Marketing practices are changing due to the massive increase in the collection and use of data paired with the digitization granted by technological advances. Yamamoto (2019) discusses the heavy use of specialized software so marketers can use analytics, advertising, and maintain customer relationships with more ease than ever before. Along with that, the digitization allows marketers to reach a wider audience and leaves more room for adaptation and innovation. Uber is a great example of technology changing traditional marketing. The whole business is based on an app which offers loyalty programs as well as rewards for successfully referring other people to use Uber, and periodic promotions that can attract more customers. Uber collects the ride data from the driver and the rider to look for trends and patterns to help their business grow. With these changes in marketing practices comes a question of ethics – what is considered right or wrong? Crane (2019) explores ethics and mentions that just because something is legal does not make it ethical. By always being trustworthy and honest in the workplace, a more ethical business is created.
Nowadays, marketing managers can misuse data very easily. This may be due to the education of marketing managers and how it lacks quantitative analysis. This is important because marketing managers need to be able to base their decisions on analytical results. The biggest pitfalls that most marketing research graduates experience are the required skills concerning a mix of technical and analytical knowledge, as well as basic marketing and business knowledge (Paas, 2019). Paas (2019) highlights the gap between education and the workplace where some college graduates are lacking in knowledge of how a business works. Missed skills like quantitative analysis are displayed during the transition from education to the workplace. Once in the workforce, many graduates have to adapt to the culture within the organization and find their niche in order to contribute to the goals of the company.
To be able to close this gap from education to the workplace, a new curriculum doesn’t need to be made but instead there are many ways in which the current curriculum can be adapted to better fit current marketing manager’s roles. According to Nunan and Di Domenico in the article they wrote concerning this topic they came to the conclusion of five specific ways in which the current curriculum can be adapted. They include: (1) decoupling of market research from research methods, (2) identification and synthesis rather than collection of data, (3) communication of insight rather than dissemination of findings, (4) consideration of insight around data analysis, not just data collection, and (5) rethinking the label: from market research to marketing analytics.
Out of these five ways, the one that fits the best with the misuse of Big Data is the identification and synthesis rather than collection of data. This fits best because when managers are given a data set in which they did not personally collect the data that data should be identified as secondary data (Nunan & Di Domenico, 2019). Also, the world of research is gradually shifting from survey research toward Big Data and with Big Data, managers need to learn how to synthesize the data because Big Data doesn’t always come structured and amenable for immediate data analysis (Nunan & Di Domenico, 2019).
The reason why some unethical practices may occur in the first place can also be due to the lack of convergence between organizational qualitative insights and analytical quantitative business practices (Camile, Susan, 2015). A past example of business conducted unethically can be seen in Walmart and the way it paid its employees wages. In 2016, it was discovered that Walmart generally underpaid their employees. This resulted in workers having to apply for government aid and further resulted in unmotivated employees. This feeling among employees translated directly to only 16 percent of stores meeting Walmart’s customer service goals. If management had looked at qualitative survey data from previous employees and executives along with aligning organizational values, perhaps this could’ve been avoided (Irwin, 2016).
In this case, the use of data could have been used to address Walmart’s problem as a force for good. In general, most consumers think that marketing data is used in a way that is not to their benefit. There is some truth in this, as it is something that is possible. In order to get a better understanding of this, we’ll look at an example: In recent years, there has been a push towards more organic and healthy food options in the United States. There are many factors leading to this, but one large reason is obesity in America. Many assumed this was, in part, due to Americans’ consumptions of large amounts of junk food. This put a lot of companies in tough spots. In order for them to mitigate backlash as well as capitalize on this new market, they introduced many new goods which they marketed as healthy alternatives to their regular products. One example of this is the wide array of organic products that have flooded the market. Organic products have been marketed in a way that has led the consumer to often associate organic with natural, which is not completely correct and often not the case. CNBC reported that a USDA study found that 40% of organic products which were tested on store shelves came back positive for pesticides. Despite this, companies continue to sell these products for an increased price. Companies intentionally engaging in this practice can be considered to be violating the practice of ethical marketing by having misleading advertising according to Forbes.
