ENVIRONMENTAL, REGULATORY, AND ETHICAL ISSUES Answers to Discussion Questions Some consumers are more concerned about the physical environment than others. Provide a specific profile of what in your opinion would be the socioeconomic and psychographic (i.e., lifestyle) characteristics of the “environmentally concerned” consumer. Answer: Depend on stereotypes (e.g., “tree huggers”), research on this matter suggests that environmentally concerned consumers are of higher socio-economic status, more liberal in their political orientation, and more likely to think that their actions will make a difference. The environmentally concerned consumer can be profiled based on both socioeconomic and psychographic characteristics. Here's a specific profile: Socioeconomic Characteristics: • Education: Typically, environmentally concerned consumers have higher levels of education, as they are more likely to be aware of environmental issues and the impact of their consumption habits. • Income Level: While environmentally concerned consumers can come from various income levels, they often have disposable income to invest in sustainable products and services, even if they may come at a premium. • Occupation: They may be employed in environmentally conscious industries such as renewable energy, conservation, or environmental advocacy. Alternatively, they may work in professions that allow them to prioritize environmental values, such as academia, research, or non-profit organizations. • Residential Area: They may choose to live in urban areas with access to eco-friendly amenities, such as public transportation, farmer's markets, and recycling facilities, or in suburban areas with a focus on green living and sustainability initiatives. Psychographic (Lifestyle) Characteristics: • Values and Beliefs: Environmentally concerned consumers prioritize environmental conservation and sustainability in their values system. They may believe in the importance of preserving natural resources for future generations and minimizing their ecological footprint. • Lifestyle Choices: They adopt sustainable lifestyle practices such as reducing waste, conserving energy and water, practicing eco-friendly transportation (e.g., biking, carpooling), and supporting environmentally responsible brands and businesses. • Consumer Behavior: They actively seek out eco-friendly products and services, such as organic foods, ethically sourced clothing, energy-efficient appliances, and renewable energy options. They may also engage in practices such as composting, gardening, and DIY projects to minimize their environmental impact. • Community Engagement: Environmentally concerned consumers may participate in environmental advocacy groups, community clean-up events, and conservation initiatives. They value community engagement and collaboration in addressing environmental challenges. • Media Consumption: They are likely to follow environmental news and trends through various media channels, including eco-conscious blogs, social media platforms, and documentaries. They may also engage in environmental activism through online petitions, social media campaigns, and grassroots movements. Overall, the environmentally concerned consumer is characterized by a combination of socioeconomic factors, such as education and income, as well as psychographic traits related to values, lifestyle choices, and community engagement that prioritize environmental conservation and sustainability. The text mentioned—in the context of discussing packaging ethics—that an ethical infraction may occur when marketers package store brands so that they look virtually identical to well-known national brands. What are your thoughts on this? Answer: One point of view may be that similar packaging helps consumers easily recognize products and product categories so that products are not wasted or go unused. Another view may be that the similarity in packaging creates duplicate products for which the demand will not support the supply and waste is created. From your experience, are most green marketing claims legitimate or do they represent green-wash? Support your answer with examples. Answer: Determining the legitimacy of green marketing claims requires careful evaluation, as some claims may indeed reflect genuine environmental efforts, while others may constitute greenwashing, where companies exaggerate or misrepresent their environmental initiatives for marketing purposes. In my experience, I've encountered a mix of both legitimate green marketing and instances of greenwashing. Here are some examples to illustrate: Legitimate Green Marketing Claims: • Tesla: Tesla's electric vehicles (EVs) are a prominent example of legitimate green marketing. Tesla promotes its vehicles as emissions-free alternatives to traditional gasoline-powered cars, emphasizing their contribution to reducing greenhouse gas emissions and combating climate change. The company's commitment to sustainability extends beyond its products, with initiatives such as solar energy solutions and energy storage products aimed at promoting renewable energy adoption. • Patagonia: Outdoor apparel company Patagonia is known for its commitment to environmental sustainability and social responsibility. The brand's marketing campaigns often highlight its efforts to minimize environmental impact, such as using recycled materials, reducing water usage, and advocating for environmental conservation. Patagonia's "Worn Wear" program encourages customers to repair and recycle their clothing, promoting longevity and reducing waste. Instances of Greenwashing: • BP's "Beyond Petroleum" Campaign: In the early 2000s, BP launched a high-profile marketing campaign branded as "Beyond Petroleum," emphasizing its commitment to renewable energy and environmental stewardship. However, critics argued that the campaign misrepresented BP's core business, which primarily focused on fossil fuel extraction and refining. The company faced criticism and accusations of greenwashing, particularly in light of the Deepwater Horizon oil spill in 2010. • Fast Fashion Brands: Some fast fashion brands have been accused of greenwashing by promoting eco-friendly or