unethical marketing case study

Ethical Marketing: 6 Examples of Brands that had Controversial Marketing Campaigns

Here’s what NOT to do when it comes to practicing ethics when marketing. We’ve picked out 6 case studies that happened in Singapore that we can learn from. This is part 1 of a 2-part series on Ethical Marketing. To learn more about how you can be mindful about ethics when marketing, head over to part 2 here.

With COVID-19 sticking around for longer than we hoped, it’s likely that even more businesses will shift towards operating online . That translates to more digital content vying for our eyeballs. As a digital marketer, it’s crucial that your content grabs the attention of your target audience.

When businesses fail to keep ethics in check, it can make them stand out in the wrong way. In this world where “customer is king”, a misstep can be detrimental for their brand. Take for example the multiple sagas House of Seafood (Punggol) was embroiled in – the use of claw machines for customers to catch live crabs , the upselling of surgical masks during the height of the pandemic and more recently, taking their crabs for a walk . The restaurant has drawn flak from the public for throwing marketing stunts that are “in poor taste”. Consumers have taken to platforms such as Google Reviews, Facebook and TripAdvisor to voice their discontent, calling for petitions to revoke their license.

Unfortunately, it’s been rather common that businesses have gotten into trouble for unethical marketing. Let’s take a look at a few instances in Singapore where campaigns or companies faced criticism for unethical practices in sales and promotions.

1. Mediacorp Ad: Racial Insensitivity

The portrayal of blackface was popularised in the 19th century after the creation of a genre in entertainment: blackface minstrel shows. White performers darkened their skin with shoe polish, grease paint or burnt cork, and illustrated behaviour that perpetuated caricatures of African Americans. Humiliating and unjust stereotypes portrayed involved undesirable characteristics such as hypersexuality, criminality and laziness.

While it’s now deemed an intolerable act of discrimination in the United States, challenging the longstanding racism that’s plagued the country remains an uphill battle.

Though we don’t share the same racial history as the United States, the concept of blackface isn’t foreign to us here in Singapore. It just manifests in another form: brownface.

In 2019, brownface appeared in an advertisement, promoting e-payment as a convenient option for all. The banner featured an ethnically Chinese actor who darkened his skin to portray a Singaporean Indian man . The ad sparked public outcry for its racist undertones in the portrayal of Indians and Malays.

Like blackface, brownface is dehumanising and unethical because it uses someone’s skin tone as a costume. Whatever intentions the advertisers had is irrelevant, as the ad is fundamentally offensive. It effectively reduced the representation of an entire ethnic minority group to just their skin colour .

For the uninitiated, wearing brownface might be easily perceived as harmless fun that doesn’t warrant the huge reaction it got from the public. Even in their apology for this e-payment ad, the agency mentioned choosing this Chinese actor specifically as he could represent characters “in a light-hearted way”. In other words, though there was no joke behind the ad, having a comedic actor wear brownface gave viewers the idea that it was meant to be laughed at.

Unfair and inadequate race representation reflects poorly on a company, particularly in a country strongly advocating racial harmony like Singapore. It’s important to factor in an additional layer of sensitivity when working on marketing efforts to ensure that no particular group feels excluded or discriminated against .

2. Circles.Life Ad: Acts of Tokenism

Being ethical isn’t only about striking while the iron is hot. It should be something weaved into your company’s DNA, and reinforced consistently at every stage of the marketing process.

Tokenism is defined as the superficial practice of making a symbolic effort to do something, in order to give the impression that certain values are honoured by a company. In the context of marketing, it could look like exploiting the differences among people to highlight inclusivity and diversity, without actually committing to it.  

In early June 2021, Singapore’s fourth telco Circles.Life received a lot of heat when they released an ad stating they were “100% for the people”. It was reportedly a collective effort between “a Filipino, a Malay and a Chinese”.

View this post on Instagram A post shared by Circles.Life (@circleslifesg)

This post was the telco’s attempt at trendjacking after racial issues had become significantly more sensitive. Cases of blatant racism like that of Beow Tan’s harassment of minorities , and a racist male verbally abusing and kicking a lady had surfaced, making race the topic on everyone’s minds. In a bid to appear inclusive, the advertisement did the exact opposite , coming off as mere tokenism instead.

When Circles.Life overtly stated the post was done by individuals from different races, they wanted to highlight their ethical and racially diverse hiring practices. But it backfired, as that’s how hiring employees should be in the first place . Furthermore, some detractors also pointed out that the post highlighted social hierarchies in Singapore. In the post, minority groups were classified as the lower-ranked employees working under the majority racial group in Singapore. Releasing this ad to promote their “race-blind” hiring at such a time was inappropriate, and did not serve its purpose.

While Circles.Life did not have ill intentions, the ad was not well designed and offensive, especially in a multiracial country like ours.

3. “Fire Sales”: False Advertisements

You’ve probably seen signs promoting a “Closing Down Sale”, or others touting a “Fire Sale”. These posters have been used by three retail brands – ABC Bargain Centre, ValuDollar and ABC Express – to attract more people to patronize their stores.

The “Closing Down Sale” lasted almost two years . These claims were effective for sales, but they were inaccurate and unethical. Customers made purchases under the belief that the deals and discounts lasted only for a short while, when in actual fact, they were not. These promotion tactics have since been discontinued to stop misleading consumers.

Amidst the surge in popularity of e-commerce, there have been more unscrupulous sellers. A 2019 study conducted by consultancy Frontier Economics reported that two in three consumers fell prey to unfair business practices while shopping online .

These false claims consisted of the following:

• Discounts ( “Buy NOW and save UP TO 60%!” )
• Deals ( “Buy THREE for the price of TWO!” )
• Time-limited Offers ( “Quick, this deal is ENDING in 30 MINUTES!” )
• Stock Running Low ( “Grab the LAST ONE in stock NOW!” )

Promotions get a ton of attention, and it is how shady sellers earn their money. These deals rush consumers to make decisions on the fly, because their minds are focused on the fear of losing out.

“Last one? Faster buy faster buy”

“WAH DISCOUNT? Must buy!”

Unfortunately, these false deals are especially effective in a society such as Singapore, which embodies the kiasu mentality .

This is due to an idea called “loss aversion” , which states people would rather avoid making a loss than gain something .

In reality, these “opportunities” don’t exist.

The prices reflected in these “discounts” and “deals”? They were the original prices sellers looked at, marked to profit without drawing suspicion.

“Time-based offers”? “Last in stock”? Many will notice they go on indefinitely. Any customer visiting the page, earlier or later, will see these phrases remain unchanged.

By marketing your products with these unethical tactics, you are not being fair to your customers. This is because they’ll be making decisions based on false information, and are being misled. Marketing your products with honesty matters if you want to build long-term relationships with your customers. What keeps them coming back ultimately, is being able to count on a company to have the best interests for their customers beyond mere profits.

4. Subway’s Meat Stack Sub: Hypocrisy

Ideally, there shouldn’t be discrepancies between advertised details and what a customer receives. I’m a big foodie, and I love an occasional trip to Subway. Getting a wide variety of ingredients and flavours in one edible submarine is all I ask for.

In September 2020, there was a new Sub – the “Meat Stack Sub” . In their slew of marketing campaigns, both online and offline , Subway stated it involved more meat and less advertising.

Yet, I saw these ads in many places around Singapore. Subway Singapore had also hired not one , but two well-known locals to promote the new Sub.

There was a contradiction : the ads about the Sub were made to look low in effort and cost, but there was so much ongoing promotion for it.

This campaign also gave the impression that the money saved on ads allowed the Sub to have a lot more meat in it. Because of that, people would think the sandwich is value for money. Yet, the Meat Stack was the most expensive option on the menu .

In my personal encounter with it, there wasn’t a significant increase in meat included either. It was clear that the advertisement had been exaggerated. This is a situation where the campaign had overstated things, and results turned out to be underwhelming. Subway had promoted one thing and produced another. The onus of accurate representations is on the company to deliver what was marketed. Though the ad was playful, it set unrealistic expectations on the experience of the product . In misleading the consumers, they alienated loyal consumers who answered the call to their ads for a Meat Stack.

5. Singapore Telcos: Smearing Competitors

Standing out in an increasingly crowded and competitive market is what makes or breaks businesses. However, it’s unethical to resort to underhand means to edge out competitors. The Singapore major Telco players in 2014 – SingTel, StarHub and M1 – were embroiled in a dispute over social media smears against SingTel’s competitors.

To promote a new mobile plan, SingTel employed social media agency Gushcloud to launch a campaign. Gushcloud had then incentivised social media influencers to make complaints on telco competitors StarHub and M1. SingTel engaged in what is called a “smear campaign” , defined as the deliberate attempt to undermine the credibility and reputation of its competitors by spreading false and disparaging comments.

SingTel's chief executive later made a public apology to StarHub and M1, both of which agreed not to pursue the matter. SingTel had also terminated their partnership with Gushcloud, with the latter taking full responsibility for the campaign.

Smear campaigns are unclassy and they often bite back at those who launch the campaign. In an ironic twist, during that period, SingTel’s own users flooded their social media page with immense dissatisfaction over SingTel’s services. The lesson here? You don’t have to love your competitors, but there are better ways to explore how you can beat the competition fairly, by focusing on improving within. When you highlight the positives and focus on delivering stellar customer service, the excellence of your product or service speaks for itself.

6. Beauty Salons: Aggressive Selling

In the past, my mother used to patronise this one hair salon near our house. I remember she always came back complaining.

They would sound something like this:

“Aiya, go cut hair only they want me to sign package again”

“This package haven’t end, they tell me buy another already”

The staff at the hair salon were often hard-selling packages to its customers. Some were nice, while others were more aggressive. But they all pressed customers just as much. I thought that it was just at this particular salon. Apparently, this was commonplace in the beauty industry.

Many hair salons and beauty parlours often adopt an aggressive approach to increase a customer’s lifetime value and engagement with their business.

The Consumers Association of Singapore (CASE) has mentioned that the beauty industry is often one of the “top” industries with complaints. In fact, in 2020, three beauty salons admitted to these unfair practices against customers . This was after many complaints were lodged for close to two years. Beyond pressuring customers to buy more treatments, some were charged additional costs. The salons had also charged consumers for even more packages without consent.

A fundamental rule that contributes to a strong, lasting business is to build rapport with your customers. Hard selling is unethical as it puts a high amount of pressure on customers; as if you’re shoving products down their throats. Psychologically, this puts customers on guard as they feel like their decisions are being dictated for them. They’re then more compelled to shut off and reject your pitch.

Doing Your Part as an Ethical Digital Marketer

While browsing through the case studies above, it’s easy to think: “Well duh, of course that’s unethical. Who in their right mind would approve these marketing efforts?” If it was that straightforward to determine the dichotomy between what’s ethical and what’s not, we wouldn’t be witnesses to these instances in marketing campaigns time and time again.

Some of the examples mentioned above are large corporations that have layers of personnel who gave their collective approval. You too, as digital marketers, are just as susceptible to making mistakes like these. The trick is acknowledging that it’s possible for you to make such mistakes and constantly checking yourself – be it adopting a customer’s perspective or taking a step back to evaluate a situation from the bigger picture of values and ethics.

How well you do depends on your marketing efforts, but it’s also based on how consumers receive it . If a particular marketing tactic doesn’t sit well with you, listen to that voice inside you and have a second take.

This is part 1 of a 2-part series on Ethical Marketing. To learn more about how you can be mindful about ethics when marketing, head over to part 2 here .

Hatch is an impact-driven business with the mission to make digital and design opportunities accessible for all.   That's why we are committed to sharing valuable resources like these freely and openly for the community.

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18 false advertising scandals that cost some brands millions

In advertising, there's a big difference between pushing the truth and making false claims. 

Many companies have been caught out for peddling mediocre products, using wild claims like "scientifically proven" with "guaranteed results."

For companies that cross the line, it can cost millions and lead to a damaged reputation.

It doesn't pay to deceive the public.

We found 18 examples of false advertising scandals that have rocked big brands — some are still ongoing and not all companies have had to pay up, but each dealt with a fair amount of negative publicity.

Karlee Weinmann and Kim Bhasin contributed to an earlier version of this report.

VW falsely advertised environmentally friendly diesel cars.

On March 29 this year, the Federal Trade Commission (FTC) filed a lawsuit against Volkswagen , which claimed that the car company had deceived customers with the advertising campaign it used to promote its supposedly "Clean Diesel" vehicles,  according to a press release .

In 2015, it was exposed that VW had been cheating emissions tests on its diesel cars in the US for the past seven years .

The FTC alleged that "Volkswagen deceived consumers by selling or leasing more than 550,000 diesel cars based on false claims that the cars were low-emission, environmentally friendly."

On top of potential fines for false advertising, the company could have to pay out up to $61 billion for violating the Clean Air Act, according to Wired .

Activia yogurt said it had "special bacterial ingredients."

Ads for Dannon's popular Activia brand yogurt landed the company with a class action settlement of $45 million in 2010, according to ABC News . The yogurts were marketed as being "clinically" and "scientifically" proven to boost your immune system and able to help to regulate digestion.

The Activia ad campaign, fronted by actress Jamie Lee Curtis, claimed that the yogurt had special bacterial ingredients. As a result, the yogurt was sold at 30% higher prices than other similar products. However, the Cleveland judge overseeing the case said that these claims were unproven.

The lawsuit against Dannon began in 2008, when consumer Trish Wiener lodged a complaint. On top of the fine of $45 million, Dannon was ordered to remove "clinically" and "scientifically proven" from its labels, according to ABC.

Phrases similar to "clinical studies show" were deemed permissible. Dannon denied any wrongdoing and claimed it settled the lawsuit to "avoid the cost and distraction of litigation."

Red Bull said it could "give you wings."

Energy drinks company Red Bull was sued in 2014 for its slogan "Red Bull gives you wings." The company settled the class action case by agreeing to pay out a maximum of $13 million — including $10 to every US consumer who had bough the drink since 2002.

The tagline, which the company has used for nearly two decades, went alongside marketing claims that that the caffeinated drink could improve a consumer's concentration and reaction speed.

Beganin Caraethers was one of several consumers who brought the case against the Austrian drinks company. He said he was a regular consumer of Red Bull for 10 years, but that he had not developed "wings," or shown any signs of improved intellectual or physical abilities.

Red Bull released this statement following the settlement:

Red Bull settled the lawsuit to avoid the cost and distraction of litigation. However, Red Bull maintains that its marketing and labeling have always been truthful and accurate, and denies any and all wrongdoing or liability.

Tesco was criticised for an ad in response to the horsemeat scandal, which suggested the problem affected "the whole food industry."

In 2013, UK supermarket chain Tesco was criticized after it ran a "misleading" ad campaign in the wake of its horse meat scandal, according to The Telegraph .

The supermarket had been caught  selling beef contaminated with horse meat in some of its burgers and ready meals .

In an attempt to recover from the PR disaster, Tesco ran a two-page spread in national newspapers with the headline "What burgers have taught us."

In the ad, Tesco was criticized for implying that the whole meat industry was implicated in the horse meat fiasco, which was untrue. The UK advertising regulator ASA banned the campaign.

Nearly £300 million ($432 million) was wiped off the value of Tesco following the horse meat scandal, according to The Guardian .

Kellogg said Rice Krispies could boost your immune system.

Kellogg's popular Rice Krispies cereal had a crisis in 2010 when the brand was accused of misleading consumers about the product's immunity-boosting properties, according to CNN .

The Federal Trade Commission ordered Kellogg to halt all advertising that claimed that the cereal improved a child's immunity with "25 percent Daily Value of Antioxidants and Nutrients — Vitamins A, B, C and E," stating the the claims were "dubious."

The case was settled in 2011. Kellogg agreed to pay $2.5 million to affected consumers, as well as donating $2.5 million worth of Kellogg products to charity, according to Law360 .

Later, Kellogg said Mini-Wheats could make you smarter.

In 2013, Kellogg was in even more trouble. The company agreed to pay $4 million for false advertising claims it made about Frosted Mini-Wheats. The cereal company had falsely claimed that the Mini-Wheats improved "children's attentiveness, memory and other cognitive functions," according to Associated Press. The ad campaign claimed that the breakfast cereal could improve a child's focus by nearly 20%.

In its defense, Kellogg said that the ad campaign ran four years previously and that it had since adjusted its claims about the cereal. Kellogg also noted that it "has a long history of responsible advertising."

People who consumed the cereal during the time the ad ran (January 28, 2009 to October 1, 2009) were allowed to claim back $5 per box, with a maximum of $15 per customer, according to Associated Press.

New Balance said its shoe could help wearers burn calories.

New Balance  was accused of false advertising in 2011 over a  sneaker range that it claimed could help wearers burn calories,  according to Reuters . Studies found that there were no health benefits from wearing the shoe.

The toning sneaker claimed to use hidden board technology and was advertised as calorie burners that activated the glutes, quads, hamstrings and calves. Plaintiffs in the lawsuit claimed to have been harmed and misled by the sneaker company.

On August 20, 2012, New Balance agreed to pay a settlement of $2.3 million, according to The Huffington Post .

Lumos Labs said Luminosity could help prevent Dementia.

In January 2016, the makers of popular brain-training app Luminosity were given a $2 million fine from the Federal Trade Commission , which said the company deceived players with "unfounded" advertising claims.

The app company made false claims about being able to help prevent Alzheimer's disease, as well as aiding players to perform better at school, the FTC found. Luminosity said in its ads that people who played the games for more than 10 minutes, three times a week would release their "full potential in every aspect of life,” according to Time.

Jessica Rich, a director at the FTC said : "“Lumosity simply did not have the science to back up its ads."

Airborne claimed it could help ward off harmful germs.

Herbal supplement Airborne was a national hit throughout the 1990s. Marketing of the product claimed that it helped ward off harmful bacteria and germs, preventing everyday ailments like the flu and common cold.There were no studies to support Airborne's effectiveness claims that met scientific standards — so the Center for Science in the Public Interest (CSPI) got involved.

However, there were no scientific studies to support Airborne's effectiveness claims that met scientific standards — so the Center for Science in the Public Interest got involved.

The high-profile scandal ended with a huge settlement, with Airborne having to pay $23.3 million in the class-action lawsuit, and an additional $7 million settlement later, according to NPR .

Wal-Mart falsely advertised the price of Coke in New York.

Wal-Mart agreed to pay more than $66,000 in fines, after over-charging customers from 117 stores in New York for Coca-Cola. The supermarket chain had advertised a nationwide sale on the soft drink in 2014, where 12-packs would cost just $3.oo.

However, customers in New York State were charged $3.50. Wal-Mart staff allegedly lied about the reasons for the price-hike, telling customers that New York has a "sugar tax," according to Corporate Crime Reporter.

New York Attorney General Eric Schneiderman, who conducted the investigation, concluded the price violated New York State’s General Business Law 349 and 350.

Definity eye cream re-touched a model in an anti-aging ad.

In 2009, an Olay ad for its Definity eye cream showed former model Twiggy looking wrinkle-free — and a whole lot younger than her then-60 years. It turned out the ads were retouched, according to The Guardian .

The British advertising regulator ASA banned the ad, after Liberal Democrat lawmaker Jo Swinson gathered more than 700 complaints against it. The digitally-altered spots were deemed to give a "misleading impression of the effect the product could achieve."

Olay's parent company Procter & Gamble responded that it was "routine practice to use post-production techniques to correct for lighting and other minor photographic deficiencies before publishing the final shots as part of an advertising campaign."

Hyundai and KIA over-advertised its cars' horsepower.

Hyundai agreed to pay more than $85 million in a settlement in 2004, after it overstated the horsepower of cars imported to the US, according to Consumer Affairs . The class action lawsuit was on behalf of around 840,000 people who bought the 1996 to 2002 models of the Hyundai Elentra sedans and the Tiburon sport coupes.

In 2001, the Korean Ministry of Construction and Transportation had uncovered the misrepresentation, which, for some models, overstated horsepower by 10% . 

The class action lawsuit was brought in southern California in September 2002. After it was settled in 2004, Hyundai sent letters offering prepaid debit cards to affected owners. They were worth up to $225.

Extenze claimed it could extend penis length.

The maker of penis enlargement pill Extenze agreed to pay $6 million to settle a class action lawsuit in 2010, according to CBS . Extenze had claimed its pills were "scientifically proven to increase the size of a certain part of the male body" in notorious late night TV commercials . 

Extenze agreed to pay $6 million to settle a false advertising class action lawsuit. CBS noted that its website was also updated to say: "These statements have not been evaluated by the Food and Drug Administration. Extenze is not intended to diagnose, treat, cure, or prevent any disease."

Splenda said it was "made from sugar."

The Sugar Association asked for an investigation into alternative sweetener Splenda's "Made from Sugar" slogan. It complained that the tagline was misleading, and that the sweetener is nothing more than "highly processed chemical compound made in a factory," CBS reported .

In 2007, a resulting lawsuit led by the makers of rival sweetener Equal, settled against Splenda. Equal was looking for $200 million from Splenda in the settlement for unfair profits. However, the exact amount of the settlement remains confidential, according to NBC .

L'Oreal claimed its skincare products were "clinically proven" to "boost genes."

In 2014, cosmetics company L'Oréal was forced to admit that its Lancôme Génifique and L’Oréal Paris Youth Code skincare products were not "clinically proven" to "boost genes" and give "visibly younger skin in just seven days," as stated in its advertising.

