Description
Marketing practice is now busy integrating the potential of information and communication technologies through the utilization of databases and Internet marketing. Billions of potential consumers can now be reached this way.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet
Ethical Marketing for Competitive Advantage on the Internet
Claire Gauzente
LARGO University of Angers
Ashok Ranchhod
Southampton Business School
Dr. Claire Gauzente is Assistant Professor of Marketing and Organization at the University of Angers, UFR de Droit, Economie et
Gestion, 13 allée F. Mitterrand, 49036 Angers cx 01, France. (33)241-962 235. [email protected] Ashok Ranchhod is
Professor of Marketing at the Southampton Business School, Southamptin Institute, East Park Terrace Southamtpn, SO14 oRH, UK.
(44) (0)23 8031 9541. [email protected]
EXECUTIVE SUMMARY
Marketing practice is now busy integrating the potential of information and communication technologies through the
utilization of databases and Internet marketing. Billions of potential consumers can now be reached this way.
Nevertheless, a brief observation of the practices of marketing on the Internet show that some firms implement aggressive
actions such as pop-ups, deceiving banners and hyperlinks and other forms of intrusive mechanisms which impinge on
personal privacy. As technology moves from desk based PC applications to mobile communications, there is potential to
become even more intrusive, with the possibility of local tracking (within a 50 metre radius of a food or retail outlet).
Given the fact that such powerful devices will become the norm within two to five years, we advocate that firms that wish
to differentiate themselves from their competitors will have to turn to marketing ethics in order to gain and keep
consumers. Short-term thinking will push firms towards ever shorter campaigns and advertising plans, pushing companies
towards an unethical stance. This danger can be averted by firms adopting a proactive ethical attitude towards consumers
within their e-marketing strategies. In order to adopt such a proactive stance, companies need to develop a model of
ethical interactivity with consumers. The model of ethical interactivity that is introduced and discussed in the paper
develops seven types of practice (notice, choice, access, contact, security, horizon, and intrusiveness). Correct
interpretation of these practices leads to empowered consumers creating greater benefits for the firm and for the
consumers themselves.
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 1
Ethical Marketing for Competitive Advantage on the Internet
"The function within business firms most often charged with ethical abuse is Marketing"
Murphy and Laczniak, 1981 (p. 251)
The development of internet-based technologies opens endless possibilities for Marketers. Marketing research can be
carried out subtly by actively archiving the procedures that each individual undertakes on the Web, through Web tracking
software. Thus making a whole new set of variables available to the marketer. The technological opportunities are
obviously highly appealing for Marketers to explore and use extensively and intensively. However, we suggest that
exploiting all these opportunities can be a threat to marketing performance in the long run. Technology has no inherent
morality and the way in which it is utilized is what really matters. In this matter, both the deontological as well as the
utilitarian view of ethics (Bergman 1997) apply. Paying close attention to the ethical aspects of the use of web-based
technologies in marketing might constitute a differentiating force for proactive firms.
In a first section, we will discuss current marketing practices on the Internet and propose 7 criteria for judging the
ethicalness of marketing practices. In the second section, we develop the potential advantages of ethical marketing on the
Internet.
DELINEATING ETHICAL MARKETING PRACTICES
The observation of marketing practice on the Internet can give an idea of the types of unethical practices that are either
already in place or recommended by certain marketing consultancy sites. A simple analysis of many sites highlights two
important issues. The first one is concerned with the gathering of consumer information and the second one is concerned
with the utilization of various marketing techniques. These are many and varied ranging from banners to fixed spot
advertisements and flash advertisements and the selling or exchange of consumer information.
Gathering Information – The Issue of Consumer information Privacy
As Kelly (2000) notes, Internet technology provides opportunities to gather consumer information "on an unprecedented
scale". However some aspects of information gathering are visible (such as self-divulgence of information for purchase,
self-divulgence of information in accessing a web-site, self-divulgence of information for free merchandise) and some are
less visible (such as anonymous profile data, IP, cookies). Owing to these possible uses and abuses of information, many
consumers remain hesitant about Internet purchasing. The development of software allowing "private Internet experience"
and ‘completely undetected surfing’ is an indication of consumer concern regarding the invasion of privacy. A survey of
the top 100 commercial web sites shows that only 20 per cent apply a full ethical policy. This shows that there is room for
the development of competitive advantage (Culnan 1999a, 1999b). Culnan’s reports on Internet privacy policy show that
five aspects can used to describe a web site’s position concerning privacy:
1. Notice, that is an indication to the consumer about what information is collected, how it will be used; whether is
will be disclosed to third parties and whether cookies are used or not.
