, 308–9 PrEP, 190–1 Prescription Medicines Code of Practice Authority, 243 Pret a Manger, 361 price discrimination, 23, 48, 49, 51 price fixing, 23, 50–1 price skimming, 51

31/08/20 6:09 PM

546

The SAGe hAndbook of MArkeTinG eThicS

pricing ethics, 399–408 affordability, 404–5 alcohol, 344–5 avoidance of unrestrained profit motive, 405–6 background injustice and, 406–7 confectionery and soft drinks, 341–2 cost plus, 405–6 cultural perspectives, 50–1 equality principle, 401–2, 408 fair trade, 405 harmful products, 341–2, 344–5, 347, 348 hypothetical market price, 402–3 non-exploitative prices, 403–4 pharmaceutical industry, 331–2, 333–5, 404–5 predatory pricing, 23, 48, 49 religious perspectives, 48, 49, 401 tobacco, 347, 348 unethical practices, 22, 23, 35, 48, 49, 50–1 voluntariness, 400–1 privacy issues differential privacy, 434 digital health, 372–4 digital marketing and social media, 82, 332–3, 415–16, 425, 427, 428–30, 434, 521, 523 online marketing research, 79, 81–2 personalization in digital marketing, 415–16, 523 pharmaceutical industry, 332–3 privacy paradox, 373–4, 428–30 Procter & Gamble, 233–4 product disclosure statements (PDSs), 309–10 product management, 385–92, 395–6 consumer information, 391 consumer protection, 389–91 counterfeit products, 317–18, 389, 394–5 defects and recall, 390–1 design stage, 386, 387, 389–90 disposal stage, 388, 390 durability and reparability, 386 environmental impacts, 385–9 information disclosures, 50 intellectual property, 392, 394 packaging, 361–2, 386, 388, 391 planned obsolescence, 386, 387 production stage, 386–7, 390 resource consumption, 385–9 safety, 389–91 use stage, 387–8, 390 see also brand management; circular economy product misrepresentation, 23, 49 financial products, 307–8 product-related practices cultural perspectives, 50 religious perspectives, 48 unethical, 22, 23, 35, 48, 50 professional development, 527–8 Project SCUM, 141, 190 promotion practices cultural perspectives, 51–2

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 546

religious perspectives, 49 unethical, 22, 23, 35, 49, 51–2 Proportionality Principle, 60, 162 Prosser, J., 427 Prothero, A., 198, 233, 234 public relations, 474–81, 521 codes of ethics, 475, 476–7, 478 corporate-conscience role, 479 ethical behavior, 480 ethical decision making, 476, 477–8 ethical knowledge, 479 ethical training, 478–9 ethical values, 476, 477 factors influencing ethical practices, 480–1 regulation, 478 social media and, 476, 478, 479, 480 tobacco industry, 347 Public Relations Society of America (PRSA), 475, 476, 477–8, 479 Puerto Rico, tourism industry, 266 Pufendorf, Samuel, 401 Pujari, D., 385 Quester, P., 137, 138 Quester, P. G., 22, 33 racial and ethnic stereotyping, 147, 148–9 Raines, K., 206 Raman, A. P., 244 Rana Plaza disaster, Bangladesh, 320, 390 Rao, P. V., 156 Raun, T., 433–4 Ravn, S., 428 Rawls, John, 60, 163 reactance theory, 172 recycling and recycled materials, 215, 216, 217, 219, 220, 244, 255, 361–2, 386, 387, 388, 393 reducetarianism, 358 Reeves, B., 67 regulation, 500–16, 524–5 building consumer awareness, 525 children and advertising, 118–19, 341, 343, 503, 504, 508, 515, 516 compliance issues, 508–16 consumer protection legislation, 500, 501–3 data protection, 4, 372–4, 415, 418–19, 425, 478, 509 digital marketing and social media, 4, 372–4, 415, 418–19, 425, 478, 509–16 ethical international marketing strategy and, 27, 34 financial product marketing, 302–3, 303, 304, 309–10 harmful product marketing, 118, 341, 343–4, 345–6, 345, 347, 349, 503–4, 516 industry lobbying organisations, 504–6, 505–6 industry response to, 503–4 self-regulation, 9, 264, 297, 341, 343–4, 348, 506–8, 509, 516, 522–3

