Ethical Issues in Marketing Communications Ethics in Marketing communications Involves matters of right and wrong, or moral, conduct pertaining to any aspect of marketing communications Honesty, honor, virtue, integrity Ethical Conduct Lack of consensus about what it is Ethical lapses and moral indiscretions occur under pressures of trying to meet business goals and attempting to satisfy the demands of the financial community

Sources of Ethical Issues Ethical Issues in Marketing Activities and Communications Advertising Targeting Marcom Public Relations Internet Marketing Sales Promotions Packaging Communications 2

The Ethics of Targeting Ethical Debate Is it ethical to target products and communications efforts to segments that are vulnerable or put at risk by these actions? Is Targeting Unethical or Just Good Marketing? When does a good targeting strategy become a method of unfair (unethical) advantage?

Is Targeting Unethical or Just Good Marketing? Positive Targeting benefits rather than harms consumers—providing them with products best suited to their particular needs and wants Negative Targeting is not concerned with fulfilling consumers’ needs and wants, but rather with exploiting consumer vulnerabilities

The Ethics of Targeting Targeting Food and Beverage Products Targeting Tobacco and Alcohol Products Targeting Miscellaneous Products Ethical Issues in Targeting Children and Teens 5

Targeting to Children and Teens Negative Targeting Outcomes Products targeted to kids are unnecessary and the communications involved are exploitative Posters, book covers, free magazines, advertising, and other so-called learning tools that are ads for products Movies with tie-in merchandise programs Targeting adult products (e.g., beer) to pre-adults Using unacceptable cartoon-like images (e.g., Joe Camel) Promoting adult-oriented entertainment (e.g., violent films, video games, and music products) to children and teens Marketing food products (e.g., high-fat, high-calorie snacks) that contribute to childhood obesity

Targeting to Economically Disadvantaged Consumers Billboards advertising tobacco and alcohol disproportionately appear in inner-city areas Examples: R.J. Reynolds attempt to market new brands cigarettes to African-Americans and downscale young women Heileman Brewing Company’s targeting of “Power Master” high-alcohol malt liquor to inner-city neighborhoods

Targeting Tobacco Products

Ethical Issues in Advertising Advertising Creates and Perpetuates Stereotypes Advertising Persuades People to Buy Things They Do Not Need Advertising Plays on People’s Fears and Insecurities Criticisms of Advertising Advertising Is Untruthful and Deceptive Advertising Is Manipulative Advertising Is Offensive and in Bad Taste

American Association of Advertising Agencies’ Code of Ethical Standards Ethical Code and Standards of Practice Set lofty goals for the advertising industry and provides a framework for evaluating whether or not ads meet the high standards specified

Ethical Issues in Public Relations Publicity Involves disseminating positive information about a firm and its products and handling negative publicity Like advertising—the same ethical issues apply Negative Publicity When firms confess to product shortcomings and acknowledge problems or, instead, attempt to cover up the problems

Ethical Issues in Packaging and Branding Label Information Packaging Safety Packaging Graphics Environmental Implications Packaging and Branding Ethical Issues Brand Naming and Brand Name Theft 12

Ethical Issues in Sales Promotions Manufacturer promotions directed at wholesalers and retailers and to consumers Slotting Allowances Manufacturers have to pay retailers to handle a new product—Is this a form of bribery and is it unethical? Consumer-Oriented Sales Promotions A promoter offers a reward for a consumer’s behavior that not delivered or lies about the odds of winning Consumers who make false claims for coupon redemptions and refunds

Ethical Issues in Online Marketing Consumer Privacy Issues Consumer’s privacy rights to personal information and shopping behaviors collected by online marketers Security of personal information collected online Selling of personal information to other parties without consent of consumer Bogus positive product evaluations and blogs deceptively extolling products

Fostering Ethical Marketing Communications The Golden Rule Act in a way that you would want others to act toward you The Professional Ethics Test Take only actions that would be viewed as proper by an objective panel of your professional colleagues The TV test Would l feel comfortable explaining this action on television to the general public?”

Regulation of Marketing Communications Justifications for Regulation When consumer decisions are based on false or limited information When benefits realized exceed the costs Benefits of Regulation Improved consumer choices Improved product quality Reduction in prices Costs Regulatory compliance Enforcement costs Unintended side effects

Regulation of Unfair Practices Unfair Advertising Acts or practices that cause or are likely to cause substantial injury to consumers, which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or competition (emphasis added) FTC’s Criteria for Unfair Business Acts Act offends public policy established by statutes Act is immoral, unethical, oppressive, or unscrupulous Act causes substantial injury to consumers, competitors, or other businesses

Environmental Marketing Communications Legitimate Green Marketing Is a firm’s introduction of environmentally oriented products and its undertaking of marcom programs to promote them Seeks to accomplish two objectives: Improve environmental quality Satisfy customers

Green Marketing Initiatives Green Marketing Communications Advertisements that promote green products Environmentally friendly packaging Seal-of-approval programs promoting green products Cause- and event-oriented marcom efforts that support environmental consciousness Point-of-purchase display materials that are environmentally efficacious Direct marketing programs that reduce resource usage by developing more efficient solicitations Outdoor advertising efforts that reduce the usage of environmentally damaging materials.