Chapter 3: Detailed Outline

I. Ethical Issues in Marketing Communications
     - As Marcom specialists, we need to take several decisions that might cause some unethical implications.
     - Some Marcom specialists may be pushed by the will to reach immediately their goals.
     - What is unethical and might be rewarded in a short run, can be costly in the long run.
     1. The Ethics of Targeting
          - What is ethical is what is right or wrong, what is moral; it is linked to societal notions such as: honesty, honor, virtue and integrity.
          a. Targeting to Children and Teens
               • Target a specific segments of customers instead of using the shotgun approach
               • Many products that target children are unnecessary = exploitative advertising
               • Using learning tools, and exploiting the children’s trust in educational materials
          b. Targeting Economically Disadvantaged Consumers
               • Tobacco and alcohol products use of billboards
               • The case of R. J. Reynolds targeting the African-Americans to sell menthol cigarettes
          c. Is Targeting Unethical or Just Good Marketing?
               • Proponents of targeting
                    • Targeting benefits rather than harms the consumers
                    • Providing the customers with best suited products
               • Opponents
                    • Ability to choose a product that better accommodates one’s needs
     2. Ethical Issues in Advertising
          a. Advertising Is Untruthful and Deceptive
          • 2/3 of Americans think that advertising is deceptive
          • Deception:
               • Advertising falsely represents a product + consumers believe the false representation
          b. Advertising Is Manipulative
               • People can be cooperative = without conscious awareness
          c. Advertising Is Offensive and in Bad Taste
               • Insulting to human intelligence + vulgar + offensive to the tastes of many consumers
               • Sexual appeal and the use of violence also exist in advertising
          d. Advertising Creates and Perpetuates Stereotypes
               • Narrow and predictable representation of minorities
               • Minorities portrayed disproportionally
               • Women stereotyped as sex objects
               • Senior citizens feeble
          e. People Buy Things They Do Not Really Need
               • Is this unethical?
          f. Advertising Plays on People’s Fears and Insecurities
               • Advertising appeals to the negative consequences of not buying the products (rejection by others, failure in personal life, etc.)
II. Regulation of Marketing Communications
     1. When Is Regulation Justified?
          a. Benefits
               1. Consumers choice is informed (Smoking kills)
               2. Better informed customer -> Better quality
               3. Price reduction due to the informational market power
          b. Costs
               • Paying the costs of complying with a regulatory remedy
     2. Regulation of Marketing Communications by Federal Agencies
          a. Deceptive Advertising
          • When the impression left by the claim or campaign is false, and when the claim is believe by consumers.
               i. Misleading
                    • A misrepresentation or a misleading omission that is likely to mislead the consumer
               ii. Reasonable consumer
                    • The perspective of a reasonable consumer
               iii. Material
                    • The misrepresentation or the omission must be material
          b. Unfair Practices
               • “Acts or practices that cause or are likely to cause substantial injury to consumers, which is not reasonably avoided by consumers themselves and not outweighed by countervailing benefits to consumers or competition”. More explicitly, unfair advertising:
                    i. Offends public policy
                    ii. Is immoral
                    iii. Causes injury to costumers, competitors or other businesses
III. Corrective Advertising
     • When a firm misleads consumers, it has to do corrective advertising
     • State Agencies’ Regulation of Marcom: departments of consumer affairs or consumer protection to stop fraudulent business practices
IV. Advertising Self-Regulation
     • Regulation undertaken by the advertising community itself
     • Media Self-Regulation
          • Advertising media clearance: self-regulation undertaken by media that takes place behind the scenes before the commercial reaches consumers
          • Advertising Media clearance  Legal department’s approval -> media approval -> FTC, state and self-regulators post hoc regulation