According to the FTC,  the claims were "false and unsubstantiated."

In the settlement, L'Oréal USA was banned from making claims about anti-aging, without "competent and reliable scientific evidence substantiating such claims," the FTC said. Though L'Oreal escaped a fine at the time, each future violation of this agreement will cost the company up to $16,000.

Eclipse said its gum could kill germs.

Eclipse gum claimed in its ads that its new ingredient, magnolia bark extract, had germ-killing properties.

A lawsuit brought by consumers alleged that the ads were misleading, according to Businessweek . Wrigley denied wrongdoing, but was ordered to pay more than $6 million to a fund that would reimburse consumers up to $10 each for the misleading product, in 2010.

Classmates.com was accused of tricking users into paying to respond to friends, who weren't actually on the site.

Millions of people lit up when Classmates.com sent them an email saying old friends were trying to contact them, promising to rekindle old friendships and flames if subscribers upgraded to a "Gold" membership. But with the upgrade, the expected reunions never came. It turns out the social networking site used the ploy to get users to give up extra dollars. In 2008, one miffed user filed a suit alleging the "deceptive" emails were false advertising. Classmates.com eventually agreed to pay out a $9.5 million settlement —$3 for every subscriber who fell for the dirty trick — to resolve the case, according to the Business Journal .

However, the website did not learn from its mistakes and in 2015 it was given another $11 million in fines, according to Consumer Affairs .

A lawsuit alleged that Taco Bell was falsely advertising its beef.

In 2011, consumers raised questions about what constituted Taco Bell's "seasoned beef."

According to the lawsuit reported in AdAge , the "seasoning" used was oat filler — which means the meat isn't seasoned beef at all, according to USDA standards. The suit alleged that the franchise had been tricking its consumers into thinking its products were of a higher grade than they actually were.

Taco Bell took the opportunity to poke fun at itself, hoping to mitigate the PR disaster. The company even took out a full-page newspaper ad thanking complainants for suing.   Taco Bell was vindicated and the lawsuit was withdrawn in April 2011, according to Associated Press.

• Main content

Starbucks sued for allegedly using coffee from farms with rights abuses while touting its ‘ethical’ sourcing

A consumer advocacy group is suing Starbucks, the world’s largest coffee brand, for false advertising, alleging that it sources coffee and tea from farms with human rights and labor abuses, while touting its commitment to ethical sourcing.

The case, filed in a Washington, D.C., court on Wednesday on behalf of American consumers, alleges that the coffee giant is misleading the public by widely marketing its “100% ethical” sourcing commitment on its coffee and tea products, when it knowingly sources from suppliers with “documented, severe human rights and labor abuses.”

“On every bag of coffee and box of K-cups that Starbucks sells, Starbucks is heralding its commitment to 100% ethical sourcing,” said Sally Greenberg, CEO of the National Consumers League, the legal advocacy group bringing the case. “But it’s pretty clear that there are significant human rights and labor abuses across Starbucks’ supply chain.”

The lawsuit cites reporting about human rights and labor abuses on specific coffee and tea farms in Guatemala , Kenya and Brazil , and alleges that Starbucks has continued to purchase from these suppliers in spite of the documented violations.

"We are aware of the lawsuit, and plan to aggressively   defend against the asserted claims that Starbucks has misrepresented its ethical sourcing commitments to customers," said a spokesperson for Starbucks.

In an earlier statement they said, “We take allegations like these extremely seriously and are actively engaged with farms to ensure they adhere to our standards. Each supply chain is required to undergo reverification regularly and we remain committed to working with our business partners to meet the expectations detailed in our Global Human Rights Statement ."

In Brazil, labor officials have cracked down on several reported Starbucks suppliers over abusive and unsafe labor practices in recent years, including garnishing the cost of harvesting equipment from farm workers wages, not providing clean drinking water, personal protective equipment and bathrooms, and employing underaged workers. In 2022, 17 workers, including three minors, were rescued by Brazilian inspectors from “modern slavery,” according to Reporter Brasil , at a coffee farm managed by a man whose coffee roaster company received Starbucks’ seal of certification a month earlier.

In response to the Reporter Brasil stories and reported labor abuses in Kenya and Guatemala cited in the lawsuit, Starbucks issued statements at the time that the company was “deeply concerned,” and that it would “thoroughly investigate” claims of labor violations, “take immediate action” to suspend purchases or “ensure corrective action” occurred.

Starbucks told NBC News it has since taken corrective action in both Guatemala and Kenya.

In a promotional video on its coffee academy website, a Starbucks coffee buyer says the company’s ethical sourcing stamp “means that we are buying coffee, making sure that it’s good for the planet and good for the people who produce it.”

Greenberg said the suit aims to prevent Starbucks from making claims like those — particularly its “Committed to 100% Ethical Coffee Sourcing” advertising — unless the company improves labor practices within its supply chain.

Starbucks, like many companies, uses third-party certification programs to ensure the integrity of its supply chains for tea and cocoa. The company launched its own sourcing standards, called C.A.F.E. Practices, in 2004 to oversee its coffee sourcing in more than 30 countries. The verification program is administered by a company called SCS Global Services in collaboration with Conservation International.

The verification program holds Starbucks coffee suppliers to more than 200 environmental, labor and quality standards. Farms that fail to meet those can be barred from supplying the company until corrective action is confirmed.

But there have long been issues with how effective such programs are, according to experts.

In 2021, Rainforest Alliance, the third-party that certifies Starbucks’ supply chains for tea and cocoa, was sued in D.C. court by another consumer advocacy group over “false and deceptive marketing” of Hershey’s cocoa as “100 percent certified and sustainable.” A judge ruled last year that the case could move forward only against Hershey, as the manufacturer of the products. 

Rainforest Alliance did not immediately respond to a request for comment. 

“There is this huge pile of evidence that shows that the mechanisms that [certifiers are] relying on to address problems like forced labor, child labor, gender based violence, are extremely flawed and not working very well,” said Genevieve LeBaron, director of the School of Public Policy at Canada’s Simon Fraser University.

“We have incident after incident that’s uncovered in these supply chains. And still, companies go around and make these kinds of claims that they have 100% sustainable or ethical sourcing” said LeBaron, whose research into cocoa and tea has shown that the prevalence and severity of labor violations on certified and uncertified farms was “basically identical."

LeBaron, who has consulted for the United Nations on global supply chain ethics, said the issue is not unique to Starbucks, but ethical commitments from large purchasing players like Starbucks can have an outsize impact on the integrity of supply chains if they are backed up.

Starbucks has 10 “farmer support centers ” in coffee-producing regions around the globe, including Brazil and Guatemala, but does not release public lists of certified suppliers, making it difficult to track how often its suppliers are found to be engaging in labor abuses.

“I think it is really hard to have an ethical supply chain. And I would say, you know, a lot of the reason for that is that, especially in agriculture, there’s a sort of status quo of sourcing goods way below the cost of actually producing them. And as long as you have that, you’re gonna have problems,” LeBaron said.

Kenzi Abou-Sabe is a reporter and producer in the NBC News Investigative Unit.

Adiel Kaplan is a reporter with the NBC News Investigative Unit.

National & World Affairs

Where’s the beef.

Lecturer Louis Tompros discusses a recent lawsuit against a fast-food giant and the role class actions play in the U.S. legal system

Is Burger King selling you a Whopper of a tale? A juicy class action lawsuit filed in March 2023 alleges that the fast-food chain’s signature hamburger contains 35% less meat than the company’s ads suggest. On August 23, a federal judge in Florida allowed the lawsuit , Coleman et al v. Burger King Corporation , to move forward based on the company’s in-store marketing and menus. Filled with mouthwatering legal issues, the Burger King case is one of several class action suits filed by the same law firm, including similar cases against Arby’s, McDonald’s, Taco Bell, and Wendy’s, each alleging that the fast-food purveyors falsely represented the size of their meat-based products.

Intellectual property expert  Louis Tompros , a lecturer on law at Harvard and a partner at WilmerHale, says that class action false advertising lawsuits often, but not always, play an important role in compensating consumers and preventing companies from committing further harm. In a recent conversation, Tompros discussed the Burger King lawsuit, how class action lawsuits work, and the legal concept of “puffery” in advertising.

Harvard Law Today: At first glance, what is your impression of the case?

Louis Tompros: It’s a very interesting case and falls into a general category of false advertising class actions. Sometimes, consumer product class action cases serve an important purpose to keep advertising honest. Other times, the cases are a little bit more opportunistic, and have more to do with going after big pockets. This is an interesting one, because it involves advertising that is on the line between a pretty clear factual statement, and something that’s not a factual statement. If what Burger King was doing was falsely stating how many pounds of meat went into each burger, it’d be a straightforward false advertising claim. And you would imagine that Burger King would settle very quickly if the claims were false, or they would fight to the end if, in fact, the claims were true. What makes this interesting is that the claim that Burger King is making in its advertisement is fuzzier as to whether it really is or is not a factual claim. And it’s those kinds of cases, where the advertisement is somewhere between a clear factual claim and pure puffery, where you find some of the most interesting cases.

It reminds me of the Red Bull case from roughly 10 years ago. Red Bull had used the slogan “Red Bull gives you wings,” and a class action was brought against them, saying that people had been drinking Red Bull for a long time and never got actual wings. Ultimately, Red Bull settled that case for a very significant amount of money. That was interesting, as well, because “Red Bull gives you wings” is one of these factual statements that most people would think is a metaphor, and it was therefore on the line between a clearly provable, relevant, factual statement and one that is not so.

HLT: Now that the judge has restricted this to in-store advertising, could Burger King argue that the plaintiffs had already decided to go to and enter the restaurant, so they were clearly planning to make a purchase before they had a chance to be influenced?

Tompros: The plaintiffs will have to convince a jury that they were standing there in the store, they looked at the picture on the menu, and if the picture on the menu had shown the burger with the size of meat that it actually had, they would not have bought that burger. They don’t have to prove that the person would have walked out of the store, only that the person wouldn’t have bought that specific burger. Deciding what the truth is will be up to the jury.

“The plaintiffs will have to convince a jury that they were standing there in the store, they looked at the picture on the menu, and if the picture on the menu had shown the burger with the size of meat that it actually had, they would not have bought that burger.”

HLT: Would it matter if the plaintiffs had purchased the burgers before, and therefore had some foreknowledge of their actual size, regardless of the advertising?

Tompros: There’s a variety of different claims in this lawsuit, the two most prominent being false advertising and breach of contract. For the false advertising claim, it may matter if the customers had previously seen the same picture and bought the burgers, because that would tend to show that they were not deceived in a way that affected their purchasing decision. So, if you’re telling me that this burger that has a certain amount meat, and I buy it, I get the burger, and it has a smaller amount of meat, then I go back and I buy it again and again, by the 10th or 12th time, I know that the picture does not look like what I’m going to get. And so, it’s wrong for me to say that that picture influenced my purchasing decision.

In the contract case, what the plaintiffs will have to show is that the picture operated as an offer, that the offer was a very specific offer of a burger with a particular amount of meat, and that the customer accepted the offer by ordering and paying for it with that picture in front of them. If I were Burger King, and the same customer who saw the same picture bought the burger 10 different times in the past, I would argue that the contract, as informed by the party’s prior performance, did not include this larger amount of meat. So, yes, the fact that somebody bought one of these burgers before having seen the picture and didn’t complain about it may affect the outcome. It’s not dispositive. It just goes to their credibility when now they come in and say they wouldn’t have bought it if they had known that it was going to look like it did.

HLT: The supposed damage in this case for each plaintiff is less than the cost of one burger. Is there a minimum level of damage for which one can file a lawsuit?

Tompros: As a matter of principle, there’s no minimum amount that you can sue somebody for. That’s why we have things like small claims courts. You are allowed to bring a case for a small amount of money. But as a practical matter, it very often isn’t worth it, because the filing fees and the attorney’s fees often dwarf the value of the case. Usually, that means that when we’re talking about small amounts per customer, the case will need to involve a large number of people, which is why this case has been brought as a class action. Under the federal Class Action Fairness Act, most class actions must allege a total amount of harm of more than $5 million across the class. And the plaintiffs in this case did make that allegation. Another requirement is that there must be at least 100 people in the class, which the plaintiffs also allege.

One of the reasons why class actions exist is to address small amounts of harm affecting a large number of people. We want it to be possible to have some legal remedy for those harms. So, we have the class action procedure to allow for that. Just because something is not worth bringing the lawsuit over in an individual case, you don’t want to let somebody get away with doing it thousands and thousands, or even millions of times.

“One of the reasons why class actions exist is to address small amounts of harm affecting a large number of people.”

HLT: One of Burger King’s arguments is that everyone knows that “[f]ood in advertising is and always has been styled to make it look as appetizing as possible.” Where is the line between making a product as attractive as possible and false advertising?

Tompros: There is a concept in false advertising law known as puffery. Puffery is intended to attract more consumers rather than to intentionally deceive them about a fact. And, generally speaking, puffery is fine. Whereas intentional deception about a fact is false advertising and is improper. Let me give you a couple of examples. For decades, cereal companies have made advertisements where they show milk being poured into their cereal. If you actually pour milk into a bowl of cereal and try to film it, it doesn’t look very good because milk is kind of thin and it usually does gross things to the cereal. Those commercials for years have used glue instead of milk because it’s thicker and you get a gorgeous picture. Even in the context of fast food, there are photoshoots of burgers in which each sesame seed is very carefully glued on to the bun in a particular configuration to look very appetizing. And there are chemicals that look like water that are placed on the tomatoes to make them look like they’ve just been washed and are fresh and beautiful. And the cheese is sometimes replaced by icing or putty or something else.

So that kind of puffery has happened all the time. It is well established that it is not generally speaking false advertising, because false advertising has to convey a specific statement of fact. That’s why in the Burger King case, the plaintiffs are not alleging that the burger didn’t look generally like the photo, and they’re not alleging that the burger didn’t look as appetizing as the one in the photo. Both of those claims would have been rejected if Burger King had argued that the photos are just puffery. What the plaintiffs instead allege is a much more specific allegation that the ratio of meat and the size of meat to the rest of the burger was misrepresented. What the plaintiffs claim is that the photo was representing a fact about the size of the patty, and that that fact was false. And that’s the distinction here that matters.

“Puffery is intended to attract more consumers … generally speaking, puffery is fine. Whereas intentional deception about a fact is false advertising and is improper.”

HLT: What role do class action lawsuits play in the U.S. legal system?

Tompros: The fundamental purpose of class actions is to allow for the resolution of harms that happen in small amounts to a large number of people. And there have been some class actions that have been hugely important over the years. For example, the auto industry class actions of the 1970s were instrumental in making automobiles safer. And I think there’s general consensus that that was a good thing. They gave some financial redress to people who had been harmed. But more importantly, they resulted in the manufacture of safer automobiles and the auto industry taking more seriously things like recalls, because they know that they will be liable across the board for problems.

There have also been some class actions that have, in my view, been of somewhat questionable value. And here I think of, for example, the Red Bull class action from 2014, in which Red Bull did indeed change its advertising and no longer says “Red Bull gives you wings.” It’s not clear to me that that provided any real value to society or provided any real value to the consumers that were supposedly deceived. So, class action false advertising lawsuits can have incredibly important impacts on industry, the economy, and consumers. But they can also be a drain. And where you draw the line is the challenge.

HLT: It seems the biggest impact can be changing corporate behavior. What kind of redress do the plaintiffs typically receive?

Tompros: Class actions are often primarily about changing company behavior and creating a disincentive because of the need to pay out money when companies to engage in misleading or unsafe behavior. The named plaintiffs in class actions usually get somewhat better compensation as a result of being the named plaintiffs, as compared to unnamed individual class members. And so there is some advantage to those plaintiffs to being involved. Although many named plaintiffs want to be involved in class actions just to do the right thing and hold the defendant accountable. And, of course, as part of class action settlements or resolutions, there are almost always significant attorney’s fees involved. So, there’s a real incentive for class action law firms to bring consumer class actions because they are very well compensated, as they clearly should be in the cases that are meritorious and societally beneficial. But that also leaves room for, to put it bluntly, shenanigans, including overly aggressive class action lawsuits that don’t have a lot of merit and are driven by the lawyers and their desire for the fees rather than by a real, meritorious effort to hold a company accountable for harmful conduct. There are some class action cases where the lawyers probably were undercompensated for the amount of good that they were able to do based on the impact that the case had. But there are some where the case was really driven by the lawyers’ fees and were settled because the defendants would rather get rid of the litigation than spend more on their own attorneys’ fees defending against it.

HLT: On that note, do you think it is a coincidence that this lawsuit is being spearheaded by the same firm which is also involved in lawsuits against McDonald’s, Taco Bell, Wendy’s, and Arby’s, all alleging that the amount of meat in their food items is less than pictured in those companies’ ads?

Tompros: There are firms that specialize in class actions and they very much do drive the identification of potential class action plaintiffs and the filing of those suits. And they’re usually pretty forthright about it and advertise themselves. You may have seen late night TV ads that say, “Were you injured after taking X medication? If so, please call this firm.” The firms behind those ads are often looking for named plaintiffs for class action litigation. Usually, the law firms will identify what they perceive as a problem, and then hunt for people who have the receipts to be able to show that they were injured. So, it’s not surprising to me that the same firm has brought multiple cases of this nature against multiple different defendants. I’d be surprised if they hadn’t, quite honestly, because it takes a lot of expertise and a lot of experience to be able to bring these kinds of class actions.

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Facebook’s ethical failures are not accidental; they are part of the business model

• Opinion Paper
• Published: 05 June 2021
• Volume 1 , pages 395–403, ( 2021 )

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• David Lauer   ORCID: orcid.org/0000-0002-0003-4521 1  

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Facebook’s stated mission is “to give people the power to build community and bring the world closer together.” But a deeper look at their business model suggests that it is far more profitable to drive us apart. By creating “filter bubbles”—social media algorithms designed to increase engagement and, consequently, create echo chambers where the most inflammatory content achieves the greatest visibility—Facebook profits from the proliferation of extremism, bullying, hate speech, disinformation, conspiracy theory, and rhetorical violence. Facebook’s problem is not a technology problem. It is a business model problem. This is why solutions based in technology have failed to stem the tide of problematic content. If Facebook employed a business model focused on efficiently providing accurate information and diverse views, rather than addicting users to highly engaging content within an echo chamber, the algorithmic outcomes would be very different.

Facebook’s failure to check political extremism, [ 15 ] willful disinformation, [ 39 ] and conspiracy theory [ 43 ] has been well-publicized, especially as these unseemly elements have penetrated mainstream politics and manifested as deadly, real-world violence. So it naturally raised more than a few eyebrows when Facebook’s Chief AI Scientist Yann LeCun tweeted his concern [ 32 ] over the role of right-wing personalities in downplaying the severity of the COVID-19 pandemic. Critics were quick to point out [ 29 ] that Facebook has profited handsomely from exactly this brand of disinformation. Consistent with Facebook’s recent history on such matters, LeCun was both defiant and unconvincing.

In response to a frenzy of hostile tweets, LeCun made the following four claims:

Facebook does not cause polarization or so-called “filter bubbles” and that “most serious studies do not show this.”

Critics [ 30 ] who argue that Facebook is profiting from the spread of misinformation—are “factually wrong.” Footnote 1

Facebook uses AI-based technology to filter out [ 33 ]:

Hate speech;

Calls to violence;

Bullying; and

Disinformation that endangers public safety or the integrity of the democratic process.

Facebook is not an “arbiter of political truth” and that having Facebook “arbitrate political truth would raise serious questions about anyone’s idea of ethics and liberal democracy.”

Absent from the claims above is acknowledgement that the company’s profitability depends substantially upon the polarization LeCun insists does not exist.

Facebook has had a profound impact on our access to ideas, information, and one another. It has unprecedented global reach, and in many markets serves as a de-facto monopolist. The influence it has over individual and global affairs is unique in human history. Mr. LeCun has been at Facebook since December 2013, first as Director of AI Research and then as Chief AI Scientist. He has played a leading role in shaping Facebook’s technology and approach. Mr. LeCun’s problematic claims demand closer examination. What follows, therefore, is a response to these claims which will clearly demonstrate that Facebook:

Elevates disinformation campaigns and conspiracy theories from the extremist fringes into the mainstream, fostering, among other effects, the resurgent anti-vaccination movement, broad-based questioning of basic public health measures in response to COVID-19, and the proliferation of the Big Lie of 2020—that the presidential election was stolen through voter fraud [ 16 ];

Empowers bullies of every size, from cyber-bullying in schools, to dictators who use the platform to spread disinformation, censor their critics, perpetuate violence, and instigate genocide;

Defrauds both advertisers and newsrooms, systematically and globally, with falsified video engagement and user activity statistics;

Reflects an apparent political agenda espoused by a small core of corporate leaders, who actively impede or overrule the adoption of good governance;

Brandishes its monopolistic power to preserve a social media landscape absent meaningful regulatory oversight, privacy protections, safety measures, or corporate citizenship; and

Disrupts intellectual and civil discourse, at scale and by design.