2. Choice: is the consumer given the choice to agree with aspects of information gathering?
3. Access: does the consumer have access to the information gathered? Is the consumer given the possibility to
review and correct the information?
4. Security concerns the protection of information transfer and subsequent storage.
5. Contact: are consumers given a contact person or address for asking questions or registering complaints regarding
privacy?
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 2
Using Information – The Issue of Marketing Tools
Advertising is an important marketing tool on the Internet with a range of possibilities for customer interactivity and
involvement (Ranchhod 1998). Banner advertising has been an important vehicle for many Internet based advertisements
with much research dedicated to its design elements. At the same time, marketing professionals try to understand how
individuals surf through websites and consequently attempt to increase the CTR (click-through ratio). In this respect,
researchers as well as practitioners try to identify key variables: type and size of ad banners, animation, use of color,
sounds, images, incentives, etc (see www.bannertips.com). Certain practices can be observed and are recommended as
efficient ones: pop-ups, deceiving banners (computer-like messages, with "ok" button). Here are some excerpts from the
advice given for designing an efficient banner:
• Feature a Call To Action,
• Create Urgency,
• Use the Word "FREE,"
• Certain truisms remain true -- intrigue and sex sell
Parallel to Internet advertising, the development of e-mail marketing and spam are features of aggressive e-marketing.
Judging Marketing Practices
In the field of advertising, Nwachukwu et al. (1997) found that three variables are important for judging the ethical nature
of an ad: individual autonomy, consumer sovereignty and harmfulness of product. These ideas are utilized to assess
specific ads and to assess sovereignty in terms of consumer awareness of a product's use and availability. Individual
autonomy refers to the ability of the individual to recognize the manipulative power of advertising. Consumer sovereignty
refers to the level of knowledge and sophistication of the target audience (e.g. the marketing of infant formula in less
developed countries illustrates low consumer sovereignty). Lastly, harmfulness of product refers to the nature of the
product (advertising for cigarettes can be deemed unethical as the product is detrimental to people’s health). On the
Internet, harmfulness could be defined by the advertising of pornography or harmful visual imagery.
Other aspects that surely need to be considered in Internet advertising are the levels of ad intrusiveness and personal
privacy. Figure 1 illustrates how some areas of Internet advertising compare with general advertising tactics. (see figure
1). Figure 1 throws some light on how advertising on the Internet can impinge on customer autonomy and sovereignty by
being intrusive and disrespectful of personal privacy. If we consider the key factors pointed out by Nwachukwu et al., take
into account Culnan’s (1999a, 1999b) criteria of online privacy and add intrusiveness to the mix, it is possible to create a
model for understanding and judging ethical marketing practices on the Internet. This model is illustrated in Figure 2.
The model shows how individual autonomy, consumer sovereignty and harmfulness of product interact with the seven
factors that are shown. The composite of seven factors in addition to Culnan’s (1999a, 1999b) factors of notice, choice,
contact, security and access, include horizon (time element) and intrusiveness. We feel that the time element, in terms of
how long companies can access customer information is important as is the degree of intrusiveness as shown in Figure 1.
These seven factors could be used to evaluate the overall degree of ethical interactivity of a company on the Internet. A
zero level (or minimum) ethical stance corresponds to an offer of notice and security (see table 1) However, as noted by
Culnan (1999a, 1999b), the level of disclosure can range from a comprehensive privacy policy notice (PPN) to a discrete
statement. This might be difficult to provide as customer details can be either gathered from the home page or through
hyperlinks to the home page. Nonetheless, paying attention to these two factors show the degree of ethical concern
afforded to the consumer by a company.
