What makes ethnic marketing unethical? A literature review.

Daniel Salazar, 2020

Introduction

The Civil Rights movement in the United States in the decade of the 1950s and 60s achieved new
opportunities for minorities, giving them visibility and participation in several new aspects of social
life. For the first time ethnic minorities were considered in the formulation of marketing strategies,
frequently at the risk of alienating the majoritarian groups (Cui, 2015). Over the following decades,
all western industrialized societies experienced a steady flow of immigrant populations together
with an increase of their purchasing power (Jamal, 2003) and (Peñalosa, 2007). This made minority
groups relevant for marketers. A growing number of studies aiming to understand and formulate
better segmentation and targeting strategies were followed by an increasing inclusion of ethnic
minorities in advertisement and marketing campaigns (Cui, 2015).

Initially, marketing research focused on describing the differences in consumption patterns between
white and black consumers (Sturdivant, 1973). It was until the 1980’s that studies started including
other minorities in their scope and focused on a more fundamental understanding of how culture,
ethnicity, and identity are drivers of consumption patterns (Holland & Gentry, 1999).

A greater inclusion of ethnic minorities in marketing strategies brought along ethical concerns,
mainly related to the way these minorities are segmented and targeted. Real life concerns, like
defective and harmful products specifically targeted to vulnerable black minorities in the US (Smith
& Cooper-Martin, 1997), among others, triggered public controversy and made it imperative to
study the ethical implications of marketing strategies pertaining to ethnic minorities.

Several authors point out that ethnic segmentation is inherently discriminatory, as it will always
imply the inclusion or exclusion of an ethnic group (Pires, 2017). That is, that the ethical implications
of ethnic segmentation are prone to questionings of stereotypes and fairness. Firstly, because the
segmentation depends on salient characteristics of a group, and secondly because it implies a
decision on the inclusion or exclusion of a particular consumer group (Cui, 2015).

This literature review aims to synthetize the most recent academic findings in this field in order to
answer what makes ethnic marketing unethical. This answer should serve as a high level guide for
managers involved in the creation of ethnic marketing strategies. The search was based solely on
Google Scholar using the following keywords: “ethics” “ethnic marketing” “alienation” “advertising”
“targeting”.

Key definitions

Ethnic marketing means “to treat ethnic consumers as distinctive markets separate from the macro
market and to reach them using differentiated marketing mix strategies” (Cui, 1998)

Consumer vulnerability is “a disadvantage in exchange relationships where that disadvantage is

attributable to characteristics that are largely not controllable by them at the time of the
transaction” (Andreasen & Manning, 1990).
Consumer empowerment refers to “the process of providing consumers, including those more
vulnerable, with the best possible tools to take effective control of their consumption decisions”
(Brennan & Ritters, 2004).

Accommodation refers to the efforts in the side of the communicator to make themselves more
similar to the target audience to improve communication (Holland & Gentry, 1999).

Review

“What is good?” is a question that pertains to philosophy and has no single answer. Cultures
influence what a society considers ethical and unethical because different cultures in different
countries have distinctive codes of what is acceptable and what is not (Segal & Giacobbe as cited in
Pires 2002). Therefore, in the context of ethnic marketing, it is assumed that countries with a
diversity of dissimilar ethnic groups will experience cultural diversity and therefore different ethical
standards will coexist within the same market. There is no unambiguous answer to what is good in
ethnic marketing.

One common approach to answer this question is through codes of conduct. Although, ethical
relativity renders codes of conduct insufficient to guarantee ethical conduct (Kotler, Armstrong, &
Brown, 1998). Even the preamble of the American Marketing Association’s Code of Conduct states
that “values represent the collective conception of what communities find desirable, important and
morally proper” (AMA, 2020), but makes no reference to the differences between ethical values of
dissimilar ethnic groups. Codes of conduct are consequently written in broad terms, so they can
host a diversity of believes, but this broadness makes them rely on good judgement (Pires & Stanton,
2015). Which, if it was so clear to exert would undermine the very need for a code in the first place.

A second “conceptual challenge” is to discern poor marketing practices from social corporate
responsibility (Pires, 2002). Even though the main function of a company is to provide services to
their customers to satisfy their needs (Pires, 2002), ethnic marketing has the potential to achieve
multicultural, collective and democratic ideas through innovative ways of market and consumer
culture (Peñaloza, 2015). Consequently, companies need to balance between satisfying their own
goals, satisfying customer needs and advocating for what they consider good for society as a whole
(Pires, 2002).

