According to Armstrong (12) ethics can be defined as a branch of philosophy that describes morals and values. It is therefore seen as a branch of philosophy that differentiate between what is right and wrong hence ethics can be seen as norms of conduct which distinguish between acceptable and unacceptable behavior. Due to the impact of globalization the marketers and businesses are faced with the ever increasing ethical issues in cross cultural setting. Most of the ethical issues many marketers are facing during the global/local marketing process include; bribery, cultural differences, political or government regulation, different ways of custom clearance, different business practices, questionable transfer of funds, Illegal/Immoral Activities in the Host country, Hacking, different methods of Pricing goods and services, Products/Technology, Tax Evasion Practices, Questionable Commissions to Channel Members among others (Armstrong, 15).
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To begin with the first ethical issue faced in global/ local marketing is the issue of cultural differences which is believed to be the differences in cultures existing in different nations. Some values and norms acceptable in one country can be unacceptable in the other country (Frederick, 16).These customs greatly determines what kind of products can be sold or consumed together with the type of services that can be provided in a particular country by the marketers. According to several researchers cross-national cultural differences tend to play a bigger role when it comes to global/local marketing.
According to the mail survey done by Frederick on managers from France, Germany and United States towards the corporate code issue of ethics it revealed that the French valued more of the corporate code of ethics in that a formal code of ethics is to ensure ethical behaviors in a company while the American and Germany differed with the statement and believed that any moral or spiritual consequences of a decision concerning whether the decision is right were not part of the business concern (Frederick, 20).
Cultural differences has a major impact on marketing of some products when it comes to differences in religious believes among different nations. This creates a situation where some products consumed in one country cannot be consumed in another due the religious believes. An example is meat which is forbidden in India due to religious beliefs as it is considered as sacred and it may be hard for any marketer to carry out any business in relation to meat industry in India than in other countries where the culture does not forbid meat eating. This therefore means that cultural differences and believes to tend to have a great impact on the consumption of products in some nations (Willem, 23).
According to Bodo (15), another example of cultural differences is colour where some cultures use the different colours for different occasions in their life experiences. An example is the red colour where in Chinese it means good luck but in the other nationalities it is a sign of danger this greatly affects the marketing especially when it comes to the printing of materials and the advertisement in media and web sites. In addition Bodo (25), argues that racial and ethnic marketing issues are considered to be a major factor encountered in local/global marketing. Since global/local marketing entails the marketing of products across nations which involve the marketing of products in different span cultures, marketers tend to encounter ethical issues that stem from different societal perceptions and sensitivities. This creates a situation where the marketers are forced to make decisions involving the promotion of certain products basing on the values of that particular country. This issue is a challenge to marketing when it comes to adjusting of certain promotional techniques to suit different markets since such adjustments tend to have both positive and negative on the company’s products
Ethical issue of Bribery
The second ethical issue that marketers encounter in global/local marketing is the issue of bribery. Normally it is divided into two which is traditional small scale bribery a case where one is supposed to make some amount of money to a foreign officer for that person to violate some official duty assigned to him/her or to make some government routines actions to be attended on in time. Another type is known as large bribery which is intended to allow violation to the law at the expense of promotion of some policy which directly has an influence on the products being marketed (Bartlett, 45).
In the western and developing countries bribes are seen as away through which some one can purchase government services due to the inability of providing enough amount required for the service to be provided freely. This implies that some nations considers bribery as way of improving equity which is the same as a progressive taxation system that is found in the developing countries since it contribute to equity distribution of power where a local officer will gain power despite having a low wealth accumulation. It is therefore viewed as away of caring for our neighbours from the Christian ground though bribery is unacceptable in some countries since it is viewed as an illegal act and one involved in it is judged for acting against the law (Armstrong, 20).
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This issue poses a great problem for individuals who come from countries where bribery is allowed to carry out businesses in countries where bribes are against the law as they find it difficult to carry out their businesses since they are used to bribery. At the same time this ethical issue poses more difficulties to individuals who come from nations where bribery is illegal to carry out business in nations where bribery is allowed since they view bribery as being unethical which becomes challenging for them to do business or market any product without giving bribe (Andreasen, 40).