1 I deleted my Facebook account

I deleted my account years ago for the reasons noted above, and a number of far more personal reasons. So when LeCun reached out to me, demanding evidence for my claims regarding Facebook’s improprieties, it was via Twitter. What proof did I have that Facebook creates filter bubbles that drive polarization?

In anticipation of my response, he offered the claims highlighted above. As evidence of his claims, he directed my attention to a single research paper [ 23 ] that, on closer inspection, does not appear at all to reinforce his case.

The entire exchange also suggests that senior leadership at Facebook still suffers from a massive blindspot regarding the harm that its platform causes—that they continue to “move fast and break things” without regard for the global impact of their behavior.

LeCun’s comments confirm the concerns that many of us have held for a long time: Facebook has declined to resolve its systemic problems, choosing instead to paper over these deep philosophical flaws with advanced, though insufficient, technological solutions. Even when Facebook takes occasion to announce its triumphs in the ethical use of AI, such as its excellent work [ 8 ] detecting suicidal tendencies, its advancements pale in comparison to the inherent problems written into its algorithms.

This is because, fundamentally, their problem is not a failure of technology, nor a shortcoming in their AI filters. Facebook’s problem is its business model. Facebook makes superficial technology changes, but at its core, profits chiefly from engagement and virality. Study after study has found that “lies spread faster than the truth,” [ 47 ] “conspiracy theories spread through a more decentralized network,” [ 41 ] and that “politically extreme sources tend to generate more interactions from users.” Footnote 2 Facebook knows that the most efficient way to maximize profitability is to build algorithms that create filter bubbles and spread viral misinformation.

This is not a fringe belief or controversial opinion. This is a reality acknowledged even by those who have lived inside of Facebook’s leadership structure. As the former director of monetization for Facebook, Tim Kendall explained in his Congressional testimony, “social media services that I, and others have built, have torn people apart with alarming speed and intensity. At the very least we have eroded our collective understanding—at worst, I fear we are pushing ourselves to the brink of a civil war.” [ 38 ]

2 Facebook’s black box

To effectively study behavior on Facebook, we must be able to study Facebook’s algorithms and AI models. Therein lies the first problem. The data and transparency to do so are simply not there. Facebook does not practice transparency—they do not make comprehensive data available on their recommendation and filtering algorithms, or their other implementations of AI. One organization attempting to study the spread of misinformation, NYU’s Cybersecurity for Democracy, explains, “[o]ur findings are limited by the lack of data provided by Facebook…. Without greater transparency and access to data, such research questions are out of reach.” Footnote 3

Facebook’s algorithms and AI models are proprietary, and they are intentionally hidden from us. While this is normal for many companies, no other company has 2.85 billion monthly active users. Any platform that touches so many lives must be studied so that we can truly understand its impact. Yet Facebook does not make the kind of data available that is needed for robust study of the platform.

Facebook would likely counter this, and point to their partnership with Harvard’s Institute for Quantitative Social Science (Social Science One) as evidence that they are making data available to researchers [ 19 ]. While this partnership is one step in the right direction, there are several problems with this model:

The data are extremely limited. At the moment it consists solely of web page addresses that have been shared on Facebook for 18 months from 2017 to 2019.

Researchers have to apply for access to the data through Social Science One, which acts as a gatekeeper of the data.

If approved, researchers have to execute an agreement directly with Facebook.

This is not an open, scientific process. It is, rather, a process that empowers administrators to cherry-pick research projects that favor their perspective. If Facebook was serious about facilitating academic research, they would provide far greater access to, availability of, and insight into the data. There are legitimate privacy concerns around releasing data, but there are far better ways to address those concerns while fostering open, vibrant research.

3 Does Facebook cause polarization?

LeCun cited a single study as evidence that Facebook does not cause polarization. But do the findings of this study support Mr. LeCun’s claims?

The study concludes that “polarization has increased the most among the demographic groups least likely to use the Internet and social media.” The study does not, however, actually measure this type of polarization directly. Its primary data-gathering instrument—a survey on polarization—did not ask whether respondents were on the Internet or if they used social media. Instead, the study estimates whether an individual respondent is likely to be on the Internet based on an index of demographic factors which suggest “predicted” Internet use. As explained in the study, “the main predictor [they] focus on is age” [ 23 ]. Age is estimated to be negatively correlated with social media usage. Therefore, since older people are also shown to be more politically polarized, LeCun takes this as evidence that social media use does not cause polarization.

This assumption of causality is flawed. The study does not point to a causal relationship between these demographic factors and social media use. It simply says that these demographic factors drive polarization. Whether these factors have a correlational or causative relationship with the Internet and social media use is complete conjecture. The author of the study himself caveats any such conclusions, noting that “[t]hese findings do not rule out any effect of the internet or social media on political polarization.” [ 5 ].

Not only is LeCun’s assumption flawed, it is directly refuted by a recent Pew Research study [ 3 ] that found an overwhelmingly high percentage of US adults age 65 + are on Facebook (50%), the most of any social network. If anything, older age is actually more clearly correlated with Facebook use relative to other social networks.

Moreover, in 2020, the MIS Quarterly journal published a study by Steven L. Johnson, et al. that explored this problem and found that the “more time someone spends on Facebook, the more polarized their online news consumption becomes. This evidence suggests Facebook indeed serves as an echo chamber especially for its conservative users” [ 24 ].

Allcott, et al. also explores this question in “The Welfare Effects of Social Media” in November, 2019, beginning with a review of other studies confirming a relationship between social media use, well-being and political polarization [ 1 ]:

More recent discussion has focused on an array of possible negative impacts. At the individual level, many have pointed to negative correlations between intensive social media use and both subjective well-being and mental health. Adverse outcomes such as suicide and depression appear to have risen sharply over the same period that the use of smartphones and social media has expanded. Alter (2018) and Newport (2019), along with other academics and prominent Silicon Valley executives in the “time well-spent” movement, argue that digital media devices and social media apps are harmful and addictive. At the broader social level, concern has focused particularly on a range of negative political externalities. Social media may create ideological “echo chambers” among like-minded friend groups, thereby increasing political polarization (Sunstein 2001, 2017; Settle 2018). Furthermore, social media are the primary channel through which misinformation spreads online (Allcott and Gentzkow 2017), and there is concern that coordinated disinformation campaigns can affect elections in the US and abroad.

Allcott’s 2019 study uses a randomized experiment in the run-up to the November 2018 midterm elections to examine how Facebook affects several individual and social welfare measures. They found that:

deactivating Facebook for the four weeks before the 2018 US midterm election (1) reduced online activity, while increasing offline activities such as watching TV alone and socializing with family and friends; (2) reduced both factual news knowledge and political polarization; (3) increased subjective well-being; and (4) caused a large persistent reduction in post-experiment Facebook use.

In other words, not using Facebook for a month made you happier and resulted in less future usage. In fact, they say that “deactivation significantly reduced polarization of views on policy issues and a measure of exposure to polarizing news.” None of these findings would come as a surprise to anybody who works at Facebook.

“A former Facebook AI researcher” confirmed that they ran “‘study after study’ confirming the same basic idea: models that maximize engagement increase polarization” [ 21 ]. Not only did Facebook know this, but they continued to design and build their recommendation algorithms to maximize user engagement, knowing that this meant optimizing for extremism and polarization. Footnote 4

Facebook understood what they were building according to Tim Kendall’s Congressional testimony in 2020. He explained that “we sought to mine as much attention as humanly possible and turn [sic] into historically unprecedented profits” [ 38 ]. He went on to explain that their inspiration was “Big Tobacco’s playbook … to make our offering addictive at the outset.” They quickly figured out that “extreme, incendiary content” directly translated into “unprecedented engagement—and profits.” He was the director of monetization for Facebook—few would have been better positioned to understand Facebook’s motivations, findings and strategy.

4 Engagement, filter bubbles, and executive compensation

The term “filter bubble” was coined by Eli Pariser who wrote a book with that title, exploring how social media algorithms are designed to increase engagement and create echo chambers where inflammatory posts are more likely to go viral. Filter bubbles are not just an algorithmic outcome; often we filter our own lives, surrounding ourselves with friends (online and offline) who are more likely to agree with our philosophical, religious and political views.

Social media platforms capitalize on our natural tendency toward filtered engagement. These platforms build algorithms, and structure executive compensation, [ 27 ] to maximize such engagement. By their very design, social media curation and recommendation algorithms are engineered to maximize engagement, and thus, are predisposed to create filter bubbles.

Facebook has long attracted criticism for its pursuit of growth at all costs. A recent profile of Facebook’s AI efforts details the difficulty of getting “buy-in or financial support when the work did not directly improve Facebook’s growth.” [ 21 ]. Andrew Bosworth, a Vice President at Facebook said in a 2016 memo that nothing matters but growth, and that “all the work we do in growth is justified” regardless of whether “it costs someone a life by exposing someone to bullies” or if “somebody dies in a terrorist attack coordinated on our tools” [ 31 ].

Bosworth and Zuckerberg went on to claim [ 36 ] that the shocking memo was merely an attempt at being provocative. Certainly, it succeeded in this aim. But what else could they really say? It’s not a great look. And it looks even worse when you consider that Facebook’s top brass really do get paid more when these things happen. The above-referenced report is based on interviews with multiple former product managers at Facebook, and shows that their executive compensation system is largely based around their most important metric–user engagement. This creates a perverse incentive. And clearly, by their own admission, Facebook will not allow a few casualties to get in the way of their executive compensation.

5 Is it incidental or intentional?

Yaël Eisenstat, a former CIA analyst who specialized in counter-extremism went on to work at Facebook out of concern that the social media platform was increasing radicalization and political polarization. She explained in a TED talk [ 13 ] that the current information ecosystem is manipulating its users, and that “social media companies like Facebook profit off of segmenting us and feeding us personalized content that both validates and exploits our biases. Their bottom line depends on provoking a strong emotion to keep us engaged, often incentivizing the most inflammatory and polarizing voices.” This emotional response results in more than just engagement—it results in addiction.

Eisenstat joined Facebook in 2018 and began to explore the issues which were most divisive on the social media platform. She began asking questions internally about what was causing this divisiveness. She found that “the largest social media companies are antithetical to the concept of reasoned discourse … Lies are more engaging online than truth, and salaciousness beats out wonky, fact-based reasoning in a world optimized for frictionless virality. As long as algorithms’ goals are to keep us engaged, they will continue to feed us the poison that plays to our worst instincts and human weaknesses.”

She equated Facebook’s algorithmic manipulation to the tactics that terrorist recruiters use on vulnerable youth. She offered Facebook a plan to combat political disinformation and voter suppression. She has claimed that the plan was rejected, and Eisenstat left after just six months.

As noted earlier, LeCun flatly denies [ 34 ] that Facebook creates filter bubbles that drive polarization. In sharp contrast, Eisenstat explains that such an outcome is a feature of their algorithm, not a bug. The Wall St. Journal reported that in 2018, senior executives at Facebook were informed of the following conclusions during an internal presentation [ 22 ]:

“Our algorithms exploit the human brain’s attraction to divisiveness… [and] if left unchecked,” Facebook would feed users “more and more divisive content in an effort to gain user attention and increase time on the platform.”

The platform aggravates polarization and tribal behavior.

Some proposed algorithmic changes would “disproportionately affect[] conservative users and publishers.”

Looking at data for Germany, an internal report found “64% of all extremist group joins are due to our recommendation tools … Our recommendation systems grow the problem.”

These are Facebook’s own words, and arguably, they provide the social media platform with an invaluable set of marketing prerogatives. They are reinforced by Tim Kendall’s testimony as discussed above.

“Most notably,” reported the WSJ, “the project forced Facebook to consider how it prioritized ‘user engagement’—a metric involving time spent, likes, shares and comments that for years had been the lodestar of its system.” As noted in the section above, executive compensation was tied to “user engagement,” which meant product developers at Facebook were incentivized to design systems in this very way. Footnote 5

Mark Zuckerberg and Joel Kaplan reportedly [ 22 ] dismissed the conclusions from the 2018 presentation, calling efforts to bring greater civility to conversations on the social media platform “paternalistic.” Zuckerberg went on to say that he would “stand up against those who say that new types of communities forming on social media are dividing us.” Kaplan reportedly “killed efforts to build a classification system for hyperpolarized content.” Failing to address this has resulted in algorithms that, as Tim Kendall explained, “have brought out the worst in us. They have literally rewired our brains so that we are detached from reality and immersed in tribalism” [ 38 ].

Facebook would have us believe that it has made great strides in confronting these problems over just the last two years, as Mr. LeCun has claimed. But at present, the burden of proof is on Facebook to produce the full, raw data so that independent researchers can make a fair assessment of his claims.

6 The AI filter

According to LeCun’s tweets cited at the beginning of this paper, Facebook’s AI-powered filter cleanses the platform of:

Disinformation that endangers public safety or the integrity of the democratic process

These are his words, so we will refer to them even while the actual definitions of hate speech, calls to violence, and other terms are potentially controversial and open to debate.

These claims are provably false. While “AI” (along with some very large, manual curation operations in developing countries) may effectively filter some of this content, at Facebook’s scale, some is not enough.

Let’s examine the claims a little closer.

6.1 Does Facebook actually filter out hate speech?

An investigation by the UK-based counter-extremist organization ISD (Institute for Strategic Dialog) found that Facebook’s algorithm “actively promotes” Holocaust denial content [ 20 ]. The same organization, in another report, documents how Facebook’s “delays or mistakes in policy enforcement continue to enable hateful and harmful content to spread through paid targeted ads.” [ 17 ]. They go on to explain that “[e]ven when action is taken on violating ad content, such a response is often reactive and delayed, after hundreds, thousands, or potentially even millions of users have already been served those ads on their feeds.” Footnote 6

Zuckerberg admitted in April 2018 that hate speech in Myanmar was a problem, and pledged to act. Four months later, Reuters found more than “1000 examples of posts, comments, images and videos attacking the Rohingya or other Myanmar Muslims that were on Facebook” [ 45 ]. As recently as June 2020 there were reports [ 7 ] of troll farms using Facebook to intimidate opponents of Rodrigo Duterte in the Philippines with death threats and hateful comments.

6.2 Does Facebook actually filter out calls to violence?

The Sri Lankan government had to block access to Facebook “amid a wave of violence against Muslims … after Facebook ignored years of calls from both the government and civil society groups to control ethnonationalist accounts that spread hate speech and incited violence.” [ 42 ] A report from the Center for Policy Alternatives in September 2014 detailed evidence of 20 hate groups in Sri Lanka, and informed Facebook. In March of 2018, Buzzfeed reported that “16 out of the 20 groups were still on Facebook”. Footnote 7

When former President Trump tweeted, in response to Black Lives Matters protests, when “the looting starts, the shooting starts,” the message was liked and shared hundreds of thousands of times across Facebook and Instagram, even as other social networks such as Twitter flagged the message for its explicit incitement of violence [ 48 ] and prevented it from being retweeted.

Facebook played a pivotal role in the planning of the January 6th insurrection in the US, providing an unchecked platform for proliferation of the Big Lie, radicalization around this lie, and coordinated organization around explicitly-stated plans to engage in violent confrontation at the nation’s capital on the outgoing president’s behalf. Facebook’s role in the deadly violence was far greater and more widespread than the role of Parler and the other fringe right-wing platforms that attracted so much attention in the aftermath of the attack [ 11 ].

6.3 Does Facebook actually filter out cyberbullying?

According to Enough Is Enough, a non-partisan, non-profit organization whose mission is “making the Internet safer for children and families,” the answer is a resounding no. According to their most recent cyberbullying statistics, [ 10 ] 47% of young people have been bullied online, and the two most prevalent platforms are Instagram at 42% and Facebook at 37%.

In fact, Facebook is failing to protect children on a global scale. According to a UNICEF poll of children in 30 countries, one in every three young people says that they have been victimized by cyberbullying. And one in five says the harassment and threat of actual violence caused them to skip school. According to the survey, conducted in concert with the UN Special Representative of the Secretary-General (SRSG) on Violence against Children, “almost three-quarters of young people also said social networks, including Facebook, Instagram, Snapchat and Twitter, are the most common place for online bullying” [ 49 ].

6.4 Does Facebook actually filter out “disinformation that endangers public safety or the integrity of the democratic process?”

To list the evidence contradicting this point would be exhausting. Below are just a few examples:

The Computational Propaganda Research Project found in their 2019 Global Inventory of Organized Social Media Manipulation that 70 countries had disinformation campaigns organized on social media in 2019, with Facebook as the top platform [ 6 ].

A Facebook whistleblower produced a 6600 word memo detailing case after case of Facebook “abdicating responsibility for malign activities on its platform that could affect the political fate of nations outside the United States or Western Europe.” [ 44 ]

Facebook is ground-zero for anti-vaccination and pandemic misinformation, with the 26-min conspiracy theory film “Plandemic” going viral on Facebook in April 2020 and garnering tens of millions of views. Facebook’s attempt to purge itself of anti-vaccination disinformation was easily thwarted when the groups guilty of proliferating this content removed the word “vaccine” from their names. In addition to undermining public health interests by spreading provably false content, these anti-vaccination groups have obscured meaningful discourse about the actual health concerns and risks that may or may not be connected to vaccinations. A paper from May 2020 attempts to map out the “multi-sided landscape of unprecedented intricacy that involves nearly 100 million individuals” [ 25 ] that are entangled with anti-vaccination clusters. That report predicts that such anti-vaccination views “will dominate in a decade” given their explosive growth and intertwining with undecided people. According to the Knight Foundation and Gallup, [ 26 ] 75% of Americans believe they “were exposed to misinformation about the election” on Facebook during the 2020 US presidential election. This is one of those rare issues on which Republicans (76%), Democrats (75%) and Independents (75%) agree–Facebook was the primary source for election misinformation.

If those AI filters are in fact working, they are not working very well.

All of this said, Facebook’s reliance on “AI filters” misses a critical point, which is that you cannot have AI ethics without ethics [ 30 ]. These problems cannot be solved with AI. These problems cannot be solved with checklists, incremental advances, marginal changes, or even state-of-the-art deep learning networks. These problems are caused by the company’s entire business model and mission. Bosworth’s provocative quotes above, along with Tim Kendall’s direct testimony demonstrate as much.

These are systemic issues, not technological ones. Yael Eisenstat put it best in her TED talk: “as long as the company continues to merely tinker around the margins of content policy and moderation, as opposed to considering how the entire machine is designed and monetized, they will never truly address how the platform is contributing to hatred, division and radicalization.”

7 Facebook does not want to be the arbiter of truth

We should probably take comfort in Facebook’s claim that it does not wish to be the “arbiter of political truth.” After all, Facebook has a troubled history with the truth. Their ad buying customers proved as much when Facebook was forced to pay $40 million to settle a lawsuit alleging that they had inflated “by up to 900 percent—the time it said users spent watching videos.” [ 4 ] While Facebook would neither admit nor deny the truth of this allegation, they did admit to the error in a 2016 statement [ 14 ].

This was not some innocuous lie that just cost a few firms some money either. As Slate explained in a 2018 article, “many [publications] laid off writers and editors and cut back on text stories to focus on producing short, snappy videos for people to watch in their Facebook feeds.” [ 40 ] People lost their livelihoods to this deception.

Is this an isolated incident? Or is fraud at Facebook systemic? Matt Stoller describes the contents of recently unsealed legal documents [ 12 ] in a lawsuit alleging Facebook has defrauded advertisers for years [ 46 ]:

The documents revealed that Facebook COO Sheryl Sandberg directly oversaw the alleged fraud for years. The scheme was simple. Facebook deceived advertisers by pretending that fake accounts represented real people, because ad buyers choose to spend on ad campaigns based on where they think their customers are. Former employees noted that the corporation did not care about the accuracy of numbers as long as the ad money was coming in. Facebook, they said, “did not give a shit.” The inflated statistics sometimes led to outlandish results. For instance, Facebook told advertisers that its services had a potential reach of 100 million 18–34-year-olds in the United States, even though there are only 76 million people in that demographic. After employees proposed a fix to make the numbers honest, the corporation rejected the idea, noting that the “revenue impact” for Facebook would be “significant.” One Facebook employee wrote, “My question lately is: how long can we get away with the reach overestimation?” According to these documents, Sandberg aggressively managed public communications over how to talk to advertisers about the inflated statistics, and Facebook is now fighting against her being interviewed by lawyers in a class action lawsuit alleging fraud.

Facebook’s embrace of deception extends from its ad-buying fraud to the content on its platforms. For instance:

Those who would “aid[] and abet[] the spread of climate misinformation” on Facebook benefit from “a giant loophole in its fact-checking program.” Evidently, Facebook gives its staff the power to overrule climate scientists by deeming climate disinformation “opinion.” [ 2 ].

The former managing editor of Snopes reported that Facebook was merely using the well-regarded fact-checking site for “crisis PR,” that they did not take fact checking seriously and would ignore concerns [ 35 ]. Snopes tried hard to push against the Myanmar disinformation campaign, amongst many other issues, but its concerns were ignored.

ProPublica recently reported [ 18 ] that Sheryl Sandberg silenced and censored a Kurdish militia group that “the Turkish government had targeted” in order to safeguard their revenue from Turkey.

Mark Zuckerberg and Joel Kaplan intervened [ 37 ] in April 2019 to keep Alex Jones on the platform, despite the right-wing conspiracy theorist’s lead role in spreading disinformation about the 2012 Sandy Hook elementary school shooting and the 2018 Parkland high school shooting.

