Thursday, October 15, 2009

Recession marks the end of ethical marketing


Sara Tower, University of Gettysburg, New York

“You never stop, especially when things are going good. But what if things are not good?” We are presently facing the first recession after the concepts of sustainability and ethical corporate behavior came into main stream. The blood of business is profit and when you are running short of blood you just try to do everything to regain its level. Because of recession, the corporate are now focusing on the base of their business and there is a clear sign of green-wash.

In the period of recession, companies focus on reducing cost and cutting down expenditure on everything that not comes in their domain of core competency. Now-a-days cutting down budgets on CSR while giving more focus on marketing of products are very common. The question here is how much difference does ethical marketing make?

There are very less number of “true green” buyers and organizations can’t sustain their business on these niche customers. Sustainability is about balancing economic and social as well as environmental aspect. If the price is wrong, then it will not be sustainable, no matter how green or useful it is. So price is very crucial and in times of recession when people are not willing to spend, why focus on these ethical and sustainable product marketing strategies.

Normally ethical marketing practices are cuddly, twee and/or semi-apologetic in nature but in the battlefield of corporate where they face cut throat competition relying on these sluggish practices won’t help much. Companies need to have aggressive and practical look towards the market to avoid the impact of recession.


Debanjana Sinha, IIM Shillong

Recession gives the opportunity to marketers to introspect and innovate. In practical situations all firms face budget constraints during such tough times of recession. To counter all this, they may resort to scrupulous means to to get the consumer’s attention. These may include making false price comparisons, providing misleading selling prices, omitting important conditions of the sale, or making very low price offers available only when other items are purchased. Deceptive packaging in the forms of mislabeled contents, size, weight etc can also be employed. But the marketers must keep in mind that long term survival requires innovative strategies. It is commonly believed that marketing cost must be cut during tough times to get a reasonable return on marketing investment. Contrary to this, increased advertising during a recession gives improved market share, when competitors are cutting back. Marketers should concentrate on core brands to channelize the scarce resources. It gives the opportunity to review the value proposition of a brand. Recession can prove whether a brand can provide value for money, even if it is relatively high priced. Firms can set examples by ethically marketing their brands by providing security to consumers in terms of quality. Unethical marketing practice can lead to the loss of the most valuable, loyal and satisfied customers. Cost cut can be achieved by the increased use of direct marketing, using more of radio and print media over TV etc. During recession marketers cannot ignore ethics while promotion. This would ensure maintenance of customer relationship and profitability when good times return.

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