In order to better understand the ethical fundamentals of ethnic marketing, academic literature
starts with the study the common issues that have historically arisen from targeting ethnic groups.
The first consolidation of such issues is compiled by Blanton (1993) listing four key problems
associated with ethnic marketing as follows: First, achieving a clear segmentation of ethnical
minority groups is not always possible. The use of both simplistic or sophisticated identifiers for a
population can be misleading and inaccurate; Second, as differences in ethical standards can be
differentiated between countries, ethical perceptions can also be different within different ethnical
groups within a country; Third, the perception of adequate ethics of one ethnic group validates the
ethnic perception of another minority ethnic group; And lastly, the difficulty to create a positive
synergy between competing ethic behaviors of two different ethnic minorities. In particular, when
a marketing strategy is rolled out in a context mutually shared by two or more ethnic minorities.
(Blanton, 1993).
On a further study, Cui (2015) consolidates the latest studies available and identifies 7 typical ethical
pitfalls that segmentation and targeting fall into. Namely:

- Ethnocentric bias: When the majority group’s standards and values are wrongly assumed to be
adopted by the ethnic minorities.
- Inadvertent stereotypes: Falsely assuming and generalizing attributes of a portion of the
minority to the whole minority.
- Biology and genetics: Targeting based on particular biological traits of the group. E.g. race,
gender. Note that a communication based on biological characteristics is not per se unethical.
Hair products specifically designed for curly hair (a biological segmentation) can be ethically
marketed to satisfy consumer’s needs.
- Nature of the product: Targeting inferior, harmful, or malign products to a specific ethnic group.
- Redlining: Targeting based on demographic data, resulting in underserving ethnic minorities of
the marketed product or service. Historically, redlining in the US has been associated with racial
divisions in cities.
- The impact of marketing: Assuming that an ethnic group has lesser response to a certain type
of marketing activity because historically their response has been lower to these type of
activities. If no ethnic specific activity has been developed before, its likely this is a bias.
- Issues of methodology: Studying ethnic groups preferences and attitudes with a weak
methodologies and measurements, leading to false conclusions about the group.

Note that the last two bullets refer to technical concerns in measurement or methodology but, that
have a negative impact from an ethical perspective. These issues could be mitigated, if not
eliminated with sounder methodological rigor (Cui, 2015).

On a further paper, Pires and Stanton (2015) explored how previous concerns listed by Ciu (2015)
would be applicable to the online sphere. As multicultural countries have experienced steady
growth in information technologies penetration, marketing communications have tilted almost
entirely to digital (social media, apps, websites, etc.) (OECD, 2012). Customers have increasingly
access to more information and tools to make better informed decisions. Therefore, more
empowered about the products they consume. Despite these improvements, Pires and Stanton
(2015) summarize a series of studies in the United States confirming tangible differences in skills,
opportunity and comfort between Anglo-Americans and Hispano-Americans (Hacker & Steiner,
2002); differences in search purposes between “Asian, White, Hispanic and Blacks” groups (Muller,
2008); differences between native and non-native speakers in the ability to understand and evaluate
between different intangible products online (Pires & Stanton, 2000); and more palpably, how
different online and offline cultural adaptation of communications remove differences between
ethnic groups access to health services (Nierkens, et al, 2013).

A second group of studies in the digital context, Pires and Stanton (2015) explore the importance of
cultural congruence to improve user's attitudes towards usefulness and ease of use (Vyncke &
Brengman, 2010). This shows that if those cultural customizations are not available for different
ethnical minorities, these groups will experience lesser ICT use and therefore lesser customer
empowerment. Also, these studies presume that ethnic consumer’s ability to access, search and
comprehend marketing communications are the driver forces behind consumer empowerment
through information technologies (Pires & Stanton, 2015). Which means that these variables
determine the degree of consumer vulnerability of the particular group.

Finally, two studies come to attention as they attempt to model ethnic consumer response. First,
Smith & Cooper-Martin (1997) propose a model for ethical risk evaluation of targeting strategies.
Their model shows that the risk of controversy is the result of the level of harmfulness of the product
and the level of vulnerability of the targeted group. (Smith & Cooper-Martin, 1997). Although the
model is developed in the context of harmful products, the approach continues to be valid for the
ethnic concerns identified by Cui (2015) and those specific to the digital sphere, identified by Pires
and Stanton (2015) adapting the harmfulness variable to how beneficial/detrimental is the product
to the ethnic minorities in terms of empowerment, stereotyping and redlining, based on the
categories identified by Cui (2015).

The second study aims to understand and predict the ethnic consumer response to an intercultural
accommodation attempt (Holland & Gentry, 1999). Holland and Gentry found that when an ethnic
communication is recognized by an ethnic consumer, the first reaction is to evaluate the motives of
the marketer (why?) and how trustworthy the source of the message is (who?), in relation to the
historical relationship of the source with the ethnicity (Holland & Gentry, 1999).

Conclusion

The literature review reveals that multicultural societies cannot formulate unambiguous ethic rules
that will satisfy all its members. This due to the ever-changing nature of values and the constant
changes in ethnic composition of multicultural countries. Codes of conduct have proven to be
insufficient as they are subject to good interpretation and judgement, which, if existed, wouldn’t
require an ethical concern in the first place.

Researchers acknowledge 5 types of ethical concerns in ethnic advertising. Additionally, failure to

achieve methodological soundness when formulating marketing strategies may also result in ethical
failure. Ethical compliance or failure of a marketing strategy might not be aligned to the financial
goal pursued by the firms. Marketers are inevitably subjected to the ethical challenge of being
socially responsible while executing successful business practices that increase revenue. Simply
avoiding the public rage should not be the main standard that is set for ethical marketing. Even
when no controversy is generated, the importance of taking the wider social good into consideration
is paramount.

