Ethics and Laws of Advertising in India

by:- Akash Jindal 729 MBA 4th

Ethics in Advertising

Is it ethical to advertise

cigarettes or to engage in alcohol advertising, which might persuade young people to start smoking and drinking? Advertising famous personalities, animals, human beings, social elements etc. in wrong manner

Ethics in Advertising

Many laws and regulations are put into force that determines what is permissible in advertising However, every issue is not controlled by rules Marketers are often faced with decisions regarding appropriateness of their actions, which are based on ethical considerations rather than what is within the law or industry guidelines Certain actions may be within the law but still unethical

Ethical Issues in Advertising

1. Using unnecessary sex appeal or showing women in advertisements immorally without purpose 2. Making false claims about the product with hidden tactics 3. Criticizing or dishonoring anything which is in real of some honor to the society 4. Criticizing the competitors product by any similar name or any other matching

Ethical Issues in Advertising

5. Pointing out human formulation such as black and fair complexion comparison etc. 6. Delivering confusing and misleading information 7. Showing infeasible and unnatural things or actions that are shown as a result of using the product 8. Advertising intoxicating products like wine, cigarette, tobacco etc.

Ethics in Advertising

False or Deceptive Advertising

False claims about products , when made in advertisements destroy public faith in advertising Advertising containing false statements amounts to deception Conceptually, deception exists when an advertisement is introduced into the perceptual process of some audience and the output of that perceptual process (i) differs from the reality of the situation, and, (ii) affects buying behavior to the detriment of the consumer

False or Deceptive Advertising

The definition of Deceptive Advertisement or False Advertisement was given in the Wheeler- Lea Act of USA as follows: The term false advertisement means an advertisement other than labeling, which is misleading in a material respect; and in determining whether any advertisement is misleading, there shall be taken into account (among other things) not only representations made or suggested by statement, word, design, device, sound or any combination thereof, but also the extent to which the advertisement fails to reveal facts material in the light of such representations or material with

Legal Restrictions on Advertising

There are 3 major institutions in the society that protect consumers against misleading or fraudulent advertising: 1. Government agencies enforcing laws against offenders 2. Advertising industry associations and media groups that impose self regulation upon their member firms and advertisers 3. Advertisers themselves acting through enlightened self- interest and a sense of social responsibility

Legal Restrictions on Advertising

The Federal Trade Practices Act as passed by the Federal Congress in 1890 has declared dealing with unfair methods of competition in commerce and unfair or deceptive acts or practices in commerce to be unlawful. The Act added: a. It shall be unlawful for any person, partnership or corporation to disseminate or cause to be disseminate any false advertisementi. By mails or in commerce by any means for the purpose of inducing or which is likely to induce directly or indirectly the purpose of food, drugs, devices or cosmetics, or ii. By any means for the purpose of inducing or which is likely to induce directly or indirectly the purchase of food, drugs, devices, or cosmetics b. The dissemination or the causing to be

Legal Restrictions on Advertising

Sachar Committee has recommended the following acts of sellers as Unfair Trade Practices: 1.Misleading advertisements and false representation- A seller should not falsely represent thata.The goods are of a particular standard, quality, grade composition, style or model, if they do not possess that qualification b.The rebuilt, second- hand goods are new goods 2.Offering of gifts or prizes with the intention of not providing them and conducting professional contests The committee is of the opinion that all the aforesaid unfair trade practices should be punishable as an offence or any person on undertaking indulging

Legal Restrictions on Advertising

Advertising Standards Council of India (ASCI) In order to enforce an ethical code, India has the Advertising Standards Council of India (ASCI) It is a non- profit organization set up by 43 founder members who are involved with advertising in one way or the other It was established in 1985 Its Board of Members has members with equitable representation to advertisers, agencies, media and others It puts forward a regulating code ASCI proposes to adjudicate on whether an advertisement is offensive and its decision will be binding on its members It proposes to deal with the government if there are any disputes It seeks to achieve the acceptance of fair advertising practices in the best interest of the ultimate consumer

Need for Advertising Regulations

Morality and Tastes: All ads are not morally acceptable and known for good taste Untruthful advertisements: Almost all ads are not cent percent true. Womanizing: Almost ninety percent of ads make use of women even if their presence is not needed. Advertising is mind pollutant: Too much advertising pollutes our mental environment.

Corrective Advertising
Corrective Advertising requires advertisers to rectify past deception by making suitable statements in future commercials The 1975 corrective advertising order against WarnerLamberts Listerine is a classic example Listerine has advertised for over fifty years that gargling with Listerine mouthwash helped prevent colds and sore throats by killing germs The order required them to include the statement, Listerine will not help prevent colds or sore throats or lessen their severity in $10 million of advertising, which was equal to the average annual Listerine expenditure during the prior ten- year period Listerine implemented the order by embedding the statement in a commercial featuring two couples, each with a husband finding himself having onion breath The corrective disclosure appeared mid- way in the thirty- second spot as follows: While Listerine will not help prevent colds or sore throats or lessen their severity, breath tests prove Listerine fights onion breath better than Scope(a rival

Is Advertising a waste of money?

It is logical to think that if advertising adds value to products or services, it also adds cost and affects prices. This view is not totally correct. While some advertised products do cost more than the unadvertised products, the opposite is also true. Advertising may help lower the overall cost of a product more than enough to offset costs and keep the prices down because of economies of scale in production and by encouraging competition

Guidelines for Advertising

1. Truth: Advertising shall reveal the truth, and shall reveal significant facts, the omission of which would mislead the public 2. Substantiation: Advertising claims shall be substantiated by evidence in possession of the advertiser and the advertising agency prior to making such claims 3. Comparisons: Advertising shall refrain from making false, misleading, or unsubstantiated statements or claims about a competitor or his products or services 4. Bait Advertising: Advertising shall not offer or services for sale unless such offer constitutes a bona fide effort to sell the advertised products or services and is not a device to switch consumers to other goods or services, usually higher priced

Guidelines for Advertising

5. Guarantees and Warrantees: Advertising of guarantees and warrantees shall be explicit, with sufficient information to apprise consumers of their principal terms and limitations or, when space or time restrictions preclude such disclosures, the advertisement shall clearly reveal where the full text of the guarantee or warranty can be examined before purchase 6. Price claims: Advertising shall avoid price claims that are false or misleading, or savings claims that do not offer provable savings 7. Testimonials: Advertising containing testimonials shall be limited to those of competent witnesses who are reflecting a real and honest opinion or experience 8. Taste and decency: Advertising shall be free from statements, illustrations, or