ethical issues in marketing and advertising
TRANSCRIPT
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ETHICAL ISSUES IN MARKETING AND ADVERTISING
Presented by:Sonakshi Bhalla(49)Deeksha Saxena(14)
Saba Khan(40)Manisha Chand(25)
Himani Garg(18)Pallavi Singh(29)
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INTRODUCTION
• Ethics in marketing– focuses on the ensuring ethical practices in the
methods of marketing and selling the products to the consumers.
– Seeks to ensure fairness and transparency in marketing.
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WHY ETHICS IN MARKETING
• Unethical marketing practices of businesses.• E.g.:-cigarette companies reducing menthol levels to
hook first- time smokers.
• Focus on increasing revenues at any cost.• Leading to exploitation of consumers.
• Defective products being marketed to them.• Harmful effects of the products like:- health hazards,
other damages.
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MEANING OF CONSUMER PROTECTION
• People who buy and use products with the intention of fulfilling their needs are called consumers.
• The idea of consumer protection – is to protect the consumers from the damages
caused to them, – by giving them correct and complete information– In other words, to develop a sense of moral duty &
responsibility on the part of business organizations.
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IMPORTANCE OF CONSUMER PROTECTION
• The purpose of a business is to create customers for its products and services.
• They support a business.
• It will result in the well- being of the company.
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Where does a manufacturer’s duty to protect consumers begin and where does the consumer’s duty to protect
self- interest end?
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Marketing ETHICS
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FRAMEWORKS OF ANALYSIS
• Value-oriented framework: e.g. honesty, autonomy, privacy, transparency.
• Stakeholder-oriented framework: e.g. consumers, competitors, society as a whole
• Process-oriented framework: e.g. research, price, promotion, placement
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ISSUES IN MARKETING ETHICS
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• Sales practices - pressure on sales
personnel to sell
• Violating ways
- deception
- manipulation
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• Labeling: means for selling product & also informing the consumer.
- Fair Packaging and Labeling Act passed by congress in 1966
- Nutrition Labeling and Education Act (NLEA) (1990)
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• Market research: ethical danger points in marketing research include:
- Invasion of privacy
- Stereotyping
• Market audience: ethical danger points include
- Targeting the vulnerable e.g. children, the elderly
- Excluding potential customers from the market:
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Pricing• Pricing: Process of determining what a
company will receive in exchange for its product
• The moral (and legal) issues in pricing fall into two categories:
---The use of prices to engage in anticompetitive behavior that can seriously harm other firms.
---Concerns fairness in pricing , which can be violated when prices are used to deceive or manipulate consumers and when goods are overpriced in ways that consumers cannot easily detect.
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Anticompetitive Pricing
The major anticompetitive marketing practices are as follows:• Price Fixing: Is an agreement , either explicit or implicit,
among two or more companies in the same market to sell goods at a set price.
• Resale Price Maintenance: Products are sold on the condition that they be resold at a price fixed by the manufacturer or distributor.
• Price Discrimination: Charging of different prices or offering different terms of sale for goods of the same kind to different buyers.
• Predatory Pricing: Reducing prices to unreasonably low or unprofitable levels in order to drive competitors
out of business.
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Unfair PricingPricing can be done in ways that treat consumers unfairly
The main type of such unfair pricing are : -• Unconscionably high price (price gouging)
• Misleading prices, including prices that are difficult to determine and compare.
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Distribution The means by which the products are delivered from the
manufacturer to the ultimate consumer
The main ethical issues in distribution are : -• Slotting allowances to gain access to shelf space in stores• Grey markets …that arise from diverting and parallel
importing.
Three illegal abuses of power in distribution are : -• Reciprocal Dealing• Exclusive Dealing• Tying dealing
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ADVERTISING
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• Non personal communication
• About an organization and its products
• To a target audience
• Through a mass medium
WHAT IS ADVERTISING?
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1.Covert Advertising –
Advertising in movies
TYPES OF ADVERTISING
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2.Television Advertising –
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3.InformericalsAdvertising in commercial ads .
Digital Video Camera 6M Pixel with MP3 / MP4 and Flashlight (Force /auto/off), Video recorder (with sound), Still Photos PC Camera and MP3 player, Digital voice recorder and Power control: Auto power off
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4.Celebrity Advertising
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5. Media Approach
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• To build brand personality
• To increase the sales of the product/service
• To create and maintain a brand image.
• To introduce a new product or service.