The ability for companies to do this is directly linked to marketing data as it is the foundation of marketing. Marketing data is the information that lets companies know what it is that consumers want and how we respond to different kinds of messaging. This means that it can be used for good as well as bad. Take the example of organic foods. A company unethically advertising organic foods is assisted by marketing data. They know how best to catch customers’ attention and what should be said in order to have these customers buy their products. From this we can see that marketing data has the ability to facilitate unethical marketing practices as well as ethical marketing practices.
Despite this, marketing data also has the potential to benefit both businesses and customers when used ethically. There are a number of ways that collecting marketing data can benefit a business. The first and probably most important is the ability for businesses to know their customers. Big data is all about knowing the customer. This can be general information like the age, gender, and location of the customer, but also more abstract things like their personal values and interests. Information like this allows businesses to “reach the right audience more frequently, and recognize a greater return on their investment” (Rocket Fuel, 2013, p. 19). A general increase in profit is not the only thing that a company can expect. When efficiently and ethically using marketing, companies can expect to see an increase in customer loyalty. Identifying which customers are the most loyal, and profitable, allows a company to focus resources on demonstrating to these customers that they are valued by the business. Loyalty programs are a great example of this as “[they] are proven to increase customer lifetime value by up to 30% or more by increasing visit frequency, increasing spend per visit, and winning back lost customers” (Reyhle, 2016, paras. 4-5).
Businesses using marketing data can also benefit the consumer. Improved understanding of who their customers are, and what they desire, allows for businesses to adapt to meet these needs. One big way that marketing data benefits customers is through its impact on pricing. The more that a business knows about the customer, and their competitors, the more able they are to adjust the price of their products in order to remain competitive (Baker, Kiewell, & Winkler, 2014, paras. 3-4). This means that consumers get lower prices and better goods, and who doesn’t like spending less money?
In conclusion, the massive increase in use of data has altered the workplace norms. Managers are put in the tough position of setting the tone for the rest of the workplace, and with the power of consumer data in their hands, this can be a hard feat. Frederick Taylor, a scientific management scholar, recognized a way to make marketing companies run more efficiently (Tadajewski, 2011). Through his “philosophy of management”, he proposed that managers were “the support staff helping the worker to operate at their optimal efficiency,” (Tadajewski, 2011, pg. 42). Taylor took charge, alleviating workload and telling “his workers to ignore the way that the economic surplus was currently being distributed (i.e. in favour of the owners of capital) and focus their energies on increasing the overall level of productivity and profitability, so that all could be suitably compensated” (Tadajewski, 2011, pg. 42). Taylor’s work was called a “revolution,” raising production rates to record-breaking levels. By taking care of his employees and not focusing on profits, he led his team to success. Overall, the points that Tadajewski makes reflect the importance of good ethical practices and how they can affect managers, employees, and consumers.
References:
Baker, Kiewell, Winkler. (2014). Using big data to make better pricing decisions. McKinsey & Company. Retrieved from https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/using-big-data-to-make-better-pricing-decisions
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Crane, A., Matten, D., Glozer, S., & Spence, L. (2019). Business Ethics (Fifth). Oxford University Press.
Nunan, D. & Di Domenico, M. (2019) Rethinking the market research curriculum. International Journal of Market Research, 61, 22-32.
Paas, L. (2019). Marketing research education in the Big Data era. International Journal of
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Wells, J. (2015). Is ‘organic’ really organic? A deep dive into the dirt. CNBC.com. Retrieved from https://www.cnbc.com/2015/11/04/is-organic-really-organic-a-deep-dive-into-the-dirt).html
Tama, K. (2019). How To Draw The Line On Unethical Marketing. Forbes.com. Retrieved from https://www.forbes.com/sites/forbescommunicationscouncil/2019/06/24/how-to-draw-the-line-on-unethical-marketing/#35290c685736