31/08/20 6:09 PM

Index

social acceptance and social licence to operate, 500–3 unintended effects, 516, 517 see also codes of conduct; codes of ethics Reich, R. B., 297 relationship marketing, 63, 413 relativism, 8, 44, 45, 137–8, 245 religious perspectives, 5, 6, 43–5, 48–50, 52–3, 401 Relmer, Arnold, 333 reputational competitive advantage defined, 35 ethical international marketing strategy and, 21, 28–9 reputational resources, ethical international marketing strategy and, 24–5, 34 Resko, B. G., 148 resource-advantage theory, 63 Responsible Tourism in Destinations conference, 260 Rest, J. R., 479 retail therapy, 317 review solicitation programs, 432–3 Reynolds, R. J., 141 Richardson, B., 395 Richardson, W. D., 480 Ridley, D. B., 327, 327 Riley, M., 342 Ringold, D. J., 4 Rittel, H. W. J., 9–10, 277 Rivera, J. L., 387 Rizzo, J. A., 332 Roberts, M., 343 Roberts, T., 96, 98 Robertson, D. C., 464 Robinson Patman Act, US, 48 robotics, 62–7, 68, 375 Rocco, R.A., 462 Rocky Mountain Institute (RMI), 197, 199–200 Roedder John, D., 132 Roeglin, Ginnie, 202–3, 207 Rogers, E. M., 433 Rogers, R., 318 Rogers, R. A., 160 Rolls-Royce, 241, 244, 245 Román, S., 464 Ronaldo, Cristiano, 453 Ross, W. T., 464 Roundtable Human Rights in Tourism, 264 Rowthorn, D., 128 Roy, P., 176 Royle, J., 494, 496 Rozendaal, E., 111 RSPCA, 356, 356 Rudman, L., 98 Rundle-Thiele, S., 171 Russell, A. R., 249 Russell, L., 137 Saat, M., 389, 390 Sacco, Justine, 428

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 547

547

Sacconi, L., 63 Sadachar, Amrut, 315–22 safety issues food, 355–6 product management, 389–91 Sainsbury’s, 230, 231, 358 St. John, B., 480 Salamanca School, 401 sales ethics subculture, 457–70, 521, 523 Attraction–Selection–Attrition (ASA) perspective, 462–3 codes of ethics, 465, 466–7 conceptual development and empirical findings, 464–7 ethical decisions, 463 ethical issue intensity, 467 ethics training, 458, 459, 464, 465 gender and, 468–70 individual characteristics and, 458, 463–4 organizational characteristics and, 458–9, 464 organizational culture, 458–9 sales as a profession, 460–2 sales as a subculture, 459–60 subculture defined, 458 theory and conceptual foundations, 467–8 values, norms, and artifacts, 458, 459, 463, 467, 468, 470 Salter, A., 392 Samson, L., 93, 94 Samsung, 109 Samuel, G., 435 Sandel, Michael, 401 Sanne, C., 221 Sanyal, R., 51 Sargeant, A., 249 Sari, S. V., 431 Saucier, J. A., 189 Saura, J. R., 490, 492, 494, 496, 497 Savani, S. J., 249 Scharkow, M., 429 Scheyvens, R., 262 Schneider, B., 462–3 Schooler, D., 91, 98 Schouten, J. W., 395 Schulman, S., 191 Schumacher, C., 509 Schwartz, M. S., 476, 479, 480–1 Schwepker, C. H. Jr, 463, 464 Scotus, John Duns, 402 search engine advertising (SEA), 416 search engines, 416–17, 420, 427, 487–8, 523 Securities and Exchange Commission (SEC), US, 241 Security Magazine, 416 segmented markets, 136 Seleim, A., 51 self-concept theory, 172 self-discrepancy theory, 172 self-identity, 13

