ETHICAL ISSUES IN MARKETING & ADVERTISING
Advertising is communication for advancing an issue/ cause. Criticism includes exaggerated claims and outright falsehoods. Lack of taste, irritating repitition and offensive character including negative stereotypes. Charged with creating a consumerist culture and emptying communication of content.
THE ECONOMIC ANALYSIS OF ADVERTISING
Advertising is wasteful. No value added to automobile quality or safety through ads. Defensive advertising to create illusory differences to increase market share. The difference is ads provide information to facilitate consumer choice. Image is an enhancer of customers perception of value.
ADVERTISING IS INEFFICIENT
Ads distort free market operation. Distort free market operation. Brand leaders spend disproportionately to maintain/ increase market share. Heavy advertising raises the prises of products. Example: Breakfast cereals.
Defence: Advertising fosters competition and facilitates market entry.
Advertising leads to increased volumes which permits lower cost.
PERSUATION, BEHAVIOUR CONTROL AND DEPENDANCE EFFECT.
Vance Packards “The Hidden Persuaders” suggests behaviour control and the risks from it.
John Kenneth Galbraiths “Dependance effect” the creation of customer wants not just satisfying existing ones.
WHICH WANTS ARE WORTH SATISFYING , THE ISSUES OF STATUS, IMAGE AND POSITIVE ASSOCIATIONS ?
Rational persuation and free choice advertising exploits deep seated emotions and short circuits logical thinking. Subliminal advertising seen by some as unscrupulous.
Product placement prevents critical evaluation of brands deceptive advertising patently false claims hair restoration: Anacin claim true but misleading reasonable knowledge the key.
MARKETING AND PRODUCT SAFETY
Consumer rights pioneering books include nader’s “unsafe at any speed” Seller’s rights include product, pricing, distribution and promotion rights.
Consumer rights: Product safety, adequate information, right of choice, voice in marketing decisions.
PACKAGING, LABELLING AND PRICING ISSUES HOW MUCH INFORMATION IS OBLIGATORY?
Deceptive and manipulative marketing practices.
Markdown from a suggested retail price
Bogus clearance sales
“Economy size”, “New”, “Improved”.
Examples of Misleading message
REDUCING QUANTITY WHILE MAINTAINING PRICE
“Bait and switch” luring the customer
Bottom line deception reduces the ability to make rational choices
OTHER UNETHICAL PRACTICES IN MARKETING
Market research: Honesty in interpreting data and presenting results.
Price fixing goes against the spirit of free market resale price maintenance interferes with free market operation.
Product safety issues include due care and the contractual rights of customers.
ETHICAL ISSUES IN MARKETING AND ADVERTISING
Advertising: It is an indisputable fact that Advertising is all pervasive in modern life. Its critics level various charges against it which include the fact that it is sometimes irritating and even offensive. At the same time advertising is entertaining and even informative. In the U.S. it accounts for 2% of the gross national product a figure which runs into several hundreds of billions of dollars. In India too, advertising is playing an increasingly significant role in promotion of goods, services and social causes.
A typical definition of advertising is that it is a paid form of non personal communication about an organization or its products that is transmitted to a target audience through a mass medium. So defined, advertising is only one of several kinds of promotion which include publicity(press releases), and personal selling, just to name two. Some of it is for a product or service, some of it for building or enhancing corporate image, and sometimes it could be to advance an idea or a cause. As an example of the latter, we have the various advertising campaigns on HIV and AIDS. Let us...
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