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 3
FIGURE 1
Ethical Perceptual Map of the Current Range of Advertisements
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 4
FIGURE 2
Delineating Ethical Internet Marketing
We would consider that a comprehensive PPN linked from the homepage and the highest level of security are the minimal
level that firms should aspire to in order to exhibit a reasonable degree of ethical behavior on the Internet. However, this
may not be entirely sufficient and a higher levels of ethical interactivity should also be considered by most firms. Higher
levels of ethical interactivity can be offered by a serious consideration of the five other criteria, which are choice, contact,
access, horizon, intrusiveness. Each of these in its own right helps to improve the levels of ethical interactivity undertaken
by a firm as depicted in Table 1.
All these factors help to create consumer empowerment. Not only should consumers be given the chance to self disclose
private information, they should also be given the opportunity to clearly and precisely agree on the manner in which it will
be used. In particular, the level of intrusiveness of marketing techniques could be agreed upon, as some consumers are
open to a variety of techniques, looking at them as sources of information. However in some cases, intrusions may simply
be considered to be fun, such as the viral marketing strategy adopted for a computer game (www.missingsheep.com). For
others an official letter of introduction may be the only way forward. Consumers should also be made aware of the
frequency of contact, choosing their own level frequency. The horizon criterion relates to the time frame in which the
information will be utilized. Here again, consumers could choose to receive marketing incentives for either a short or a
long period of time. Finally, the possibility of anonymous visits to a website, free of any tracking could also be offered.
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 5
TABLE 1
Ethical Marketing Criteria and Competitive Advantage
Leveraging the degree of ethical interactivity will help to tailor marketing actions according to consumer ethical
flexibility. The ethical sensitivity of a consumer could even become a segmentation criterion. This is all the more
important than ethical sensitivity is likely to differ from one sector to another, just as Nwachukwu et al. (1997) noted
about certain products like cigarettes. Also, for instance, consumers could be less ethically sensitive when buying a book
and far more ethically sensitive when using online banking.
GAINS FROM USING ETHICS IN E-MARKETING
Singhapakdi (1999) showed that marketing managers who perceive an ethical problem in a situation are more likely to
have an ethical intention. Hence, we suggest that marketing professionals engage in more thought and reflect on their
marketing practices on the Internet. This could lead to a greater consciousness and hence to the development of more
ethical intentions and practices. The question of adopting an ethical marketing behavior does not only boil down to
providing a firm’s policy concerning information privacy, it should also be demonstrated in marketing actions. The seven
criteria presented above can serve as a guideline for firms wanting to implement an ethical e-marketing strategy. Survey
of other web sites practices can also help. For instance, in France, the site Voilà.fr decided to ban the use of "pop-ups», as
this was deemed too aggressive for Internet users.
The comfort of secure navigation is a key to internet-user satisfaction (Szymanski and Hise 2000), the absence of intrusive
techniques can be part of this comfort and hence lead to consumer satisfaction and loyalty. The design of the web site is
often mainly evaluated in terms of pleasure and interactivity (Eighmey 1997; Ghose and Dou 1998 Chen and Wells 1999;
Boulaire and Mathieu 2000). We argue that it should integrate ethical considerations. Avoiding misleading, deceiving
signs, controlling the ad banners that appears and preventing other intrusive advertising will be important in the future.
It will also be important to inform consumers that a particular firm takes an ethical stance through the creation and
diffusion of Internet ethical charts. Chonko and Hunt (2000) deplore the lack of ethical guidelines in marketing practices,
however such a development and its diffusion to consumers will be critical in the future.
Both the deontological and utilitarian views of ethics can be used to design ethical web-sites. Whether any practices
should be banned on the Internet, within a free society is a moot point. However, it is possible for firms to exercise self-
restraint and also develop personalized sites that depend on each individual’s tolerance levels.
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 6
As Internet software becomes more sophisticated, it will be increasingly possible to tailor sites for individual ethical
preferences. The seven criteria mentioned above could form the basis of creating and sustaining competitive advantages
(Table 1).
This table clearly illustrates that ethical marketing is critically associated with a firm’s long term orientation. Advantages
like image, trust, relationship quality, database reliability and database update are typically representative of the goals of
long-term, market oriented firms. A firm that has a short term orientation will lose its competitive advantages in the long
run against firms that develop ethics as a marketing weapon for the consumer’s benefit.