Arguably, Facebook’s executive team has not only ceded responsibility as an “arbiter of truth,” but has also on several notable occasions, intervened to ensure the continued proliferation of disinformation.

8 How do we disengage?

Facebook’s business model is focused entirely on increasing growth and user engagement. Its algorithms are extremely effective at doing so. The steps Facebook has taken, such as building “AI filters” or partnering with independent fact checkers, are superficial and toothless. They cannot begin to untangle the systemic issues at the heart of this matter, because these issues are Facebook’s entire reason for being.

So what can be done? Certainly, criminality needs to be prosecuted. Executives should go to jail for fraud. Social media companies, and their organizational leaders, should face legal liability for the impact made by the content on their platforms. One effort to impose legal liability in the US is centered around reforming section 230 of the US Communications Decency Act. It, and similar laws around the world, should be reformed to create far more meaningful accountability and liability for the promotion of disinformation, violence, and extremism.

Most importantly, monopolies should be busted. Existing antitrust laws should be used to break up Facebook and restrict its future activities and acquisitions.

The matters outlined here have been brought to the attention of Facebook’s leadership in countless ways that are well documented and readily provable. But the changes required go well beyond effective leveraging of AI. At its heart, Facebook will not change because they do not want to, and are not incentivized to. Facebook must be regulated, and Facebook’s leadership structure must be dismantled.

It seems unlikely that politicians and regulators have the political will to do all of this, but there are some encouraging signs, especially regarding antitrust investigations [ 9 ] and lawsuits [ 28 ] in both the US and Europe. Still, this issue goes well beyond mere enforcement. Somehow we must shift the incentives for social media companies, who compete for, and monetize, our attention. Until we stop rewarding Facebook’s illicit behavior with engagement, it’s hard to see a way out of our current condition. These companies are building technology that is designed to draw us in with problematic content, addict us to outrage, and ultimately drive us apart. We no longer agree on shared facts or truths, a condition that is turning political adversaries into bitter enemies, that is transforming ideological difference into seething contempt. Rather than help us lead more fulfilling lives or find truth, Facebook is helping us to discover enemies among our fellow citizens, and bombarding us with reasons to hate them, all to the end of profitability. This path is unsustainable.

The only thing Facebook truly understands is money, and all of their money comes from engagement. If we disengage, they lose money. If we delete, they lose power. If we decline to be a part of their ecosystem, perhaps we can collectively return to a shared reality.

Facebook executives have, themselves, acknowledged that Facebook profits from the spread of misinformation: https://www.facebook.com/facebookmedia/blog/working-to-stop-misinformation-and-false-news .

Cybersecurity for Democracy. (March 3, 2021). “Far-right news sources on Facebook more engaging.” https://medium.com/cybersecurity-for-democracy/far-right-news-sources-on-facebook-more-engaging-e04a01efae90 .

Facebook claims to have since broadened the metrics it uses to calculate executive pay, but to what extent this might offset the prime directive of maximizing user engagement is unclear.

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Lauer, D. Facebook’s ethical failures are not accidental; they are part of the business model. AI Ethics 1 , 395–403 (2021). https://doi.org/10.1007/s43681-021-00068-x

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Ethics in Marketing

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Understanding and appreciating the ethical dilemmas associated with business is an important dimension of marketing strategy. Increasingly, matters of corporate social responsibility are part of marketing's domain.

Ethics in Marketing contains 20 cases that deal with a variety of ethical issues such as questionable selling practices, exploitative advertising, counterfeiting, product safety, apparent bribery and channel conflict that companies face across the world. A hallmark of this book is its international dimension along with high-profile case studies that represent situations in European, North American, Chinese, Indian and South American companies. Well known multinationals like Coca Cola, Facebook, VISA and Zara are featured. This second edition of Ethics in Marketing has been thoroughly updated and includes new international cases from globally recognized organizations on gift giving, sustainability, retail practices, multiculturalism, sweat shop labor and sports sponsorship.

This unique case-book provides students with a global perspective on ethics in marketing and can be used in a free standing course on marketing ethics or marketing and society or it can be used as a supplement for other marketing classes.

TABLE OF CONTENTS

Part | 2  pages, part i background, chapter 1 | 24  pages, foundational perspectives for ethical and socially responsible marketing decisions, chapter 2 | 28  pages, advanced perspectives for ethical and socially responsible marketing decisions, chapter 3 | 14  pages, “preserving the venture”—a sample case study with frameworks and ethical analysis, part ii short cases, chapter 4 | 3  pages, just a friendly request, chapter 5 | 3  pages, going along to get along raymondf . keyes, chapter 6 | 4  pages, casas bahia chrissygolden, chapter 7 | 3  pages, discount drugstore: no gifts allowed, chapter 8 | 4  pages, reference prices in retailing: what is a fair comparison fionaharris, chapter 9 | 4  pages, drug testing in india, chapter 10 | 5  pages, starbucks china: the world’s priciest cup of coff ee peiluchen, part iii intermediate cases, chapter 11 | 4  pages, superior services: should short skirts sell software lori leppcorbett, chapter 12 | 6  pages, tough decisions: something to snack on, chapter 13 | 4  pages, a young pharmacist’s dilemma: questionable transactions barborakocanovaandveronikavosykova, chapter 14 | 5  pages, peta karinbesenbaeckandhaleyrosenbach, chapter 15 | 6  pages, zara and fast fashion saraheide, elizabethsadlerandsarahtonti, chapter 16 | 6  pages, the co-operative bank of the uk fionaharris andsarahtonti, chapter 17 | 5  pages, counterfeits in online retailing: how they are sold and what can be done to fi ght back barbarastöttingerandjuliagschwendner, chapter 18 | 6  pages, montenegro electronics, ltd., part iv long cases, chapter 19 | 7  pages, the coca-cola company: the skinny on a big fat problem marshelrapuzzi, chapter 20 | 7  pages, auchan (france) geertdemuijnck, chapter 21 | 13  pages, toms shoes: one for one movement robertmeara, matthewterilli andjennifersawayda, chapter 22 | 18  pages, facebook in the developed and developing world, chapter 23 | 8  pages, visa and fifa: everywhere you want to be brianr. leveyandjamesmatakovich.

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How to Manipulate Customers … Ethically

• Neeti Sanyal

Companies like Facebook and YouTube have been slammed for nudging users to adopt certain behaviors. Consider these three principles to avoid repeating their mistakes

As the influence of behavioral economics has grown, companies have increasingly been adopting “nudges” to influence how users of their products or services make choices. But nudges — changes in how choices are presented or set up to influence people to select specific ones — can have troubling consequences. Consequently, business leaders need to look critically at how they nudge users to understand whether they are truly acting in their best interests. Drawing from a landmark report to guide the conduct of biomedical and behavioral research involving human subjects, this article offers three principles to help companies design ethical nudges.

As these examples make abundantly clear, business leaders need to look critically at how they nudge users to understand whether they are truly acting in their best interests.

People aren’t fully rational. Environments, whether physical or digital, influence the choices people make and how they behave. Anyone who has followed the cues to socially distance himself or herself from others in a line in a supermarket during the pandemic or ended up donating more money to a charity than they had originally intended due to the suggested donation amounts on the charity’s webpage has likely been subject to a nudge. Originating in the field of behavioral economics, nudges are changes in how choices are presented or set up to influence people to take a specific action. They are extremely effective in steering consumer behavior but can have troubling consequences. Consider how Facebook’s “like” button has contributed  to digital addiction and the way YouTube’s recommendation algorithm  has fueled extremism and hate. As these examples make abundantly clear, business leaders need to look critically at how they nudge users to understand whether they are truly acting in their best interests.

• Neeti Sanyal is an executive creative director at Artefact , a design firm that works in the areas of health care, education, and technology.

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Understanding and appreciating the ethical dilemmas associated with business is an important dimension of marketing strategy. Increasingly, matters of corporate social responsibility are part of marketing's domain. Ethics in Marketing contains 20 cases that deal with a variety of ethical issues such as questionable selling practices, exploitative advertising, counterfeiting, product safety, apparent bribery and channel conflict that companies face across the world. A hallmark of this book is its international dimension along with high-profile case studies that represent situations in European, North American, Chinese, Indian and South American companies. Well known multinationals like Coca Cola, Facebook, VISA and Zara are featured. This second edition of Ethics in Marketing has been thoroughly updated and includes new international cases from globally recognized organizations on gift giving, sustainability, retail practices, multiculturalism, sweat shop labor and sports sponsorship. This unique case-book provides students with a global perspective on ethics in marketing and can be used in a free standing course on marketing ethics or marketing and society or it can be used as a supplement for other marketing classes.

Table of Contents

Patrick E. Murphy is a Professor of Marketing at the University of Notre Dame, USA. His research on marketing ethics has been published in Journal of Marketing, Journal of Business Ethics, Journal of Macromarketing, Journal of Public Policy & Marketing and European Journal of Marketing Gene R. Laczniak is the Sanders Professor of Business Emeritus at Marquette University, USA. His research and commentary on marketing and society issues has been published in Journal of Public Policy & Marketing , Journal of Business Ethics , Business Ethics Quarterly and the Journal of Macromarketing . Fiona Harris is a Senior Lecturer in Management in the Department for Strategy and Marketing and Deputy Director of ISM-Open at the Open University, UK.

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Worst examples of unethical marketing revealed in new survey

There is a litany of poor marketing and advertising practices remembered in a new survey from the New Statesman Media Group (New Statesman, Press Gazette, sustainable luxury lifestyle and ESG publishers).

From Fyre Festival to Kendall Jenner and Pepsi to demonstrate the dangers of collaborating with unethical influencers, to Volkswagen and their greenwashing scandal, examples of brands ignoring ethics are plentiful.

In this report, New Statesman Media Group disclosed which unethical tricks are considered the most heinous by senior marketers, business leaders and publishers, ranking the 7 choices in order of egregiousness.

Download the free report to discover which tactic was ranked as the lowest of the low

There is a good reason for this report. Over the past year, marketing platform Semrush found there was a 200% increase in searches for ‘ethical marketing strategies’ between Jan and Dec 2021 in the UK.

The BBC followed this same line, citing a global review by management consultancy firm Accenture, which found “60% [of people] have made more environmentally friendly, sustainable, or ethical purchases since the start of the pandemic.

“Nine out of 10 of that percentage were likely to continue doing so.”

• Responders were asked to choose from the following malevolent strategies:
• Greenwashing (brand a product as eco-friendly, green or sustainable when such claims are false)
• Concealing important information (omit certain details which happen to be vital)
• Targeting the vulnerable (deliberately target consumers who least need the product or service in question)
• Non-transparent data use (use consumer data in a non-advertised fashion)
• Collaborating with unethical influencers (partner with the wrong type of influencer or on the wrong subject)
• Clickbait article headlines (calls to action do not deliver on promises)
• Newsjacking (boost a brand by aligning with current events or cultural issues)

Representatives from Henley Business School, Raconteur, Mindshare, Faze Digital, Bloc, Energy PR, Klaviyo and The Global Marketing Alliance all supplied comments.

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Digital Marketing Case Studies for Ethics: Patagonia

There are plenty of blogs out there applauding the clothing brand Patagonia for their quality products. And plenty give them a showcase as an ethical company worth purchasing from. Some of the better digital marketing case studies do a great job of itemizing the brand’s goals and triumphs . But how does Patagonia communicate these ethics via their marketing? How well do these values translate? Let’s take a look at some of their major campaigns for insights.

Snow-capped mountains and million-dollar sunrises galore. The visuals associated with Patagonia campaigns inspire travel, exploration, and an appreciation for nature. They highlight how grand this planet of ours can be. It’s maybe the least you would expect from a company named for one of the most gorgeous places on Earth, but they do it so well.

Even more wonderful is how smoothly this imagery fits with the core cause of the brand: environmental crisis. By showcasing an exuberant love for the oceans, the mountains, and the skies, the folks at Patagonia cement the connection between them and nature. Of course, they make this activism known in more overt ways as well, but there’s something special about how these visuals work on the subconscious level.

For Patagonia's marketing, it’s not enough to create camping and outdoorsy imagery. They show folks biking on cliff-sides, and repelling off cliff-sides, and okay there are a lot of cliff-sides, but the point is they’re stressing the joy of doing hard things.

One campaign in particular was an invitation to mentally and physically struggle. It started with coordinates, printed large, without any context. Challenge 1 was to be curious, to figure out why you were seeing coordinates, and more importantly, what the location was. It turns out, the coordinates Patagonia put on billboards and magazines were of locations they deemed the "7 unknown wonders of the world.” These locations were amazing but rarely visited because of their remote or difficult nature. So of course, challenge 2 was to go to the places that others say is too far or too taxing. Challenge 3 was finding a geocache that the Patagonia folks hid at those exact coordinates. Wow, right?

This kind of marketing captures people who enjoy the accomplishment of deeply hard work. Strategically, making use of this association not only suggests that Patagonia products can do that hard work too, it also allows viewers to connect that spirit-in-challenge mentality to Patagonia as a brand and the work they do. This type of reputation, one that says, “we do hard work, not fair-weather activism,” is likely a huge component to their success, especially when it's been shown in the consistency of their decades-long history.

This one is simple, but no less powerful. When your mission statement is so inspirational, and your dedication to it so strong that you can turn it into murals, you’re doing something right. Patagonia famously painted multiple buildings, some with scenes, some without, but all with the simple message of their long-standing mission statement:

"Build the best product.  Cause no unnecessary harm. Use business to inspire and implement solutions to the environmental crisis." 

The folks at Patagonia take their own path, to be sure. Famous examples of their marketing include stunts like the giant New York Times Black Friday ad that read “ DON’T BUY THIS JACKET .” (No, it wasn’t an attempt at reverse psychology, the breakdown underneath that header outlined how negatively even an environmentally conscious brand like theirs impacts the planet. The underlying point was genuinely “don’t buy this unless you really need it.”) Another campaign saw a blown-up image of one of their flannels that had been well-worn and torn in places, with a second image of that same flannel with repaired sleeves and a leather patch affixed. The point was to encourage more purposeful purchasing of things that could be repaired--and that Patagonia will make repairs--rather than acceptance of quick-purchase items that won’t even last a season before they’re retired to a landfill.

In both of these cases, they rebel against not only the traditional models for marketing and product sales, but also against the fashion industries they are reluctantly part of. This approach, again, reinforces their environmental messaging while also complementing the brand identity of rugged adventurers.

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McDonald’s Ethical Issues: Examples of Unethical Marketing Practices

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Unethical marketing practices are a significant issue affecting firms’ operations. The fast-food industry is one of the most affected sectors of the economy when it comes to unethical marketing practices. A case in point is when a company promotes a product without indicating its implications on the consumer’s health. Ethical standards in business focus on ensuring that the organization attains its core objectives in a manner that adheres to the laid down requirements.

The process of developing a marketing plan may tempt the business entity to violate the ethical principles put in place. Therefore, the case study of McDonald’s ethical issues is an outstanding opportunity to learn about the violations of a big corporation. There is a need to examine some ethical practices businesses must comply with. Every industry has its unique set of guidelines to which the players are expected to adhere. However, several standards apply to all companies operating in the modern global market. In this study, the author analyzed the case of unethical practices of McDonald’s UAE.

Background Information

• Problem & Thesis

Objectives of the Study

Research questions, assumptions, limitations, and delimitations.

• Marketing Ethics

Chapter I Summary

Marketing in the uae, suitable marketing ethics, common ethical issues in marketing, the domain of marketing ethics, theoretical frameworks of ethics in marketing, emergent ethical issues in marketing, chapter ii summary, demographics.

• Familiarity with ethical standards

Ethical Practices

Reasons for selecting mcdonald’s, common unethical practices, application of ethical standards, opinion of consumers regarding ethical practices in marketing, motivation for unethical practices, chapter iii summary, recommendations and conclusion.

In marketing, ethical considerations play a vital role in advancing the objectives of an organisation. In the world of business, ethics is all about developing trust between the various parties involved in trade. According to Murphy and Laczniak (2012), a number of ethical practices are evident in the process of carrying out business activities. They include, among others, honesty and integrity on the part of the producer. Unfortunately, many organisations flout the ethical principles put in place. Ethical violations have a devastating effect on both the business concerned and the consumer.

The current study intends to shed more light on this issue of ethical business practices in the contemporary market. It is a case study of McDonalds and how the international company disregards the ethical considerations of business in the fast food industry. The discussions in this paper focus on the ethical issues that emerge in the process of implementing a marketing plan. In this regard, the study uses the McDonalds’ chain of stores in the United Arab Emirates (UAE). Hundekar (2010) argues that competition among companies is one of the factors that lead to the violation of ethical standards. The organisations carry out such violations in a bid to endear themselves to the consumer.

One of the primary ethical practices relate to the need for professional conduct. According to Sirgy and Lee (2008), businesses are expected to market their products in a professional manner. Such an undertaking should be reflected in the interactions between a business and its stakeholders. The parties referred to in this case include consumers, competitors, and the regulatory authorities put in place. Such an ethical practice is said to occur when a company is non-discriminatory and portrays its products in an honest manner to the consumers. On their part, Smith (2012) suggests that ethical standards should be factored in when planning on how to deal with the competitive nature of a business environment. To this end, the ethical practices include the accurate representation of a product in the market. Other common codes of conduct fall within the category of pricing and labelling of the products.

In spite of the fact that the ethical practices are obvious and clear, some business organisations still flout them. As already mentioned, the procedures are often abused by companies during the development of a marketing plan. Murphy and Laczniak (2012) point out that there are many ethical standards violated by contemporary business entities. Four of these codes of conduct are commonly cited in literature and studies conducted in this field. All of them relate to the development of a marketing plan. They touch on pricing, labelling, inaccurate representation of information, and disregard for professionalism.

There are serious ramifications associated with the violation of the laid down ethical guidelines. Hundekar (2010) observes that the most affected party is the consumer. In the case of the fast food industry, companies that misrepresent the health implications of their products put the health of their consumers at risk. It is noted that fast food has serious consequences on the health of the people. In light of this, it is important for food related companies to elaborate on the impacts of their products so that the consumers can make informed choices. Other effects of flouting ethical issues in business relate to the performance of the industry at large. For example, negative publicity associated with a given sector in relation to violation of ethical standards may affect the success of organisations of businesses operating therein.

McDonalds is a good reference point when it comes to the analysis of ethical issues in business. The company has a history of violating codes of conduct in a bid to gain a competitive advantage against its rivals in the fast food market. It is one of the reasons why the current study focuses on McDonalds stores in the UAE. Smith (2012) argues that most companies in the fast food industry tend to hide information relating to the ingredients of their products from the consumers. For instance, there are several allegations made against McDonalds on matters touching on the labelling of its products. In addition, the company has in the past been accused of using sports icons to create the impression that its products are healthy. Such form of unethical conduct jeopardises the health of the consumers.

The current study is developed against this background of business ethics in relation to the various marketing plans that companies develop in efforts to remain competitive in their respective sectors. In the opinion of Sirgy and Lee (2008), competition cannot be wished away in the business environment. However, Sirgy and Lee (2008) point out that it is possible for companies to gain a competitive edge in their industry without having to engage in unethical practices. The current study seeks to develop a framework through which organisations can achieve this objective. The strategies through which entities in the fast food industry can succeed by adhering to the codes of conduct will be discussed.

In the literature review, some insights into the UAE fast food market will be highlighted. For instance, there are various regulations around marketing that are meant to be followed by firms operating in this market. The same is discussed alongside the larger UAE fast food industry. To this end, a comprehensive insight into the fast food industry is outlined. Furthermore, the study intends to use the UAE as a model region to showcase how ethics are violated in today’s global market. In addition, the country is used to show how solutions to this problem can be dealt with in an effective manner.

Problem Statement

The current study is an integral aspect of marketing and, in extension, formulation of a marketing plan. To this end, the researcher makes use of a functional organisation that is associated with rampant unethical practices. McDonalds UAE is selected as an ideal company for the purposes of this study. It will act as a reference point owing to the sheer magnitude of consumers associated with the brand. Sirgy and Lee (2008) suggest that the evaluation of ethical issues in business is effectively done when an analysis is carried out on the market leaders.

Thesis statement

The current study was guided by one thesis statement, which is stated as follows:

Unethical practices reduce the credibility and image of a brand in the fast food industry.

Based on the thesis statement developed for the current study, the problem that will be addressed at McDonald’s is its unethical practices that ought to be addressed to curb the rising food related diseases in the modern society. The World Health Organisation (as cited in Smith 2012) recognises the link between poor diet and illnesses like diabetes and heart failure. An organisation like McDonald’s should not exploit its customers by marketing its products as healthy when this is not true. The current study identifies the said marketing plan that illustrates the company as an entity that relies on false information to gain competitive advantage.

Companies operating in the UAE are subject to Islamic laws used in the country. The same is particularly observed in the food industry with emphasis on Halal branded items. Marinov (2007) points out that promotion of products in the Islamic market should be gender specific. Other issues that should be factored into the marketing process include emphasis on the quality and value of the commodity offered. There are a number of regulations that should be adhered to with respect to entities operating in the food industry in the UAE. The literature review will expound on these issues.

