Regulatory, Ethical, and “Green” Issues in Marketing Communications 3

When Is Regulation Justified? Benefits Consumer choice is improved Product quality tends to improve Reduced prices Costs Enforcement costs Unintended side effects

Regulation of Marketing Communications 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 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 Deception Misleading Reasonable consumer Material

Misleading? Misleading Reasonable consumer Material

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

Information Regulation Corrective advertising A firm that misleads consumers should have to use future advertisements to rectify any deceptive impressions it has created in consumers’ minds

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

Information 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 Communications Ethics in our context involves matters of right and wrong, or moral conduct pertaining to any aspect of marketing communications

Enhancing 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 Communications See text for ethical issues in: Targeting Advertising Public relations Packaging communications Sales promotions Online marketing communications

Criticisms of Advertising Advertising is untruthful and deceptive Advertising is manipulative Advertising is offensive and in bad taste Advertising creates and perpetuates stereotypes People buy things they do not really need Advertising plays upon people’s fears and insecurities

Criticism of Advertising An Appeal to Insecurity

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

Response to Environmental Problems Green advertising Packaging response Seal-of-Approval programs Cause-Oriented Programs Point-of-Purchase

Green Advertising Relationship between product and environment Promote a green lifestyle Corporate responsibility

Green Advertising Green Advertising Promoting an Image of Environmental Responsibility

Green Advertising Corporate Responsibility

Green Advertising Mercedes-Benz Leo Burnett Company, Inc.

Response to Environmental Problems Green advertising Packaging response Seal-of-Approval programs Cause-Oriented Programs Point-of-Purchase

Package Response Recyclable bottles Polystyrene to paperboard Plastic to cardboard Smaller packages

Response to Environmental Problems Green advertising Packaging response Seal-of-Approval programs Cause-Oriented Programs Point-of-Purchase

Seal-of-Approval Programs Designed to assist consumers in identifying environmentally friendly products and brands Green Seal of Approval “Chasing arrows logo”

Response to Environmental Problems Green advertising Packaging response Seal-of-Approval programs Cause-Oriented Programs Point-of-Purchase

Cause-Oriented Programs

Response to Environmental Problems Green advertising Packaging response Seal-of-Approval programs Cause-Oriented Programs Point-of-Purchase

Point-of-Purchase Programs Use the point-of-purchase as a vehicle for promoting a brand’s environmental virtues

Appropriate Environmental Claims Make specific claims Reflect current disposal options Make substantive claims Make supportable claims