CONCLUSIONS
While the potentialities of ICT are endless, the very interactiveness of the Internet creates new and serious ethical
problems reflected by the use of short-term aggressive actions. Firms that follow ethical marketing stances are likely to be
more competitively advantaged in the future. Ethical marketing can be judged against seven criteria: notice, choice,
contact, security, access, horizon and intrusiveness. The importance paid to each criterion can reflect the degree of ethical
interactivity that the firm is willing to exhibit. At the same time firms need to understand the impact on individual
autonomy and safeguard customer sovereignty. In the long run, increasing ethical interactivity is likely to produce
consumers who feel empowered, creating competitive advantage for a firm and satisfaction for the consumers.
REFERENCES
Bergman, Alexander. 1997. "Ethique et gestion." in Encyclopédie de Gestion, Economica Paris.
Boulaire, Christelle and A. Mathieu. 2000. "La fidélité à un site web : proposition d'un cadre préliminaire." Actes du
XVIème Congrès International de l'Association Française du Marketing (Montréal): 303-312.
Chen, Q. and W. D. Wells. 1999. "Attitude toward the Site." Journal of Advertising Research 39 (5): 27-37
Chonko, Lawrence B. and Shelby D. Hunt. 2000. "Ethics and Marketing Management -A Retrospective and Prospective
Commentary." Journal of Business Research 50: 235-244
Culnan, Mary J. 1999a. Privacy and the Top 100 Web Sites : Report to the Federal Trade Commission [Online] Available:
http://www.msb.edu/faculty/culnanm/gippshome.html
Culnan, Mary J. 1999b. Georgetown Internet Privacy Policy Survey : Report to the Federal Trade Commission [Online]
Available: http://www.msb.edu/faculty/culnanm/gippshome.html
Eighmey, J. 1997. "Profiling User Responses to Commercial Web Sites" Journal of Advertising Research 37 (3): 59-66
Ghose, S. and W. Dou. 1998. "Interactive Functions and Their Impacts on The Appeal of Internet Presence Sites." Journal
of Advertising Research 38 (2): 29-43
Kelly, Eileen P. 2000. "Ethical and Online Privacy in Electronic Commerce." Business Horizons May/June 43(3): 3
Murphy, Patrick E. and Gene R. Laczniak. 1981. "Marketing Ethics: A Review with Implications for Managers, Educators
and Researchers." in Review of Marketing. Eds B.M. Enis and K.J. Roehring, AMA, 251-266.
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 7
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Nwachukwu Saviour L.S., Scott. J. Vitell, Faye W. Gilbert and James H. Barnes. 1997. "Ethics and Social Responsibility
in Marketing: An Examination of Ethical Evaluation of Advertising Strategies." Journal of Business Research 39:
107-118
Ranchhod, Ashok. 1998. "Advertising into the Next Millennium." International Journal of Advertising 17 (4): 427-446.
Singhapakdi, Anusorn. 1999. "Perceived Importance of Ethics and Ethical Decision in Marketing." Journal of Business
Research, 45(1): 89-99
Szymanski, D.M. and Hise, R.T. 2000. "E-Satisfaction: An Initial Examination." Journal of Retailing 73 (3): 309-322.
doc_290506374.pdf
Marketing practice is now busy integrating the potential of information and communication technologies through the utilization of databases and Internet marketing. Billions of potential consumers can now be reached this way.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet
Ethical Marketing for Competitive Advantage on the Internet
Claire Gauzente
LARGO University of Angers
Ashok Ranchhod
Southampton Business School
Dr. Claire Gauzente is Assistant Professor of Marketing and Organization at the University of Angers, UFR de Droit, Economie et
Gestion, 13 allée F. Mitterrand, 49036 Angers cx 01, France. (33)241-962 235. [email protected] Ashok Ranchhod is
Professor of Marketing at the Southampton Business School, Southamptin Institute, East Park Terrace Southamtpn, SO14 oRH, UK.
(44) (0)23 8031 9541. [email protected]
EXECUTIVE SUMMARY
Marketing practice is now busy integrating the potential of information and communication technologies through the
utilization of databases and Internet marketing. Billions of potential consumers can now be reached this way.
