Regulatory, Ethical, and “Green” Issues in Marketing Communications

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Regulation of Marketing Regulation of Marketing CommunicationsCommunications

Federal Trade Commission (FTC)

The U.S. government agency that has primary responsibility for regulating matters such as deceptive and unfair business practices and advertising

Regulation of Deceptive AdvertisingRegulation of Deceptive Advertising

FTC will find a business practice

deceptive “if there is a representation,

omission or practice that is likely to

mislead the consumer acting

reasonably in the circumstances, to

the consumer’s detriment.”

Elements of DeceptionElements of Deception

• Misleading

• Reasonable

consumer

• Material

Misleading?Misleading?

• Misleading

• Reasonable

consumer

• Material

Federal RegulationFederal Regulation

• Regulation of deceptive advertising• Regulation of unfair practices• Information regulation• Regulation of product labeling (FDA)• Regulation of prescription drug ads

(FDA)

Information RegulationInformation Regulation

Corrective advertising

Information RegulationInformation Regulation

Corrective advertising

Which firm in 1975 was ordered to spend $10 Mill to correct a misleading campaign?

Information RegulationInformation Regulation

Current Events

Which firm in 2005 was ordered by U.S. District Court to halt and remove a misleading claim?

What was the claim?

Ethical issues in marketing Ethical issues in marketing CommunicationsCommunications

Ethics in our context involves matters

of right and wrong, or moral conduct

pertaining to any aspect of marketing

communications

Enhancing Ethical BehaviorEnhancing Ethical Behavior

Two core values

• Treat customers with respect, concern, and honesty

• Treat the environment as though it were your own property

Ethical issues in marketing Ethical issues in marketing CommunicationsCommunications

See text for ethical issues in:

• Targeting

• Advertising

• Public relations

• Packaging communications

• Sales promotions

• Online marketing communications

Criticisms of AdvertisingCriticisms of Advertising

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Criticism of AdvertisingCriticism of Advertising

An Appeal to

Insecurity

Enhancing Ethical BehaviorEnhancing Ethical Behavior

Act in a way that you would want

others to act toward you

The Golden Rule

The Professional

Ethics

The TV test

Take only actions that would be

viewed as proper by an objective

panel of your professional

colleagues

“Would l feel comfortable

explaining this action on

television to the general public?”

Response to Response to Environmental ProblemsEnvironmental Problems

Cause-Oriented Programs

Packaging response

Green advertising

Point-of-Purchase

Seal-of-Approval programs

Green AdvertisingGreen Advertising

• Relationship between product and environment

• Promote a green lifestyle

• Corporate responsibility

Green AdvertisingGreen Advertising

Green Advertising

Promoting an

Image of

Environmental

Responsibility

Green AdvertisingGreen Advertising

Corporate

Responsibility

Green AdvertisingGreen Advertising

Mercedes-Benz

Leo Burnett Company, Inc.

Response to Response to Environmental ProblemsEnvironmental Problems

Cause-Oriented Programs

Packaging response

Green advertising

Point-of-Purchase

Seal-of-Approval programs

Package ResponsePackage Response

• Recyclable bottles

• Polystyrene to paperboard

• Plastic to cardboard

• Smaller packages

Response to Response to Environmental ProblemsEnvironmental Problems

Cause-Oriented Programs

Packaging response

Green advertising

Point-of-Purchase

Seal-of-Approval programs

Seal-of-Approval ProgramsSeal-of-Approval Programs

• Designed to assist consumers in identifying environmentally friendly products and brands

• Green Seal of Approval

• “Chasing arrows logo”

Response to Response to Environmental ProblemsEnvironmental Problems

Cause-Oriented Programs

Packaging response

Green advertising

Point-of-Purchase

Seal-of-Approval programs

Cause-Oriented ProgramsCause-Oriented Programs

Cause-Oriented

programs

Response to Response to Environmental ProblemsEnvironmental Problems

Cause-Oriented Programs

Packaging response

Green advertising

Point-of-Purchase

Seal-of-Approval programs

Point-of-Purchase ProgramsPoint-of-Purchase Programs

Use the point-of-purchase as a

vehicle for promoting a brand’s

environmental virtues

Guidelines for Green MarketingGuidelines for Green Marketing

• Qualifications and disclosures should be sufficiently clear and prominent to prevent deception

• Claims should make clear whether they apply to the product, the package, or a component of either

• Claims should not overstate an environmental attribute or benefit, either expressly or by implication

• Comparative claims should be presented in a manner that makes the basis for the comparison sufficiently clear to avoid consumer deception

Appropriate Environmental ClaimsAppropriate Environmental Claims

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