Volume 18, Number 1 Article by Katherin Sele March, 2006
Marketing Ethics in Emerging Markets – Coping with Ethical Dilemmas :
Multinational companies (MNCs) are increasingly investing in emerging markets outside the Western hemisphere in the hope of generating additional profits, which are difficult to achieve in saturated Western markets. However, guided by profit maximisation, their operations are often questionable as they push for a market-oriented satisfaction of needs as opposed to the need-oriented, welfare-maximising market activity that emerging markets require. Kathrin Sele examines the different facets of this classical dilemma between economic and social goals, establishes the basis for ethical considerations in global marketing, and concludes by making practical recommendations for responsible marketing.
MNC ‘misconduct’ includes not orienting products along the basic needs of the people and artificially creating needs instead; an uncritical transfer of Western life style and consumption patterns to exploit economies of scale and to achieve additional profits through an artificial extension of product life cycles; exploiting the knowledge standard of the consumers, the absence of environment protection, and the lack of oversight of product safety and product quality in developing countries; not being sensitive to local context and identity, especially in their communication measures; and following unrealistic pricing strategies that automatically exclude the ‘bottom of the pyramid’ from market development.
MNCs must act along maxims that support responsible decision making in marketing by designing products specifically suited to the need of low-income consumers, working towards welfare maximisation, incorporating social responsibility by becoming more trustworthy as more and more authority is being transferred to them from the government, and fostering ethical behaviour at home through ethical audits and codes and guidelines of ethics which are exemplified by their top management leadership. MNCs can thus make a valuable contribution towards the sustainable development of these economies, which offer a huge potential for a win-win situation.
Reprint No 06106c