Major objective

The current study is guided by one major objective, which entails relating ethical issues to business operations, specifically in the fast food industry.

Specific objectives

The study has four specific objectives, which support the major one. They include the following:

To establish the ethical standards related to the process of marketing a product

In this regard, the author will analyse literature on ethical practices. According to Murphy and Laczniak (2012), common ethical considerations include reasonable pricing, adhering to professionalism, accurate labelling, and proper representation of information in the market. The current study identifies the ethical standards that relate to the mentioned practices.

To illustrate the common ethical violations committed by businesses in the modern market.

Violations of the ethical requirements of business are common in the food industry. The current study illustrates how businesses can mislead the consumers of their products. Specifically, the research undertaking outlines how McDonald’s misleads its customers through the use of sports icons in its marketing plan. In addition, the study addresses the manner through which McDonald’s conceals vital information from consumers in the labelling of its products.

To outline the effects of non-adherence to ethical standards during marketing.

Whenever businesses fail to adhere to the laid down ethical practices, the stakeholders involved are affected in different ways. According to Hundekar (2010), marketing plans and strategies have a direct impact on the consumer. To this end, the current study establishes the affected parties with respect to unethical business practices. Consequently, the research undertaking outlines the respective effects of unethical business practices to the parties. The same will enable the development of a suitable marketing strategy that respects ethics of business.

To propose ethical marketing plans

McDonalds is used in the current study to outline the numerous unethical practices in the fast food industry around the world. According to Smith (2012), it is possible to achieve competitive advantage in the market without necessarily having to flout the various ethical requirements put in place. To this end, the current study makes recommendations on the necessary measures that industry stakeholders can implement to achieve the objective. Such measures will help to minimise the unethical practices presently being carried out in the fast food sector. The same will illustrate how to make these products suitable to sell in the market without harming the health of the consumers.

Rationale of the Current Study

Studies are often carried out to ascertain or verify the existence of a number of phenomena. In addition, Saunders, Lewis, and Thornhill (2003) recommend the need for research undertakings to provide solutions to the problems identified in a given field. For example, a study can be carried out to explore a challenge facing a particular market segment and the possible solutions. In light of this, the findings made in the current study are expected to be quite beneficial to the marketing sector. It is based on the need to observe ethical issues.

As such, the study provides the phenomenal aspects behind ethical practices in the industry. The findings can be applied in other industries apart from the fast food. They can also be applied in other countries apart from the UAE. Considering the market size served by McDonald’s, the study illustrates how industry players can retain their leadership positions without having to engage in unethical practices (Saunders et al. 2003).

The study is developed with the intention to promote a culture of ethical practices in businesses. Smith (2012) points out that the best way to promote a given culture is to have key industry players adopt the concept. To this end, the food industry will start paying more attention to ethical work practices if a key player like McDonald’s adopts the recommendations proposed. Murphy and Laczniak (2012) argue that most consumers prefer identifying with brands that have integrity. Courtesy of the survey carried out, it is established that organisations can make the most the market which supports ethical practices by heeding to the consumers’ call (Murphy & Laczniak 2012). Consequently, the current study plays a huge role in ensuring that other companies get to appreciate this growing concern from the consumers.

The discussion in this paper carried out in partial fulfilment for the requirement of a degree. To this end, the research might not be conclusive in certain areas. However, Saunders et al. (2003) suggest that the inconclusive nature of any research is bound to reveal more information that will require future study. In the same light, the current study outlines the many areas that need expounding upon. For instance, to what extent should the law address ethical practices in business? The same will help to address the several cases where businesses exploit legal loopholes to navigate around the ethical requirements.

The research carried out in this study is centred on the subject of ethical issues in business. Based on the objectives, discussed, the study has seven main research questions. In point form they include the following:

What is meant by, ‘ethical standards in business/?

• What are the respective ethical practices demanded for in business?
• Why was McDonald’s selected for the study?
• What are the impacts of unethical practices in the food industry
• How are ethics of standards applied in a marketing plan?
• What are the opinions of the consumers regarding adherence to ethical practices in businesses?
• What is the motivation behind undertaking unethical work practices?

Assumptions

The current study is developed under the assumption that fast food consumers will continue to indulge in the commodities even with comprehensive labelling. According to Saunders et al. (2003), the assumptions made in a study prompt the researcher to delve deeper into the specifics of the subject matter. To this end, the study relies on the assumption in reference to develop a marketing plan that will open up the information sharing between McDonald’s and the consumers. The same will advice on the need for honest labelling and representation of the ingredients involved in the preparation of the foodstuff (Saunders et al. 2003).

Limitations of the study

In point form, the following is a list of the limitations faced in the execution of the current study:

• The time required for the research was quite small
• The current study is limited to the unethical practices in only one business industry (the food industry). Other sectors like logistics, banking and insurance are areas where unethical practices are carried out. However, their role is not examined
• Within the food industry, the researcher is restricted to fast foods, and by extension McDonald’s. The same was carried out with the awareness of diversity within the industry.

Delimitations of the study

• Initially, the researcher planned to use primary data by interviewing employees and dedicated customers of McDonald’s from 4 cities over various outlets. However, it was not possible to access all the participants due to the short time. To this end, the survey was carried out across 15 McDonald’s outlets in the United Arab Emirates.
• The study focused on the food industry owing to the increased interest in healthy products from consumers. The findings of this study are aspects that can be generalised to other sectors as well.
• The researcher settled on fast foods owing to the market size. Fast food industries across the world have larger consumers and the same implies easy access for participants to such a study.

Definition of Marketing Ethics

Ethics is a concept that is understood from the perspective of human conduct. In previous studies and existing literature, ethics has been defined variedly. According to Murphy (2006) ethics is a philosophy that evaluates human conduct. Murphy and Laczniak (2012) point out that ethics evaluates how individuals can make a distinction between right and wrong. In the field of marketing, ethics are viewed as the principles that govern the decision making.

The standards and principles associated with marketing ethics are meant to enhance an acceptable conduct in this field of business. Murphy and Laczniak (2012) suggest that marketing ethics are determined by various stakeholders. In most cases, the stakeholders include the company marketing its products alongside its customers. Given the integral role of marketing in business the respective principles and standards are incorporated several regulations. Murphy and Laczniak (2012) point out that a code of ethics on matters pertaining to marketing is very important to realise the acceptability of this field.

The code of ethics allows marketers to conform to the expectations from the various stakeholders and the society at large. However, marketing ethics transcends the legal and regulatory issues contained in the code of conduct. Ethical marketing practices and principles constitute the necessary elements required in establishing trust. Kotler (2000) suggest that trust is an essential ingredient in fostering long-term marketing relationships. To this end, ethical principles are necessary to ensure that marketing strategies endear a company to its clients.

In the field of marketing, the practitioners and scholars have a divergent approach to the subject. Churchill and Lacobucci (2002) cite an example of scholars who perceive ethics as being associated with an individual’s morality. Separately, Kotler (2000) argues that virtues such as honesty, fairness, responsibility can be acquired, notwithstanding an individual’s personal character. Practitioners who approach ethics from an organisational perspective focus on the cost of a marketing strategy. Kotler (2000), suggests that the cost implication results in the training of personnel on adherence to the code of ethics. Consequently, practitioners have a secondary view of ethics in the context of marketing.

The current chapter lays the foundation for the entire study with respect to unethical marketing practices in business. A background on the subject is outlined. The foundation of this study is based on the thesis statement that unethical practices destroy the image of an organisation. In this regard, McDonald’s franchise based in the UAE is used as the basis of researching up on the thesis statement. The rationale and research technique, employed are all outlined in this chapter. The subsequent chapter offers an insight into the existing literature on the issue of ethical standards in marketing.

Literature Review

Historical perspectives of ethical marketing.

Matters relating to ethics, with respect to marketing, are not a new phenomenon in business. According to Smith (2012), some of the earliest literature on the subject dates back more than half a century ago. For instance, as early as 1957 Packard (as cited in Smith 2012) discussed some of the negative elements of marketing.

Packard (as cited in Smith 2012) makes a claim that marketing is a completely manipulative area of business. In chapter 15 of the book, Packard (as cited in Smith 2012) argues that, “The large-scale efforts being made, often with impressive success to channel our unthinking habits, our purchasing decisions, and our thought processes by the use of insights gleaned from psychiatry and the social sciences” (Smith 2012, p. 7)

Notwithstanding the claim of marketing as a manipulative technique, the idea was advanced for several years. However, there were other schools of thought which did not buy into the whole manipulative idea. Smith (2012) point out that whereas the idea was advanced, other scholars associated the sentiments to how best to understand a consumer. Packard (as cited in Smith 2012) was seen to suggest that consumers should not be seen as being gullible.

The subject of marketing ethics is also associated with the element of social responsibility to the consumers. To this effect, Levitt (as cited in Saucier 2008) wrote a series of papers reflecting on his sentiments regarding social responsibility. Levitt (as cited in Smith 2012) was against business ethics that violated the civil nature of a people’s daily activities. The arguments were developed from the idea that businesses have no obligation to the welfare and social responsibility. The underlying aspect of business is to realise profits. To this extent Levitt (as cited in Smith 2012) associated marketing with the core principles which scarcely make reference to ethics in business.

The elements of marketing ethics have, for a long time now, been published in a number of peer reviewed articles. However, Saucier (2008) cites the Journal of Marketing as the most notable journal with respect to the subject. Saucier (2008) points out that the journal has gained the necessary reputation owing to its publication of articles that touch on advertising practices. Specifically, marketing ethics have been discussed from the perspective of advertising practices, deceptive marketing techniques and promotional aspects in a marketing campaign.

The Journal of Marketing has acted as a platform for notable scholars who have discussed marketing ethics at length. According to Lazo, Petit, and Zakon (as cited in Smith 2012), issues like promotion of questionable values and ethical dilemmas in marketing are very significant to companies. On their part, Bogart 1962 and Twedt 1663 (as cited in Smith 2012) outline the numerous ethical concerns in marketing. Their publication over the years has continued to assert the importance of the subject in the broader spectrum of business.

Based on the review outlined, so far, the foundation of ethics in business is pointed out as having taken roots several decades ago. Smith (2012) helps to illustrate that scholars and marketing experts have placed the subject on a high pedestal. However, critical aspects of marketing ethics lie in understanding the suitable and unethical marketing techniques. The same are reviewed in the subsequent sections as a means of developing on the historical foundations laid out (Smith 2012).

The UAE is considered one of the fastest growing market regions in the world. To this end, the region has attracted a wide array of companies, cutting across all industries. Marinov (2007) argues that the UAE is part of the affluent markets of the world. The same explains why big brand names like McDonald’s are found in the region. Notwithstanding the presence of Islamic laws, affluent markets have a lot in common with similar ones in Europe and America. Marinov (2007) points out that there is an appetite for western commodities in the UAE region. However, the same calls for marketing strategies which ought to conform to the regulations in the UAE market.

Corporate governance and business ethics are market specific. While carrying out a study on the same, Obay (2009) uses Dubai as an illustration of this phenomenon. The marketing guidelines in the region require that an advertisement campaign should be gender specific. A similar perspective has been discussed by Marinov (2007). Marinov (2007) argues that the message in such marketing strategies should either target men or women. In addition, Marinov (2007) points out that the UAE still has gender inequalities. To this end, the message for women should be subtle.

As already mentioned, Islamic law is applicable in the larger context of the UAE. Consequently, marketing campaigns are required to involve some religious words. This aspect has been discussed previously in literature. For instance, Marinov (2007) points out that the use of religious words and phrases should be used where appropriate. Separately, Obay (2009) argues that the same is essential in endearing the religious community to the product. There are cases when such words are inappropriately used, bringing about ethical concerns.

The Islamic religion emphasises on a modest lifestyle. The implication for companies is such that marketing should ensure that simplicity is at the heart of the message (Marinov 2007). In addition, in the UAE, marketing techniques where the message emphasises on price-cuts are not allowed. Such marketing tactics suggest that the price was intentionally raised high. To this end, marketing in the UAE is required to closely align itself with the requirements of the Islamic law.

As illustrated in the previous sections, there are several instances where marketing is seen as suitable and unsuitable. According to Coldwell and Herbst (2004), suitable marketing ethics can sometimes be referred to as positive. The positivity is seen in the sense that marketing is carried out in a manner that conforms to morally neutral aspects of a society.

To this end, studies in the field advance the understanding that ideal marketing ethics are the kinds that are developed on moral principles (Smith 2012). While discussing the subject, Nill and Schibrowsky (as cited in Chaar & Lee 2012), positive marketing ethics can be considered as suitable. However, relying on morality introduces the aspects of normative ethics. The difference between the two lies in the ideal ethics and what is actually applied in the field.

With respect to the suitable marketing ethics, a number of variables have been identified. For instance, Chonko and Hunt (as cited in Palmer 2000) initially carried out a study to identify suitable ethics in marketing. Their study found a number of ethical issues which hinder the realisation of suitable practices in marketing. Some of the issues include bribery, fairness and honesty. However, in a separate study, Smith (2012) found that pricing and product related issues add to the ethical concerns that inhibit stable ethics to be adhered to in marketing. To this end, suitable marketing ethics present a dilemma to the stakeholders whereby the demands of a company and the consumers have to be met.

The importance of ethics in marketing has resulted in several studies sprouting up to establish the actual ethical concerns that marketing experts face. For instance, Hunt, Chonko and Wilcox (as cited in Clemes & Burn 2000) carried out a survey which would identify key ethical concerns in marketing. The study by Hunt et al. (as cited in Clemes & Burn 2000) involved a total of 460 participants, all of whom were marketing researchers. Hunt et al. (as cited in Clemes & Burn 2000) identified a number of ethical concerns, which included research integrity and the treatment of consumers. On their part Smith (2012), found that most marketing executives engage in unethical behaviours when it comes to the marketing of certain products. However, when such managers were reprimanded, the vices stopped.

Understanding suitable marketing ethics requires insight on ethical judgments that marketers have to make. The same was the subject of a study by Akaas and Riodan (as cited in Davidson 2003) where marketing researchers’ opinions were sought regarding the ethical judgments they make. In the study, ethical issues like labelling of products and hyped branding as the borderlines for ethical issues. Smith (2012), on their part, found that ethical judgments are brought about by such issues as the information given to clients and the pricing of commodities. In both cases the judgments result in outlining the suitable marketing techniques. To this end, suitable marketing ethics are only realised when the marketers can make the necessary judgments from the issues raised.

Labelling is seen as a suitable marketing technique with respect to ethics. Alserhan (2011) argue that businesses that deal with goods require adherence to certain standards of labelling. Smith (2012) argues that labelling is particularly important in the food industry. For instance, companies that manufacture processed foods are required to adhere to certain safety standards. To this end, issues like the ingredients used in the products ought to be outlined. Hunt et al. (as cited in Clemes & Burn 2000), Smith (2012), and Saucier (2008) argue that proper labelling of products like food and commodities ensure that the safety concerns of the consumers are catered for. Proper labelling is, as a result, considered as one of the suitable marketing ethics.

As already mentioned, marketing executives are faced with a dilemma when it comes to making profits at the expense of honesty to their customer. The subject has been an issue of debate as outlined by Saucier (2008). Saucier (2008) found that most marketing professionals tend to distort certain information while describing their product. Smith (2012) found that misinformation and misinterpretation are ethical concerns that most marketers face. The dilemma results from the claim by Packard (as cited in Smith 2012) that consumers can be gullible and the need to increase sales.

Several studies outline the possibility of realising profits by avoiding the ethical issues surrounding misinformation and misrepresentation. Hunt et al. (as cited in Clemes & Burn 2000) initially advocated that companies avoid overhyping their products but, instead, focus on the actual benefits. Gilbert and Churchill (2001) recently pointed out that companies can market their product by outlining the actual benefits of their products. The same calls for intensive research on the said benefits. Saucier (2008) found that marketing a product based on well researched issues by credible authorities increases the allure of a product.

Pricing, on its part, is one of the thorny ethical issues that most marketing executives face. The subject was an issue of research in the study carried out by Smith (2012). According to Packard (as cited in Smith 2012), marketing is seen as deceptive in the manner that a particular commodity is priced. Packard (as cited in Smith 2012) found that marketers tend to associate a product with high values when in fact the same is not true. Under such circumstances, the idea advanced by Levitt (and cited in Smith 2012) argues that consumers are not as gullible as imagined, emerges.

Marketers tend to price their products under an illusionary value in order to attract their customers. However, Smith (2012) point out that such a move is seen as exploiting the consumers. To this end, reform is necessary to ensure the dignity of the consumer is safeguarded.

Good marketing ethics have a direct impact on the operations of a company, with respect to meeting its core objectives. Ethics are the viewed as the principles a person or an organisation relies on, to meet its objectives. In a study carried out my Gulls (and cited in Brenkert 2008), decisions made by a company can be clear cut right and wrong. However, with respect to marketing there are exists ambiguity resulting in ethical dilemmas.

In the field of marketing, there are a set of uncertain problems pertaining to product development and pricing policy. Gulls (and cited in Brenkert 2008) made an observation that when it comes to distribution activities and promotion ethical dilemmas present themselves. In this section, of the review, ethical issues in marketing are highlighted. To that extent a code of ethics, is outlined, to point out the areas where business ethics must be employed.

The first ethical issue, commonly associated with marketing is the misleading of clients. The issue was subject of the study by Gilbert and Churchill (2001) and Davidson (2003). In the studies, the production of a misleading advertisement was viewed as a common ethical dilemma. Gilbert and Churchill (2001) suggest that regulation creates the boundaries for what can be said in a marketing campaign. Consequently, marketers are required to consider the ethical boundaries. Davidson (2003) evaluated a number of claims with respect to how clients get misled through marketing campaigns. Consequently, to establish when a claim is taken too far companies are required to adhere to a code of conduct on matters relating to ethics.

The ethics related to direct marketing is another concern facing a number of companies in the present times. According to Davidson (2003), direct e-mails and telemarketing amounts to the invasion of privacy. However, direct marketing should not be misconstrued to imply that it is not an ideal marketing strategy. Davidson (2003) suggests that the same is another example of the ethical dilemmas which present themselves when developing an ideal marketing strategy. To this end, the use of promotion avenues, to market a product should be governed by sound ethical principles.

The safety of consumers is an important concern that should be considered in the development of a marketing plan. Hermit (as cited in Murphy 2006) carried out a study to evaluate the safety measures taken in protecting consumers from harmful products. According to Saucier (2008), companies, particularly in the cosmetic and food sectors, fall prey t the temptations of marketing of harmful products. Saucier (2008) went on further to point out that, industries like tobacco and fast foods are culprits in the production of products that are wholly harmful to their consumers. To this end, marketers ought to evaluate the degree of responsibility they take due to the harm caused by the products.

Although the consumers also have a responsibility, the same should be clearly delegated in the form of disclaimer alerts on the harm caused by the products. Brenkert (2008) argues that the right choice is not always clear. The same calls for adherence to ethics. Marketers can also take their own initiative to set out ethical practices. Saucier (2008) refers to the fast food industry pointing out that, while enjoying the profits made by the easy-to-make foods they should take personal initiatives to advance ethical standards.

In the field of marketing, adherence to pricing ethics is an important component in enhancing the relationship between the seller and the consumer. Davidson (2003) evaluated the same and mentions predatory pricing as a common practice used by marketers. According to Davidson (2003), predatory pricing is practice used to drive out competition. The same is done in a manner that the competition cannot possibly compete. Such a trend can be harmful to consumers and marketers are advised to tread carefully. Policy designed to foster a healthy marketing environment must ensure that there is a balance between the profits and the welfare of the consumers.

Cause-related marketing is an emergent ethical issue in the field. Davidson (2003) argues that cause-related marketing becomes an ethical dilemma based on how it is managed. The society develops a perception of a company based on the of cause impact on customers. To this end, marketing departments responsible for the relationship with a cause are required to manage the same with transparency.

In the current business arena, companies are increasingly forced to adhere to the environmental concerns. According to Davidson (2003) marketers are developing marketing strategies based on how their product affects the environment. The so called ‘Green’ practices can improve the good standing of a company since the society will attach such practices to the care and protection of the environment. Environmentally-friendly choices can be a costly affair (Saucier 2008). However, marketers must consider their responsibility to society and the environment, as they come up with strategies to sell their products

Marketing executives are often confronted by a number of ethical issues. Graham (as cited in Clemes & Burn 2000) argues that the ethical issues often revolve around the costing of development of a marketing strategy. Consumers ought to be informed of price or size changes and the same has huge cost implications. However, marketers are also required to consider the ethics behind their policies. To this end, issues of cost result since certain ethical requirements are a costly affair. An example of cost implications on ethical demands of marketing is in the distribution of products. Fresh foods, for instance, require healthy transport conditions like refrigerators. However, marketing executives opt to ignore the requirement just to minimise on the operating costs of their company.

Ultimately, ethics relates to organisational performance in generating goodwill for a particular company. Davidson (2003) argues that such goodwill often translates into sales. Adhering to the laid down ethical concerns, of marketing, by a company turns an organisation into a more attractive place to work. Davidson (2003) argues that the company’s good reputation is passed on to the staff. Motivated, proud employees tend to improve on their performance. Companies that don’t conform to the required marketing ethics destroy their good reputations with their consumer base. A good reputation is arguably much harder to build compared to sales numbers.