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548

The SAGe hAndbook of MArkeTinG eThicS

selfies, dangerous, 431–2 self-interest, 44 enlightened self-interest model, 290, 294 self-objectification, 95, 96, 100 self-objectification theory, 172 self-presentation theory, 427 self-regulation, 9, 264, 297, 341, 343–4, 348, 506–8, 509, 516, 522–3 Sen, A. K., 293–4 Sender, K., 186, 187 Sengupta, J., 94 service science, 65 service-dominant (S-D) logic, 58, 61–2, 63–5, 69–71, 70 services marketing, 63 sexual appeals in advertisements, 49, 52 sexualisation see female sexualisation and objectification Sharif, M. A. M., 172–3 sharing economy, 61, 217, 218 Sharp, E., 97 Sharp, M., 371 Shaw, R., 415, 490–1 Shell, 232 Sherman Act, US, 48 Sheth, J. N., 14, 14 Shin, W., 111, 114, 117 Shrkeli, Martin, 334–5 Shugart, H. A., 156 Silva, B. M., 371 Simmons, J., 294 Simons, N., 188, 192 Simpson, J., 137, 138 Sin, R. G., 411 ‘sin products’ see harmful products Sinclair, S., 97 Sinegal, Jim, 201, 202, 204, 205, 207 Singh, J., 386 Singhapakdi, A., 22, 348 Sirgy, M.J., 404 Sisodia, R. S., 14, 14 Skiera, B., 491 skin-whitening products, 142, 170, 175, 177 slacktivism, 280 slavery, modern, 278 smartphones, 109, 112, 115, 115, 117, 127, 504 see also digital health Smith, Adam, 44 Smith, N. C., 392 Smith, W., 254 Smith and Ouzman Ltd, 241 smoking, 141, 190, 345–8, 345, 346, 348, 450, 503, 504 Smorthit, Lee, 487–98 Sobel, R. N., 432 social capital, 199 social causes, 275–83 anti-brand activism, 278

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 548

anti-consumption movements, 12, 77, 279–80, 358 cause-related marketing, 254, 277–8, 282–3, 321, 524 causes-as-solutions, 277 climate change, 278 consumer activism, 275–6, 279–81 consumer boycotts, 27, 28, 281, 358 corporate brand activism, 278 culture jamming, 280 definitions and concepts, 275, 276–7 human rights movement, 276, 281–3 human trafficking and modern slavery, 278 social cognitive theory, 172, 173 social comparison theory, 172 social contract theory, 8, 61, 293 social entrepreneurship, ethical international marketing strategy and, 25, 34 social identity theory, 172 social justice framework, 60 social licence to operate (SLO), 500–3 social marketing, 13–14, 14, 250–2, 262, 263, 277–8 corporate, 254–6, 278 to LGBT community, 185, 190 social media see digital marketing and social media social network theory, 64 social norms, changing, 5 social public concern, ethical international marketing strategy and, 28, 34 social robotics, 62–7, 68 social supermarkets, 359–60 societal marketing, 60 sockpuppets, 430–1 Soet, J., 98 soft drinks, 340–3, 342, 348 Soil Association, 356, 356 Sony, 389 Sorin, R., 130 South Africa, 334 South Korea, (Republic of Korea), 175 Spain, 503, 511, 514 Spiller, L., 492, 496 Spinello, R. A., 404 sponsorship, 444–54 ambush marketing, 444–5, 451–4, 452 brand protection policies, 449 defined, 445 non-ethical practices from sponsees, 449–51 non-ethical practices from sponsors, 447–9 objectives, 446–7 origins of, 445–6, 446 reputational risks, 449–50 social media influencers, 15, 433–4 sponsored online posts, 109 sportswashing, 450–1 sport sponsorship see sponsorship sportswashing, 450–1 Spotswood, F., 129–30 Sriramesh, K., 6

