Progra

BEACHLOR of BUSINESS ADMINSTRATOR

Submitted To:

Prof : Sadullaha
Group Leader:

MUHAMMAD TARIQ

11344

Submitted By:

M.TARIQ Haroon Sadiq M .Sufiyan Usman Sadiq Umer Farooq

11344 11349 11324 11360 11317

Class:

BBA (6) A

Advertising and Marketing Ethics

Marketing ethics is the area of applied ethics which deals with the moral principles behind the operation and regulation of markets. Some areas of marketing ethics (ethics

of advertising and promotion) overlap with media ethics.

Issues in Fundamental the ethics of marketing:Frameworks of analysis for marketing ethics Possible frameworks: Value oriented framework, analyzing ethical problems on the basis of the values which they break (e.g. Honesty, autonomy, privacy, transparency). An example of such an approach is the AMA Statement of Ethics. Stakeholder oriented framework, analyzing ethical problems on the basis of whom they affect (e.g. Consumers, competitors, society as a whole). Process oriented framework, analyzing ethical problems in terms of the categories used by marketing specialists (e.g. Research, price, promotion, placement). None of these frameworks allows, by itself, a convenient and complete categorization of the great variety of issues in marketing ethics Power based analysis:Contrary to popular impressions, not all marketing is adversarial, and not all marketing is stacked in favor of the marketer. In marketing, the relationship between producer/consumer or buyer/seller can be adversarial or cooperative. For an example of cooperative marketing If the market situation is adversarial, another dimension of difference emerges, describing the power balance between producer/consumer or buyer/seller. Power may be concentrated with the producer (caveat emptor), but factors such as over supply or legislation can shift the power towards the consumer (caveat vendor).

Is marketing inherently evil?

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A popularity anti marketing stance commonly discussed in the blogosphere and popular literature is that any kind of marketing is inherently evil. The position is based on the argument that marketing necessarily commits at least one of three wrongs:

Damaging personal autonomy. The victim of marketing in this case is the intended buyer whose right to self determination is infringed.

Causing harm to competitors. Excessively fierce competition and unethical marketing tactics are especially associated with saturated markets.

Manipulating social values. The victim in this case is society as a whole, or the environment as well. The argument is that marketing promotes consumerism and waste.

Specific issues in marketing ethics:-

Market research:Ethical danger points in market research include:

Invasion of privacy. Stereotyping.

Stereotyping occurs because any analysis of real populations needs to make approximations and place individuals into groups. However if conducted irresponsibly, stereotyping can lead to a variety of ethically undesirable results. In the American Marketing Association Statement of Ethics, stereotyping is countered by the obligation to show respect ("acknowledge the basic human dignity of all stakeholders")

Market audience:Ethical danger points include:

Excluding potential customers from the market: selective marketing is used to discourage demand from undesirable market sectors or disenfranchise them altogether.

Targeting the vulnerable (e.g. Children, the elderly).

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Examples of unethical market exclusion or selective marketing are past industry attitudes to the gay, ethnic minority and obese ("plus-size") markets. Contrary to the popular myth that ethics and profits do not mix, the tapping of these markets has proved highly profitable. For example, 20% of US clothing sales are now plus size Another example is the selective marketing of health care, so that unprofitable sectors (i.e. The elderly) will not attempt to take benefits to which they are entitled. A further example of market exclusion is the pharmaceutical industry's exclusion of developing countries from AIDS drugs Examples of marketing which unethically targets the elderly include: living trusts, time share fraud, mass marketing fraud and others The elderly hold a disproportionate amount of the world's wealth and are therefore the target of financial exploitation. In the case of children, the main products are unhealthy food, fashionware and entertainment goods. Children are a lucrative market: "...children 12 and under spend more than $11 billion of their own money and influence family spending decisions worth another $165 billion", but are not capable of resisting or understanding marketing tactics at younger ages ("children don't understand persuasive intent until they are eight or nine years old. At older ages competitive feelings towards other children are stronger than financial sense. The practice of extending children's marketing from television to the school ground is also controversial (see marketing in schools). The following is a select list of online articles

Donnell Alexander and Aliza Dichter, Ads and Kids: How young is too young? Rebecca Clay, Advertising to children: Is it ethical? (Monitor on Psychology, Volume 31, No. 8 September 2000), American Psychological Association

Media Awareness Network. How marketers target kids.

Other vulnerable audiences include emerging markets in developing countries, where the public may not be sufficiently aware of skilled marketing ploys transferred from developed countries, and where, conversely, marketers may not be aware how excessively powerful their tactics may be. See Nestle infant milk formula scandal. Another vulnerable group is mentally unstable consumers. The definition of vulnerability is also problematic: for example, when should indebtedness be seen as a vulnerability and when should "cheap" loan providers be seen as loan sharks, unethically exploiting the economically disadvantaged?