According to a research done by John (23), on the issue of bribery in Nigerian and American business found out that bribery and extortion was an ethical issue that has different perception across-national nations as well as when it comes to cross national marketing. It was found that some nations saw the issue of immorality as an action considered to be the function of the nationality actor that was relative to the nationality of the respondent. An example is Nigeria where the sample showed that receiving bribes from foreigners is believed to be unethical than receiving bribes from the Nigerian residents. This has brought the issue of what really constitute the ethical and what doesn’t (John, 45)
Political or Government regulation
The third ethical issue is the issue of differences in political or government regulation. This is an ethical issue in global/ local marketing which is encountered since different nations tend to have different legal as well as government structures compared to others. This therefore implies that some government actions can either support or inhibit particular marketing structures aimed at improving the productivity or consumption of some products and services in some other nations (Frederick, 25).Examples of such actions may include discrimination against foreign companies when it comes to giving subsidies, over regulation of foreign companies unlike the companies from the host country, the government may implement additional factors which may be a trade a barrier to marketing some products in a that particular nation, poor tax considerations where foreign companies products is taxed more than the host country’s products, poor foreign exchange regulations that greatly affect products that comes from underdeveloped countries among others (Fredrick, 28).
Furthermore some nations may cause political exertion on some multinationals companies to engage in any trade agreements between the nations especially when the home country and the host countries are at war (Bodo, 26). This becomes more difficult for marketers to carry out any business transactions since the two countries see each other as enemies therefore each country’s products cannot be allowed to the other. This becomes a problem when the host countries comprise a bigger percentage of the total demand of the product Due to these political differences it may cause a particular company or business of the other nation to collapsing as a result of decreased demand (Bodo, 28).
In addition different nations tend to have different laws regulating the operations of businesses, managerial decision making as well as legal systems and methods for resolving disputes differs a great deal from one country to another which greatly affects the way some business can be transacted in one nation compared to other as some policies maybe favorable to some business but unfavorable to others (Bartlett, 51).
According to Andreasen (45), political influence greatly influences what kind of products can be sold or manufactured in one particular nation since some people will always rely on their government to tell them what are good products to be consumed as well as what they should not and this may lead to high demand of some particular products from specific nations while considering products from other specific countries as bad making it for marketers to carry out the business effectively due political differences (Andreasen ,48).
Ethical issue concerning Illegal/ Immoral activities
The fourth issue which is encountered during local or global marketing is the issue of Illegal or Immoral activities in carried out in some countries. These practices include activities such as high rate of environmental pollution which may be a major cause to some health problems, poor maintenance and unsafe working conditions, product/technology copying where no protection laws exist to restrict the citizens of the host country from copying other company’s trademarks as well as using other products trade patents (Armstrong, 25)
According to Armstrong (53), some countries may implement some policies that lead to short weighing of some overseas shipments for the host countries to charge more on the phantom weight. Copyright and trademark violations are seen to be ever-present unethical issues in the developing countries unlike developed countries example United States where such practices are not allowed. These issues normally result due to lack of robust legal framework in such countries that heavily penalizes the violators (Armstrong, 56).This therefore means that carrying out business in such countries is difficult since no product protection rights exists and any person can use a given product trade mark or label illegal without the authority of the company that actually manufactures the product. Examples of nations where such actions exist are those nations from South East where data piracy is major issue which leads to the circulation of a million illegal discs being made without the authority of the owners. Carrying business in these parts has become a big problem due to the costs involved (Bodo 28).
Hacking is also a major ethical issue where some countries tend to obtain some trade secrets from the internet that is downloaded freely. Currently it is believed that over 100,000 websites offer the free downloads that carries the hacking tools which do not require any special knowledge on the protocols nor the IP addressing. and normally the system hacking assumes that the attacker already is familiar with the user account.The hacking process is divided into remote hacking where in this case some one attempts to penetrate to other companies databases remotely through the internet. Usually the hacker in really sense does not hold any privileges to access the company’s products or services (Frederick, 29). The other type is physical hacking where it requires the person just to enter a personal facility and once the facility is entered the person can freely access any information concerning particular products by just entering the name and password of the company. Such access to the internet is a great hindrance when it comes to companies keeping its trade secrets because some companies will tend to take advantage of other companies to ensure only some products are more demanded than others (Frederick, 30).
