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1. Background of the topic: Integrity issues in marketing
One common definition of integrity holds that integrity is a form of honesty or conscientiousness (Murphy 1993; Ones & Viswesvaran 1993). There are three major types of philosophical principles underlying business ethics to help individual and business organizations to decide what is right and what is wrong: consequences (by focusing on consequences and pragmatism of decisions or actions); duties, obligations and principles (by focusing on right of individuals and companies) and virtue ethics which sets the base of the criterion for determining the ethics of behavior on the character of the person involved in the decision making and carrying out of an action (DuBrin 2009, p.77). When a business is treated as a human being, here comes the concept of business integrity or business ethics. It is well known to people that any for-profit organizations are striving for profit that provides incentive for hard work and key changes in business; business integrity seems to support the firms to keep profitable in a long term basis. According to Rhonda Abrams and Eugène Kleiner (2003, p.9), studies of business success over time have shown that companies that emphasize goals in additional to making money succeed better survive than companies whose sole motivation is monetary. This assignment will probe into to the research and discussion of the journal paper, Integrity in marketing: Chinese and European perspectives (by Mike J. Thompson#) to have an in-depth understanding of the integrity issues in the areas of marketing which could be defined as an integrated process through which companies build strong customer relationships and create value for their customers and for themselves (Gattorna 2003).
2. Objectives of this report
u Refine the concept of integrity as a basic value in the China culture and tradition
u Research the topic of “law of diminishing brand loyalty”
u Explain why marketers could lack an integrity in the marketing
u To find out the conflicts between the views of the journal and traditional views
3. Summary of the journal literature
In the abstract part of the journal, Mike J. Thompson introduce the new emerging crisis which is different from the ongoing environmental and financial crisis, the ethical crisis in brand marketing, in term of a number of business scandals making the business integrity a popular topic and top concerns. And one topic questions is also mentioned which is the “ultimate challenge” in the marketing integrity in this paper: To character of the marketer and of those who are responsible for the management of brands with the reference to the business behaviors in China and Europeans countries.
In the introduction of the paper, the author provides a brief introduction of the several hot topics in the integrity in marketing. These topics discussed mainly about: an increased number of scandals in business and public sectors in term of product safety issues and corruption in all levels; Increased media reports and public attention on the business integrity and honesty performance; Public demand for transparency in both business and public sectors and in the positive side there is a raise of ethical brands which has been used as business and brand strategy for major and popular brands. These topics construct the base and major content for background for the generation and analysis of ethical issues in marketing. The major body of the paper is unfolded under three points, we will summarize these them as below:
3.1 Increased adoption of integrity as a basic value in China
First, the author discussed about international popularization of integrity as a fundamental value in the business practice. A recent study was mentioned in the paper which has shown that there are a growing number of Chinese consumers who are supporting and expecting good CSR (Corporate Social Responsibility) behaviors (Ramasamy & Yeung 2009) while another study found out that 76% of the consumers agreed with the view that the large organizations contributed to the social improvement positive impacts. Then the author tried to provide an understanding of the concept of integrity by demonstrating several common definition of the term “integrity”. Then the journal paper described the 2008 Chinese milk scandal which was a food safety incident in the People’s Republic of China, involving milk and infant formula, and other food materials and components, adulterated with melamine. By November 2008, China reported an estimated 300,000 victims, with six infants dying from kidney stones and other kidney damage, and a further 860 babies hospitalised (Brooks & Dunn 2010, p.27). While many domestic brands like Sanlu which was among the worst impacts of the milk scandal failed in the food safety crisis with people’s buying preference shifted to the imported brands, the largest domestic brands survived the crisis such as Yili (The Inner Mongolia Yili Industrial Group Co., Ltd.) and Sanyuan were found to have enjoyed solid advantages against the crisis compared to other competitors because of their high commitment to the CSR and business integrity which enabled them to put the customer interest and product safety at the top priorities.
