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Marketing was easier when the economy was expanding and consumer disposable income was growing. For three decades after World War II, marketing strategies generally were built around the development of growth markets. Satisfying customers was important, but never as important as it has become in the nineties, with the competitive pressures of largely static markets. Previously, ethical problems were less apparent as well, not so much because people did not care, but because society’s expectations were different and there was a simple rule for evaluating marketing practices: caveat emptor, within the rule of law. If it was legal to sell a product that might be harmful or might not live up to the seller’s promises, then marketing the product was acceptable because the decision to buy was the consumer’s. The consumer was expected to employ the maxim “buyer beware.”
Today there is widespread concern about ethics in public and private life extending to many areas — politics, education, health, as well as business. Indeed, the current period may be called the “ethics era.” For marketers, this has meant that standards of acceptable marketing practice have shifted along a continuum, from a position wherein producer interests are paramount to a position wherein consumer interests are more favored. Society’s expectations have changed so that if caveat emptor ever was truly an adequate basis for evaluating marketing ethics, this is no longer the case.
What constitutes ethical marketing practice in the ethics era? In this article, I provide an answer by first illustrating society’s expectations of marketers today and the challenges to basic marketing assumptions. Second, I propose a tool, the “consumer sovereignty test” (CST), that helps resolve some of the ethical problems marketing managers are currently experiencing.
I briefly review research developments in business and marketing ethics to highlight the difficulties in guiding managers on ethical business conduct. Next, I use three examples of ethical controversy in marketing to illustrate the decline of caveat emptor. This shift in society’s expectations of marketers, which further complicates the task of guiding managers, I cover more formally in a discussion of the marketing ethics continuum. I propose resolving the problems identified by using the consumer sovereignty test. I describe the rationale for CST, discuss how managers can use it (including its application to the foregoing examples), and identify the major ethical issues in marketing to which it applies. I conclude with a discussion of the strengths and limitations of the marketing ethics framework.
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