Marketing Ethics and Social Responsibility

Name: Marketing Ethics and Social Responsibility
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Description: Marketing Ethics and Social Responsibility

Marketing Ethics and Social Responsibility
CHAPTER SIXTEEN Marketing Ethics and Social Responsibility

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Learning Objectives Overall: To Understand the Meaning of Marketing Ethics and Social Responsibility. To Learn About Potential Unethical Marketing Practices Involving Targeting Especially Vulnerable or Unaware Consumers. To Learn How Marketers Can Ambush Consumers with Unexpected Ads, Tinker with Their Perceptions, and Mislead Them. To Understand How Marketers Can Advance Society’s Interests via Such Practices as Advocating Social Benefits. Here is an outline of the topics for Chapter Sixteen. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Why Is the Sponsor of This Ad Criticizing McDonald’s, and What Business Concept Did McDonald’s Ignore by Using Trans Fats? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Societal Marketing Concept
“Marketers should endeavor to satisfy the needs and wants of their target markets in ways that preserve and enhance the well-being of consumers and society as a whole, while fulfilling the objectives of the organization” The marketing concept has been rewritten to the societal marketing concept which includes the welfare of consumers and the society. Many marketers, including McDonald’s, have been criticized by consumer groups for their marketing practices. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5 Chapter Sixteen Slide

Exploitive Targeting Marketing to Children Overaggressive Promotion Selling Pharmaceuticals directly to consumers The perils of precision targeting These are four topics worth further exploration under the topic of exploitive targeting or potentially unethical marketing practices to vulnerable consumer groups. This web link brings you to the Children's Advertising Review Unit (CARU), which is discussed in the next slide. Review the site to get a better understanding of the guidelines in marketing to children. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Marketing to Children Guidelines by Children’s Advertising Review Unit (CARU) Guidelines include: No misleading claims about product’s performance or benefits Must not exploit children’s imagination Can not create unrealistic expectations Products must be shown in safe situation No encouragement of inappropriate behavior Advertising to children is of particular concern because kids tend to imitate behavior and are not old enough to correctly process and evaluate the information they see. These guidelines are constantly under review and there has been a particular concern with advertising of food to children and increases in childhood obesity. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 7 Chapter Sixteen Slide

Annual Exposure by Category and Program Type - Figure 16.2
This figure shows the extensive targeting to kids across 12 product categories, including 8 types of food. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Discussion Questions Think back to when you were a kid. What products seemed more appealing in their ad than in actuality. Why? As a student: What marketers try to sell you products that might not be in your best interest? What marketing tactics do they use? This might be the first time you have reflected back to when you were a child and analyzed the marketing tactics and approaches used by food and toy companies. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 9 Chapter Sixteen Slide

Overaggressive Promotion
Recession due in part to Americans’ rising credit and easy credit to risky groups Credit became too easy for people to get – college students, homeowners, low-income groups were all high risk and have defaulted on much of their credit and loans, helping to cause the current recession. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Selling Pharmaceuticals Directly to Consumers
Began in 1997 Television, print, and the Internet Congress and the Food and Drug Administration (FDA) are very concerned with the increase in pharmaceutical use. This increase can be partly explained by pharmaceutical companies advertising directly to consumers. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 11 Chapter Sixteen Slide

The Perils Of Precision Targeting
Narrowcasting Directed messages to small audiences Data providers support the marketers with information GPS Cell phones and cars Gives marketers your location As marketers acquire more information, there becomes an increased concern with privacy. On the one hand, consumers can receive better offers from marketers because they are more targeted but on the other hand, they are providing information unknowingly to marketers. This web link brings you to Google analytics. Explore this sight to see the potential of web analytics. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Data Collection by Web Companies Figure 16.3 – Part A
This figure shows several large websites and the information they have collected on their consumers. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Data Collection by Web Companies Figure 16.3 – Part B
This is a continuation of the previous slide. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Manipulating Consumers
Forced exposure to advertising Tinkering with consumers’ perceptions Covert marketing Socially undesirable representations False or misleading advertising As we learned in this class, marketers understand how consumers perceive and learn. This can be used to the advantage of marketers but sometimes not always with the best intentions. Here are five topics that will be explored which relate to manipulating consumers. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Forced Exposure To Advertising
Product placement Advertorials Infomercials Consumers can be unaware that they are even watching a paid advertisement. This is often the case in product placement when a product is featured in a television show or movie. Advertorials are found in print media, whereas infomercials are commonly found on television and often look like documentaries. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Tinkering With Consumers’ Perceptions
Increased consumption from: Organization of merchandise Size of package Symmetry of display Perceived variety of display Store Environments Relative Pricing There are a variety of tactics that marketers can use to change consumers’ perceptions. This is often done in pricing of products and product lines. Consumers tend to base pricing on a reference point that has been placed in their mind. Marketers can move this reference price up and consumers will often pay more for products. Supermarkets can use many tools in their stores to help marketers’ perception. End-of-aisle displays, product location, and store temperature will all have an effect on the consumer. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Covert Marketing Also called masked or stealth marketing Messages appear to be from independent parties but are company driven. Disagreement as to whether they violate FTC guidelines As consumers block out more messages, marketers look for alternative ways to market. Stealth marketing often uses posers, people of similar demographics, to market to people their own age. Liquor companies have sent people to bars and phone companies have couples masked as tourists asking people to use their phone to take a picture. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