3.2 Development trends of integrity in the marketing
Second, the author discussed about main development trends of business integrity in the marketing practices. This part of the study first discussed the phenomenon of brand failures in the European countries by referring back to the view of Askew (2009) which suggests that there are two levels of brand failures in the new brands that provide a more holistic proposition to customers: one is that they (the failed brands) have been experiencing a diminishing of brand purpose; and another is the failure to get adapted and manage the changes that have significant impacts on the future development of the brands. Then the author concluded there are two dimensions of the ethical crisis in brands, the fist dimension is from the very basic challenge to the honesty of the brand communications and the second dimension is the moral imperative of sustainability in term of environmental protection. One ethical charge on the brands term of environmental protection comes from Brenkert (2008)’s claim which is in two versions with the stronger version claim that marketers should not have produced the products if they come with negative impacts in term of pollution, waste and intoxication and so on; and the weaker version that requires the marketers to provide products that are with positive overall environmental impacts (stronger positive impacts than negative impacts).
The largest multinational corporations (MNCs) proactively or are rather forced to take the lead the ethical crisis of brands. In the proactive side, Wal-Mart and Marks and Spencer had been introduced as successful example in adopting strategies to approach the marketing integrity such as releasing a “sustainable product index” (SPI) and other activities and plan together with an increased effort to communicate greater transparency of the environmental protection and sustainability effort by the companies. In the inactive side, McDonald’s business sectors in US and UK after a number of lawsuits and disputes were rather reactively to take up strategies to reshape and reposition the brand to be inclusive of a healthy lifestyles by providing a more balanced and healthier menu and also increase the transparency of the information of the food offerred by the McDonald Stores. Another similar brand reposition case belongs to ABInBev UK with similar change in the brand position to a more environmentally responsible way by sharing the information of the recyclability of the products to the public. Though many of the marketers have turn to a more environmentally friendly brand positioning, the author suggested that more actions and institutionalization will be needed to authenticate the slogans created by the marketers.
While making and delivering promises seems could be able to be separated apart, another phenomenon that indicates a growing demand for greener products by the customers and provides a more reliable source of confirmation of the environmental nature of the products is the verification and certification process which is most popular in the agricultural products. One organization mentioned in the journal as providing such verification services is the Rainforest Alliance which is an independent, third-party non-for-profit organization that offers the following certification, verification and validation services: Agriculture, Forestry, Tourism and Forest Carbon (Rainforest-alliance.org 2011). Because in order for the products to be certified and validated by Rainforest Alliance, the product manufacturers have to follow the a series of processes which are aiming to contribute to the sustainability and environmental protection, the certification under Rainforest Alliance would actually tells the customers that these products are already quite “green” rather than waiting for what the manufacturers have promised to be delivered. Example under Rainforest Alliance described in the journal is Nestle Nespresso. Then the author expressed his understanding and rationality on these certification actions. He began by explaining role of responsible marketing which is to facilitate the product innovation and communicate the product values to the customers through branded frameworks.
Figure 1 Ladder of Integrity
Source: Thompson (2009)
The figure of ladder of integrity actually describes how marketers should act to achieve responsible marketing in term of promoting the company’s efforts in protecting the environment. On one side, a company will move from lower steps to higher steps by advancing to higher verification and validation, and on the other side along the progressing steps a company would be able to use the communication strategies accordingly to express the credibility and verification that the company has obtained on the other side of the ladder. As suggested by the author, when markers reach certain high level along the ladder, competitiveness and customer preference would be enjoyed by the company due to the company’s contribution has been communicated appropriately.
3.3 Develop marketers’ integrity
Third, the author tried to look further into the marketing integrity by emphasizing on the personal integrity development of the marketers. Though it is generally believed and assumed that marketers are usually approach unethical behaviors such as providing misleading information, exaggerating instructions as part of the routine jobs in marketing positions, but the author did not agree with is common assumption and he referred to Brenkert (2008) that morality is neither simply a matter of opinion nor irrelevant to marketing and the fact that some of the marketers do not at all times do what they are required to do as a marketer with high integrity but this is not strong enough to make the integrity separate from marketers, same human beings as others. And to improve the integrity, the author suggested that the core job of the development and cultivation of the marketers’ integrity would be shaping of the marketer’s character as well as the moral maturity level of the decision makers in the companies which he believed were usually omitted in practice while people would more likely to focus on the “calculative rationality”.