Nevertheless, a brief observation of the practices of marketing on the Internet show that some firms implement aggressive
actions such as pop-ups, deceiving banners and hyperlinks and other forms of intrusive mechanisms which impinge on
personal privacy. As technology moves from desk based PC applications to mobile communications, there is potential to
become even more intrusive, with the possibility of local tracking (within a 50 metre radius of a food or retail outlet).
Given the fact that such powerful devices will become the norm within two to five years, we advocate that firms that wish
to differentiate themselves from their competitors will have to turn to marketing ethics in order to gain and keep
consumers. Short-term thinking will push firms towards ever shorter campaigns and advertising plans, pushing companies
towards an unethical stance. This danger can be averted by firms adopting a proactive ethical attitude towards consumers
within their e-marketing strategies. In order to adopt such a proactive stance, companies need to develop a model of
ethical interactivity with consumers. The model of ethical interactivity that is introduced and discussed in the paper
develops seven types of practice (notice, choice, access, contact, security, horizon, and intrusiveness). Correct
interpretation of these practices leads to empowered consumers creating greater benefits for the firm and for the
consumers themselves.
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 1
Ethical Marketing for Competitive Advantage on the Internet
"The function within business firms most often charged with ethical abuse is Marketing"
Murphy and Laczniak, 1981 (p. 251)
The development of internet-based technologies opens endless possibilities for Marketers. Marketing research can be
carried out subtly by actively archiving the procedures that each individual undertakes on the Web, through Web tracking
software. Thus making a whole new set of variables available to the marketer. The technological opportunities are
obviously highly appealing for Marketers to explore and use extensively and intensively. However, we suggest that
exploiting all these opportunities can be a threat to marketing performance in the long run. Technology has no inherent
morality and the way in which it is utilized is what really matters. In this matter, both the deontological as well as the
utilitarian view of ethics (Bergman 1997) apply. Paying close attention to the ethical aspects of the use of web-based
technologies in marketing might constitute a differentiating force for proactive firms.
In a first section, we will discuss current marketing practices on the Internet and propose 7 criteria for judging the
ethicalness of marketing practices. In the second section, we develop the potential advantages of ethical marketing on the
Internet.
DELINEATING ETHICAL MARKETING PRACTICES
The observation of marketing practice on the Internet can give an idea of the types of unethical practices that are either
already in place or recommended by certain marketing consultancy sites. A simple analysis of many sites highlights two
important issues. The first one is concerned with the gathering of consumer information and the second one is concerned
with the utilization of various marketing techniques. These are many and varied ranging from banners to fixed spot
advertisements and flash advertisements and the selling or exchange of consumer information.
Gathering Information – The Issue of Consumer information Privacy
As Kelly (2000) notes, Internet technology provides opportunities to gather consumer information "on an unprecedented
scale". However some aspects of information gathering are visible (such as self-divulgence of information for purchase,
self-divulgence of information in accessing a web-site, self-divulgence of information for free merchandise) and some are
less visible (such as anonymous profile data, IP, cookies). Owing to these possible uses and abuses of information, many
consumers remain hesitant about Internet purchasing. The development of software allowing "private Internet experience"
and ‘completely undetected surfing’ is an indication of consumer concern regarding the invasion of privacy. A survey of
the top 100 commercial web sites shows that only 20 per cent apply a full ethical policy. This shows that there is room for
the development of competitive advantage (Culnan 1999a, 1999b). Culnan’s reports on Internet privacy policy show that
five aspects can used to describe a web site’s position concerning privacy:
1. Notice, that is an indication to the consumer about what information is collected, how it will be used; whether is
will be disclosed to third parties and whether cookies are used or not.
2. Choice: is the consumer given the choice to agree with aspects of information gathering?
3. Access: does the consumer have access to the information gathered? Is the consumer given the possibility to
review and correct the information?
4. Security concerns the protection of information transfer and subsequent storage.
5. Contact: are consumers given a contact person or address for asking questions or registering complaints regarding
privacy?