Preaching ethics:List of unethical pricing practices.

Bid rigging Dumping (pricing policy) Predatory pricing Price discrimination Price fixing Price skimming Price war Supra competitive pricing Variable pricing

Ethics in advertising and promotion:-

Ethical pitfalls in advertising and promotional content include:

Issues over truth and honesty. In the 1940s and 1950s, tobacco used to be advertised as promoting health. Today an advertiser who fails to tell the truth not only offends against morality but also against the law. However the law permits "puffery" (a legal term The difference between mere puffery and fraud is a slippery slope: "The problem is the slippery slope by which variations on puffery can descend fairly quickly to lay. See main article: false advertising.

Issues with violence, sex and profanity. Sexual innuendo is a mainstay of advertising content (see sex in advertising), and yet is also regarded as a form of sexual harassment. Violence is an issue especially for children's advertising and advertising likely to be seen by children

Delivery Channels :

Direct marketing is the most controversial of advertising channels, particularly when approaches are unsolicited. TV commercials and direct mail are common examples. Electronic spam and telemarketing push the borders of ethics and legality more strongly.
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Shills and gastro are examples of ways of delivering a marketing message under the guise of independent product reviews and endorsements, or creating a supposedly independent watchdog or review organizations. For example, fake reviews can be published on Amazon Shills are primarily for message-delivery, but they can also be used to drive up prices in auctions, such as Ebay auctions

Deceptive Advertising and Ethics:Another breach of marketing ethics has to do with the use of deceptive advertising. This form of advertising is not specific to one target market, and can sometimes go unnoticed by the public. There are a number of different ways in which deceptive marketing can be presented to consumers; one of these methods is accomplished through the use of humor. In a study conducted by Hassib Shabbir and Des Thwaites, 238 advertisements were assessed and 73.5% of them were found to have used deceptive marketing practices. In those advertisements that were conducted deceptively, 74.5% of them used humor as a masking device in order to mislead potential customers. Part of what drives this study is the idea that humor provides an escape or relief from some kind of human constraint, and that some advertisers intend to take advantage of this by deceptively advertising a product that can potentially alleviate that constraint through humor. Through the study it was also found that all types of humor are used to deceive consumers, and that there are certain types of humor that are used when making certain deceptive claims. It is important to understand that humor is not the only method that is used to deter consumers minds from what a product actually offers. Before making important purchases, one should always conduct their own research in order to gain a better understanding of what it is they are investing in. The use of ethics as a marketing tactic:siness ethics has been an increasing concern among larger companies, at least since the 1990s. Major corporations increasingly fear the damage to their image associated with press revelations of unethical practices. Marketers have been among the fastest to perceive the market's preference for ethical companies, often moving faster to take advantage of this shift in consumer taste. This results in the expropriation of ethics itself as a selling point or a component of a corporate image.

The Body Shop is an example of a company which marketed itself and its entire product range solely on an ethical message.

Greenwash is an example of a strategy used to make a company appear ethical when its unethical practices continue.

Liberation marketing is another strategy whereby a product can masquerade behind an image that appeals to a range of values, including ethical values related to lifestyle and anti consumerism.

"Liberation marketing takes the old mass culture critique consumerism as conformity fully into account, acknowledges it, addresses it, and solves it. Liberation marketing imagines consumers breaking free from the old enforcers of order, tearing loose from the shackles with which capitalism has bound us, escaping the routine of bureaucracy and hierarchy, getting in touch with our true selves, and finally, finding authenticity, that holiest of consumer grails. Neuromarketing ethics :Neuromarketing Nero marketing and its precursor, neuroeconomics, uses clinical information about brain functions and mechanisms to help explain what is happening inside of the black box so prevalent in many explanations of consumer behavior. In order to do so, specialists use neuroimaging techniques and record brain responses to different stimuli. The Neuromarketing Science & Business Association has launched on November 2012 a Neuromarketing Code of Ethics. This is a first step towards adopting international standards applied to using neuroscientific methods to study the effectiveness of advertising campaigns, packaging and product design, as well as communication campaigns from non-profit organizations and government institutions. Marketing strategy:The main theoretical issue here is the debate between free markets and regulated markets. In a truly free market, any participant can make or change the rules. However when new rules are invented which shift power too suddenly or too far, other participants may respond with accusations of unethical behaviour, rather than modifying their own behavior to suit (which they might not be able to anyway). Most markets are not fully free: the real debate is as to the appropriate extent of regulation.