The other major issue which is encountered during local/global marketing is the issue of product advertisements. The way some products can be advertised in some nations differs a great deal among the nations. False and misleading advertisements has been an issue of concern where currently the newspaper columns are full of advertisements which deliberately has a comparison of the various features of some given brands with those their competitors. Normally some advertisements done in some particular nations is meant to make some products appear superior than others and in really sense that is not actually true creating a situation where the host nations companies claim to have a product or service that it does not have which in the end leads to the consumers actually not getting what they really asked for just to make that company’s products superior over the other products (Bartlett, 55).
This false or deceptive advertising is one of the key issues concerned in marketing communications. In some nations each United States laws have been established to deal with these issues. Surrogate Advertisements for example in India which are advertisements in favour of alcohol and cigarette have been banned in India and this may make it difficult for a marketer marketing such products in India since the advertisement are not allowed which clearly indicates that such promotions are difficult to be carried in some nations where some products are actually banned (Willem, 26).
According to Willem another major issue under advertising is the issue of political advertising where in some nations political advertising is seen to be on high rise where the advertising seeks to distort some views and records of some opponents by unfairly attacking their reputations without any particular grounds of doing so. Normally political advertising happens when the nation encourages advertisements to appeal more to the people’s emotions basing on the instincts of selfishness, bias and hostility particularly to other ethnic or racial groups (Armstrong, 58).In addition Sublimal advertisements is another ethical issue in marketing in the advertising area especially when it comes to the advertising of some products where some marketers may decide to use some advertisements which have a misleading effect to the consumers of that particular product. Such actions may involve the marketers manipulating consumers through the products through the use of messages that is inherently misleading (Delener, 25)
Another very important ethical issue is stereotyping which is common in advertising and can be termed as an issue ethical issue in advertising where some companies tend to promote information regarding a given product in a manner that gives the audience a quicker understanding of a person or group of persons usually with the relation to the their class, ethnicity or race, gender or even sexual orientation. According to research done by Robert and David (25), in France it was found out that an exaggerated racial stereotype was used in advertisements to make Kellogg’s cereal more popular in the market.
Research therefore showed that through this advertisement it is believed to have paved way for the strong establishment of the comic book art in France. Stereotyping therefore is a situation which leads to the violation of the marketing principles of ethics since it tends to create a situation where the local companies are forced to use some racial images when it comes to the promotions of some products in foreign countries especially overseas countries. This method of using racial ads in advertising has been implemented by the local marketers in order to lure people into buying a certain product since racial gags are believed to be still considered to be the only way to draw customers to certain product (Robert & David, 32).
Exploitation of Social Paradigms
According to Fredrick (33), the other major ethical issue is the issue of exploitation of social paradigms with the typical hopes of making fast cash out the market. Some marketers often opt to use some of the social paradigms of any given country for them to market their products effectively. An example is India where for example some large company’s have campaigns which normally run against the black colour.An example of such action was depicted in India where a young lady found it hard to market given products of a certain company due to her facial expression it was therefore witnessed that as soon as the lady began to the use the creams from India her facial expression changed automatically which was the key success for her to easily sell the products freely. This ethical issue is of concern since it has made many marketers to embrace social paradigms of some countries for their own commercial advantage (Frederick 36).
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Post Purchase Dissonance
Another ethical issue is the issue of Post Purchase Dissonance where marketers tend to market a product which is not what the consumer gets for consumption in the end. Typical examples are the Television shopping Networks and the internet where no elements of consumer tangibility exist which causes a situation where deliberately a customer gets what she/he did not ask for (Andreason, 55).
Propaganda is another ethical issue which is encountered in global/local marketing. Propaganda is a term which in marketing refers to the generally appeal to the customers emotions.Normally in marketing some individuals will get involved in the promotion of some commercial products with the attracting more customers in using the product through the reaction of false perception of the product.