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 2
Using Information – The Issue of Marketing Tools
Advertising is an important marketing tool on the Internet with a range of possibilities for customer interactivity and
involvement (Ranchhod 1998). Banner advertising has been an important vehicle for many Internet based advertisements
with much research dedicated to its design elements. At the same time, marketing professionals try to understand how
individuals surf through websites and consequently attempt to increase the CTR (click-through ratio). In this respect,
researchers as well as practitioners try to identify key variables: type and size of ad banners, animation, use of color,
sounds, images, incentives, etc (see www.bannertips.com). Certain practices can be observed and are recommended as
efficient ones: pop-ups, deceiving banners (computer-like messages, with "ok" button). Here are some excerpts from the
advice given for designing an efficient banner:
• Feature a Call To Action,
• Create Urgency,
• Use the Word "FREE,"
• Certain truisms remain true -- intrigue and sex sell
Parallel to Internet advertising, the development of e-mail marketing and spam are features of aggressive e-marketing.
Judging Marketing Practices
In the field of advertising, Nwachukwu et al. (1997) found that three variables are important for judging the ethical nature
of an ad: individual autonomy, consumer sovereignty and harmfulness of product. These ideas are utilized to assess
specific ads and to assess sovereignty in terms of consumer awareness of a product's use and availability. Individual
autonomy refers to the ability of the individual to recognize the manipulative power of advertising. Consumer sovereignty
refers to the level of knowledge and sophistication of the target audience (e.g. the marketing of infant formula in less
developed countries illustrates low consumer sovereignty). Lastly, harmfulness of product refers to the nature of the
product (advertising for cigarettes can be deemed unethical as the product is detrimental to people’s health). On the
Internet, harmfulness could be defined by the advertising of pornography or harmful visual imagery.
Other aspects that surely need to be considered in Internet advertising are the levels of ad intrusiveness and personal
privacy. Figure 1 illustrates how some areas of Internet advertising compare with general advertising tactics. (see figure
1). Figure 1 throws some light on how advertising on the Internet can impinge on customer autonomy and sovereignty by
being intrusive and disrespectful of personal privacy. If we consider the key factors pointed out by Nwachukwu et al., take
into account Culnan’s (1999a, 1999b) criteria of online privacy and add intrusiveness to the mix, it is possible to create a
model for understanding and judging ethical marketing practices on the Internet. This model is illustrated in Figure 2.
The model shows how individual autonomy, consumer sovereignty and harmfulness of product interact with the seven
factors that are shown. The composite of seven factors in addition to Culnan’s (1999a, 1999b) factors of notice, choice,
contact, security and access, include horizon (time element) and intrusiveness. We feel that the time element, in terms of
how long companies can access customer information is important as is the degree of intrusiveness as shown in Figure 1.
These seven factors could be used to evaluate the overall degree of ethical interactivity of a company on the Internet. A
zero level (or minimum) ethical stance corresponds to an offer of notice and security (see table 1) However, as noted by
Culnan (1999a, 1999b), the level of disclosure can range from a comprehensive privacy policy notice (PPN) to a discrete
statement. This might be difficult to provide as customer details can be either gathered from the home page or through
hyperlinks to the home page. Nonetheless, paying attention to these two factors show the degree of ethical concern
afforded to the consumer by a company.
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 3
FIGURE 1
Ethical Perceptual Map of the Current Range of Advertisements
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 4
FIGURE 2
Delineating Ethical Internet Marketing
We would consider that a comprehensive PPN linked from the homepage and the highest level of security are the minimal
level that firms should aspire to in order to exhibit a reasonable degree of ethical behavior on the Internet. However, this
may not be entirely sufficient and a higher levels of ethical interactivity should also be considered by most firms. Higher
levels of ethical interactivity can be offered by a serious consideration of the five other criteria, which are choice, contact,
access, horizon, intrusiveness. Each of these in its own right helps to improve the levels of ethical interactivity undertaken
by a firm as depicted in Table 1.
All these factors help to create consumer empowerment. Not only should consumers be given the chance to self disclose
private information, they should also be given the opportunity to clearly and precisely agree on the manner in which it will
be used. In particular, the level of intrusiveness of marketing techniques could be agreed upon, as some consumers are
open to a variety of techniques, looking at them as sources of information. However in some cases, intrusions may simply
be considered to be fun, such as the viral marketing strategy adopted for a computer game (www.missingsheep.com). For
others an official letter of introduction may be the only way forward. Consumers should also be made aware of the
frequency of contact, choosing their own level frequency. The horizon criterion relates to the time frame in which the
information will be utilized. Here again, consumers could choose to receive marketing incentives for either a short or a
long period of time. Finally, the possibility of anonymous visits to a website, free of any tracking could also be offered.