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Index

stakeholder orientation, 62, 200–1, 200 stakeholder theory, 65, 293 Standard and Poor’s (S&P) Index, 304 Starbucks, 199, 205, 230 Starks, T.J., 190 Staska, S., 94 Steinkamp, N., 175 Stephen, A. T., 425 stereotype threat, 147 stereotyping, 5, 146–51, 522–3 age, 147, 149–50 cross-cultural marketing and, 142–3 ethnic, 147, 148–9 gender, 5, 52, 146, 147, 148, 150 LGBT community, 150 mirror vs. mold arguments, 150 other social categories, 150 Stevens, P., 190 Stone, M., 415 Subramanian, S., 231 Suen, Y. T., 189 sugar consumption, 340–3, 342, 348 sugar tax, 342 Sunikka, A., 412 surveillance capitalism, 4 sustainability, 12–13, 196–209, 226–34 business engagement, 233–4 business schools and, 207–8 business-to-business marketing, 244–5 collaborative consumption, 318 consumption reduction, 216, 220–2 Costco case study, 201–7, 202 critical school, 198 defining, 196–7 developmental school, 197–8 dominant social paradigm (DSP) and, 198–9, 227 ecological marketing, 227 ethical dimensions, 197 Fairtrade, 62, 229–31, 233, 357–8, 405 fashion industry, 228, 316, 318, 319, 320, 321, 386–7 firm performance and, 208 five-capital approach to capitalism, 199–200, 199 food waste, 360–1 grassroots movements, 234, 522 green consumers, 233 green marketing, 12–13, 226, 227–8, 233–4, 244 greenwashing, 5, 218, 219, 231–3, 321, 393, 522 indexes, 207 labelling, 228–9 lifestyles of health and sustainability (LOHAS), 198–9 macromarketing perspectives, 197–201, 200 materialism and, 316 packaging, 361–2, 386, 387 palm oil, 5–6, 279, 387, 500 planned obsolescence, 386, 387 product management, 385–9

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 549

549

rebound effects, 221–2 recycling and recycled materials, 215, 216, 217, 219, 220, 244, 255, 361–2, 386, 387, 388, 393 sharing economy, 61, 217, 218 stakeholder orientation, 200–1, 200, 204–7 sustainable consumption, 217–18 sustainable products, 12–13, 198–9, 227, 228–9, 244 tourism, 261–2, 263, 265–6, 269–70, 271 see also circular economy Sustainability Accounting Standards Board (SASB), 208–9 Sustainable Apparel Coalition (SAC), 233, 320 Sustainable Development Goals (SDGs), 196–7, 208, 266, 354, 367, 376 Sutton, Robert, 311 Swarts, I., 234 sweatshop practices, 6, 279, 280, 318, 319, 321 Sweeney, J., 32 Symons, K., 113 Szablewska, Natalia, 248–56, 275–83 Taiwan, 358 tanning and tanorexia, 170, 175 TARES test, 479 taxation consumption reduction and, 221–2 harmful products, 342, 344, 345, 347 Taylor, Charles R., 3–15, 43–54, 143, 326–35, 500–16, 520–9 Taylor, M., 477 Te Ara Tika, 84–5 technology acceptance models, 370 teleology, 8 Tellis, G. J., 126 Tempel, E. R., 252 Terlutter, Ralf, 367–76 tertiary education courses and curricula, 526–7 Tesco, 176 theory building, 520–1 theory of planned behavior (TOB), 370 theory of the firm, 63 therapeutic shopping behavior, 317 Thomas, J. L., 64 Thomas, N. J. R., 234 Thunberg, Greta, 362 Thunman, E., 429–30 Tiggermann, M., 96, 97 Times Higher Education (THE), 207 tobacco, 141, 190, 345–8, 345, 346, 348, 450, 503, 504 Todor, R. D., 412 Toledano, M., 478, 479, 481 Tony’s Chocolonely, 62 tourism industry, 259–71, 523 Bermuda, 266, 267–8, 267 Canmore, Canada, 269–70, 270, 271 climate change and, 265–6, 271 collaborative governance, 269–70