Role of Advertising
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• Truthfulness in advertising
• To establish itself in the hearts of the customers
Ethics in Advertising
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UNETHICAL ISSUES IN ADVERTISING
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Deceptive Advertising
• Advertisement creates false belief • Interferes with the ability of people to make rational
consumer choices
• Depends not only on truth or falsity of claims but also on its impact
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Deceptive advertising- all of us have seen it..
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Deceptive methods
• Hidden fees and surcharges • Rebates • Inflated price comparison • Cost-plus pricing • Buy x, get y free • Introductory offers • Non-sale advertisements • Disclaimers and fine print • Manipulation of standards• Fillers and oversized packaging • Label tampering
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Misleading Advertising
• Advertising that does not literally contain falsehoods, but which causes consumers to make false inferences
• Examples– Strongly implied falsehoods
– Critical missing information
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Irrational Persuasion
• Making use of subconscious factors that influence human actions
• Play on human desires for security, acceptance, self esteem, etc
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Diamond Jwellery ad???
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Subliminal Communication
• Interferes with freedom of choice
• Acts without our knowledge and thus without consent
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Are we aware that products are being advertised without our consent … ???
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Impact of advertising
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Social and Cultural Consequences of Advertising
Does Advertising Make People Buy ThingsThey Don’t Need?
Does Advertising Make People Buy ThingsThey Don’t Need?
Does Advertising Encourage Materialism?
Does Advertising Encourage Materialism?
Does Advertising Encourage Materialism?
Does Advertising Encourage Materialism?
Does Advertising Make People Buy ThingsThey Don’t Need?
Does Advertising Make People Buy ThingsThey Don’t Need?
Is Advertising JustA Reflection of Society?
Is Advertising JustA Reflection of Society?
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Advertising and Stereotyping
Portrayal of Women to Reflect Their Changing
Role in Society
Portrayal of Women to Reflect Their Changing
Role in Society
Portrayal ofWomen AsSex Objects
Portrayal ofWomen AsSex Objects
Ethnic Stereotyping/
Representation of Minorities
Ethnic Stereotyping/
Representation of Minorities
Ethnic Stereotyping/
Representation of Minorities
Ethnic Stereotyping/
Representation of Minorities
Portrayal ofWomen As
Objects
Portrayal ofWomen As
ObjectsGender
StereotypingGender
StereotypingGender
StereotypingGender
Stereotyping
Portrayal of Women to Reflect Their Changing
Role in Society
Portrayal of Women to Reflect Their Changing
Role in Society
Portrayal ofThe ElderlyPortrayal ofThe Elderly
Criticisms of Advertising
With Regard to Stereotyping
Criticisms of Advertising
With Regard to Stereotyping
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Do Advertisers Control the Media?
Advertising Is the Primary Source of Revenue for Newspapers,
Magazines, and Television and Radio Networks and Stations
Advertising Is the Primary Source of Revenue for Newspapers,
Magazines, and Television and Radio Networks and Stations
Advertisers May Exert Control Over The Media by Biasing Editorial Content, Limiting
Coverage of Certain Issues or Influencing Program Content
Advertisers May Exert Control Over The Media by Biasing Editorial Content, Limiting
Coverage of Certain Issues or Influencing Program Content
The Media’s Dependence on Advertising For Revenue Makes Them Vulnerable To Control by
Advertisers
The Media’s Dependence on Advertising For Revenue Makes Them Vulnerable To Control by
Advertisers
Advertising Is the Primary Source of Revenue for Newspapers,
Magazines, and Television and Radio Networks and Stations
Advertising Is the Primary Source of Revenue for Newspapers,
Magazines, and Television and Radio Networks and Stations
The Media’s Dependence on Advertising For Revenue Makes Them Vulnerable To Control by
Advertisers
The Media’s Dependence on Advertising For Revenue Makes Them Vulnerable To Control by
Advertisers
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Social Aspects of Advertising
Advertising Educates Consumers– Pro: Advertising informs– Con: Advertising is superficial and intrusive
• Advertising improves living standards– Pro: Ads lower the costs of products– Con: Ads are wasteful and help only some
Is there “information” in
this ad?
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impact of Ads for Children
Advocates Argue That Children:Advocates Argue That Children:
Marketers Argue Children:Marketers Argue Children:
Lack the knowledge and skills to evaluate
advertising claims
Lack the knowledge and skills to evaluate
advertising claims
Cannot differentiatebetween programs and
commercials
Cannot differentiatebetween programs and
commercials
Must learnthrough socialization
Must learnthrough socialization
Must acquire skills needed to function in
the marketplace
Must acquire skills needed to function in
the marketplace
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CONCLUSION
• Advertising is not unethical if its done in the right way