In a highly competitive marketing landscape, it is challenging to create a fair competitive advantage for a brand when the core differentiator is limited to price or convenience. And even more so when the brand has limited budgets, shorter timelines, high overheads, and a need for high ROI.
This in turn sometimes forces poor marketing actions with exaggerated marketing claims while leaving customers feeling manipulated, which eventually results in customers wanting to stop any form of association with the brand.
A study on corporate responsibility by Aflac found that 75 per cent of consumers will take some kind of negative action if they believe a company is acting socially or environmentally irresponsible. And 73 per cent of millennials are willing to pay more for sustainable offerings.
What does this mean for brands?
Understanding modern consumers’ expectations for ethical issues is important to connecting with them. Today’s consumers not only value ethics but also demand to see themselves represented in the brands
they support.
We are starting to see a high proportion of Gen Z consumers consider a brand’s social stance before making a purchase. Hence, it’s absolutely critical for brands to proactively incorporate ethics and diversity into their marketing decisions.
Patagonia is a great example, where the founder, in 2022, donated the entire company to a charitable trust focused on combating climate change. Patagonia also consistently allocates 1 per cent of its total sales to environmental groups.
Can ethical marketing drive profit?
Companies that prioritise business ethics are more likely to achieve and sustain profitability compared to their counterparts, according to the Brandwatch Digital Marketing Trends report.
In fact, the world’s most ethical companies consistently outperform similar companies by approximately 7 per cent. Brands that incorporate these principles often tend to have highly loyal employees with greater performance than other brands.
It’s no surprise that brands such as H&M have been working with sustainability for almost 30 years. It’s part of their business idea to offer customers the best combination of fashion, quality, price, and sustainability.
Is ethical marketing a challenge with AI systems?
As AI and automation play a growing role in marketing, marketers should ensure that their use is transparent and ethical. When choosing an AI-driven marketing activity, marketers should ensure to check for any discriminatory practices and biases arising from AI algorithms.
For example, one should ensure AI-suggested pricing strategies do not exploit vulnerable or disadvantaged individuals by having checks in place to avoid any price discrimination based on factors such as race or gender. This would mean regularly scrutinising AI tools to ensure they do not inadvertently perpetuate stereotypes or discriminatory practices.
AI systems must also be explainable in their decision-making capabilities. This is particularly challenging in marketing, where complex algorithms are often used to analyse consumer behaviour and personalise marketing efforts. But an added layer of human oversight can prevent the incorrect use of data and reduce the threat to consumer privacy protection.
How can any brand practice ethical marketing?
Be honest: This might sound simple, yet it is very powerful in building customer trust. Try to convey your brand goals, vision, and practices to your customers. Focusing on honesty does not mean one has to avoid psychology in marketing. Marketers still have to find the right product-market fit and continue to do the hard work of communicating the brands’ product or service value by creating campaigns that are relatable yet realistic.
Embrace inclusivity: Consider the diverse perspectives of your customers by showcasing a wider range of gender, age group, size, and shape in your communication strategies to appeal to a more diverse demographic. This will start expanding your consumer base, drive sales, and ultimately outperform brands that neglect inclusivity. But spend good enough time on market research. As long as you have research to back you up, your audience will respond positively.
Incorporate social responsibility: At the end of the day, who doesn’t want to do some good in the world? Ethical marketing can only come from real-life ethical practices. Start supporting corporate social responsibility (CSR) initiatives and communicate such efforts to consumers through marketing. By doing so, brands will not only be able to build relationships with customers but also support socially conscious organisations to grow.
In today’s world, it is almost impossible to achieve success without demonstrating brand authenticity. Hence, brands have to evolve their marketing efforts to meet the expectations of an increasingly conscious and diverse consumer base.
Rather than solely focusing on bottom lines, brands that dedicate themselves to the greater good will only see growth in customer support, brand loyalty, and remarkable profits. So it’s time for some good and responsible marketing.
By Hemalatha Subramanian, Omnichannel Lead, Alshaya Group