A Typology of Masked Marketing Practices Table 16.3
Description Posers (disguised communicator) Actors or salespeople who pretend to be ordinary people or researchers conducting a survey to explain product benefits and give potential consumers the chance to examine, sample, or use a product. Buzz and viral marketing (disguised communicator) Recruitment of people to talk about products through free samples or discounts before the product is available to the general public and suggestions on what to say and how to approach people about the product. Some refer to this as viral marketing when the contact with potential consumers is done electronically. Advertorials (disguised format) Advertisements that appear to be information from an independent source, such as prepared television news stories: infomercials that appear to be consumer television shows; and print advertisements that appear to be editorial content. The next two slides present masked marketing practices. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

A Typology Of Masked Marketing Practices Table 16.3 (continued)
Description Disguised monitoring of queries via search engines Use of invisible metatags by a marketer or the sale of priority by a search engine of the results from a particular query when the results are not identified as biased. Urgent ad-formation (disguised format) Advertisements that appear in the form of important account information from firms with an existing business relationship, government notices, sweepstakes prize notices, or checks that are simply discount coupons. Advertainment (disguised format) Product and advertising placement in television shows, at sporting events, and in video games. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Discussion Questions Do you think covert marketing is wrong? Why might others have a different opinion from you? You might find yourself disagreeing with classmates on whether covert and masked marketing are wrong. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 21 Chapter Sixteen Slide

Socially Undesirable Representations
Children’s Toys Barbie and G.I. Joe Thin models in the media Brands that promote violence Stereotypes Here is a selection of representations made by marketers in the media. There are many consumer groups who are pushing back on these portrayals and marketers are reacting to the requests. There does seem to be an increase in “healthy”-sized models and more careful planning in toy creation. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

False or Misleading Advertising
Puffery Truth-in-advertising laws Deceptive advertising Corrective advertising Puffery is often used in advertising. It is a general claim about a product – that it is wonderful, the best, important. Truth-in-advertising must be followed when an advertiser states specific claims about their ad. The FTC has careful guidelines as to what is deceptive advertising. If the FTC decides an advertiser has misled customers, they often have to spend the money to run corrective advertising. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Social Responsibility
Advocating socially beneficial causes Cause-related marketing Green marketing Consumer ethics Many companies are trying to become “good corporate citizens” and integrate social responsibility into their marketing plans and organizational goals. These are the four topics that will be discussed as they relate to corporate social responsibility. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Advocating Socially Beneficial Causes
Not-for-profits Government agencies Consumer advocacy groups Many organizations work to market socially beneficial causes. There are companies, government agencies, and consumer groups that all work to inform the public about products and services that are available to the public. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

What Is the Ad’s Objective, and Why Is the CSPI Sponsoring It?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Cause-Related Marketing
Contribute a portion of revenues Good fit between cause and company’s positioning is important It seems that almost the majority of companies are involved in cause-related marketing. Sometimes organizations will even band together to fight a certain cause or disease. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Green Marketing Promoting of healthy, reusable, and ecofriendly products Many industries have made great initiatives in offering green marketing. This ad highlights a car as the auto industry has made some strong efforts in offering green products. This web link brings you to a site that specializes in green home products. Look through their selections and decide how green you are. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

What Is the Name and Purpose of the Marketing Practice Depicted in the Three Ads and How Did Each of the Three Carmakers Featured Adopt This Practice? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Green Marketing Better Mileage Social Conscience
Responsibility and Luxury Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Discussion Questions Do you make an effort to purchase green products? If a product is better for the environment than the alternative, are you more likely to purchase the green product? Would you pay more for the green product? You might differ from others in the class. Why do you think you are more or less green than your peers? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 34 Chapter Sixteen Slide

Measuring Consumers’ Attitudes Toward Green Products – Table 16.4 (excerpt) A Scale Measuring Consumers’ Attitudes Toward Green Products I believe there are a lot of exaggerations about companies taking environmental risks nowadays. I believe the government is doing all that is possible to safeguard the environment. I believe that we should not slow down industry progress because of concern for the environment. I believe environmental safety is the responsibility of the government, not individual citizens. I believe that government legislation adequately regulates environmental protection. I believe a well-known brand is always a safe product to buy. This is an example of a survey marketers would use to determine an individual’s attitude toward green products. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Consumer Ethics Returning used product Software privacy We have talked about the importance of ethical behavior by marketers but just as important is ethical behavior by consumers. What other unethical actions might consumers take? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Sixteen Slide

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