Stereotyping is also another ethical issue of concern in business. Advertisements are known to cast particular groups in stereotypical roles. Davidson (2003) examined washing powder advertisements across the world. Such marketing campaigns often portray women as housewives preoccupied with their laundry. Another angle used in similar advertisements is the ‘do-it-yourself’ marketing. According to Rodwin (2010) such advertisements depict only men as being “handy.” The stereotypical impression created by a number of advertisements is that having an abundance of possessions translates into fulfilment and happiness. Such campaigns create an opposing message that the consumer will not be part of the happy group unless they purchase the product.

Most marketing campaigns insert a hidden message meant to manipulate clients. Smith (2012) cites the George Bush 2000 Presidential Campaign. In that campaign, there was an advertisement where the word “rats” was used for a split second (Smith 2012). The same was one as criticism to his opponents’ medical plan. Such tactics appeal to the metal faculties of a consumer to a associating certain aspects (good or bad) in relation to their product.

Marketing can come out as offensive, especially when it appears to create some cultural and ethnic sensitivity. Waller (2012) conducted a survey on motor vehicle advertisements. According to Waller (2012), advertisements about luxury cars depict men as womanisers. Such a marketing tactic depicts women as objects that can easily be acquired through material objects. Waller (2012) suggest that depicting a woman as dependent on financial success is offensive. Marketing campaigns of that nature ruin relationships between organisations and their clients.

Racial stereotypes are the most common when it comes to marketing strategies. Waller (2012) found that it is possible to exclude a certain group of people in a multi ethnic society. In a separate study Palmer (2000) found that marketers in the fast food industry often target children with the juicy images created. The ethical concern in this case is the assumption that children don’t need to be informed on the dangers of fast food Waller (2012). Consequently, the children are exposed to such diseases as obesity.

Marketers tend to manipulate consumer into buying a certain commodity, when in fact it is not the actual product. Waller (2012) discussed the same and refers to such a trend as post-purchase dissonance. According to Waller (2012), post-purchase dissonance often occurs when a consumer makes a mail order. Such a scenario occurs when a client gets an inferior quality or quantity of the goods they ordered. Although the buyer may claim a refund, such tactics usually deter prospective buyers.

As already mentioned, trust and good faith are integral aspects of developing a rapport between the consumer and the seller. The implied good faith, due to marketing ethics is essential for the mutual benefit of both parties to trade. To this end, the study by Kotler (2000) established that the performance of an organisation transcends the discretion of its executives. Marketing ethics opens up the process to include all the stakeholders in trade. The same ensures maximum benefits out of the trading endeavour. Waller (2012) suggests that marketing ethics have been legislated in certain states in America.

The implied covenant of good faith and fair dealing “is meant to enforce the contract or transaction in a manner consistent with the parties’ reasonable expectations” (1998 WL 1991608 Mich. App.). Gundlach and Murphy (as cited in Murphy 2006) argue that courts may ensure the good faith is incorporated in any form of marketing exchange. To this end, legal institutions like courts and tribunals are expected to embody the spirit of good will.

Ultimately, marketers are required to make decision but ought to be guided by the principles of ethics. In the study by Fry and Polonsky (and cited in Rodwin 2010) must ensure that all the stakeholders are satisfied by the decisions made. The input from all stakeholders is required, coupled with their specific interests to ensure that a middle ground is reached. Homburg, Krohmer, and Workman (and cited in Grewal & Levy 2010) carried out a survey to establish marketing orientation and how it relates to marketing. Homburg et al. (and cited in Grewal & Levy 2010) arrived at the conclusion that a marketing orientation results in the success of possible marketing strategies employed by a company. A disclaimer is necessary to point out that. At times, the marketing strategy may not be 100% satisfactory t all stakeholders but their involvement enhances ethics.

The domain of marketing ethics has a locus in the element of pricing. Customers at Wal-Mart customers often get low prices. However, Palmer (2000) points out that the company has several critics. The critics include “organised labour, feminists, human rights activists, environmentalists, local businesses, and anti-sprawl activists…resulting in a growing negative consumer perception of Wal-Mart’s corporate citizenship” (Palmer 2000). Unfortunately, most approaches to market orientation often opt to elevate the interests of individual stakeholders.

According to Coldwell and Herbst (2004), Wal-Mart is an example of a company that focuses on the consumer as its individual stakeholder while at the same time disregarding the plight of its workforce. Wal-Mart disregards the workforce but lays emphasis on profits and the consumer numbers. Failure to incorporate their employees in the decision making process, gives Wal-Mart a bad image. Such a move is seen as a failure for a marketing strategy.

In recent times companies are facing immense pressure to focus on all their stakeholders. The incorporation of all stakeholders ensures that an organisation is accountable for its actions. Vargo and Lusch (and cited in Coldwell & Herbst 2004) add that the consideration of all the interests is a step towards satisfying all the stakeholders. Marketing exists to provide both social and economic progress (Coldwell & Herbst 2004). The logic behind such an understanding is captured in the one of the many definitions of marketing.

The American Marketing Association defines marketing as follows, “marketing is an organisational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders” (Coldwell & Herbst 2004, p. 34).

The definition places emphasis, on marketing, with respect to ethics. The American Marketing Association (as cited in Coldwell and Herbst 2004) introduces the importance of delivering value while marketing. To this end, it is the responsibility of marketers to come up with meaningful relationships that provide benefits to all relevant stakeholders. Based in the study by Saucier (2008), marketing ethics was, for the first time, defined to include all the necessary parties. The same is seen as a move in the right direction with respect to the development of marketing ethics.

Marketing executives can make an ordinary decision or one that is bound by ethics. Saucier (2008) uses their study to point out the difference between the two decisions. An ordinary marketing decision disregards the code of ethics while an ethical one sticks to the laid down regulations. Consequently, Saucier (2008) advices marketers to settle on a decision that satisfies all the parties. An individual’s values also contribute towards a marketing decision. At this point, ethical dilemmas present themselves on the decision to be selected. Ethical decision making requires that marketers make decisions informed by their personal morality, laid down rules and the conviction to enhance the concept.

Ethical decision making, in marketing, is not any different from other similar functions of an organisation. Gilbert and Churchill (2001) argue that marketing ethics overlap with those of general business practices. The argument relies on the assumption that all activities in an organisation are geared at ensuring the products reach the consumer. To this end an ethical component to business decisions, regardless of whether it is marketing or some other functional area component is important in the functionality of the organisation.

There is a high possibility to generalise the average behaviour patterns in any company. Waller (2012) points out that marketing identifies the importance of stakeholders, their related issues. Marketing also enhances information gathering. The same is meant to respond to the constituent elements of the marketing domain. Secondly, in the decision-making process, marketers are required to settle on the most important issues. Based on this argument, Waller (2012) suggests that marketers should focus on the intensity of the issues at hand.

The fast food industry, in the US, is under immense pressure by government agencies, consumers, and special interest groups to develop menu options that consider the health of their consumers. While discussing the same, Smith (2012) makes reference to children as the main interest group. Children, as already mentioned, are not in a position to make informed health choices.

Upon the release of the movie Super Size Me McDonald’s restaurants became the focus of negative publicity associated with fast food. McDonald’s responded by introducing healthier portions, like salads, to their menu. The evaluation and resolution of ethical dilemmas in marketing requires an ideal theoretical framework as a point of reference. Churchill and Lacobucci (2002) point out that moral philosophy is an ideal point of reference in the development of a theoretical framework.

An ideal theoretical framework is one which encourages internal discipline. Research has indicates that companies are lenient on the top sales performers compared to the ones who perform poorly (Churchill & Lacobucci 2002). Such lenience allows top sales performers to further unethical practices without fear of the repercussions.

The process of advancing a theory of marketing ethics has been the subject of numerous studies. The following agencies are an example of how the US intends to enhance an ideal theoretical framework due to policy making:

• American Marketing Association
• Direct Selling Association
• Direct Marketing Association
• Marketing Research Association
• American Federation of Advertising
• National Advertising Division of the Council of Better Business Bureaus.

The agencies mentioned above have come up with comprehensive codes of conduct meant to tackle the ethical risk in marketing. According to Baragona (2010), the recent regulatory changes in America require marketing executive to take the onus of implementing ethics in the field. A theoretical framework that promotes the culture of ethics in an industry will ensure marketing becomes a respectable entity. The General Theory of marketing lays the ground for a more comprehensive framework.

Increasing trends in the field of business support new trends of ethical issues in marketing. According to Smith (2012), most emergent ethical concerns arise from consumer psychology. In this section, of the review, some fundamental consumer behaviours are outlined.

Ethical consumerism

Marketing strategies, and ultimately, marketing strategies are developed with the understanding that consumers perceive certain ethical concerns. The study by Smith was able to outline that “consumers are influenced in purchase and consumption due to certain ethical considerations” (2012, p. 43). Whereas such an understanding was seen as a definition of ethical consumerism, there is distinction from consumerism as defined by Kotler (and cited in Smith 2012).

Based on the definition, given, it is possible to have a negative ethical consumerism. In a separate study Gilbert and Churchill (2001) point out that, consumers develop an attitude towards a product, based on the ethical connotations associated in its marketing. To this end, Smith (2012) found that certain customers make a decision to purchase a product based on the ethics of its production and marketing. There are cases when a product is associated with a company that is reputed for unethical practices Waller (2012). Similarly, consumer decisions have been developed based on the ethical perceptions.

Understanding ethical consumerism is largely focused on the consumer decisions with respect to purchases. According to Smith (2012), when a consumer refuses to make a purchase, the same can be considered as an ethical boycott. In a separate study Bellizzi and Hasty (and cited in Smith 2012) found that organised consumer boycott often results from a negative perceptions to the ethical concerns of marketing a commodity. The same applies for cases when there is a positive ethical consumerism.

The current chapter highlights the previous studies on the issue of ethics in marketing. Some of the areas of interest include a historical outlook on the subject followed by an overview of some of the unethical perspectives of marketing. In this chapter theoretical perspectives on the subject of ethical marketing standards are outlined. The review of literature highlights the general thoughts on the subject from various scholars. The next chapter provides the results from the actual research undertaking carried out through the administration of questionnaires.

In this section of the study, the outcome of the interview is illustrated. The participants were administered with questionnaires, randomly. The questions in the questionnaire are closed. Participants are only required to respond with a No or a Yes as the case may be. The questions on ethical marketing practices are posed in a fast food industry setting. The results, outlined, give a general bearing of the objectives of the study. The results act as responses to the questions raised in the introductory section. Based on the results outlined, a suitable discussion on the ethics of marketing in the fast food industry suffices.

The study involved a total of 250 participants based in the United Arab Emirates’ city of Dubai. In terms of gender, 140 of the participants were female while 110 were male. The females were mostly between the ages of 19 to 25. On the other hand, the males were selected between the ages of 20 to 27. The participants were randomly selected from various McDonald’s outlets in the city of Dubai. 154 of the participants were customers while 96 were employees. Prior to the study all the participants filled out the consent forms.

Familiarity to ethical standards

Participants to a study are required to exhibit an understanding of the subject intended for evaluation. According to Creswell (2003), the credibility of a study is determined by the participant’s ability to understand the subject matter. In this regard a series of questions were posed to the participants to establish their understanding of ethical standards. Participants were required to respond with a ‘Yes’ or ‘No’ depending on the question posed.

• Have you encountered the word ethics in your career?

All the participants were given the questionnaires to fill out. Table 1 is an illustration of how the participants responded.

Table 1: Have you encountered the word, ‘ethics’ in your career?

Based on the figures represented in Table 1, a total of 27 participants failed to respond to the question posed. However, an overwhelming 223 responded in the affirmative. It is unclear whether the 27 had no clue or the question was skipped accidentally. That notwithstanding, there is a general view that a majority of the participants have a general idea of the concept.

2. What are ethical standards?

The need to establish whether the participants truly understood the subject was followed up by this question. Table 2 illustrates the responses based on the proposed set of answers.

Table 2: What are ethical standards?

Responses to the question posed, in this section were varied. 138 of the participants were of the view that ethical standards are the practices that promote integrity of a business. 59 of the participants view ethical standards as the adherence to the rules of business practice. On the other hand, 53 view the subject as genuine business practices. In general, the participants have an idea of the entails of business ethics.

Ethical standards in the field of business are coupled by a series of practices. The participants were given a number of options to select from in regard to their view on the ethical practices demanded by a business. Table 3 outlines the responses given.

Table 3: Ethical Practices

There are a number of practices that a company can carry out to conform to ethical practices. In this study a total of 6 different opinions were surveyed regarding ethical practices of an organisation. Table 3 illustrates the results of the study in which the representation of ethical principles was the most common opinion among the participants. The least popular view was that competence should be a core principle in organisation. That notwithstanding, the responses given illustrate a general willingness among the participants for ethical practices.

As already mentioned, the current study was focused on McDonald’s, the fast food outlet. However, ethical practices cut across various business organisations. In this regard, the participants were asked to indicate why think McDonald’s fits the profile of a suitable company for the study. Table 4 outlines the results of this survey.

Table 4: Why was McDonald selected for the study?

McDonald’s is an international brand in the fast food industry. According to Brubaker (2007), the fast food industry is laced with several instances of unethical practices. To this end, the study decided to involve a well known brand in the industry. The information in table 4 suggests that 103 participants viewed that McDonald’s was selected owing to the unethical practices common in the industry. On the other hand, 67 of the participants were of the view that the company was selected owing to its huge client base while 65 suggested that the company was a common brand. A paltry 15 supported the view that it was an easy company to evaluate.

In the fast food industry, there are a number of issues which constitute unethical practices. In this regard a number of those issues were posed as questions to the participants. Figure 1 is a representation of the unethical practices and the percentages of their occurrence, according to the participants.

Figure 1: Unethical marketing issues

Participants in this study were provided with 8 different issues related to unethical practices in marketing. Misrepresentation recorded a whopping 35% of the responses from the participants. According to the results in figure 1, consumer safety and hidden messages follow suit at a joint 16%. The participants perceived pricing as another unethical practice associated with McDonald’s with the subject recording 15% response from the participants. Other unethical issues associated with the fast food franchise include, Cause-related marketing (5%), employee motivation (7%), Post-purchase dissonance (5%) and cultural sensitivities (1%).

Misrepresentation

Misrepresentation, as already discussed in the literature review, is the most common unethical practice in the food industry. Participants were asked of the degree at which misrepresentation occurs. Figure 2 is an illustration of the responses given.

Figure 2 illustrates that the participants view that misrepresentation is an often occurrence in the fast food industry. However, the results also indicate that more than 50% of the participants perceive the misrepresentation occurs once in a while. A significant percentage of the participants perceive that the same rarely occurs. The disparity in the responses can be attributed to the various issues of misrepresentation.

There are a number of instances where marketing makes use of misrepresentation. In the current study, participants were provided with three options that would suggest misrepresentation. In this regard, figure 3 illustrates how the participants responded.

The participants perceive that the misrepresentation commonly occurs when fast food companies associate their products with celebrities. More than 70% of the participants surveyed hold this opinion. An equally overwhelming number of participants perceive that fast food companies create the impression that their products are healthy. In addition, more than 505 of the participants are of the opinion that an inaccurate representation of ingredients is a common occurrence in the fast food industry. Figure 3 is a clear indicator that misrepresentation is a common occurrence in the fast food industry.

Consumer safety

From the literature review section, it was clear that fast food companies do not necessarily come up with safe products. In this regard, the consumers were surveyed on their opinions regarding consumer safety in the marketing strategies used by fast food companies. Figure 4 is an illustration of the responses. Participants were polled on their opinion regarding prioritisation of consumer safety in marketing strategies.

Based on the results outlined in figure 4 it is clear that there is little priority given to safety standards. For instance, more than 50% of the participants perceive that fast food companies rarely make consumer safety a high priority. The opinions on the moderate priority found that 44% of the participants are of the opinion that companies do so once in a while. An equal number suggest that the same is rarely a consideration. Collectively an average of 40% of the participants view that consumer safety is not a priority based on the results of the once in a while and rarely responses.

Marketing practices, like any other business operations, can be executed based on certain standards. The participants were asked as to whether they were familiar with this premise. To this end, the participants were required to outline the various instances through which ethical standards can be applied in marketing. The scope of the responses was limited to the fast food industry. Figure 5 is an illustration of the responses.

The participants were provided with four options to which they would select their preferred application of ethics in marketing of fast foods. Based on figure 5, 35% of the participants were of the opinion that health considerations should be a top priority in the marketing of fast food products. On the other hand, 15% were of the view that marketing campaigns should have a full disclosure of the ingredients. 30% percent of the participants were supported the adherence to set out marketing strategies. Given the option to avoid the use of misleading information, 20% of the participants perceive the same as an ethical application.

In this part of the questionnaire, the participants were asked to illustrate the degree of application of the respective options of ethical applications in marketing. Based on the respective option, participants were asked to outline the degree of priority and frequency. The figures 6, 7, 8 and 9 are an illustration of the responses given.

From the results obtained, 75% of the participants perceive health consideration as a high priority in ethical marketing. Within this percentage, 55% view health considerations to be applied often while 9% suggest that the same should be applied moderately. A paltry 1% of the respondents suggest that whereas health considerations should be a high priority, they should rarely be applied in marketing.

24% of the participants support a moderate application of ethical practices. A whopping 14% of this percentage support an often approach to a moderate application of health considerations. Based on figure 5 , 10% of the moderate proponents support a ‘once in a while approach’, while 1% suggest that the same should not be applied altogether. Finally, 9% of the participants support the premise that health considerations should not be a priority in ethical marketing practices in fast food companies.

Figure 6 indicates results from the participants regarding their opinions on the issue of adherence to the laid out standards of ethics in the fast food industry. 83% of the participants support the idea that adherence to industry regulations on ethics should be treated as a high priority. Within this set of participants 57% argue that the same should be carried out often while 26% are for once in a while application. Interestingly, none of the participants supported the view to rarely apply standards of ethics in marketing.

In the case of full disclosure and the misleading campaigns, the participants were asked to give a cumulative response. Both premises were seen as having a similar effect in the sense that they point to the nature of a marketing strategy. Marketing campaigns tend to be deceptive. In this regard, the participants were sought for their opinion regarding misleading advertisements. Figure 7 is an illustration of their responses.

Figure 8 points to four main aspects of a misleading advertisement campaign. The participants were asked to voice their opinion on the main aspect they would have likes addressed in the nature of a marketing strategy. With respect to the fill disclosure of the ingredients, a paltry 5% were in support. On the other hand, 43% were in support of an enticing but not deceptive marketing strategy. 35% would like marketing campaigns to point out the effects of using the product in reference. All this while, 17% percent of the participants support the need for a partial outline of the ingredients of a product.

The study was cognisant to the idea that ethical practices can be practiced across various industries without having to diminish the quality of the product. To this end, the study allowed the participants to voice their opinions regarding ethical practices in marketing. Figure 8 is an illustration of the results of this survey.

Figure 9 outlines the five main opinions of consumers regarding marketing ethics. 15% of the participants relate ethical marketing to a vote of confidence on the product. 17% perceive the ethical practices can be profitable to a business venture. 24% of the participants suggest that ethical marketing techniques, in the fast food industry, promote healthy eating. On the other hand, 23% view ethical marketing as an ideal method of reducing lifestyle related diseases. Finally, 21% of the participants view ethical marketing practices as a means to terminating the tradition of deception in advertisements.

In the previous chapter, it was established that unethical practices are driven by the need to make profit. However, the current study went on further to outline a number of reasons as to why fast food outlets end up violating ethical standards in marketing. The major motivation has been making profits. However, demand from consumers and the high cost of alternative foods have made the fast food industry violate ethics in marketing.

To a certain extent the lack of a tough legal framework to enforce the ethical practices motivates said unethical techniques. In this regard the participants were sought after to provide an opinion on what they feel is the main reason as to why fast food companies engage in unethical practices. The results are outlined in figure 9 below.

According to the results displayed, in figure 9, it is apparent that quick profits coupled by a weak legal framework act as the major motivation for unethical practices. 51% of the participants perceive quick profits as the main motivator, followed by 31% in favour of a weak legal framework. 11% find the high cost of fast food alternatives as another driver. On the other hand 8% of the participants cite high demands of fast foods as a motivating factor for unethical practices. That notwithstanding, all four options provided to the participants checked out as possible motivators for unethical marketing practices in the fast food industry.

The current chapter outlines the results of the study carried out. The study involved administering questionnaires to participants. The results are a reflection of the participant’s opinions on ethical marketing standards in the fast food industry. The responses shed more light on the questions raised by the objectives of this study. In the subsequent chapter a comprehensive discussion on the findings is provided. Chapter four compares the findings of this study to the opinions raised by previous studies on the subject.

The previous chapter was an illustration of the responses obtained from the participants who took part in the study. In light of this, a discussion on the implications suffices. The first chapter mentions four specific objectives of this study. Primarily, the study is meant to establish the standards of ethics in the fast food industry. Secondly, some of the common ethical violations made by companies are outlined. The effect of not adhering to ethical standards during also features in the discussion. The discussions are meant to open the way for an ideal marketing technique for fast food companies.

