Are Marketers Misleading Consumers With the Word ‘Organic’?

Marketers have discovered that consumer demand for organic products is not just a passing trend, but has, in fact, created an entire industry that was estimated in 2012 to be worth $31.5 billion (DiMartino, 2013).  Unethical marketers, witnessing the profitability of products within this growing industry, are using marketing communications to mislead consumers about organic products.  Specifically, marketers have found that merely using the word or a version of the word ‘organic’ on packaging can create brand distinction in crowded categories and give cause for charging a premium.

The goal of this article will be to show that marketers at DermOrganic are using the term ‘organic’ unethically.  To accomplish this, an analysis of DermOrganic’s brand marketing strategies will be analyzed and placed into a historical context.  Additionally, the ethics of using the ‘organic’ term will be evaluated by using the suggested factors for judging ethical behavior as outlined in “Ethical Marketing” (Bowie, Laczniak, & Murphy, 2005).

DermOrganic is Not Organic

Although DermOrganic’s brand name contains the word ‘organic,’ the line of hair and skin care products are not certified as organic.  In fact, on DermOrganic’s website, it advertises its main product, a daily conditioning shampoo, and lists all of the product’s ingredients, none of which are organic (DermOrganic, 2013).

DermOrganic's ingredient list for its shampoo shows that it is not an organic product. Socially Minded Marketing | Anna Seacat

DermOrganic’s ingredient list for its shampoo shows that it is not an organic product. Socially Minded Marketing | Anna Seacat

Stephen Mastey, president and founder of DermOrganic admitted that ‘organic’ is a “legal term that refers, in part, to agricultural products grown without pesticides and handled, processed and sold in a special manner,” but justified his brand management strategies by explaining that “the regulations defining the use of the word ‘organic’ changed sometime after the formation of our company and the use of our trademark” (Mastey, 2013).

Heather Locklear was Not Promoting Organic

Mastey and his brand, DermOrganic, are certainly not the first to incorporate the term ‘organic’ in a product name, despite the lack of organic ingredients within the product.  Faberge Organics was one of the first brands in the personal care category to utilize ‘organic’ in its name, but the product did not contain any organic ingredients.  Faberge Organics was introduced on major media outlets in 1981. The manufacturer acquired Heather Locklear as an endorser of the product and used brand management strategies to position Faberge Organics as a “natural” product that contained “pure wheat germ oil and honey” (Ozzeozborn, 2007).

Consumers will Pay a Premium for Organic

Although Faberge is no longer being manufactured, it has developed somewhat of a cult following.  Bottles of the shampoo and conditioner are currently being sold on Ebay for upwards of $75.00.  Clearly, a combination of Locklear and the reference to being organic and natural has proven to be a memorable brand that vintage collectors will pay a premium for.  Nevertheless, the usage of the term ‘organic’ back in 1981 clearly did not have the power, on its own, to cause consumers to pay a premium for a product.

faberge organics

Socially Minded Marketing | @AnnaSeacat Faberge Organics being sold on Ebay.

This is in strike contrast to the power of brands associated with ‘organic’ today.  Recent research discovered that nearly half of all consumers want organic products and are willing to pay a premium for them (D’Alessandro & Dugal, 2012, p. 16).  Consequently, it is easy to understand why modern marketers see the appeal in incorporating indirect references to or direct utilization of the term ‘organic’ in marketing communications.

Marketers Should Evaluate Ethics in Product Management

IMG_4161

SociallyMindedMarketing.com | Anna Seacat

Despite the demand for organic products and the appeal to incorporate ‘organic’ in brand names and marketing communications, as DermOrganic has, this marketing tactic could be perceived as unethical if it has the potential to mislead consumers.  Consequently, a formally educated, professional marketer or product manager for DermOrganic would have the obligation to evaluate the ethics involved in the brand’s name and determine if its position should be altered.  A guideline to conduct such an evaluation was offered in “Ethical Marketing” (Bowie, Laczniak, & Murphy 2005, p. 109) and will be employed below as a tool to show that DermOrganic’s brand position should, indeed, be altered.

Intent/Foreseeability

While DermOrganic’s president and founder stated that his “products are not labeled ‘organic’ or intended to be represented as ‘organic’ nor sold as ‘organic,’” (Mastey, 2013, para. 3), the authors of “Ethical Marketing” (2005) proposed that consumers could conceivably  perceive its brand name as being descriptive of the product’s contents (Bowie, Laczniak, & Murphy, 2005, p. 103-104).  In other words, “irrespective of the purpose…if a prudent decision maker can predict a substantial portion of the target market may be mislead, intent is established” (p. 109).  Therefore, this legal interpretation of intent could cause a marketer at DermOrganic to not only negatively judge the ethics behind the founder’s intent with using ‘organic’ in the brand name, but also assess that a large number of consumers will wrongly interpret the use of the ‘organic’ terminology.

@Anna Seacat Ethical Marketing

@Anna Seacat Ethical Marketing

Means

Beyond intent, the authors of “Ethical Marketing” also recommended that the “means or method used to implement a particular marketing program must also be ethically analyzed” (p. 109).  In terms of DermOrganic, the brand has circumvented a possible legal difficulty by only using the term ‘organic’ in the brand’s name and not within advertising copy.  Therefore, DermOrganic is claiming that this brand management tactic complies with the law (Mastey, 2013). However, it is clear that such methods are being conducted in a grey area of the law and most certainly raise serious ethical questions.

Consequences 

Therefore, it is important to consider the consumer’s desires and motivations when he or she is shopping.  A brand’s position should be altered if it appeals to those desires, but cannot sufficiently fulfill them through the purchased product.

