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Understanding the Industry’s Environmental, Ethical and Legal
Issues
Chapter 11
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Please Note:
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Opening Vignette
Snow and Associates
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Ethics versus Morals
Ethics are the moral principles of conduct governing the behavior of an individual or a group
Morals are often described in terms of GOOD and BAD
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Environmental Issues 5 Objectives of DMA’s Environmental
Resolution: Offering target and choice to mail recipients Questioning paper suppliers where the paper comes
from Reviewing direct mail and direct marketing pieces,
testing and downsizing when possible Encouraging suppliers to submit alternate solutions
for environmentally preferable packaging Purchasing office papers, packaging and packaging
materials made from recycled materials with post-consumer content
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Environmental Issues DMA “Recycle Please” public education
campaign
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The DMA Green 15: Benchmarking Environmental Progress Business Practices
(Highlights from Figure 11-3)
Paper Procurement & Use 1. Encourage paper suppliers to increase wood purchases from
recognized forest certification programs. 2. Require paper suppliers to commit to implementing sustainable
forestry practices 3. Ask paper suppliers where your paper comes from before
buying it 4. Require paper suppliers to document that they do not produce or
sell paper from illegally harvested or stolen wood. 5. Evaluate the paper you use for marketing pieces, product
packaging and internal consumption to identify opportunities for increased environmental attributes.
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The DMA Green 15 (continued)
List Hygiene & Data Management 6. Comply with DMA Guidelines for list
management 7. Maintain lean mailing lists by using USPS or
commercial equivalent files 8. Apply predictive models and/or Recency-
Frequency-Monetary (RFM) segmentation where appropriate.
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The DMA Green 15 (continued)Mail Design & Production 9. Review your direct mail and printed marketing pieces,
and test downsized pieces when and where appropriate. 10. Test and use production methods that reduce print
order overruns, waste allowances and in-process waste.
Packaging 11. Encourage packaging suppliers to submit alternate
solutions for environmentally preferable packaging, in addition to quoting prices on approved or existing specifications.
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The DMA Green 15 (concluded)
Recycling & Pollution Reduction 12. Purchase office papers, packing and packaging
materials made from recycled materials with post-consumer content where appropriate.
13. Integrate use of electronic communications (email, Web and intranets) for external and internal communications.
14. Ensure that all environmental labeling is clear, honest and complete
15. Participate in DMA’s Recycle Please campaign and/or in another recycling campaign
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DMA Guidelines for Ethical Business Practices
Visit http://www.dmaresponsibility.org/Guidelines/ for updated versions of the guidelines.
The terms of the offer Collection, use and maintenance of marketing data
Advance consent Online marketing
Marketing to children Telephone marketing
Special offers and claims
Fundraising
Sweepstakes Laws, codes and regulations
Fulfillment
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DMA Ethics and Consumer Affairs
This office assists marketers in maintaining consumer and community relationships that are based on fair and ethical principles.
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Services Within the Ethics and Consumer Affairs
Department
Mail Preference Service (MPS)
Telephone Preference Service (TPS)
E-Mail Preference Service (EPS)
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Basic Consumer Rights
1. The Right to Safety2. The Right to Be Informed3. The Right to Selection 4. The Right to Confidentiality5. The Right to Privacy
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Legislative Issues Intellectual Property
Security
Privacy
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Privacy Legislation Since the 19th century, laws about consumer
rights to privacy have been constantly evolving with time and with technology. In recent years privacy has become a major issue for everyone.
The process of DM has attained new success since the explosion of credit cards to the advent of personal computers and cyberspace.
Direct marketers with customer knowledge have an edge over the ones that do not, but there is an ethical question, how much do we need to know?
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Privacy Protection Study Commission
Privacy Act of 1974 -mainly concerned with databases and mailing lists
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Privacy Today - Anti-Spam Laws
CAN-SPAM Act of 2003 - applies to commercial emails and its main provisions are that it: Ban false or misleading header information Prohibits deceptive subject lines Requires that your e-mail give recipients an
opt-out method Requires that commercial e-mail be
identified as an advertisement and include the sender’s physical postal address
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Types of Information General Descriptive Information
Ownership Information
Product Purchase Information
Sensitive/Confidential Information Copyright© 2010 Pearson Education,
Inc. Publishing as Prentice Hall
Consumer Privacy Segments
Privacy Unconcerned
Privacy Fundamentalists
Privacy Pragmatists
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DMA Commitment to Consumer Choice
An expansion of The DMA “Privacy Promise” in 1999.
The DMA Commitment to Consumer Choice provides
public assurance that all members of the DMA will be
following certain specific “practices” to protect consumer privacy.
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
The Four Components of the Commitment to Consumer
Choice
1. Provide customers, donors and prospects with notice of their ability to “opt-out” of information exchanges.
2. Honor customer opt out request not to have their contact information transferred to others for marketing purposes.
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The DMA Commitment to Consumer Choice (con’t.)
3. Accept & maintain consumer requests to be on an in-house suppress file to stop receiving solicitations from your company.
4. Use the DMA Preference Services.
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DMA Online Privacy Principles
Additional privacy principles and guidelines have been established for direct marketers operating on-line sites and state:
Marketers must make their information practices available to consumers in a prominent place on the website
Marketers must furnish consumers with an opportunity to opt out of the disclosure of such information
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
The Platform for Privacy Preferences Initiative (P3P)
Currently under development this initiative would
enable web browsers to read a web site’s privacy
policy automatically and compare it with the user’s
privacy preferences
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Regulatory Authorities of Direct Marketing Federal Trade Commission Federal Communication
Commission United States Postal Service State and Local Regulation Private Organizations
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Federal Communication Commission Established by the Communication
Act of 1934 Charged with regulating interstate
and international communications by radio, television, wire, satellite and cable
Enforces the Telephone Consumer Protection Act (TCPA) & its new DNC legislation
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Federal Trade Commission The FTC is charged with regulating content of
promotional messages used in interstate commerce
FTC Act and the Wheeler-Lea Amendment (public health-foods, drugs, cosmetics and therapeutic devices)
FTC Act prohibits unfair or deceptive advertising There are many rules and guidelines that all
merchandisers must abide by Mail, telephone, fax, and computer order
merchandisersCopyright© 2010 Pearson Education,
Inc. Publishing as Prentice Hall
United States Postal Service USPS has rules
and regulations that impact the promotional activities of direct marketers
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State and Local Regulation Specific organizations that use
direct marketing strategies are closely regulated by state regulation Insurance companies, lending
associations, banks and pharmaceutical companies
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Private Organizations Better Business Bureaus are sponsored
by private businesses and organizations to prevent promotional abuses through common sense regulation
The Direct Marketing Association(DMA) have provided ethical guidelines for use by their members and others desiring to adhere to them
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The Future: Self Regulation Or Legislation Self-regulation is the preferred method
by direct marketers - “CPO’s” Eight step self regulation program for
direct marketers to follow (see text) If direct marketers do not follow the
policies and procedures, legislation will limit their access to public information
Permission Marketing…the future?
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Conclusion Upholding ethical guidelines in
carrying out direct marketing activities is crucial to the present and future success of the direct marketing industry
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Chapter Case
The TCPA
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