Further issues in marketing ethics:Marketing ethics overlaps with environmental ethics in respect of waste problems associated with the packaging of products. Some, such as members of the advocacy group No Free Lunch, have argued that marketing by pharmaceutical companies is negatively impacting physicians' prescribing practices, influencing them to prescribe the marketed drugs rather than others which may be cheaper or better for the patient. Ethically thinking is responding to situations that deal with principles concerning human behavior in respect to the appropriateness and inappropriateness of certain communication and to the decency and indecency of the intention and results of such actions. In other words, ethics are distinctions between right and wrong. Businesses are confronted with ethical decision making every day, and whether employees decide to use ethics as a guiding force when conducting business is something that business leaders, such as managers, need to instill. Marketers are ethically responsible for what is marketed and the image that a product portrays. With that said, marketers need to understand what good ethics are and how to incorporate good ethics in various marketing campaigns to better reach a targeted audience and to gain trust from customers. Marketing ethics, regardless of the product offered or the market targeted, sets the guidelines for which good marketing is practiced. When companies create high ethical standards upon which to approach marketing they are participating in ethical marketing. To market ethically and effectively one should be reminded that all marketing decisions and efforts are necessary to meet and suit the needs of customers, suppliers, and business partners. Ethical behavior should be enforced throughout company culture and through company practices.

Ethical Marketing:
Ethical marketing refers to the application of marketing ethics into the marketing process. Briefly, marketing ethics refers to the philosophical examination, from a moral standpoint, of particular marketing issues that are matters of moral judgment. Ethical marketing generally results in a more socially responsible and culturally sensitive business community. The establishment of marketing ethics has the potential to benefit society as a whole, both in the
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short- and long-term. Ethical marketing should be part of business ethics in the sense that marketing forms a significant part of any business model. Study of Ethical marketing should be included in applied ethics and involves examination of whether or not an honest and factual representation of a product or service has been delivered in a framework of cultural and social values. It promotes qualitative benefits to its customers, which other similar companies, products or services fail to recognize. The concern with ethical issues, such as child labor, working conditions, relationships with third world countries and environmental problems, has changed the attitude of the Western World towards a more socially responsible way of thinking. This has influenced companies and their response is to market their products in a more socially responsible way. The increasing trend of fair trade is an example of the impact of ethical marketing. In the 'Ethical Shoppers Price Index Survey' (2009), trade was the most popular ethical badge products could have. It also revealed that many consumers distrusted green claims. (The idea of fair trade is that consumers pay a guaranteed commodity price to a small group of producers, the producers agree to pay fair labor prices and conserve the environment - a fair deal for everyone.) The philosophy of marketing is not lost with this newfound ethical slant, but rather hopes to win customer loyalty by reinforcing the positive values of the brand, creating a strong citizen brand. However, this new way of thinking does create new challenges for the marketer of the 21st century, in terms of invention and development of products to add long term benefits without reducing the product's desirable qualities. Many brands have tried to use ethics to make themselves look responsible, often spinning environmental claims which has led to the term greenwash (see greenwashing) In research consumers have shown to have even less trust of ethical claims in ads than ordinary ads. media attention on ethics has resulted in many top brands suffering consumer boycotts. Although many brands have tried to use green issues, it has been noted that in research 2/3 of consumers responded more to ethical claims that relate to people rather than to than environment. Ethical marketing should not be confused with government regulations brought into force to improve consumer welfare, such as reducing sulfur dioxide emissions to improve the quality of
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the air. A government regulation is a legal remedy intended to mitigate or correct an ethical issue, such as pollution of the air that we all share. Enlightened ethical marketing is at work when the company and marketer recognize further improvements for humankind unrelated to those enforced by governments or public opinion. By way of example, the Coop Group refuses to invest money in tobacco, fur and any countries with oppressive regimes.

False advertising:False advertising or deceptive advertising is the use of false or misleading statements in advertising. As advertising has the potential to persuade people into commercial transactions that they might otherwise avoid, many governments around the world use regulations to control false, deceptive or misleading advertising. "Truth" refers to essentially the same concept, that customers have the right to know what they are buying, and that all necessary information should be on the label. False advertising, in the most blatant of contexts, is illegal in most countries. However, advertisers still find ways to deceive consumers in ways that are legal, or technically illegal but unenforceable.