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550

The SAGe hAndbook of MArkeTinG eThicS

destination marketing, 260–1, 263, 266, 268–9 ecological footprint, 6, 13 ecotourism, 13, 262, 263, 264 ethic of care, 270 ethical tourism marketing, 260, 268–70, 271 evolution of ethics in, 260–3, 261, 263 governance and regulation, 264–5 justice and, 262–3, 263 LGBT tourism, 185 medical and surgical tourism, 389 as neocolonialism, 263 sustainability, 261–2, 263, 265–6, 269–70, 271 volunteer tourism, 262 Toys ‘R’ Us Australia, 302 traditional knowledge see cultural appropriation Traidcraft, 229 Tranfield, D., 92 transformative consumer research (TCR), 81 Tree, I., 359 Trevino, L. K., 480 Treviño, L. K., 26 Trinkhaus, N., 370 TripAdvisor, 432–3 triple bottom line, 199–200 trolling, online, 430–1 Trussell Trust, 359 Tryhorn, C., 232 Tsai, W.-H. S., 187, 192 Tuck, E., 265, 270 Tucker, C., 416, 417, 434, 435 Turing Pharmaceuticals, 335 Turnbull, P. W., 243 Tuten, T., 492, 496 Twining-Ward, L., 260 Twitchell, J. B., 316 Twitter, 434, 480 Tybout, A. M., 76 Uber, 61 Ugras, Y. J., 463 Ulver-Sneistrup, S., 64 uncertainty avoidance, 28, 34, 46, 47, 50, 51, 52, 53, 137 UNESCO, 159–60 Unfair Commercial Practices Directive, EU, 501 UNICEF, 282 Unilever, 5–6, 142, 386 unionization, 205 United Arab Emirates, 434 United Kingdom bribery cases, 241 charity sector, 253–4, 489, 492, 493–6 children and advertising, 118 codes of ethics, 7, 8 corporate social responsibility (CSR), 296 digital advertising spend, 490 ethical clothing, 228 ethical fashion, 315 Fairtrade, 229, 230, 357, 358

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 550

financial product marketing, 304, 308 food poverty, 359 food sector, 354, 355, 356, 356, 357 fundraising standards, 253–4, 489 greenwashing regulation, 232 plastic packaging, 361 public relations, 476 self-regulation, 511, 514 tobacco regulation, 346 vegetarianism and veganism, 358 United Nations, 281, 319, 371 Agenda 2030, 360 Declaration on the Rights of Indigenous Peoples, 156 Global Compact, 293 Guiding Principles on Business and Human Rights, 264 Human Development Index, 294 Human Rights Council, 293 Mataatua Declaration, 165 Sustainable Development Goals (SDGs), 196–7, 208, 266, 354, 367, 376 United Nations World Tourism Organization (UNWTO), 259, 261, 262, 264 United States air pollution, 198 breast implant ban, 176 bribery cases, 241 buying–shopping disorder, 317 children and advertising, 118 children’s screen time, 107, 108–9 codes of ethics, 7–8 consumer activism, 279 consumer protection legislation, 501–2 corporate social responsibility (CSR), 290, 291, 292 cosmetics industry regulation, 177 cultural appropriation, 158 data protection regulations, 425 digital health, 368, 369 digital marketing rules, 15 environmental, social and governance (ESG) issues, 11–12 ethical fashion, 315 evolution of marketing ethics, 60 fair trade, 230 financial product marketing, 305, 306 food poverty, 359 food sector, 355, 356, 357 food waste, 360–1 Foreign Corrupt Practices Act, 49, 241, 245, 304 fundraising standards, 253 gifts, 329 industry lobbying organisations, 506 institutional review boards (IRBs), 83 materialism, 316 pharmaceutical industry, 329, 330, 331, 332–3, 334, 335 pinkwashing, 191