Price discrimination is also a popular ethical issue encountered in local/global marketing. Price discrimination actually exists when sales from identical goods or services are transacted at different varying prices. Price discrimination is seen as a common feature of monopoly and oligopoly markets where in greater sense the market power is exercised where some marketers find it hard to efficiently sell their products at a given price compared to the same products being sold else but by a different company (Delener, 28). This causes a situation where marketers find it harder to market and sell their at a higher price given that the consumers will always prefer to buy products at a lower price compared to same products with the features but manufactured with a different company being sold at a higher price. According to Delener price discrimination in actual sense is more often in foreign countries where though the costs charged on the supply of the products are the same the prices of the goods differ depending on the type of the customer leading to a situation where it costs more to supply a product to one customer than it does another, and yet the supplier charges to both the consumers is the same (Delener, 58).
Price discrimination commonly is associated with racism and sex.This is an ethical issue which is very challenging to marketers when it comes to the marketing and selling of such products since it leads to the lowering of some prices for some goods for some consumer while charging higher prices for the same product to particular selected consumers. This normally creates a situation where output for the same products that is sold at a higher price makes more profits than the other companies products. This therefore leads to a situation that of misallocation of output among consumers and market segmentation a situation which leads to the discouragement of discount customers from becoming resellers (John, 50).
Another prominent ethical issue is the dumping of goods where some companies tend to sell their goods at low prices with an aim of increasing its market share and decreasing competition which is aimed at the subsequent increase of prices in the future. This becomes a challenge to the companies which are competing with the company since the when a particular company lowers the prices it automatically forces other companies in the market to lower their prices too so that they can effectively compete with each other this creates a situation where the company whose products are being offered at a lower price acquires a larger market percentage of share. Due to this some companies are forced to cut down their costs of producing some products with an aim of increasing its market share by lowering the price an issue which actually has a long-term effect on the profits of the company since lowering of prices will automatically lead to low profits especially to a company which has high production costs (John, 58).
Another issue which is of importance that is encountered in local/global marketing is the issue of predatory pricing where large multinational corporations tend to fix prices with an aim of wiping out competition from the small corporations. This usually leads to a situation where the multinational corporations fixes low prices for their products to take advantage of the small medium enterprises who fixes prices of their goods higher in order for the small medium enterprises to be able to make some profits (Robert & Delener, 60).This predatory pricing creates a situation where the small enterprises are unable to meet the costs of production due to the low prices imposed on the goods which eventually leads to the facing out of the small businesses.
Furthermore some nations tend to implement some unfair differential pricing which actually involves the use of unquestionable invoicing where some buyers will requests a written invoice that does not really represent the actual price paid. Such policies are actually implemented with an aim of forcing out local competition (John, 50). Moreover the other ethical issue in local/global marketing is the issue of tax evasion practices where companies implement policies that are aimed at tax evasion such evasion includes the transfers pricing where that prices paid between the affiliates and the actual parent company are adjusted with an aim of making adjustments to the product allocations. Some companies will tend to use the tax havens where these companies ensures that any profits made from the company are low so that they avoid to be taxed more (John ,52).
The other ethical issue is insider trading which is a term that refers to illegal trading of a company where a particular company tends to trade based on the material information which is not available to the general public but rather the information is just known to the company (Patrick & Murphy, 45). This normally common to the companies trading in stocks especially bonds and the company’s normally tend to use such type of trading with an aim of withholding information for the company to built more investor confidence. Insider trading therefore can be seen as a situation which arises when a particular company is interested in hiding some information so that other companies cannot known of its practices example could be when a particular company is planning the development of a particular product whose sales is predicted to be on a higher level the company will decide to keep the information secret within the company so that other companies cannot take or be informed about the product (Armstrong, 65).
The other issue is the phenomenon issue of consumerism also known as bait and switch selling. In marketing it can be seen as a situation where the advertisers seek to promote their product so they can create a stable market for their products through the manipulation of the consumers’ emotions. (Robert & David 35).It can be seen as an appeal by marketers to desire a certain product or services which they actual do not need but due to the influence from the marketers a consumer is actually motivated to buy the product. As result of such persuasion a consumer will tend to switch his/her consumption from normal a product which he/she can afford to a more expensive product (Robert & David, 50). This actually causes exacerbate socio-economic problems to communities which are seeking to raise their standards of living through responsible living since they are persuaded to purchase the products which they do not need leading to a situation where marketers tend to persuade them to buy a certain product through which they progressively tend to satisfy their wants wasting individual resources and forgetting about the genuine wants which in the end lead to a fall in development (Delener,75).