It is not clear how the previous types of ethical failure apply to the digital domain. Although
preliminary research introduces the of concepts of vulnerability and empowerment in relation to
ethnic groups in the digital sphere. Further research is required in this sphere as dissimilar digital
gaps by geography, different levels of customization of the digital space by ethnic group, and the
intrinsic peculiarities by product; haven’t been explored and the fundamentals of online interaction
with ethnic groups remains inconclusive.

One last limitation observed in the studies examined is that a great portion of them were produced
in the US and the UK. This goes in line with their level of multiculturalism but their conclusions may
not be accurate to extrapolate to other mayor European countries that are also increasing their
ethnic populations at a rapid pace.
One elementary conclusion that can be derived from Peñalosa’s work is that if “ethnic marketing
implies the targeting of ethnic groups from individuals outside of the group” (Peñalosa, 2015). Thus,
adding more diversity into marketing teams should also reduce biases, false assumptions and all
overall the risk of ethical failure.

Literature

AMA, A. M. (2020). www.ama.org. Obtenido de https://www.ama.org/codes-of-conduct/

Andreasen, A., & Manning, J. (1990). The dissatisfaction and complaining behavior of vulnerable
consumers. Journal of Consumer Satisfaction, 3, 12-20.

Bauer, R., Cunningham, S., & Wortzel, L. (1965). The Marketing Dilemma of Negroes. Journal of
Marketing 29, 1-6.

Blanton, K. (1993). Pitfalls in the ethnic marketing mindfield. Boston Globe, 75-77.

Brennan, C., & Ritters, K. (2004). Consumer education in the UK: New developments in policy,
strategy. International Journal of Consumer Studies, 28(2), 97-107.

Cui, G. (1998). Ethical Issues in Ethnic Segmentation and Target Marketing. Proceedings, 1998
Multicultural Marketing Conference (Academy of Marketing Science, Montreal), 87-91.

Cui, G. (2015). Ethical issues in ethnic segmentation and target marketing. Proceedings of the 1998
Multicultural Marketing Conference. Developments in Marketing Science: Proceedings of the
Academy of Marketing Science.

Hacker, K., & Steiner, R. (2002). The digital divide for Hispanic Americans. Howard Journal of
Communications, 267-83.

Holland, J., & Gentry, J. (1999). Ethnic Consumer Reaction to Targeted Marketing: A Theory of
Intercultural Accommodation. Journal of Advertising, 28(1), 65-77. Obtenido de
www.jstor.org/stable/4189101

Jamal, A. (2003). Marketing in a multicultural world: The interplay of marketing, ethnicity and
consumption. European Journal of Marketing, 37(11/12), 1599–620.

Kotler, P., Armstrong, G., & Brown, L. (1998). Marketing. Sydney: Prentice Hall.

Muller, B. (2008). Communicating With the Multicultural Consumer. New York: Peter Lang.

Nierkens, V., Hartman, M. A., Nicolaou, M., Vissenberg, C., Beune, E. J., Hosper, K., . . . Stronks, A.
(2013). Effectiveness of cultural adaptations of interventions aimed at smoking cessation, diet,
and/or physical activity in ethnic minorities: A systematic review. PloS one, 8(10). Obtenido de
Available from: http://www.plosone.org

OECD. (2012). The impact of internet in OECD countries. OECD Digital Economy papers. Obtenido
de http://dx.doi.org/10.1787/migr_outlook-2013-en
Peñalosa, L. (2007). Research with ethnic communities. The Handbook of Qualitative Research in
Marketing, 547-59.

Pires, G. (2002). Ethnic Marketing Ethics. Journal of Business Ethics, 1-6.

Pires, G., & Stanton, J. (2000). Marketing services to ethnic consumers in culturally diverse markets:
Issues and Implications. Journal of Services Marketing, 14, 17-18.

Pires, G., & Stanton, J. (2015). Revisiting ethnic marketing ethics. En A. Jamal, L. Peñaloza, & M.
Laroche, The Routledge Companion for Ethnic Marketing (págs. 326-345). Routledge.

Segal, M., & Giacobbe, R. (1995). An empirical investigation of ethical issues in marketing research:
Asian perspectives. Research conference on Ethics and Social Responsibility in Marketing (Hofstra
University), 110-116.

Smith, N., & Cooper-Martin, E. (1997). Ethics and target marketing: The role of product harm and
consumer vulnerability. The journal of marketing, 61, 1-20.

Sturdivant, F. (1973). Subculture theory: Poverty, Minorities and Marketing. En W. Scott, & S.
Thomas, Consumer Behavior: Theoretical sources (págs. 469-521). New Jersey: Prentice Hall.

Vyncke, F., & Brengman, M. (2010). Are culturally congruent websites more effective? An overview
of empirical evidence. Journal of Electronic Commerce Research, 11(1), 14-29.