Business Ethics

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Business Ethics

Background Information: Marlboro

Marlboro is rated as the most consumed cigarette product within the globe. The cigarette manufacturer is owned by Philip Morris, an operational constituent of the Altria Group Inc. Marlboro was instigated into the cigarette industry in the period 1924 with its initial market prospects aiming at the female populace following the 1920s product policy that accorded promotional activities to the aspect of femininity in products (Philip Morris USA Inc, 2011). It was not until the period 1950s that the cigarette was re-branded for the male populace with the adoption of the cowboy image. Following the research that had accorded an enhanced level of lung cancer cases to unfiltered cigarettes, Marlboro was well received due to its filtered packs and it was able to acquire 1.7 percent market share within the period 1955 (Byrnes, 2005). Currently, Marlboro is accorded a principal market share of 40.8 percent that has dominated since the period 2005, and is projected within the same share until the period 2015.

Market Dominance

Marlboro’s unrelenting control within the cigarette industry has been attributed solely to its marketing approaches that have accorded comprehensive research to determine the most optimal niche from the period 1985 to 1994. The research work has focused on three marketing elements namely lifestyle, trademark and communication. Studies reflective of the lifestyle aspect were conducted in the Japan, Switzerland, Germany, United States of America, Australia, Taiwan, Spain, Netherlands, Italy, Hong Kong, Saudi Arabia, Ivory Coast and Korea within the stipulated duration (Hafez and Ling 264). The objective of this element was the identification of consumer wants, preferences, principles and morals with regard to cigarette consumption. The age range used within the studies was eighteen and twenty-five. A notable constraint with regard to cigarette usage was noted within the female populace within sexist communities that would discriminate against female smokers and therefore inhibit the market size within the given region (Voltz, 2005). Other factors concerned the preservation of family ideals with the condemnation of the practice due to the health factors.

Concerning the trademark aspect, countries involved within the research were Germany, Italy, UK, Hong Kong, Ivory Coast, China, Korea, Philippines, Belgium, France and Netherlands (Hafez and Ling 264). This factor was employed within the study in the assessment of the cowboy figure used for brand marketing and whether individuals identify with the concept. Several workshops were organized by the company with participating individuals being accorded opportunities with the design group to suggest color, clothes types, picture captions and other design elements that should be included within the Marlboro cowboy trademark. A control study with regard to the design aspect was also conducted on other cigarette brands to establish the weaknesses and the strengths that they had over the Marlboro brand. The enhancement of this factor would enable the company in the creation of product standardization with regard to user loyalty within a global level.

Lastly, the communications requirement was the best covered as it involved a higher number of participants namely Belgium, European Economic Community, France, Netherlands, Korea, Germany, Italy, Spain, Finland, Hungary, Sweden, Japan, Switzerland, Hong Kong, Malaysia, Taiwan, Argentina, Brazil, Mexico, Venezuela, Holland, China, Philippines, Ivory Coast, Europe, Taiwan, and the United States of America (Hafez and Ling 264). This element focused on the advertisement factors with individuals required to appraise the promotional activities pursued by the institution and any upgrading that could be accorded to the same. Hypothetical advertisement approaches were also assessed, for instance the use of renowned icons to enhance available markets with the advertisement need. With the three research elements based on the customer-centric approach, the accomplishment attached to the study was immense as noted within the long-term period with the level of dominance that the company has accorded on its marketing needs.

Criticism for Market Dominance

The principle of free market as accorded by Adam Smith, Karl Marx and Friedrich Engels advocated for unrestrictive market practices towards the creation of a perfect economy through liberalized trade concepts. This approach was supported by classical economic scholars due to the equity principle in terms of competition. However, this approach has hindered the market entry from other eligible cigarette producers as within its thirty-six years of dominance the company has accrued a high capital base that is nearly impossible to compete. Recent market research has revealed that the company’s market dominance surpasses the collective share of its thirteen top-most rivals and thereby evidencing the impracticability of survival for new manufacturers.

Ethical Principles

Least Harm

This principle charges individuals with the need to act in a manner that leads to the lowest level of harm to other individuals. Marlboro admits that cigarette consumption has less of benefits other than the adverse dangers. According lobby activities against the use of cigarettes would mean that the company would have to shut down. The number of individuals that die from cigarette usage is high, the company has resorted to active crusades against cigarette usage among juveniles, and thus reducing the number of cigarette associated demises (Hyland 2). Although the level of deaths is heightened on yearly basis, a level of reduced harm is accorded.