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Index

pricing ethics, 48, 50–1 public relations, 476, 477, 478, 479 racial and ethnic stereotyping, 147, 148–9 self-regulation, 511, 515, 516 sponsorship disclosure regulations, 434 uncertainty avoidance, 47 United Technologies Corporation, 199, 241 United Way of America, 249 Universal Declaration of Human Rights, 262, 281, 359 Universal Declaration on the Human Genome and Human Rights, 159–60 University Impact Rankings, 207 Unruh, G. C., 221 utilitarianism, 8, 44, 45, 60, 197 Vaaland, T. I., 292, 295 Valdman, M., 403–4 Valentine, S., 464 Valkenburg, P. M., 116, 117–18 value-for-money movement, 279 van Dijck, J., 429 van Gogh, Roseline, 411–20 van Neck, L., 112 vandals, online, 430–1 Vandelanotte, C., 370 Vanwesenbeeck, I., 118 Varadarajan, P. R., 296 vegetarianism and veganism, 358–9 Vezich, S., 94 Victor, D. A., 139 Victoria’s Secret, 321 Vietnam, 295 Vijayalakshmi, A., 113 violence against women see female sexualisation and objectification Virgin Mobile, 393 virtual reality, 375 virtue ethics, 8, 45, 197 Vitaly Uncensored, 453–4 Vitell, S. J., 46 Vitoria, F., 402 Vogt, W. B., 331–2 Volkswagen, 219, 232, 388, 389 volunteer tourism, 262 vulnerable consumers, 125–34 children, 128–33, 140 cross-cultural marketing, 139–42 harmful products and, 118, 141, 190, 341, 342–3, 347, 348 vulnerability to advertising, 127–30 Vygotsky, Lev, 130 Waeger, D., 295 Walker, B., 63 Walker, K., 321 Waller, D. S., 92 Wallich, H. C., 290 Walmart, 387

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 551

551

Walrave, Michel, 411–20, 431 Walsh, A., 406 Walton, D., 469 Walton, Sam, 205 Wan, F., 321 Wang, R., 432 Ward, M., 91, 98 Ward, S. J. A., 435 Wardana, A., 263 Warren, Richard C., 65 Warren, Ron, 110, 113 Wasserman, H., 435 Watson, S., 174 wearable technology, 369 see also fashion industry Weaver, G. R., 478–9 Weaver, N., 479 Webber, M. M., 9–10 Webber, M. W., 277 Webster, F., 201 WeChat, 434 well-being marketing, 294 Werbin, K. C., 429 Werner, S. B., 291 Wernick, A., 369, 372 Wertheimer, A., 403, 407 Westberg, K., 433 Wetbewerbszentrale, Germany, 510 WhatsApp, 418 White, C., 490–1 White, H. J., 330 Whole Foods, 205, 208 wicked problems, 9–11, 277 Wiebe, G. D., 250 Wiederhold, M., 319 Wikipedia, 431 Wilbratte, B., 404 Wiles, R., 428 Wilkins, L., 476, 479 Willard, M., 387 Williamson, O. E., 242 Wingood, G., 99 Winston, A., 387 Winter, R., 435 Wittink, D. R., 331 Wogalter, M. S., 331 Wolanski, Kinsey, 453–4 Women4Climate project, 278 Wong, H. M., 49 Wood, G., 254 Wood, R., 253 Woodcock, J., 330 World Commission on Environment and Development (WCED), 196, 261, 262, 319 World Economic Forum, 298 World Federation of Advertisers, 505 World Health Organization (WHO), 339, 340–1, 367, 371, 372, 389, 504

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552

The SAGe hAndbook of MArkeTinG eThicS

World Intellectual Property Office (WIPO), 165 World Tourism Barometer, 259 World Trade Organization (WTO), 355 World Wildlife Fund, 206 Wotruba, T. R., 463 WRAP (Waste & Resources Action Programme), 360, 361–2 Wulfson, M., 292, 297 Wylie, A., 162 Yang, A., 477 Yarett, I., 140 Yonkers, V., 526 Yoo, B., 51 Young, Brian, 125–34

BK-SAGE-EAGLE_ET_AL-200177-Index.indd 552

Young, J. O., 161, 163, 164, 165 Young, L., 242 YouTube, 433–4, 503 Yu, J., 411 Yves Rocher, 393 zakaat, 45 Zaltman, G., 76, 250, 251, 277 Zarkada-Fraser, A., 33 Ziff, B., 156 Zink, T., 217 Zuckerberg, Mark, 58, 426, 429 Zwick, D., 198 Zwolinski, M., 405

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