sustainable collections without addressing the broader environmental and social issues associated with their business models. Critics argue that these brands' sustainability initiatives may serve as a distraction from their unsustainable practices, such as overproduction, excessive waste, and poor labor conditions in their supply chains. Evaluation Tips: • Look for Third-Party Certifications: Legitimate green marketing claims often include certifications from reputable organizations such as the Forest Stewardship Council (FSC), ENERGY STAR, or the USDA Organic seal. These certifications provide independent verification of a product's environmental claims. • Assess Transparency and Accountability: Companies that are genuinely committed to sustainability tend to be transparent about their environmental initiatives, disclosing information about their practices, goals, and progress. Look for companies that provide detailed sustainability reports or disclose their environmental impact metrics. • Consider the Context: Evaluate green marketing claims in the context of the company's overall business practices and industry norms. Beware of claims that seem too good to be true or inconsistent with the company's track record or industry standards. In summary, while there are instances of legitimate green marketing, consumers should approach green claims with skepticism and critically evaluate them to distinguish between genuine environmental efforts and greenwashing tactics. Third-party certifications, transparency, and consideration of the broader context can help consumers make informed choices and hold companies accountable for their environmental claims. Are the profit motive and green marketing inherently in conflict? Answer: No, not always. Many industries have found that when they incorporate a reduce-reuse-recycle program they are able to cut costs associated with buying and disposing of resources. Did Subway crossed the exploitation line in targeting its food products to obese children? Answer: They will probably bring up the issue of targeting. The ethics of targeting is questioned when targeting to children, who are considered “vulnerable” consumers, and targeting of controversial products. Some could argue that teens will be unduly influenced into thinking that Subway sandwiches are “healthy,” and then the argument of whether or not this is an unhealthy product will invariably be mentioned. Again, applying the three tests discussed in the previous question could provide some guidance. The issue of whether Subway crossed the exploitation line in targeting its food products to obese children is subjective and open to interpretation. However, there have been criticisms and concerns raised about fast-food marketing practices targeting children, including Subway's marketing strategies. Subway has marketed itself as a healthier alternative to traditional fast food, emphasizing its fresh ingredients and customizable sandwich options. The company has also promoted its kids' meals, often featuring healthier choices such as sandwiches with lean protein and vegetables, along with low-fat milk and apple slices. However, critics argue that despite Subway's healthier options, marketing to children can still contribute to unhealthy eating habits and obesity. Some concerns include: • Pester Power: Marketing directly to children can influence their food preferences and encourage them to request unhealthy options, even if healthier choices are available. • Lack of Context: While Subway may offer healthier options, children may still consume high-calorie, high-sugar items such as cookies and sugary drinks as part of their meal, potentially contributing to obesity. • Influence of Advertising: Advertising can shape children's perceptions of food and nutrition, leading them to associate certain brands with positive experiences and desirable outcomes. • Parental Influence: Children may have limited understanding of nutritional concepts and rely on parental guidance when making food choices. Marketing campaigns targeting children can undermine parents' efforts to promote healthy eating habits. Whether Subway's marketing to children constitutes exploitation depends on one's perspective. Some may argue that Subway is simply offering healthier alternatives in a competitive market, while others may view it as taking advantage of children's vulnerability to promote its products. Ultimately, addressing childhood obesity requires a multi-faceted approach involving not only food marketing regulations but also education, access to nutritious foods, and support for healthy lifestyle choices at home and in schools. As such, discussions about the appropriateness of Subway's marketing practices should consider the broader context of public health and nutrition. What is your opinion regarding the ethics of product placements (e.g., cigarettes, alcohol) in movies targeted at children? Identify the arguments on both sides of the issue, and then present your personal position. Answer: Pro: What is unethical about having your brand featured in a movie? Is this any different than advertising the brand? Shouldn’t marketers be permitted to promote their brands in any favorable context so long as the promotion is not misleading or the product is not unsafe or morally inappropriate? Con: In general, product placement has been criticized because some view it as “stealth” advertising, meaning that viewers do not process the information with the same filters as they do with advertising. Placing a brand in context of lovable movie characters (e.g., E.T.) provides the marketer with an unfair advantage over impressionable children. Such a practice verges on the egregious when the targeted product is unsafe or undesirable for children (e.g., tobacco products). Is targeting unethical or just good marketing? Identify the arguments on both sides of the issue, and then present your personal position. Answer: Pro: Targeting benefits rather than harms consumers because it provides consumers with products best suited to their particular needs and wants. Not to be targeted is to have to choose a product that better accommodates someone else’s needs. Con: Some instances of targeting are concerned not with fulfilling consumers’ needs and wants but rather with exploiting consumer vulnerabilities, so that the marketer gains while society loses. What is your view regarding Anheuser-Busch’s use in the early-to-mid 1990s of humorous TV commercials that portray animated characters Frank and Louie, and an accompanying cast of lizard and frog characters? Is this form of advertising simply a marvelous creative execution, or is it insidious in its potential to encourage kids to like the concept of drinking beer, and perhaps Budweiser in particular? (Note: If you don’t recall these commercials, ask your professor to provide a description.) Answer: Students can bring many different perspectives to bear on this question. If students argue for the frogs and lizards, the instructor can bring up Joe Camel and all the issues surrounding youth smoking. This question also highlights the issue of ads appealing to individuals who are not in the firm’s target market. Are you in favor of the FDA requiring nutritional labeling, or do you consider such requirements an unnecessary intrusion into the free marketplace? Justify your position on this matter. Answer: As with any regulation, there are benefits and costs. The major benefits are: (1) improved consumer choice among alternatives because they are better informed in the marketplace, (2) product quality tends to improve in response to consumers’ changing needs and preferences, and (3) reduced prices result from a reduction in a seller’s “informational market power.” The costs associated with regulation are: (1) marketers’ cost of complying with the regulation, (2) enforcement costs incurred by regulatory agencies and paid for by taxpayers, and (3) unintended side effects that might result from regulation, such as the cost of complying with a regulation being passed along to consumers in the form of higher prices. While students’ opinions on this matter will vary, most will probably argue that the benefits outweigh the costs in this instance because consumers will be more informed and will force marketers to offer more healthy choices. I can provide insights into both sides of the argument. In Favor of FDA Nutritional Labeling Requirements: • Informed Consumer Choices: Nutritional labeling empowers consumers to make informed decisions about the foods they purchase and consume. By providing information about calorie content, serving sizes, and key nutrients, labels enable individuals to assess the nutritional value of products and choose options that align with their dietary needs and health goals. • Public Health Impact: Access to accurate and transparent nutritional information can contribute to improved public health outcomes by helping individuals make healthier food choices. With rising rates of diet-related chronic diseases such as obesity, diabetes, and heart disease, nutritional labeling plays a vital role in promoting healthier eating habits and reducing the burden of preventable illnesses. • Promotion of Accountability: Nutritional labeling requirements promote accountability among food manufacturers and encourage them to formulate products that meet certain nutritional standards. By mandating standardized labeling formats and content, the FDA ensures consistency and transparency across the food industry, fostering consumer trust and confidence in the marketplace. Against FDA Nutritional Labeling Requirements: • Burden on Small Businesses: Compliance with FDA nutritional labeling requirements can pose a financial burden, particularly for small businesses and independent food producers. The costs associated with redesigning packaging, conducting nutritional analyses, and updating labeling materials may disproportionately affect smaller companies, potentially hindering their competitiveness and growth. • Regulatory Overreach: Critics argue that FDA nutritional labeling requirements represent unnecessary government intervention in the free marketplace. They contend that consumers are capable of making their own informed choices without mandated labeling, and that market forces and consumer demand should drive food industry practices, rather than regulatory mandates. • Complexity and Confusion: Nutritional labeling requirements may contribute to information overload and confusion among consumers, particularly if labels contain too much technical information or if there are inconsistencies in labeling formats across products. Simplifying labeling requirements and ensuring clear, user-friendly formats could address these concerns. Ultimately, the debate over FDA nutritional labeling requirements involves balancing the interests of consumers, public health considerations, and the economic concerns of businesses. Striking an appropriate balance requires careful consideration of the potential benefits and drawbacks of regulatory interventions in the food industry. What is the distinction between a deceptive and an unfair business practice? Answer: In theory, a deceptive practice is one that is materially false yet is believed by consumers to have influenced their behavior. Unfair advertising is an even more nebulous regulatory concept. In general, business practices are considered unfair if they are evaluated to be immoral, unethical, oppressive, or unscrupulous and cause substantial injury to consumers, competitors, or other businesses. Deception policy has been a much more frequently used regulatory policy than unfairness policy. Give examples of advertising claims that, if found false, probably would be considered material and those that probably would be evaluated as immaterial. Answer: A material representation involves information that is important to consumers and which is likely to influence their choice regarding a product. Claims that pertain to central features (salient attributes) of a product or service (such as performance features, price, and size) are considered material by FTC officials. Examples of material representations include the following: (1) an automobile advertiser falsely claiming the promoted car gets greater gas mileage than it does; (2) a hair-restoration marketer falsely claiming the