When talking about the determinants of the standard about what is correct and desired behaviors, the author agreed that ethics theories based on duties, obligations and principles (by focusing on right of individuals and companies) should be considered but it is not enough and also external factors should be considered as well. The external factors include the higher management’s convictions regarding whom they would like to be and one’s bargaining power. In another word, the author suggested that the motives that marketers have are important as well s the moral responsibilities in deciding in the final decision making results.
Before drawing a conclusion, the author critically discussed some of the approaches towards the generation of the business integrity in the marketing conditions: Deontological ethics or deontology which judges the morality of an action based on the action’s adherence to a rule or rules could help set up universally applicable policies to be followed by the marketers but such policies could lack a practical evaluation of the efficiency and effectiveness of the job performance of the marketers acting according to the rules; and a utilitarian method, which holds that the morally right course of action in any situation is the one that produces the greatest balance of benefits over harms for everyone affected, could lead to so called as “disinterested and benevolent spectator”; and the author mentioned about the view of Whetstone (2001) who suggested that management should take into account of the virtue ethics, deontological ethics and also actual external environmental inputs in order to have a more flexible and comprehensive knowledge regarding the ethics.
To conclude the journal, the author suggested that integrity in marketing is about placing the emphasis on the marketers to perform the jobs of moral agents to appropriately inform the stakeholders about the environmental features of the products and the ethics has been becoming an increasingly important platform for competition in the nowadays.
4.1 Useful findings
There are several findings and new useful information that we can learn from this journal paper in term of both theoretical understanding of business ethics in the marketing relative departments and positions as well in a organizational level to use the marketing integrity as a strategy to increase the brand awareness and organization social responsibility performances.
4.1.1 Core elements in concept of integrity in Chinese culture
One of the definitions that the author would like to use is one that defines integrity as a set of virtues that consists of six related values; these values are honesty, competence, consistency, dependability, sincerity and benevolence. After this, the author further researched into definition by looking on the related expressions of the term in the long Chinese history. He concluded in the traditional Chinese culture, integrity has three major fundamental components: honesty, credibility and basic moral principles. While individual integrity is developed through cultivating one’s inner world, the integrity should be able to be shown externally in the integrity of a group or a country (group interest is considered as in all the time more important than that of the individuals).
220.127.116.11 Inner world cultivation
While the reading materials teach us that, integrity is seen as the inner sense of “wholeness” derived from qualities such as honesty and consistency of character (Simpson 2011, p.82), the Chinese understanding of integrity which besides the recognition of the important of individual inner effort to cultivate the respected values in consistency with a good person’s characteristics, it also important to look at the expectations from and impacts from external sources.
18.104.22.168 External dependency
External groups, organizations and even a whole country could provide such external inputs. As suggested by Richard H. Solomon (1971, p.22) the Confucius cultures tend to stress attitudes of dependency in their children in order to preserve the integrity of the family group, the organizational guarantor of individual security. For example, as a Chinese, I have deeply understood the importance of protecting the group interests as part of the responsibility of a typical person with integrity in China. To express this in another way, it is actually a kind of influence from the different culture systems.
In my own understanding with the knowledge that I have mastered, that the impacts the Chinese culture has on the development of the concept integrity actually indicates that the cultivation of integrity has never been a pure inner world related job but under the impacts of other people’s judgments in term of individual and group (in different levels).
