Industrial Marketing

Ethics in Industrial Marketing : Chapter 19

Ethical behavior has gained prominence in buyer seller relationships, which play a vital role in industrial markets. Both buyers and sellers need to adhere to honesty and trust and attempt to act in a manner that is mutually beneficial. They must fulfill their contractual obligations and verbal agreements. Many marketers, however, fail to follow ethical norms of behavior. This has led to unethical practices in the bidding process, cartelization, and forced reciprocity. But, some firms have begun to adopt ethical practices like environmentally responsible buying, green packaging, and establishing green factories.

Sales personnel are the face of an organization and any wrong action on their part can jeopardize the image and profitability of the firm to which they belong. Increasing competition and expectations from the top management have brought in issues regarding unethical selling practices. Sales personnel need to be ethical toward customers as well as their employers.

They should not resort to bribery, gifts, and unsolicited entertainment expenses. There are other ethical issues involved in personal selling. The sales personnel should maintain information confidentiality, furnish proper sales expense reports, and refrain from moonlighting. Industrial promotions have also come under the purview of ethics. Comparative advertising and puffery are two basic ethical issues that marketers need to tackle.

Industrial marketers must keep in mind cultural issues while developing the marketing mix in international markets. Ethics or moral practices differ from country to country. International industrial marketers must be aware of the rules and regulations of trade in the country of operation. The right product must be sold depending on the needs of the customer.

Dumping practices and unreasonably low pricing that harms domestic players should not be resorted to. Unfair trade practices like bribery and gifting, exaggeration in advertising, etc., should be avoided in distribution and promotional efforts respectively. On the whole, industrial marketers need to fulfill social and environmental obligations to society and trade obligations to their business partners to become successful in industrial markets.

Chapter 19 : Overview