product will regrow hair for most anyone who uses the product; (3) a cereal manufacturer claiming that a new cereal brand is fat-free, when in fact it is not; and (4) a power saw manufacturer claiming falsely that the product has more safety features than any competitive brand. Immaterial representations would include false claims for trivial product features or benefits. What exactly is trivial depends on consumer research and litigation. What is your opinion of the defense Kraft used in claiming that calcium is an immaterial product attribute? Answer: Kraft’s basic defense was that its claim (that Kraft Single American cheese slices contain as much calcium as five ounces of milk) is immaterial, and hence nondeceptive, because calcium is a relatively insignificant product attribute. Some students might see Kraft’s defense as a stroke of genius. Other students will see through the hypocrisy. In other words, Kraft spent millions on an advertising campaign that argued the merits of calcium in cheese. Then when confronted with a charge of deceit, Kraft conducted research supposedly finding that calcium is relatively unimportant to consumers when buying cheese for their children. Hence, Kraft found itself in the hypocritical position of saying "well, yes we may have told a falsehood, but the falsehood amounted to a little white lie, so no harm was done." When discussing the criticism that advertising is manipulative, a distinction was made between persuasion efforts of which consumers are cognitively aware and those that fall below their conscious radar screens. First, explain in your own words the distinction between the potential for advertisers to “manipulate” consumers cognitively and unconsciously. Second, express your thoughts about the ethical ramifications of say, retailers’ potential use of in-store advertising to air subliminal messages. Answer: When consumers are consciously aware that attempts are being made to persuade or influence them, they have the cognitive capacity to resist efforts to motivate them in a direction they wish not to be moved. However, there is growing evidence that much human behavior is not under conscious control, and communications can activate, or prime, subconscious thoughts in people using subtle techniques and subliminal messages. For subconscious priming to be effective, however, the primed topic must be compatible with the individual’s current need states. Either way, consumers pretty much control whether or not the marketer’s message will influence them. What is your view of proposals that would ban all advertising and marketing in elementary schools? Require calorie and nutrition menu boards in fast food restaurants? Tax nutritionally inferior food that only provide added calories? Answer: This hits on one criticized aspect of children-directed marketing communications that are disguised as educational materials. Critics charge that these communications are unethical because they use children’s trust in educational materials as a deceptive means of hawking merchandise. The second issue suggests that people who make poor food choices may make better choices if they were informed. In theory, corrective advertising represents a potentially valuable device for regulating deceptive advertising. In practice, however, corrective advertising must perform a very delicate balancing act by being strong enough without being too forceful. Explain the nature of this dilemma. Answer: The public policy mandate underlying the Federal Trade Commission’s efforts is to preserve competition and to protect the interests of competitors and consumers. Herein rests the basis for a dilemma. When a company engages in deception, it alters the competitive situation and injures competitors and/or consumers. Corrective advertising is designed to restore the marketplace to the situation preceding the deceptive activity. Some penalty has to be invoked against the perpetrator in order to accomplish this. Ideally, the penalty will be stiff enough to remove any false gains that the perpetrator has gained due to the deception, but not too strong that it will seriously affect the company’s marketing and financial positions. Achieving this balance (strong enough to restore the marketplace, but not too strong to injure the perpetrator) is a theoretical ideal that is difficult, if not impossible, to accomplish in practice. In the late 1990s, the Distilled Spirits Council of the United States voted to lift its voluntary ban on advertising “hard” liquor on television and radio, a self-imposed ban that had been in effect for nearly a half century. In your opinion, what are the arguments on both sides of the issue regarding the removal of this ban? If you were an executive employed by the Distilled Spirits Council, would you have urged a return to the airways? Is this return to advertising distilled spirits via electronic media unethical or, alternatively, is it a matter of a gutsy business decision by the Distilled Spirits Council that was long overdue? Answer: Pro: The majority of alcohol use in the US and the world is responsible, and the products are advertised through many existing media channels other than TV and radio. The products are also substantial tax revenue generators. The use of another channel does not change the fundamental ethical issue of advertising hard liquor. Also, consumers deserve product information to make more informed choices, and radio and TV could theoretically expand customer product knowledge. Finally, competitive products (beer and wine) are advertised over both radio and TV, and allowing hard liquor the same access is only fair. Con: Radio and TV advertising would reach children, and possibly mislead them given that they process information differently than adults. Alcoholism is a major health problem in the U.S., and increased attention to alcohol through mass media might make sobriety more difficult for problem drinkers. Solution Manual for Advertising Promotion and Other Aspects of Integrated Marketing Communications Craig J. Andrews, Terence A. Shimp 9781111580216, 9788131528242, 9781133191421, 9781337282659
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