4.2 The law of diminishing brand loyalty
One helpful concept and phenomenon in explaining the brand decay issue that we could learn from this journal is the concept of a diminishing brand equity and purpose which could happen when customer expectations exceed the organization’s ability to deliver, then the brand must decline to where no amount of marketing effort can reverse its decay (Launchengineering.com 2011). The model seen from the figure shows that brand equity could be reduced overtime. This model corresponds with the life cycle theory which refers to a series of stages in form and functional activity through which an organism passes between successive recurrences of a specified primary stage (Merriam-Webster 1995). Based on this concept, companies have to exceed the customer expectation by continual innovation and brand equity maintenance and management though methods such as product extension and adoption of integrity in marketing to differentiate the products.
Figure 2 Brand image, Negative brand equity & brand decay
Source: Launchengineering.com 2011
4.3 Critical discussion on the journal paper and working ethical problems
4.3.1 Are marketers responsible for business ethics crisis?
If we look at a screen shoot of the possible fact that Sanlu’s (the company that was involved in an adulterated milk powder scandal, affecting some 294,000 Chinese infants and killing six) marketing managers and brand managers decided to promote the company’s ethical contribution to the environmental protection, we could easily conclude that their marketing behaviors is unethical; but we look at the crisis from the perspective of the individual marketers, they are not, or at least not fully responsible for the business ethics crisis and it could be reasonable.
22.214.171.124 Higher management decision
When we talk about limited responsibility of the marketers in causing the business ethics crisis such as the milk scandal mentioned in the journal paper, one of the reasons is that the marketers would not always make the decision out of their own judgments and management decisions could be in many case the form how unethical decisions are made and implemented which results in the charges on the marketers who are usually the one to implement rather than those who finalize the the key important decisions.
126.96.36.199 Information asymmetry
One most critical wrong assumption in blaming the marketers in promoting the healthy and green products while at the same time there could be toxic ingredients added into the products is that the marketers are doing the marketing jobs knowingly the bad ingredients in the product. The fact that helps the marketers to mitigate the charge of unethical marketing is that their work is more similar to a procedure to work on the information provided by other departments and the management and also the work are constrained by the management’s demand and special request, and when the information given to them could already be wrong it is reasonable that the marketers could generate an unethical marketing plan.
188.8.131.52 Target to be achieved
I have one friend who is working as a telesales and his daily job is to make outbound calls to promote the customers with the new products. According to him, it is professional requirements in the job to tell all the term and conditions to the customers before the agreement or contract could be signed, but they are trained to select positive words to up sell the product while the restrictions would be mentioned briefly without strongly emphasizing some major restrictions which could probably be frequently appeared and disputable issues. The responsibility of a telesales should be very limited for several reasons. Firstly, marketers are too some extend trained to do things somewhat unethically; SOPs, i.e. the standard operation procedures will be taught to the employees during the trainings and such standard procedures could already be unethical while they had been designed; secondly, there are targets to be achieved during every call, every day and every month which is linked with the employees’ performance, what is more sale created will always be a widely accepted basis to determinate the sale bonus as part of the remuneration; thirdly, when customers complaints happen, another departments or managers will handle the disputes after the successful sale agreements. And because the telesales are trained to perform the unethical SOPs and do not have to experience the direct consequences (the complaints) of the unethical behaviors, and sale incentives, there is more possibility that they would engage in the unethical behaviors with little reflection pointing at the unethical sale behaviors.
The information the journal tries to send include three folds: first, integrity in marketing are becoming more and more popular and with strategic importance among the diminishing brand equity to keep the brands competitive; second, many large MNCs have adopted the strategies to integrate integrity into the business practice and brand management; third, integrity in marketing is about placing the emphasis on the marketers to perform the jobs of moral agents to appropriately inform the stakeholders about the environmental features of the products by using a mixture of different ethics theories. Though such information seems to be quite in consistence with our work experience as many large companies have already set up policies and framework and functional departments and teams concerning the ethics, situation in the medium sized enterprises (MSEs) seems to quite different as they are under less spotlights previously. What the author encouraged in the closing part of the journal in actually adopting a mix of different ethics theories in order to be more dynamic.
iv. Appendice: Integrity in marketing: Chinese and European perspectives
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