Understanding Ethical Standards of Marketing

As previously mentioned, ethics is associated with the human conduct of a people engaged in a specific trade. In There is no universal definition for the subject. However, Kotler (2000) looks at ethics from a philosophical point of view. Kotler (2000) argues that ethics is akin to the evaluation of human conduct. Kotler (2000) further describes ethics as an attribute that business persons exhibit when it comes to making a choice between what is right and what is wrong. Ethical marketing techniques enable the consumer to make rational decisions regarding the product.

From the survey conducted, comprehension of the subject was quite vital. For instance, table 1 points out that out of the 250 participants, only 27 of them failed to give an affirmative response. That notwithstanding, a whopping 223 participants responded in the affirmative. The results are an indicator that both consumers and producers of products have the knowledge of the idea of ethics in business.

At this juncture, a question would be posed as to the importance of being familiar with ethical standards of marketing. Churchill and Lacobucci (2002) made it clear that marketing ethics are meant to enhance an acceptable conduct in this field of business. In this regard, the credibility of an organisation depends on good marketing ethics. Churchill and Lacobucci (2002) standards in the field are supposed to be developed by the necessary stakeholders depending on the industry. Some of the stakeholders include the company, its customers and marketing professionals. Churchill and Lacobucci (2002) point out that a code of ethics on matters pertaining to marketing is very important to realise the acceptability of a particular industry to the market. To this end, an industry developed code of conduct becomes necessary.

The issue of a code of conduct was also part of the issues presented to the participants. Participants were asked what their idea of ethical standards entails. There were three responses presented as options to the participants. From table 2, it is clear that 138 of the participants were of the view that ethical standards are the practices that promote integrity of a business. With respect to the rules of business practice (industry code of conduct) only 59 of the participants associated the same to the meaning of ethical. On the other hand, 53 view the subject as genuine business practices. Based on the first two responses, industry practices are essential in understanding the subject of ethical standards.

Codes of ethics in various industries allow marketers to adhere to certain agreed upon rules of practice. However, marketing ethics transcends the legal and regulatory issues contained in the code of conduct (Abbarno 2001). Ethical marketing practices and principles should encompass the necessary elements required in establishing trust. Kotler (2000) points out that a number of long-term marketing relationships (between producers and consumers) largely depend on trust. To this end, ethical principles are necessary to ensure that marketing strategies endear a company to its clients.

The divergent approach to the subject of ethical standards is evident. The results, in tables 1 and 2, help to support this argument. Ethical standards of practices have been associated with morality where virtues such as honesty, fairness and responsibility are necessary (Borgerson & Schroeder 2002). Since the subject boils down to individual characteristics such traits can be acquired by an individual and applied on a corporate level. The study found that McDonald’s staff had the awareness of ethical standards of marketing but failed to adhere to most of them.

Expected Ethical Marketing Practices

Companies rely on their marketing techniques to ensure the market is well informed about the product. However, based on the discussions in this study it is important to evaluate of the ethical concerns that should be factored in the marketing process (Brinkman 2002). In this study a total of 6 different opinions were surveyed regarding ethical practices of an organisation. Participants’ opinions were sought regarding McDonald’s keenness to apply ethical practices.

Quality assurance, accreditation and ethical auditing also featured as the necessary practices that companies should undertake. From the results displayed in table 3 the representation of ethical principles was the most common opinion among the participants. The least popular view was that competence is disregarded during marketing in fast food industries. The participants are aware that ethical practices are necessary in an organisation (Ellerbach 2004).

In light of the ethical awareness of the participants it is important to answer the question on the entails of ethical practices in a given organisation. Ellerbach (2004) looks at ethical marketing as a philosophy. Ellerbach (2004) argues that the philosophy of ethical marketing is meant to encourage responsibility when it comes to advertising. The idea of what is ‘right’ and what is ‘wrong’ makes the ethical practices rather abstract.

Based on the abstract nature of what is regarded as ethical, certain practices which are unethical tend to surface when discussing about the subject. Hsu (2012) points out that, unethical practices per se are not illegal. It all boils down to winning psychological battle of impressing the consumer. A look at figure 1 points out that McDonald’s UAE is characterised by 8 different unethical marketing practices.

Misrepresentation recorded a whopping 35% of the responses from the participants. In a joint second position, consumer safety and hidden messages follow suit given the 16% response rate. Pricing was also another unethical practice associated with McDonald’s with the subject recording 15% response from the participants. Other unethical issues associated with the fast food franchise include, Cause-related marketing (5%), employee motivation (7%), post-purchase dissonance (5%) and cultural sensitivities (1%).

The results in figure 1 point to a dark and sneaky trend being developed by the McDonald’s franchise in the UAE. According to Bronstein (2012), companies that engage in unethical practices given the loopholes of the system, tend to destroy customer relationships. The same can be reflected from the study given that 103 participants perceive McDonalds’s UAE as having unethical marketing techniques (see table 4). Such an opinion dents the brand’s image.

Ethical marketing practices are an ideal way through which a brand’s image is improved. Herbst, Sean, and Allan (2013) suggest that shunning unethical marketing techniques help promote long-term relationships with the consumers. In this regards, companies should ensure their advertisement campaigns are honest. The consumer is meant to get what is advertised and not anything less. In this regard the issue of regular ethical auditing comes into play.

The marketing team requires a mechanism that can evaluate their adherence to ethical marketing. Lurie (2009) argues that regular ethical auditing will help reduce cases where companies overlook grey areas in the marketing techniques being applied in various advertisement campaigns. For instance, the respondents in this case were asked about what they believe to be the most unethical marketing technique used by McDonalds. To this end, 35% of the participants mentioned misrepresentation. The findings are represented in figure 1. However, internal ethical auditing will ensure that such unclear areas are not exploited.

Most companies tend to develop their own marketing strategies to use in promoting their products. In addition, some organisations use benchmarking to develop their marketing techniques (Moshe & Yaov 2004). What this means is that the firm compares its operations with those of other companies regarded to be leaders in the industry. The marketing strategies developed are in line with those of the leaders. Table 3 points out that an average of 4.77 of the participants perceives McDonald’s UAE as one of the companies that engage in the benchmarking practices. The ethical element of this technique is that benchmarking can be done against a company that has a strict policy on ethical marketing. As such, the developed strategies are also likely to be ethical.

Benchmarking can help an organisation to adhere to industry regulations. However, Chaar and Lee (2012) argue that companies may also copy marketing practices that are unethical from their peers in the industry. To avoid this situation, the management should engage in quality assurance. The strategy is described in table 3. Quality assurance enables an organisation to verify whether their content meets the necessary ethical standards of the market. The numerous gray areas become illuminated and help a company avoid engaging in unethical marketing practices without their knowledge (Clemes & Burn 2000).

Quality assurance was once seen as a necessary undertaking in a marketing campaign for Dove soap. According to Rodwin (2010), the company had an advertisement that allegedly involved actual models. Such a marketing strategy was as a result of benchmarking from other high end cosmetic brands. The idea was to give the market segment the impression that the product would provide them with the ‘supermodel’ look they were looking for. The marketing campaign was found to have misled the consumers. The reason is that it did not involve real models. In addition, it was found that the company had altered the images of the individuals used in the campaign to suit the needs in the market (Waller 2012). The absence of quality assurance meant that Dove would engage in an unethical marketing technique, which would have been avoided.

Ethical practices in marketing demand a strict adherence to the principles laid down in a particular field. According to Waller (2012), marketing communication is needed to enhance uniformity in the ethical standards used. In this regard, the language used in an advertisement campaign should less deceptive but more convincing. The misrepresentation cited by McDonald’s involves advertisement campaigns which involve a sports personality. Given the high health demands for sporting action the advertisement creates the impression that fast foods for McDonald’s are healthy enough. Such a claim is definitely flawed considering the ingredients used in production of fast foods.

Ethical marketing strategies are developed by professionals who have a firm knowledge of the subject. Professionalism has some principles which apply almost universally (Ayers 2011). Ethical practices are realised when the marketers adhere to the demands of professionalism. One of the reasons McDonald’s appears to be failing is their disregard for competence. To this end, non-professionals end up developing a marketing strategy which disregards most if not all the requirements of ethics.

Ethical marketing demands that an advertisement should be developed as an individual content. Brinkman (2002) argues that sneaking an advertisement alongside news or other forms of entertainment is unethical. Viewers of such content tend to associate the product with the content being broadcast. Most of the consumers are unable to differentiate between the product and the content being aired. McDonald’s have run into some problems with that subject by targeting children’s programs to advertise their products. Such a move is unethical owing to the intense deception. However, this is one of the gray areas since such advertisement usually don’t mention association with the entertainment. They merely create an impression of association.

Fair treatment, on the part of the consumer, is an important principle of marketing. In this regard, the exploitation of children is a common practice in the fast food industry (Hodge et al. 2013). Such instances of exploitation result in a disregard of consumer safety as pointed out in figure 1.

Fast food companies are known to compromise on the healthiness of their products. The study sought the participants’ opinions regarding consumer safety in the marketing strategies used by fast food companies. Figure 4 points out that there is little priority given to safety standards in the marketing process. From the results 50% of the participants perceive that fast food companies rarely make consumer safety a high priority. 44% of the participants argue that consumer safety is a seasonal concern to McDonald’s. An equal number suggest that the same is rarely a consideration. On average, 40% of the participants are of the opinion that consumer safety is not a priority to McDonald’s franchise in the UAE (Ellerbach 2004).

Companies are expected to have some ethical practices. Table 4 points out that McDonald’s fairs poorly in implementing the ethical marketing practices. However, adherence to the principles of marketing, as outlined, helps companies to avoid treading into gray areas that will compromise the ethical integrity of their marketing techniques. When a company fails to adhere to such principles, they find themselves in a situation similar to that of McDonald’s (Grewal & Levy 2010).

Unethical Practices Associated with McDonald’s

In the literature review section, a number of unethical marketing practices were outlined. Most organisations were found guilty of misleading clients. The same was reflected in the current study as illustrated by the 35% opinion from the participants. Gilbert and Churchill (2001), together with Davidson (2003), argue that misrepresentation is a gray area in the ethical concerns of marketing. Gilbert and Churchill (2001) suggest the absence of strict wordings forbidding misrepresentation and hiding of information encourages the practice. Consequently, marketing stakeholders should clearly define ethical boundaries.

There are a number of ways through which consumers are misled during a marketing campaign. Davidson (2003) argues that marketing in the fast food industry involves deceptive techniques like associating the brand with icons. A similar opinion is shared in the current study given that more than 705 of the participants hold the opinion that McDonald’s tends to associate its products with celebrities. Such misleading marketing gimmicks are not forbidden in most codes of conducts (Palmer 2000). The same explains why companies like McDonalds will engage in such practices (Clemes & Burn 2000).

Many companies tend to carry out direct marketing. According to Davidson (2003), direct e-mails and telemarketing amounts to the invasion of privacy. However, direct marketing also involves making campaigns that target vulnerable groups like the young and elderly. The toy strategy used in McDonald’s Happy Meal campaign is one such avenue. The company lures children to buy extremely unhealthy foods through toys. It is unfair that such a campaign ignores the parents of such children. Davidson (2003) suggests that the same is another example of the ethical dilemmas which present themselves when developing an ideal marketing strategy.

Marketing plans become unethical when there is a clear violation of consumer safety demands. The study by Saucier (2008) found that fast food companies are the main culprits. In the current study it is clear that there is little priority given to safety standards. Figure 4 illustrates that more than 50% of the participants hold the opinion that fast food companies rarely make consumer safety a high priority. 44% of the participants are of the view that fast food related companies regard consumer safety once in a while. An equal number suggest that the same is rarely a consideration. On average 40% of the participants view fast food companies do not take consumer safety seriously. Marketers ought to evaluate the degree of responsibility they take due to the harm caused by the products (Saucier 2008).

Consumers also have a role to play regarding the safety of the products purchased. Saucier (2008) argues the shortcoming, in this regard, is the absence of clarity in making a choice in the market. The misrepresentation and hidden messages pointed out in figure 1 are contributors to the lack of clarity on the part of the consumer. However, marketers can also take their own initiative to set ensure consumers can easily make out a decision on a product by adequately providing the necessary information. Saucier (2008) makes reference to the fast food industry pointing out that, while enjoying the profits made by the easy-to-make such companies should ensure consumer safety is given a top priority.

In the field of marketing, adherence to pricing ethics is an important component in enhancing the relationship between the seller and the consumer. According to Davidson (2003) most marketers come up with predatory pricing which is meant to drive out competition. In certain cases the prices of commodities are set so low to a point that other brands cannot penetrate the market with their high prices. Such a trend can be harmful to the market (Hsu 2012). A healthy market must strike a balance between the profits and the welfare of the consumers. Such a balance is needed to enhance ethical conduct in the field.

In the literature review section, cause-related marketing was cited an emergent ethical concern. Davidson (2003) describes cause-related marketing as one of the numerous ethical dilemmas brought about by the gray areas. In this regard, a society develops a perception of a company based on the of cause impact on customers. To this end, marketing departments responsible for the relationship with a cause are required to manage the same with transparency (Davidson 2003).

Ethical concerns in business are driven by the cost of coming up with a marketing strategy. Lurie (2009) supports the idea of informing the consumers of price fluctuations. That notwithstanding marketer should always consider the ethics behind their policies. Cost implications affect the quality of a product. For instance a company that promotes fresh foods must incorporate storage facilities in their transport. The cost implications, in this regard, spills over to the consumer.

Fast food companies tend to develop stereotypes in their marketing campaigns. In the UAE, Halal products rake in the most sales. McDonald’s is known to sell products which are not Halal assuming that their market is gullible just by the display of the word ‘ Halal ’. Stereotypical campaigns create an opposing message that the consumer will not be part of the happy group unless they purchase the product. McDonald’s relies on this technique to capture the children’s market by using toys (Ellerbach 2004).

Most marketing campaigns insert a hidden message meant to manipulate clients. Smith (2012) argues that such tactics appeal to the metal faculties of a consumer to regarding certain aspects (good or bad) of their product. For instance, when McDonald’s makes an advertisement with a footballer like Lionnel Messi, an impression is created that such foods boost the performance in sport. However, given the calorie levels of fast foods the same couldn’t be any further from the truth.

In 2010, an article appearing on the Voice of America website pointed out to unethical practices of McDonald’s which prompted legal action. According to Baragona (2010), McDonald’s was being sued by a nutritional lobby group for the former’s action of luring children to buy their products using toys. The Centre for Science in the Public Interest (as cited in Baragona 2010) suggests that the toys are a ploy to lure the children into unhealthy eating habits. Such acts are unethical.

The Happy Meal is a children’s special by McDonald’s which dates back to 1979. Baragona (2010) argues that this technique makes use of popular toys, like action figures from television shows. The Centre for Science in the Public Interest (as cited by Baragona 2010) cites a study carried out in 2005 by the Centres for Disease Control and Prevention. The study found that one in every five American child was obese. Unhealthy eating habits contribute to children acquiring diabetes and heart problems. The Centre for Science in the Public Interest (as cited in Baragona 2010) perceives the idea of enticing children with toys as unethical given the health repercussions. In this regard, the misrepresentation outlined in figure 1 becomes clear.

From the results, displayed in figure 3, misrepresentation is common when fast food companies associate their products with celebrities given the 70% response to this opinion. An equally high percentage of the participants create the impression that their products are healthy. The same would explain why McDonald’s would continue to encourage the ‘Happy Meal’ giving the impression that it is okay for children. Also, more than 50% of the participants are of the opinion that an inaccurate representation of ingredients is a common occurrence in the fast food industry. The arguments raised by the Centre for Science in the Public Interest (CSPI) are a reflection of the instances of misrepresentation pointed out in the results section.

The grounds of the Centre for Science in the Public Interest vs. McDonald’s suit are largely due to the nutritional content of the product. According to Baragona (2010), the Happy Meals were found to have an excess of a child’s recommended calorie dose by up to 67%. The contents of this meal include a cheeseburger, French fries and a carbonated drink (soda). Baragona (2010) is quick to add that the soda contains “multiple levels calories and saturated fat. The drink is also found to have day’s worth of sodium coupled by two day’s worth of sugar”.

As already mentioned, the ethical concerns in marketing require an element of fairness. In this regard, Baragona (2010) cites the question raised by CSPI as to the fairness of the company to overlook the parent’s of the children and engage in a direct marketing campaign to the gullible children. A similar perspective is shared by the participants of the current study. 50% of the participants perceive that fast food companies rarely make consumer safety a high priority.

Another question raised touches of the tricks employed in the marketing campaign. To this end, CSPI (as cited in Baragona 2010) raise the question as to the correctness of using deceptive techniques to attract the children’s market. The effects of this toy promotion would also be discussed if the case were to be presented before a jury. In most cases, giant corporations tend to deflect response to such accusations by pointing out the good they engage in. For instance, Baragona (2010) suggest that McDonald’s responded to the claims with the numerous health products they have sold.

McDonald’s are notorious for unethical marketing techniques based on the pricing of their commodity. Based on the study, 15 % of the participants believe that McDonald’s does not adhere to ideal pricing techniques when it comes to the pricing of their commodities. The results are illustrated in figure 1. Borgerson and Schroeder (2002) reiterate that markets in the Middle East demand modesty based on the Islamic teachings. However, McDonald’s pricing disregarded the element of simplicity as demanded for in an Islamic market. The company tends to come up with advertisements, which suggest a he price cut on their products such a move create the impression that the price was place high intentionally.

In general, McDonald’s is seen as one of the major corporations whose ethical concerns, with respect to marketing, demand a review. Rinallo et al. (2013) argue that a shift from unethical marketing practices should be led by the industry leaders. In the fast food industry McDonald’s is a household name. Continued unethical marketing practices tarnish the brand’s name. The effects of such practices are devastating. Rinallo et al. (2013) argue that since there are a lot of gray areas in ethical marketing, mechanisms should be established to prevent further engagement in the practices.

Ultimately, ethical marketing techniques relates to how a company will generate enough goodwill from the market. According to Davidson (2003), the goodwill of a company in a given market is translated into sales. When a company adheres to ethical concerns, the work environment becomes conducive. In this regard, an organisation’s good reputation is passed on to its workforce. Employees with the necessary motivation tend to improve on their performance. Companies that don’t conform to the required marketing ethics destroy their good reputations with their consumer base. It is easier to boost sales numbers than it is to build an organisation’s reputation.

The Impact of Unethical Marketing Practices

When companies engage in unethical marketing practices there is a ripple effect. According to Abbarno (2001), unethical marketing practices have resulted in easy profits for many companies. Companies engage in deceptive advertisement campaigns to lure consumers to their products. Increased volumes of consumers result in high sales. Consequently, companies tend to make profits in the process (Abbarno 2001).

On the flip side, unethical marketing techniques have the potential to ruin a market. When companies resort to low pricing in a market they shut out competition. According to Ayers (2011), markets require competition to ensure consumers experience diversity. In cases where consumer safety is concerned, the lack adherence towards the same contributes to health concerns.

A suitable example is the health risk associated with the ingredient quantities given to children in the Happy Meal product. Some of the health risks associated with unhealthy fast food includes heart disease, diabetes and even cancer. Fast food companies can avoid such situations by making sure that they provide their consumers with adequate information pertaining to the product in reference. The burden of responsibility now shifts to the consumer (Ayers 2011).

The Application of Ethical Theories by McDonald’s

Marketing techniques are informed by a number of theories. According to Ellerbach (2004), some of the theories of ethical marketing include individualism, virtue, Kantian and the utilitarian theories. The absence of a universal code of conduct implies that the ethical actions of an organisation are best evaluated courtesy of the theories of the subject. The theories are essential to the study as they justify whether or not McDonald’s is in violation of expected ethical concerns.

Theory of individualism

The theory of individualism was developed by Friedman. According to Brinkman (2002), an organisation is intended to have returns to its profits. The actions of McDonald’s, based on the marketing strategy, appear to be in line with this theory. The direct marketing to children forces parent to make purchases of the products being advertised. McDonald’s capitalises on this idea because, the parent will buy a product while having taken their child to get the Happy Meal . In this regard, the company has realised double sales at a go. At the heart of the theory of individualism, the business venture must yield profits to itself and the stockholders. Brinkman (2002) suggests that increased sales translate to high profits. Based on this theory, McDonalds is well within the ethical demands of individualism.

The utilitarian theory

The utilitarian theory envisions satisfactions from industry stakeholders. Drawing understanding from the discussion at hand the industry stakeholders include the staff, management and customers of McDonald’s. Hodge et al. (2013) suggest that happiness from all the stakeholders implies that a company is within its ethical demands. In the case of the misrepresentation of the Happy Meal the complainant is not a direct stakeholder. In this regard, an assumption is made that all the direct stakeholders are content with the product. That being the case, then McDonald’s is seen as having adhered to ethical marketing demands.

Evidently, when the children go to a McDonald’s outlet they can acquire toys. Parents love the idea of seeing their children in a fun mood. Consequently, the entire experience translates into sales for the company. High profits suggest that employees get to be given a better pay (Hodge et al. 2013). The same also translates into plenty of other employment opportunities. The net results are stakeholders who are happy with their organisation. Again such results indicate that the company was squarely within the ethical demands.