To combat the problem of juvenile smoking, the company within the period 1990 implemented an awareness curriculum in alignment to the Positive Youth Development program towards according knowledge to the young individuals with regard to dangers hinged on smoking practices. To accord legal enforcement on the problem of having selling instances to juvenile individuals, the company became an affiliate of the Master Settlement Agreement that aims at eradicating cigarette consumption amongst juveniles (Philip Morris USA Inc, 2011). The company has also adopted a restrictive online marketing approach with the initial requirement being a minimal age of twenty-one and the level of interactivity through electronic mails being restricted too. Marlboro has also worked with film industries in ensuring that movies targeting the young individuals are devoid of smoking scenes in a bid to discourage the practice among juveniles. To accord this to the adult populace, health warnings are indicated on the packs yet autonomy is accorded for individuals to accord their independent choices.

Beneficence

This principle is based on upholding good practices to third parties in all instances. This principle is very useful in the clarification of moral dilemmas that comprise of the constructive and unconstructive parts (Velasquez 3). Marlboro admits that their products accord a dependence element to its customers that are hard to break from. The addiction therefore acts as a guarantee for market sustenance as this translates to product loyalty. Therefore, helping individuals overcome the dependence would be beneficial to the user, yet less beneficial to the company as a market share is lost. With the issue of product addiction, Marlboro has accorded a level of responsibility with the given effect. This is accorded to the fact that the company manufactures the product and has enhanced the accessibility factor through the allocation element thereby according a significant manner in which the market has expanded.

This has accorded an adverse effect with the level of health issues and mortality rates bearing an upward trend as the consumption of the same has been noted within the twenty-first century period as a modernization has overcome challenges like women stigmatization. Health researchers have clearly relayed to the populace the escalating nature of health issues accorded to the age cause and this has led to an enhanced number of aged individuals towards relinquishing cigarette usage. With the level of addiction having risen within the consumption period, quitting becomes a considerable challenge. Marlboro has initiated the Philip Morris USA’s Cessation Support initiative in the period 2003 to aid the determined individuals with the project (Philip Morris USA Inc, 2011). This serves as one of the factors that have made Marlboro a preferred cigarette company within the global scale.

Duty

The principle of duty focuses on the ability of an individual to identify their responsibilities within a given setting and perform it towards social wellbeing. Marlboro has evidenced its duty through its environmental duties related to its manufacturing instances (Velasquez 15). Ecological preservation has been strictly observed within the company, in alignment to the international standards. For resource preservation, Marlboro has accorded its futuristic targets before the period 2013 as an energy cutback equaling to 7.5 percent, as this would accord to a proportionate decline for effluents from the tobacco processing plants (Philip Morris USA Inc, 2011). The current water needs will be cutback by fifteen percent for higher resource efficiency. For enhanced preservation, the company is bent on the institution of a recycling program that will employ ninety-five percent of waste materials into useful forms while the remaining five percent is treated as waste materials to be released on land for fertility purposes.

Currently, the company has enforced the Total Land Care and Good Agricultural Practices initiatives in its farming lands located majorly in Malawi. Both programs have worked towards the preservation of land resources by employing healthy farming habits to minimize adverse instances such as soil erosion. Reclamation practices are also practiced through irrigation with the water being used in an effectual manner to avoid wastage. With local employees working within the firm’s agricultural areas and bearing an agricultural lifestyle, the company offers farming workshops to enhance their private output in their domestic lands and this has enhanced communal welfare. Since the period 2002, Marlboro has actively advocated for aestheticism in the natural environment through the Cigarette Litter Prevention Program that has enhanced responsible discarding practices to the smoking populace through various approaches (Philip Morris USA Inc, 2011).

The initial approach involves the relaying of this healthy approach to the consumers through online messages sent to personal addresses, inclusion of the campaign information on the cigarette pack and the Marlboro online site, and the allocation of at least two million litterbins in strategic places within the nation. Marlboro has been directing its wastewater into the James River in the US, and this has altered the level of nitrogen and phosphorous within the water body to excessive levels. In the period 2001, the company acquired an effluent permit from the state authorities that restricts its level of nutrient release within the river and this has noted considerable improvement within the water body (Philip Morris USA Inc, 2011). In the period 2008, the company instituted its recycling plant for wastewater purification and this has led to a downward review on the level of nitrogen by fifty-seven percent whereas the phosphorous component has been reviewed similarly by seventy-five percent.