In the final section of how to evaluate ethics in product management, the authors of “Ethical Marketing” suggested that the concept of the consumer as a shopper should be considered when judging the brand’s position.  It was proposed that a negative consequence will occur if a product that is actually purchased is different than the one desired by the consumer during the shopping experience (p. 109).  In the case of DermOrganic, the incorporation of ‘organic’ in the brand name could cause consumers to purchase the product, solely on the belief that they were buying an organic product.  A negative consumer-consequence would undoubtedly be reflected in a consumer discovering after the purchase was made that DermOrganic’s name did not accurately reflect its contents. Therefore, it is important to consider the consumer’s desires and motivations when he or she is shopping.  A brand’s position should be altered if it appeals to those desires, but cannot sufficiently fulfill them through the purchased product.

Summary 

The utilization and manipulation of the term ‘organic’ in DermOrganic’s brand name was analyzed as an unethical brand management strategy.  It was shown that, in a historical context, branding associated with organic terminology today is a powerful tactic. Last, factors used to judge ethics of marketing decisions were used collectively as a tool to determine that DermOrganic should alter its current brand position.

References

Bowie, N. E., Klein, T. A., Laczniak, G. R., & Murphy, P. E.  (2005). Ethical Marketing. Upper Saddle River, NJ: Pearson Prentice Hall.

D’Allessandro, P. & Dugal, L. F. (2012). Experience Radar 2013: Lessons from the US Grocery industry. PwC. Retrieved from http://www.pwc.com/en_US/us/advisory/customer-impact/assets/pwc-experience-radar-us-grocery-industry.pdf

DermOrganic. (2013). Daily Conditioning Shampoo. Retrieved on October 7, 2013 from http://www.dermorganic.com/shop/index.php?main_page=product_info&cPath=1&products_id=1

DiMartino, C. (2013). 2013 OTA Industry Survey Data Show Fresh Organic Produce Continues to Lead the Category. The Produce News. Retrieved from http://www.producenews.com/index.php/news-dep-menu/test-featured/11151-2013-ota-industry-survey-data-show-fresh-organic-produce-continues-to-lead-the-category

Mastey, S. (2013). Organic Explained. DermOrganic official webpage. Retrieved on October 7, 2013 from http://www.dermorganic.com/shop/index.php?main_page=page&id=10

Ozzeozborn. (2007). VHS – Heather Locklear. YouTube video. Retrieved from http://www.youtube.com/watch?v=oCjmDI4AJlk

2 comments

  1. Jared Nesbit · · Reply

    Anna,
    You have created a great argument on why DermOrganic can mislead consumers into thinking the product is indeed organic. My question to you is this, as you pointed out in your post the founder was defending his strategies by say, “the regulations defining the use of the word ‘organic’ changed sometime after the formation of our company and the use of our trademark” Do you feel companies should change names if definition of words change?
    I am asking mostly because I am a big sports fan and some team nicknames having been under fire because society feels we need to be more politically correct. The names under fire are those of both professional and colleges with names evolving for Native American history. For example:
    • Washington Redskins (Professional Football)
    • Florida State Seminoles (College Sports)
    • Utah Utes (College Sports)
    There are a lot more than the three listed above. So my question to is, should the schools have to change their mascots to fit the social pressures of those seeking to be politically correct? One more note, I do think the Redskins can be taken offensively and they should change. On the other hand Florida State and Utah University both have letters from the respected Indian tribes involved giving permission to use the tribe name as a nickname.

    1. Jared,

      You have drawn a compelling tangent between my topic and the names of sports team, which make references to Native Americans. I agree that these two issues are connected along the same ethical lines.

      Instead of approaching these questions from the perspective of the current societies’ norms and values, I would propose that the sports teams and DermOrganic evaluate this ethical decision with a virtue-based theory. For instance, instead of being preoccupied with the notion that the football franchise’s name is offending Native Americans and their fans (primary stakeholders) or a number of indirect and secondary stakeholders, perhaps it would be more effective for the organization to ask, “What kind of organization should we be?” (Bowie, Laczniak, & Murphy , 2005, p. 31).

      In other words, the Washington Redskins should decide what type of organization it aspires to be and then make strategic business decisions that embody that ideal. In the case of DermOrganic, that organization needs to decide whether or not its vision is to operate within the organic and natural industry. If the answer to that is ‘yes,’ it would do well to recognize that consumers, as well as activists and watchdog groups, hold manufacturers within that industry to a high ethical standard. Specifically, this standard requires painstaking transparency and responsible marketing communications.

      On a personal note, my undergraduate degree is in Communication and Culture. Therefore, I would be amiss if I did not take a stand against the term “Redskin.” It has long been used as a derogatory racial slur that reduces an entire culture of people down to the perceived color of their skin. I say “perceived,” because Native Americans’ skin is only seen as “red” when compared to “white” skin, which defines the Native American as the “other” or the “non-white.” In other words, “white” is the standard at which all other skin colors are compared against. This scenario puts those with “non-white” skin at a significant disadvantage when considering the social ladder and the standard of beauty. —-Probably more than you wanted in a response to your comment. 😉

      Thank you for your time and contribution to this discussion.

      @AnnaSeacat

      References

      Bowie, N. E., Klein, T. A., Laczniak, G. R., & Murphy, P. E. (2005). Ethical Marketing. Upper Saddle River, NJ: Pearson Prentice Hall.

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Ethan McCarty

Digital strategy | Social business | People-centric biznology

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