The Weak Link: Ethics in delivery channels

As marketers we are all well acquainted with the 4P’s in the Marketing Mix. Place, specifically, involves the delivery and distribution channels in which the product goes from the manufacturer to the customer – bridging the gap between business and consumer. Brand loyalty is heavily determined by the maintenance of relationships and it is through the delivery channel that the trajectory of these relationships are thereby established.

Delivery channels, however, are often rooted with the greatest temptation and opportunity for ‘short-cuts’ in minimizing costs. From ordering, handling, shipping, storage, display, selling to information feedback. BUT with even one weak link in the supply chain, the whole operation is disrupted and reputation erodes faster than it is built.

Some examples of ethical issues that arise within delivery channels include:

1. Spam in direct marketing

Direct marketing refers to selling directly to the customer through mail, telemarketing and email. This is often a cost effective channel as it takes out the need for the middlemen. However, this channel presents the greatest issues as it usually finds itself at the borders of unethical practice when effective selling becomes spam.

2. Grey Market

The grey market is another channel that raises serious ethical issues. It is the use of unauthorized intermediaries that go around authorized channels by buying at significantly lower costs. Products are then resold in high-price markets at lower prices than those charge by authorized channel sellers.

3. Power and responsibility

Like in any context, power imbalance can cause disruptive contractual disputes. Certain stakeholders may then respond in problematic tactics such as:

i. Restrictive supply

ii. Exclusive contracts

iii. Commercial bribery

With tighter monitoring and regulations, indulging in the practices outlined above are not only unethical but unlawful too. In today’s market, consumers now not only want to support businesses that meet ethical minimums but those who stand out with socially reasonable ethos. So what can YOU do?

o Follow the trends of a more environmentally conscious consumer. Sustainable distribution strategies can include suppliers who focus on a reduction of energy use or implement recycled materials. You will benefit from both financial savings and the loyalty of green consumers

o Transparency is key! All parties involved in the delivery channel must be open and accountable. If you are sourcing from international markets, take the time to learn the environment for the workers. Consider disclosing your sources, materials and labour conditions. If you hold yourself to high ethical standards, you will be proud to disclose these.