Academy of Marketing Science Review
Volume 2001 No. 10 Available: http://www.amsreview.org/articles/gauzente10-2001.pdf
Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 5
TABLE 1
Ethical Marketing Criteria and Competitive Advantage
Leveraging the degree of ethical interactivity will help to tailor marketing actions according to consumer ethical
flexibility. The ethical sensitivity of a consumer could even become a segmentation criterion. This is all the more
important than ethical sensitivity is likely to differ from one sector to another, just as Nwachukwu et al. (1997) noted
about certain products like cigarettes. Also, for instance, consumers could be less ethically sensitive when buying a book
and far more ethically sensitive when using online banking.
GAINS FROM USING ETHICS IN E-MARKETING
Singhapakdi (1999) showed that marketing managers who perceive an ethical problem in a situation are more likely to
have an ethical intention. Hence, we suggest that marketing professionals engage in more thought and reflect on their
marketing practices on the Internet. This could lead to a greater consciousness and hence to the development of more
ethical intentions and practices. The question of adopting an ethical marketing behavior does not only boil down to
providing a firm’s policy concerning information privacy, it should also be demonstrated in marketing actions. The seven
criteria presented above can serve as a guideline for firms wanting to implement an ethical e-marketing strategy. Survey
of other web sites practices can also help. For instance, in France, the site Voilà.fr decided to ban the use of "pop-ups», as
this was deemed too aggressive for Internet users.
The comfort of secure navigation is a key to internet-user satisfaction (Szymanski and Hise 2000), the absence of intrusive
techniques can be part of this comfort and hence lead to consumer satisfaction and loyalty. The design of the web site is
often mainly evaluated in terms of pleasure and interactivity (Eighmey 1997; Ghose and Dou 1998 Chen and Wells 1999;
Boulaire and Mathieu 2000). We argue that it should integrate ethical considerations. Avoiding misleading, deceiving
signs, controlling the ad banners that appears and preventing other intrusive advertising will be important in the future.
It will also be important to inform consumers that a particular firm takes an ethical stance through the creation and
diffusion of Internet ethical charts. Chonko and Hunt (2000) deplore the lack of ethical guidelines in marketing practices,
however such a development and its diffusion to consumers will be critical in the future.
Both the deontological and utilitarian views of ethics can be used to design ethical web-sites. Whether any practices
should be banned on the Internet, within a free society is a moot point. However, it is possible for firms to exercise self-
restraint and also develop personalized sites that depend on each individual’s tolerance levels.
Academy of Marketing Science Review
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Copyright © 2002 – Academy of Marketing Science.
Gauzent and Ranchhod / Ethical Marketing for Competitive Advantage on the Internet 6
As Internet software becomes more sophisticated, it will be increasingly possible to tailor sites for individual ethical
preferences. The seven criteria mentioned above could form the basis of creating and sustaining competitive advantages
(Table 1).
This table clearly illustrates that ethical marketing is critically associated with a firm’s long term orientation. Advantages
like image, trust, relationship quality, database reliability and database update are typically representative of the goals of
long-term, market oriented firms. A firm that has a short term orientation will lose its competitive advantages in the long
run against firms that develop ethics as a marketing weapon for the consumer’s benefit.
CONCLUSIONS
While the potentialities of ICT are endless, the very interactiveness of the Internet creates new and serious ethical
problems reflected by the use of short-term aggressive actions. Firms that follow ethical marketing stances are likely to be
more competitively advantaged in the future. Ethical marketing can be judged against seven criteria: notice, choice,
contact, security, access, horizon and intrusiveness. The importance paid to each criterion can reflect the degree of ethical
interactivity that the firm is willing to exhibit. At the same time firms need to understand the impact on individual
autonomy and safeguard customer sovereignty. In the long run, increasing ethical interactivity is likely to produce
consumers who feel empowered, creating competitive advantage for a firm and satisfaction for the consumers.
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