Justice

As the name suggests, the principle primarily deals with the accordance of integrity within the company’s dealings (Velasquez 23). With Marlboro being a cigarette company, its main input remains as tobacco and this is majorly sourced from the underprivileged nations like Malawi whose main economic stay is agriculture. Such nations tend to have a dualistic form of economy that comprises of the agriculture on one hand and industry on the other. The main challenge however infused in this structure is evidenced by the outmoded forms of technology within the agricultural segment and thus adversely affecting the industries with incompatibility for a synchronized approach (Dreyfuss 47). Output therefore in agriculture is achieved through labor acceleration as this translates into enhanced employment and therefore higher populace wellbeing. A notable challenge in this arrangement is hinged on the need for creation of additional supply to match the increasing demand.

Child labor is therefore a viable option in the agricultural areas as families capitalize on according employment positions to a number of family members for a higher level of inflow in the combined salaries (Philip Morris USA Inc, 2011). Employers are also bent on such immoral practices as this form of labor tends to be highly affordable with regard to the cost structure and this would lead to higher profitability. Marlboro has instituted guidelines that prohibit child labor and the accorded penalties with the contravention of any of the given rules. To enhance the farmers’ welfare in a manner that safeguards the children, the company offers credible payments to its workers with the freedom for unions’ creations towards the wellbeing of the same. To ensure that quality products are acquired from the farms, the cultivators are enrolled in the Tobacco Leaders Program that focuses on according farming instructions for superior outputs.

Criticism for Ethical Principles

David Ricardo presented the comparative advantage doctrine that accorded resource specialization for enhanced returns. Within this relation, underprivileged nations focus on raw materials sold to developed nations as export overheads to the developing nations tend to be lower than domestic manufacturing overheads. This approach has been employed to define the relationship between the producing and manufacturing nations within the world foe economic progression. However, the intrinsic costs attached to the doctrine have accorded significant drawbacks that have accorded unprecedented overheads to the producing countries enhancing the dependence relationship that is proving to be retrogressive for development.

Producing nations are facing ecological deteriorations, resource depletion, dumping, and instances of child employment whose costs primarily originate from the manufacturing nations. This evidences a shared cost that is does not concern the underprivileged nations at all. Additionally, the concept is an inhibitor towards the achievement of long-term development measured by autonomy and the ability to sustain the existing wealth for futuristic developments. This will never be attained in the developing nations unless the contemporary imperialistic nature of the developed nations is addressed.

 

 

 

 

 

Works Cited

Byrnes, Nanette. “Leader of the Packs: Marlboro is still smokin’ as50, thanks to buzz marketing.” Bloomberg Businessweek 31 Oct. 2005. Web. 26 May 2011.

Dreyfuss, Robert. “Big Tobacco Rides Fast.” Mother Jones Magazine Jan-Feb 1999: 44-49, 82-83. Print.

Hafez, N. and Ling P. “How Philip Morris built Marlboro into a global brand for young adults: implications for international tobacco control.” Tobacco Control 14 (2005): 262-271. Print.

Hyland, A., Goldstein R., Brown, A., O’Connor R. and Cummings K. “Happy Birthday Marlboro: the cigarette whose taste outlasts its customers.” Tobacco Control 0 (2006): 1-3. Print.

Philip Morris USA Inc. (2011). Cigarettes. 2011. Web. 26 May 2011. <http://www.philipmorrisusa.com/en/cms/Products/Cigarettes/default.aspx?src=top_nav>

Velasquez, Manuel. Business ethics: concepts & cases. Pearson Prentice Hall, 2006. Print. <http://www.businessweek.com/magazine/content/05_44/b3957107.htm>.

Voltz, Cameo. Beyond the Marlboro Man: A Cross Cultural Perspective on the Marlboro Campaign. 2001. Web. 26 May 2011. <http://www.rochester.edu/College/ANT/faculty/foster/ANT226/Spring01/papers/voltz_beyond.html>.