The virtue theory

The virtue theory calls for a good character on the part of a marketer. To this end, issues like honesty and justice become an integral part of the theory (Borgerson & Schroeder 2002). The trends of McDonald’s and with respect to this theory can be seen as unethical. The company is deceptive in the manner through which they advertise their products. A common example is the now famous Happy Meal where the direct marketing to kids is done without an explanation of the health ramification.

In terms of the nutritional content of their products, McDonald’s is honest in pointing out the ingredients of the Happy Meal . The argument as to low nature of the nutritional value of the food places the responsibility on the parents. A parent has a responsibility to evaluate the nutritional value of whatever they are purchasing. To this end, the power to determine what is good for a child is the sole responsibility of their parents (Waller 2012). In this regard, the company is ethical in the sense that honesty, as to the nature of their product, is evident.

Kantian theory

The Kantian theory is advanced under the premise that people should engage in activities for the right reasons. According to Hsu (2012), the Kantian theory compels marketers to examine their customers more as people and not just statistics. Most marketers operate under the principle where the end justifies the means. However, the Kantian theory is a departure from such an ideology. The theory compels marketers to develop strategies based on some sense of rationality. The theory advances the element of consistency in the execution of organisational objectives.

In terms of consistency, the company is in line with this theory. According to Baragona (2010), the company has consistently maintained their concept of providing toys and play grounds to children who are a huge market segment. However, the company fails when it comes to ensuring that rational decisions are arrived at by the consumer. One way through which this can be achieved is by ensuring all their products outline the respective nutritional information. In so doing, the consumer is allowed to make an informed decision based on the information provided to them.

The Kantian theory demands that a marketing strategy should be respectful. Based on the study and literature review there is no record of McDonald’s engaging in a marketing campaign that is vulgar and disrespectful. All the advertisements, carried out for the company, are always respectful and mindful of foul language. Respects transcends to cultural demands of a certain people (Chaar & Lee 2012). In the UAE, the McDonald’s chain is mindful of religious holidays like Ramadhan by not exposing the locals to temptation of food during the day.

Based on the information outlining the demands of the Kantian theory, McDonald’s appears to fair well in all of them. However, the motivating factor behind luring children using toys is not out of the goodwill of the company. The desire is to ensure that maximum profits are realised from the sales. Hsu (2012) suggests that the techniques used in marketing may fail the ethics text due to the numerous gray areas.

Chapter Summary

The chapter provides a discussion into the various ethical and unethical aspects of marketing in the fast food industry. The crux of this chapter relies on the results obtained from the questionnaires administered to the participants of the study. Additional information is drawn from the literature review. To this end, the discussions respond to the research questions mentioned in chapter one. The next chapter provides a summary of the entire study. Chapter five provides recommendations to McDonald’s and at the same time concludes the study by pointing out areas that require further research.

In this chapter, a review of the problem statement is provided. In this regard, a suitable marketing technique for McDonald’s is provided. According to Rodwin (2010), ethical marketing strategies are real. Companies do not have to border on the gray areas but can develop marketing techniques based on sound practices. The recommendations provided are an indicator that other companies in the fast food industry can also carry out the same to avoid losing credibility.

Developing an Ethical Marketing Plan

Ethical marketing is all about the tools used to develop a strategy for use in the present and times to come. The first step to ethical marketing is to decide the objective of the strategy sought after (Hsu 2012). The tools of ethical marketing are essential in revising the already existing techniques to ensure that the brand image is maintained at the expense of making profits.

The first recommendation is an analysis of the company, its customers and the market segment. Based on the results of this study, McDonald’s does not appear to have a comprehensive analysis of the three parameters. According to Waller (2012), there are plenty of advantages in engaging in an ethical marketing campaign. However, companies like McDonald’s shun such methods since profitability is usually at stake.

The study further recommends that McDonald’s engages in an extensive market research. Rinallo et al. (2013) suggest to a possibility of ethical marketing resulting in profitability. However, this result is only attainable with intensive market research. For instance, McDonald’s can try to penetrate the organic food market by developing suitable packages like salads. Such a move will attract consumers who prefer healthy food but lack any in menus of fast food outlets.

The study recommends that McDonalds should always use ethical marketing features. Ethical marketing is determined by the features which an organisation intends to utilise in its campaign (Alserhan 2011). The abstraction of ethics calls for reliance on professionalism and the necessary competence. In this regard, McDonald’s should engage the services of professional marketers to develop ideal marketing features. Marketing gaffes like associating sports personalities with unhealthy food products will be avoided if ideal marketing features are employed by a company.

McDonald’s can achieve this objective by avoiding direct marketing, to children, products with high sugar and calorie content. According to Ellerbach (2004), children don’t eat a lot of food to this end, fast food outlets have the advantage of coming up with portions of food that don’t have inflated content of unhealthy ingredients. Ethical marketing features therefore call for a delicate balance between that which is true and the persuasion of the consumer.

As already mentioned, McDonald’s is a market leader in the fast food industry. In light of this, ethical marketing should not be something they should straggle over. Lurie (2009) points out that, market leaders have the advantage of pick up ethical techniques and incorporate them in their strategies. The issue of cost should not be an impediment given the financial muscle that such companies possess. In light of this, the study recommends that McDonald’s should develop marketing strategies that acts like a benchmark for emulation in the fast food industry. The recommendations made in this section are a response to the research questions raised at the preliminary phase of the study.

As mentioned earlier, the study is a holistic overview of marketing and by extension market plan development. The adoption of McDonald’s as a reference point worked in favour of the thesis statement suggested. The results of the study point out that the consumers respect for the brand is dwindling. The thesis statement sought to establish whether unethical practices are a threat to a brand’s image and credibility. Sirgy and Lee (2008) suggest that the evaluation of ethical issues in business is easier done when an analysis is carried out on the market leaders. The unethical practices, unearthed in this study contribute to a degradation of the credibility and image of McDonald’s.

The image of an organisation is smeared when the brand is found to be engaging in activities that do not promote integrity and honour (Smith 2012). For instance, when McDonald’s, an industry leader, misrepresents the facts about their products such is seen as preying on the gullibility of their consumers. Although the fine print of required ethics might be faint, the same calls for a judgment call on the part of the marketers. Prior to the development of a marketing plan, marketers should weigh on the ripple effect of such an action with respect to the image of their organisation.

The discussions in this paper suggest that the subject of ethics in marketing is not easy to crack. According to Ayers (2011), what might appear ethical to one party might be unethical to the other. For instance, the theories of ethical marketing suggest that McDonald’s (in the Happy Meal suit) were largely engaged in ethical practices. However, the same was not reflected in the response given by the participants to this study.

The study found that misrepresentation was a common phenomenon in the marketing strategy of McDonalds. Marketing techniques of such a nature tend to destroy the trust levels between an organisation and its customers (Rodwin 2010). From the theory of individualism profitability is seen as the motivating force behind what appear to be unethical practices. However, the loss of trust from consumers poses a threat to the intended profits. To this end, organisations need to develop a hybrid of marketing techniques. Such techniques should ensure that the marketing strategies will not interfere with customer relations.

In conclusion, acts like misrepresentation and withholding information tend to erode the trust between a company and its customers. The same supports the view, of the thesis statement, that unethical marketing practices destroy a brand’s image and further reduce its credibility. The same is due to the loss of trust from the unethical practices (Hodge et al. 2013). Further research is called for to examine the gray areas of ethics. The same would set the stage for a universal code of conduct. Such a move will protect brands from unknowingly engaging in unethical practices.

The chapter evaluates the problem statement with regards to unethical marketing practices at McDonald’s. Necessary recommendations for the development of ethical marketing strategies are outlined in this chapter. According to Rodwin (2010), ethical marketing strategies are real. Companies do not have to border on the gray areas but can develop marketing techniques based on sound practices. The recommendations suggest that fast food companies can engage in ethical marketing practices without compromising on their brand image.

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IvyPanda. (2020, July 11). McDonald’s Ethical Issues: Examples of Unethical Marketing Practices. https://ivypanda.com/essays/mcdonalds-company-unethical-marketing-practices/

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IvyPanda . (2020) 'McDonald’s Ethical Issues: Examples of Unethical Marketing Practices'. 11 July.

IvyPanda . 2020. "McDonald’s Ethical Issues: Examples of Unethical Marketing Practices." July 11, 2020. https://ivypanda.com/essays/mcdonalds-company-unethical-marketing-practices/.

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Ethical Issues in Marketing: Steering Clear of Pitfalls

Avoid marketing pitfalls with a proactive approach to ethical issues. Discover how to align your strategy with integrity for lasting success.

Entrepreneurs, marketers, and business owners know the importance of promoting products and services effectively. However, in pursuing profit, it's easy to overlook the ethical considerations underpinning marketing strategies.

How often have companies stretched the truth, exaggerated claims, or targeted vulnerable demographics to boost sales? These practices might yield short-term gains, but they can also lead to long-term damage to brand reputation and company values .

So, how does one navigate this ethical minefield and ensure that marketing efforts are practical and morally sound? The ethical responsibility extends beyond merely complying with regulations to ensure that marketing efforts are fair and respectful and do not exploit vulnerabilities for commercial gain.

By understanding and addressing these challenges, businesses can build stronger relationships with consumers and contribute positively to society while achieving their business objectives.

Ethical marketing refers to applying moral principles and values in marketing practices, ensuring that businesses engage in fair, honest, and responsible behavior towards customers, society, and the environment.

It encompasses various aspects, including truthfulness in advertising, transparency, respect for consumer privacy, and fair treatment of all stakeholders.

Common ethical faced by businesses in marketing include:

• Truthfulness and transparency: This involves ensuring that marketing messages and advertisements are accurate, honest, and not misleading. Deceptive practices such as false claims and exaggerated impractical underlying consumer trust can lead to reputational damage.
• Targeting vulnerable demographics: Businesses must be mindful of not exploiting or manipulating vulnerable groups such as children, older people, or individuals with limited financial literacy. Targeting graphics inappropriately can cause ethical harm to both individuals and society.
• Privacy and data protection: With the proliferation of digital marketing channels, businesses must respect consumer privacy and handle personal data responsibly. This involves obtaining consent for data collection and safeguarding sensitive information.
• Environmental responsibility: Ethical marketing extends to the environmental impact of products and promotional activities. Businesses should minimize their carbon footprint, reduce waste, and promote sustainable practices throughout their supply chain.

Trust is a cornerstone of brand-consumer relationships. Consumers today are increasingly vigilant and vocal about unethical marketing practices by companies. Instances of exploitation, false advertising, or disregard for societal values can quickly spread through social media and online platforms.

When consumers perceive a brand as unethical, they are less likely to engage with its products or services, resulting in lost sales and market share. Building and maintaining trust requires consistent adherence to organizer adults and transparent communication.

Key ethical marketing practices

Ethical marketing strategy encompasses a range of principles and actions that prioritize honesty, transparency, authenticity, and responsibility towards consumers and society. These practices align with moral values and contribute to building trust, enhancing brand reputation, and fostering long-term customer relationships.

Transparency and honesty are foundational principles of ethical marketing. Businesses should ensure that advertising and promotional messages accurately represent their products or services. This includes providing clear and truthful information about product features, benefits, pricing, and any limitations or risks associated with their use. 

Another core value of ethical marketing is authenticity, which involves being genuine, sincere, and authentic to one's values and brand identity. Brands that prioritize authenticity build deeper connections with customers who appreciate their integrity.

Some well-known examples of successful ethical marketing are:

• Patagonia: The outdoor apparel company Patagonia has built its brand around environmental sustainability and ethical manufacturing practices. Their "Don't Buy This Jacket" campaign encouraged consumers to think critically about consumption and waste while promoting the brand's commitment to quality, durability, and responsible production.
• TOMS Shoes: Through its "One for One" business model, TOMS Shoes pledged to donate shoes to a child in need for every pair purchased. This socially conscious initiative not only differentiated TOMS from competitors but also appealed to socially conscious consumers, who valued the brand's commitment to positively impacting communities around the world.

These examples demonstrate that ethical marketing can be both socially responsible and commercially successful. By aligning their values with those of their target audience and prioritizing transparency and authenticity, brands can create meaningful connections with consumers while also driving business success.

Ethical marketing has become more than a moral obligation—a business's strategic imperative. Ethical decision-making in marketing can reap several benefits that contribute to a company’s long-term success and sustainability.

Let's explore three key advantages of ethical marketing: enhancing brand credibility and trustworthiness, building a loyal customer base, and gaining a competitive edge in the market.

Enhance brand credibility and trustworthiness

Ethical marketing practices bolster a brand's credibility and trustworthiness in the eyes of consumers. When businesses consistently practice ethical marketing and communicate transparently with customers, they establish themselves as trustworthy partners. This trust forms the foundation of solid and enduring relationships between the brand and its audience.

Build a loyal customer base

Ethical marketing resonates deeply with consumers who value integrity and social responsibility. By aligning their values with those of their target audience, businesses can attract and retain loyal customers who prioritize ethical considerations in their purchases. A loyal customer base drives repeat business and revenue and serves as a powerful advocacy network.

Gain a competitive edge in the market

Ethical marketing can serve as a powerful differentiator in today's crowded marketplace, where consumers have many choices. Businesses prioritizing ethical decision-making set themselves apart from competitors and appeal to socially conscious consumers. By demonstrating a genuine commitment to ethical values and practices, companies can capture market share and establish themselves as leaders in their industry.

Implementing ethical marketing strategies requires a comprehensive approach encompassing guidelines for developing and maintaining ethical practices.

Businesses should establish clear guidelines and standards for ethical marketing practices, including honesty, transparency, respect for consumer privacy, and social responsibility. These guidelines should be communicated effectively to all employees and stakeholders, ensuring a shared understanding of ethical expectations and responsibilities.

Regular review and updates to these guidelines are essential to adapt to evolving ethical challenges.

Employee training plays a crucial role in promoting ethical behavior within an organization. Training programs should educate employees about ethical principles, provide practical examples and case studies, and empower them to make ethical decisions in their day-to-day work.

Fostering a company culture that values integrity, accountability, and ethical conduct from top leadership down to frontline employees is essential. Employees who feel encouraged to act ethically are more likely to uphold ethical standards in their interactions with customers, suppliers, and other stakeholders.

Businesses can leverage various tools and resources to assist them in ethical and responsible practices. As AI technologies play an increasingly prominent role in marketing, ensuring ethical AI use is paramount.

Businesses should prioritize AI ethics by incorporating ethical frameworks into designing, developing, and deploying AI-powered marketing tools and algorithms.

Industry associations, nonprofit organizations, and academic institutions also offer resources, training programs, and certification courses focused on ethical marketing practices. These resources provide valuable insights, best practices, and support for businesses seeking to navigate ethical challenges effectively.

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Industry standards and regulations

Industry standards and legal regulations provide essential guidance for ethical marketing practices, emphasizing principles such as honesty, transparency, and fairness.

Organizations like the American Marketing Association (AMA) and the International Chamber of Commerce (ICC) have established codes of ethics and guidelines to promote responsible marketing communications.

Alongside these standards, legal regulations such as the Federal Trade Commission (FTC) Act and the General Data Protection Regulation (GDPR) impose requirements to protect customer data and ensure fair competition.

Compliance with these standards and regulations is crucial for businesses, as non-compliance can lead to reputational damage, legal penalties, and loss of customer trust.

Moreover, ethical lapses, conflicts of interest , and data bias in marketing can undermine trust and credibility, necessitating careful consideration and mitigation strategies. Marketers must ensure that their decisions and actions are driven by the best interests of consumers and stakeholders rather than personal gain or organizational interests.

Engage your audience with ethical messaging

By showcasing corporate social responsibility initiatives and incorporating ethical storytelling into marketing campaigns , businesses can connect with consumers more deeply, aligning with their values and concerns. This enhances brand reputation and fosters trust and loyalty among customers. 

Leveraging Mailchimp's suite of tools and services can further amplify ethical business practices. From audience segmentation and personalized messaging to social media management and analytics, Mailchimp offers comprehensive solutions to help businesses deliver impactful ethical messaging across multiple channels.

By harnessing the power of ethical storytelling with Mailchimp's innovative tools, companies can differentiate themselves in the marketplace, drive engagement, and ultimately achieve success while positively impacting society. 

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More From Forbes

Navigating the data maze: ai's role in strategic decision-making.

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Gaurav Tewari, founder and Managing Partner of Omega Venture Partners .

From corporate boardrooms to manufacturing floors, the exponential growth of data is impacting businesses everywhere. In just three years, the total amount of data generated worldwide has almost doubled—growing from 64 to 120 zettabytes .

This increase in available data creates both challenges and opportunities when it comes to leveraging information for strategic business decisions. According to a study by Oracle and author Seth Stephens-Davidowitz, over 70% of business leaders admit being hampered by the sheer volume; however, forward-thinking executives are leveraging artificial intelligence (AI) to help navigate the data maze and unlock actionable insights.

As a leader in the AI investment space, I have seen firsthand how AI is revolutionizing data analysis and business decision-making across industries.

The Rise Of AI In Strategic Decision-Making

While some business executives are successfully leveraging the growing availability of data to make more informed decisions, others have not been able to handle information effectively. According to the earlier cited study, 33% cite missed opportunities due to data overload, and 29% cite unnecessary spending driven by inconclusive data projects. Yet, the study also found that a striking 94% of business leaders have restructured their decision-making frameworks over the past three years, reflecting the urgency to align with new technological capabilities.

This shift is also driven by external forces. Nearly four in five consumers believe that organizations that use technology to make data-driven decisions are more trustworthy and more likely to be successful. The ability to ground business decisions in robust data analysis has become a competitive differentiator, prompting executives to embrace AI-powered solutions that can swiftly parse vast informational volumes and surface actionable insights.

AI’s Multi-Faceted Decision Support

While AI's decision-support capabilities span numerous functional areas, I see four key application domains emerging as particularly transformative.

1. Strategic Planning

AI is particularly well suited for descriptive and diagnostic analysis, forecasting future scenarios and performing robust risk assessments. This can allow your organization to develop more robust scenario planning and informed strategies.

2. Operational Efficiency

AI can also optimize operational processes, including logistics and production schedules. In a recent McKinsey survey, 25% to 30% of respondents claim they are already using AI to drive results in supply chain management and service operations. Similarly, the technology can be used to assist in finding alternative suppliers, discover more about existing suppliers and even negotiate more effectively .

3. Marketing And Sales

Generative AI models are expected to amplify marketing productivity to the tune of $460 billion annually over the coming years. This will be accomplished by improving both the efficiency and effectiveness of marketing spend via improved customer targeting, granular segmentation and highly personalized customer engagement.

4. Risk Management

With unprecedented capabilities to quickly and objectively analyze a vast array of potential outcomes, AI has the potential to redefine how businesses assess risks from financial or operational changes. AI tools can allow executives and corporations to pursue innovation confidently while mitigating collateral damage.

Driving Results: Case Studies Of Successful AI-Powered Decisions

Verizon is one of many companies using AI-powered VR training to enhance customer service skills. By simulating realistic customer service scenarios, employees were able to practice and improve their empathy, understanding and de-escalation techniques in a controlled environment. The company concluded that the training resulted in marked improvements in employees' poise, verbal fluency and confidence during difficult conversations, contributing to higher customer satisfaction and more effective management of service challenges.

Decision-Making

The world’s largest ports, including Los Angeles, Rotterdam and Singapore, are using AI to enhance decision-making to optimize the functionality of the global supply chain. The ports of Los Angeles and Long Beach (L.A. port complex), for example, which handle a third of all American imports , utilize an AI-powered application called Port Optimizer that helps streamline operations. Globally, I see AI tools increasingly being leveraged to revolutionize vessel scheduling, cargo transfers and congestion prevention.

Customer Preference

Netflix, the video-streaming pioneer, uses AI to analyze the preferences and behavior of each individual consumer and subsequently craft individualized, bespoke recommendations for a superior user experience. AI-driven models continuously nudge users to discover content they are most likely to enjoy, and 80% of all media viewed on the platform today is a result of these personalized recommendations.

Navigating Ethics: AI Augmentation

Ultimately, AI is an extraordinarily powerful paradigm for business applications that can effectively parse vast troves of data, suggest novel solutions and forecast future scenarios. And it can do so at a speed and scale that transcends human capabilities in order to efficiently augment human ingenuity and judgment. However, there are valid concerns regarding how much power the technology should have when it comes to actually making unsupervised and autonomous decisions.

I believe we stand at the dawn of the era where artificial and human intelligence will increasingly intersect and amplify each other's strengths. To mitigate the known limitations of contemporary AI systems (e.g., bias, hallucination, explainability) while leveraging their formidable capabilities, AI systems today should be viewed as assistants— informed, intelligent and rapidly improving assistants—but not yet ready to be promoted to the role of fully autonomous decision-makers. Those organizations that understand this limitation and how to navigate the best of both humans and AI stand to reap formidable rewards in this new era.

As of last year, a mere 7% of companies said they use AI in large strategic decisions, yet 75% of leaders believe access to robust AI systems can supercharge their ability to make informed decisions for a competitive advantage.

As AI's decision-support capabilities continue advancing at an astonishing pace, our ability to wield this power prudently and ethically will determine its ultimate impact. The road ahead requires fusing the ability of people to analyze context, think creatively and exercise moral judgment alongside AI's tremendous dexterity and scalable pattern recognition.

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Editor Highlights: ANA's Ethics Code, Data Compilance, and CTV

August 15, 2024    

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