Kelly D. Martin and N. Craig Smith
Executive Summary
Early indications suggest that a wide range of firms are making increasing use of nontraditional marketing communications, including covert marketing. Although most of these novel marketing practices raise few, if any, ethical concerns, a problematic subset of covert marketing, known as stealth marketing, relies on deception. Stealth marketing uses surreptitious practices that fail to disclose or reveal the true relationship with the company that is producing or sponsoring the marketing message. In this article, the authors explore the rise of this practice and present three case studies of stealth marketing by Sony Ericsson, Wal-Mart, and Procter & Gamble. The analysis of these cases identifies and isolates the way and extent to which deception, intrusion, and exploitation of social relationships was involved and how those attributes potentially violate ethical standards. Both codes of marketing practice and theories of moral philosophy are applied to ground this discussion. Examining its consequences in detail, the authors evaluate the effectiveness of stealth marketing from the marketer and consumer perspective. This discussion is augmented by an examination of the role of consumer skepticism and other defense mechanisms as they are potentially circumvented by stealth marketing, illuminating several long-term problems created for both consumers and marketers. Indeed, any short-term benefits firms enjoy from reaching consumers using stealth practices may well be outweighed by the more troubling consequences that could surface in the future.
In practice, stealth marketing might be mistaken for a relatively innocuous covert marketing campaign. With this in mind, the authors offer the following guidelines to marketers: (1) Seek alternatives to deception, intrusion, and exploitation; (2) beware the backlash of the duped consumer; and (3) self-regulate through disclosure. Marketers who self-regulate by avoiding deception and requiring responsible disclosure of their marketing communication sponsorship can likely avoid possible future sanctions. Furthermore, self-policing throughout an industry can help ensure that groups of firms or product categories remain in the good graces of consumers and regulators. Alternatively, should marketers continue to push the envelope with stealthy and undisclosed persuasion attempts, action by the Federal Trade Commission may become a distinct possibility. Beyond the possible legal ramifications that stealth marketing can generate, practitioners might also consider the long-term effects of erosion of consumer trust in marketing. Chronic and prolonged deception of consumers by firms or even entire industries may seriously undermine the credibility of corporate marketing. Alternatively, stringent self-regulation and adherence to ethical standards may help preserve the remaining loyalty and positive consumer associations for which marketers strive.
Biography
Kelly D. Martin is Assistant Professor Of marketing at Colorado State University, Fort Collins. Her research interests involve marketing strategy with ethical implications; interfirm relationships; the role of marketing in society; and the effects of institutions, social norms, and culture on marketing practices. Her work has appeared in Academy of Management Journal, Business & Society, and Journal of Business Ethics.
N. Craig Smith is the INSEAD Chaired Professor of Ethics and Social Responsibility at INSEAD in Fontainebleau, France. He was previously on the faculties of London Business School, Georgetown University, and Harvard Business School. His current research projects examine ethical consumerism, deception in marketing, marketing ethics, and strategic drivers of corporate responsibility. His recent publications appear in Journal of Marketing, Journal of the Academy of Marketing Science, Business Ethics Quarterly, Journal of Business Ethics, Sloan Management Review, and California Management Review. He consults on business and marketing ethics and corporate responsibility and serves on the Scientific Committee of Vigeo (a social responsibility rating agency) and the Advisory Board of Carbon Clear (a carbon offset company). Smith was the winner of the Aspen Institute Beyond Grey Pinstripes 2005 European Faculty Pioneer Award for his work on social and environmental issues in business.
Journal of Public Policy & Marketing, Vol. 27, No. 1, Spring 2008
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