Marketing and promotion of some goods may differ. Some products promoted in under developed countries may not be promoted in developed countries. An example is tobacco where in the united states and British tobacco companies are restricted from aggressively selling the products since they are considered to have a larger impact on the health of individuals while in Asia tobacco products such as Cigarettes are much cheaper since little regulation over who buys the cigarettes and who does not exist making such products accessible to children due less potential awareness on the effects of the product (Armstrong, 69). Due to this in Asia it has raised to potential pressure on the tobacco companies to increase its awareness on the effects of the consumption of tobacco which has great effect on the marketability of this product given the much pressure from the government to inform the public the effects of using this product since such education will lead to the decrease in demand as some people who have been using the product after learning of the effects will decline from using the product (Patrick & Murphy, 56).
Questionable commissions to channel members
Questionable commissions charged to the channel members is another ethical issue that is encountered in the local/global marketing. Usually this includes the unreasonable charging of large commissions or fees being paid to the channel members such as sales agents and importers to take advantage of the market since such practices leads to unfair practices and unfair competitive advantage where one company are sold more aggressively over the other products (John ,56).
Counterfeit goods and brand piracy
According to Delener (76), another ethical issue is the issue of counterfeiting of goods and brand piracy. Though some countries may have signed some trade agreements which concerns the copyright and brand piracy as well as trade marks counterfeiting remains a big issue affecting a larger percentage of most branded goods which include computer software, jeans, cosmetics as well as clothing.This has lead to the loss of revenue especially to the companies whose products are being pirated as well as causing a high risks of damaging the company’s image and identity.
This has lead to a situation where the consumer buys goods at low cost at the expense of the original goods though the consumer has the real idea that the goods are of poor quality but since they are being offered at a cheaper price and the products seem to serve the same function the consumer this makes the consumer to prefer the product which has a low quality compared to the genuine product that is being offered at a higher price. Counterfeiting of goods is always aimed at the consumers who have prior knowledge of the product example could be the luxury goods or some goods like the food and beverages where the consumer has no prior knowledge of the product (Delener, 78).
Internal accounting ethics
The other important ethical issue is the issue concerning the internal accounting ethics. Some nations have restructured the accounting systems a situation which has lead to the increased competitive pressures in the companies a situation which has lead to each company promoting aggressive pricing strategies and more diversification from the current areas to more traditional areas such as consulting a situation which is believed to raise the possibility of threatened auditor independence. These changes have presented multinational firms with ethical dilemmas concerning the local auditing as well as the financial reporting standards (Patrick & Murphy, 69)).
In conclusion it can be seen that the local/global marketing involves many ethical issues which should be dealt with in order to make the process of glocal marketing easier. Understanding of such ethical issues will lead to the development of some ethical solutions to the problems which actually will make glocal marketing an easier task at the same time enabling each company to be able to sell the products or services all over the world without difficulties.
Alan R. Andreasen, Ethics in social marketing; Published by Georgetown University Press, Pg 40-55 (2001).
Armstrong, R. W., “An Empirical Investigation of International Ethics: Problems Encountered by Australian Firms, Journal of Business Ethics, Pg 12-65 (1992).
Bartlett C. A., Managing across Borders: The Transnational Solution”, Boston: Harvard Business School Press Pg 45-55. (1989).
Jan Willem; Marketing Ethics: A Selected, Annotated Bibliography of Articles; Published by American Marketing Association, Pg 23-26 (1993).
Michael John, The marketing book; Published by Butterworth-Heinemann, Pg 23-53 (2003).
Nejdet Delener, Ethical issues in international marketing; Published by Haworth Press, Pg 25-78 (1995).
Robert Frederick, A companion to business ethics; Published by Wiley-Blackwell, Pg 16-36 (2002).
Robert D, David C, Hospitality Marketing Management; Published by John Wiley and Sons, Pg 25-50 (2009).
Schlegelmilch Bodo, Marketing ethics: an international perspective; Published by Cengage Learning EMEA, Pg 15-28 (1998).
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