Ethical Issues in Marketing and Advertising

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ETHICAL ISSUES IN MARKETING AND ADVERTISING

Presented by:Sonakshi Bhalla(49)Deeksha Saxena(14)

Saba Khan(40)Manisha Chand(25)

Himani Garg(18)Pallavi Singh(29)

INTRODUCTION

• Ethics in marketing– focuses on the ensuring ethical practices in the

methods of marketing and selling the products to the consumers.

– Seeks to ensure fairness and transparency in marketing.

WHY ETHICS IN MARKETING

• Unethical marketing practices of businesses.• E.g.:-cigarette companies reducing menthol levels to

hook first- time smokers.

• Focus on increasing revenues at any cost.• Leading to exploitation of consumers.

• Defective products being marketed to them.• Harmful effects of the products like:- health hazards,

other damages.

MEANING OF CONSUMER PROTECTION

• People who buy and use products with the intention of fulfilling their needs are called consumers.

• The idea of consumer protection – is to protect the consumers from the damages

caused to them, – by giving them correct and complete information– In other words, to develop a sense of moral duty &

responsibility on the part of business organizations.

IMPORTANCE OF CONSUMER PROTECTION

• The purpose of a business is to create customers for its products and services.

• They support a business.

• It will result in the well- being of the company.

Where does a manufacturer’s duty to protect consumers begin and where does the consumer’s duty to protect

self- interest end?

Marketing ETHICS

FRAMEWORKS OF ANALYSIS

• Value-oriented framework: e.g. honesty, autonomy, privacy, transparency.

• Stakeholder-oriented framework: e.g. consumers, competitors, society as a whole

• Process-oriented framework: e.g. research, price, promotion, placement

ISSUES IN MARKETING ETHICS

• Sales practices - pressure on sales

personnel to sell

• Violating ways

- deception

- manipulation

• Labeling: means for selling product & also informing the consumer.

- Fair Packaging and Labeling Act passed by congress in 1966

- Nutrition Labeling and Education Act (NLEA) (1990)

• Market research: ethical danger points in marketing research include:

- Invasion of privacy

- Stereotyping

• Market audience: ethical danger points include

- Targeting the vulnerable e.g. children, the elderly

- Excluding potential customers from the market:

Pricing• Pricing: Process of determining what a

company will receive in exchange for its product

• The moral (and legal) issues in pricing fall into two categories:

---The use of prices to engage in anticompetitive behavior that can seriously harm other firms.

---Concerns fairness in pricing , which can be violated when prices are used to deceive or manipulate consumers and when goods are overpriced in ways that consumers cannot easily detect.

Anticompetitive Pricing

The major anticompetitive marketing practices are as follows:• Price Fixing: Is an agreement , either explicit or implicit,

among two or more companies in the same market to sell goods at a set price.

• Resale Price Maintenance: Products are sold on the condition that they be resold at a price fixed by the manufacturer or distributor.

• Price Discrimination: Charging of different prices or offering different terms of sale for goods of the same kind to different buyers.

• Predatory Pricing: Reducing prices to unreasonably low or unprofitable levels in order to drive competitors

out of business.

Unfair PricingPricing can be done in ways that treat consumers unfairly

The main type of such unfair pricing are : -• Unconscionably high price (price gouging)

• Misleading prices, including prices that are difficult to determine and compare.

Distribution The means by which the products are delivered from the

manufacturer to the ultimate consumer

The main ethical issues in distribution are : -• Slotting allowances to gain access to shelf space in stores• Grey markets …that arise from diverting and parallel

importing.

Three illegal abuses of power in distribution are : -• Reciprocal Dealing• Exclusive Dealing• Tying dealing

ADVERTISING

• Non personal communication

• About an organization and its products

• To a target audience

• Through a mass medium

WHAT IS ADVERTISING?

1.Covert Advertising –

Advertising in movies

TYPES OF ADVERTISING

2.Television Advertising –

3.InformericalsAdvertising in commercial ads .

Digital Video Camera 6M Pixel with MP3 / MP4 and Flashlight (Force /auto/off), Video recorder (with sound), Still Photos PC Camera and MP3 player, Digital voice recorder and Power control: Auto power off

4.Celebrity Advertising

5. Media Approach

• To build brand personality

• To increase the sales of the product/service

• To create and maintain a brand image.

• To introduce a new product or service.

Role of Advertising

• Truthfulness in advertising

• To establish itself in the hearts of the customers

Ethics in Advertising

UNETHICAL ISSUES IN ADVERTISING

Deceptive Advertising

• Advertisement creates false belief • Interferes with the ability of people to make rational

consumer choices

• Depends not only on truth or falsity of claims but also on its impact

Deceptive advertising- all of us have seen it..

Deceptive methods

• Hidden fees and surcharges • Rebates • Inflated price comparison • Cost-plus pricing • Buy x, get y free • Introductory offers • Non-sale advertisements • Disclaimers and fine print • Manipulation of standards• Fillers and oversized packaging • Label tampering

Misleading Advertising

• Advertising that does not literally contain falsehoods, but which causes consumers to make false inferences

• Examples– Strongly implied falsehoods

– Critical missing information

Irrational Persuasion

• Making use of subconscious factors that influence human actions

• Play on human desires for security, acceptance, self esteem, etc

Diamond Jwellery ad???

Subliminal Communication

• Interferes with freedom of choice

• Acts without our knowledge and thus without consent

Are we aware that products are being advertised without our consent … ???

Impact of advertising

Social and Cultural Consequences of Advertising

Does Advertising Make People Buy ThingsThey Don’t Need?

Does Advertising Encourage Materialism?

Does Advertising Make People Buy ThingsThey Don’t Need?

Is Advertising JustA Reflection of Society?

Advertising and Stereotyping

Portrayal of Women to Reflect Their Changing

Role in Society

Portrayal ofWomen AsSex Objects

Ethnic Stereotyping/

Representation of Minorities

Portrayal ofWomen As

Objects

Portrayal ofWomen As

ObjectsGender

StereotypingGender

Stereotyping

Role in Society

Portrayal ofThe ElderlyPortrayal ofThe Elderly

Criticisms of Advertising

With Regard to Stereotyping

Criticisms of Advertising

With Regard to Stereotyping

Do Advertisers Control the Media?

Advertising Is the Primary Source of Revenue for Newspapers,

Magazines, and Television and Radio Networks and Stations

Advertisers May Exert Control Over The Media by Biasing Editorial Content, Limiting

Coverage of Certain Issues or Influencing Program Content

Advertisers May Exert Control Over The Media by Biasing Editorial Content, Limiting

Coverage of Certain Issues or Influencing Program Content

The Media’s Dependence on Advertising For Revenue Makes Them Vulnerable To Control by

Advertisers

Social Aspects of Advertising

Advertising Educates Consumers– Pro: Advertising informs– Con: Advertising is superficial and intrusive

• Advertising improves living standards– Pro: Ads lower the costs of products– Con: Ads are wasteful and help only some

Is there “information” in

this ad?

impact of Ads for Children

Advocates Argue That Children:Advocates Argue That Children:

Marketers Argue Children:Marketers Argue Children:

Lack the knowledge and skills to evaluate

advertising claims

Lack the knowledge and skills to evaluate

advertising claims

Cannot differentiatebetween programs and

commercials

Cannot differentiatebetween programs and

commercials

Must learnthrough socialization

Must acquire skills needed to function in

the marketplace

Must acquire skills needed to function in

the marketplace

CONCLUSION

• Advertising is not unethical if its done in the right way

Ethical Issues in Marketing and Advertising

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