Bait and switch:Bait and switch is a form of fraud used in retail sales but also practiced in other contexts. First, customers are "baited" by merchants' advertising products or services at a low price, but when customers visit the store, they discover that the advertised goods are not available, or the customers are pressured by sales people to consider similar, but higher priced items ("switching" Function:The intention of the bait-and-switch is to encourage purchases of substituted goods, making consumers satisfied with the available stock offered, as an alternative to a disappointment or inconvenience of acquiring no goods (or bait) at all, and reckoning on a seemingly partial recovery of sunk costs expended trying to obtain the bait. It suggests that the seller will not show

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the original product or service advertised but instead will demonstrate a more expensive product or a similar product with a higher margin. Legality:In the United States, courts have held that the purveyor using a bait-and-switch operation may be subject to a lawsuit by customers for false advertising, and can be sued for trademark infringement by competing manufacturers, retailers, and others who profit from the sale of the product used as bait. However, no cause of action will exist if the purveyor is capable of actually selling the goods advertised, but aggressively pushes a competing product. Likewise, advertising a sale while intending to stock a limited amount of, and thereby sell out, a loss leading item advertised is legal in the United States. The purveyor can escape liability if they make clear in their advertisements that quantities of items for which a sale is offered are limited, or by offering a rain check on sold out items. In England and Wales it is banned under the Consumer Protection from Unfair Trading Regulations 2008. Breaking this law can result in a criminal prosecution, an unlimited fine and two years in jail.

Non retail use:Bait and switch tactics are frequently used in airline and air travel advertising. Hotels widely use the form of bait-and-switch tactics known as 'resort fees'. They first attract customers by advertising the lower price (which appears on all promotional materials and rate comparison engines), and charge customers the mandatory "resort fee" when they arrive for check-in. Politics:12

In lawmaking, "caption bills" that propose minor changes in law with simplistic titles (the bait) are introduced to the legislature with the ultimate objective of substantially changing the wording (the switch) at a later date in order to try to smooth the passage of a controversial or major amendment. Rule changes are also proposed (the bait) to meet legal requirements for public notice and mandated public hearings, then different rules are proposed at a final meeting (the switch), thus bypassing the objective of public notice and public discussion on the actual rules voted upon. While legal, the political objective is to get legislation or rules passed without expected negative community review.

Planned obsolescence:Planned obsolescence or built-in obsolescence in industrial design is a policy of planning or designing a product with a limited useful life, so it will become obsolete, that is, unfashionable or no longer functional after a certain period of time. Planned obsolescence has potential benefits for a producer because to obtain continuing use of the product the consumer is under pressure to purchase again, whether from the same manufacturer (a replacement part or a newer model), or from a competitor which might also rely on planned obsolescence. For an industry, planned obsolescence stimulates demand by encouraging purchasers to buy sooner if they still want a functioning product. Planned obsolescence is common in many different products, including but not limited to wheeled can openers, ear phones, ear buds, shoes, automobile batteries, and bicycle tires. There is however the potential backlash of consumers who learn that the manufacturer invested money to make the product obsolete faster; such consumers might turn to a producer (if any exists) that offers a more durable alternative. Estimates of planned obsolescence can influence a company's decisions about product engineering. Therefore, the company can use the least expensive components that satisfy product lifetime projections. Such decisions are part of a broader discipline known as value engineering.

Marketing warfare strategies:Marketing warfare strategies are a type of strategies, used in business and marketing, that try to draw parallels between business and warfare, and then apply the principles of military strategy to
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business situations, with competing firms considered as analogous to sides in a military conflict, and market share considered as analogous to the territory which is being fought over. It is argued that, in mature, low-growth markets, and when real GDP growth is negative or low, business operates as a zero sum game. One persons gain is possible only at another persons expense. Success depends on battling competitors for market share

Media ethics:Media ethics is the subdivision of applied ethics dealing with the specific ethical principles and standards of media, including broadcast media, film, theatre, the arts, print media and the internet. The field covers many varied and highly controversial topics, ranging from war journalism to Benetton advertising.

Consumerism:Consumerism is a social and economic order that encourages the purchase of goods and services in ever greater amounts. Criticisms of consumption are already present in the works of Torstein Veblen (1899). Veblen's subject of examination, the newly emergent middle class arising at the turn of the twentieth century, comes to full fruition by the end of the twentieth century through the process of globalization. In this sense, consumerism is usually considered a part of media culture. The term "consumerism" has also been used to refer to something quite different called the consumerists movement, consumer protection or consumer activism, which seeks to protect and inform consumers by requiring such practices as honest packaging and advertising, product guarantees, and improved safety standards. In this sense it is a movement or a set of policies aimed at regulating the products, services, methods, and standards of manufacturers, sellers, and advertisers in the interests of the buyer In economics, consumerism refers to economic policies placing emphasis on consumption. In an abstract sense, it is the consideration that the free choice of consumers should strongly orient the choice what is produced and how, therefore the economic organization of a society (compare producers, especially in the British sense of the term). Also this vote is not "one man, one voice", but "one dollar, one voice", which may or may not reflect the contribution of people to society.
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