Chapter 15 Marketing Ethics and Social Responsibility REVIEW AND DISCUSSION QUESTIONS 15.1 Some say that targeting any group of consumers who are willing and able to purchase a product is simply good marketing. For example, advertising very sweet and fatty foods to young children is perfectly ok because children like sweets and, when parents buy these products at their children’s requests, the needs of both the kids and their parents are met and satisfied. What is your reaction to this view? Targeting children with advertisements for very sweet and fatty foods raises ethical concerns due to the potential negative impact on children's health. While it may be true that children naturally gravitate towards sweets and fatty foods, it's important to consider the long-term effects of promoting unhealthy eating habits. Children are more susceptible to advertising and may not fully understand the health implications of consuming such foods in excess. By targeting them with advertisements for these products, there is a risk of contributing to childhood obesity, diabetes, and other health issues. Furthermore, parents may face challenges in balancing their children's desires with their responsibility to provide nutritious meals. Advertising that heavily targets children can put pressure on parents to buy these unhealthy foods, even if they are aware of the health risks. From a marketing perspective, while it may seem like good marketing to target any group of consumers willing and able to purchase a product, ethical considerations should always be taken into account. Marketers should strive to promote products that contribute to the well-being of their target audience and society as a whole. 15.2 A soft drink company distributed cell phones to pre-adolescents in low-income areas. The phones routinely received advertising messages for the drink. Following criticism, the company said that the benefits of the disadvantaged children’s having the cell phones (e.g., safety) outweighed any “exploitive targeting’ considerations. Do you agree with the company’s position? Explain your answer. A lively conversation regarding intent and credibility should result from this question. Answers might also relate to the societal marketing concept. It appears that the soft drink company believes that the phones may enhance the well-being of the pre-adolescents in the low-income areas. The question should be asked, “At what expense?” Students need to consider if this is a form of overaggressive marketing. I can see both sides of the argument, but I would lean towards disagreeing with the company's position. Here's why: 1. Exploitative targeting: Targeting pre-adolescents in low-income areas with advertising messages for a soft drink could be seen as exploitative, as these children may be more vulnerable to marketing tactics and less able to critically evaluate advertising messages. Using cell phones as a medium for this advertising could be seen as taking advantage of their situation. 2. Health implications: Advertising sugary drinks to children, especially in low-income areas where access to healthy food and beverages may already be limited, could contribute to health issues like obesity and diabetes. The long-term health impact of such advertising should be carefully considered. 3. Safety benefits: While providing cell phones to children in low-income areas could have safety benefits, such as being able to contact parents or emergency services, this alone may not outweigh the potential negative effects of targeted advertising. 4. Corporate social responsibility: Companies have a responsibility to consider the ethical implications of their marketing strategies, especially when targeting vulnerable populations. This includes weighing the potential benefits of a program against the potential harm it could cause. In conclusion, while there may be some benefits to providing cell phones to pre-adolescents in low-income areas, the potential harm caused by targeted advertising for sugary drinks likely outweighs these benefits. Companies should prioritize the well-being of children and act responsibly in their marketing practices. 15.3 At a time when many consumers can avoid advertising messages via sophisticated “time shifting” devices, marketers increasingly use product placements (also known ads “branded entertainment”). In your view, is this a wise strategy or not? Explain your answer. Product placement can be a wise strategy for marketers, but it depends on various factors. Here are some considerations: 1. Effectiveness: Product placements can be effective in reaching audiences who might otherwise avoid traditional advertising. When done well, placements can integrate seamlessly into the content, making them less intrusive and more memorable. 2. Audience Perception: Consumers are often aware of product placements, but their effectiveness can vary depending on how they're executed. If placements feel forced or unnatural, they can be viewed negatively and may not achieve the desired results. 3. Cost-Effectiveness: Product placements can be cost-effective compared to traditional advertising, especially if they reach a large and engaged audience. However, the costs can vary widely depending on the placement's prominence and reach. 4. Brand Alignment: Placements should align with the brand's values and image. If the placement feels out of place or contradicts the brand's messaging, it can damage brand perception. 5. Regulatory Considerations: In some regions, there are regulations regarding disclosure of product placements. Marketers must ensure they comply with these regulations to avoid legal issues. In conclusion, product placement can be a wise strategy if executed thoughtfully, aligns with the brand, and effectively reaches the target audience. However, it's essential to consider the potential drawbacks and ensure that placements are integrated seamlessly into the content to maximize their impact. 15.4 Is it right to advertise prescription medications directly to consumers? Why or why not? Direct-to-consumer (DTC) advertising of prescription medications is a complex issue with arguments both for and against. Here are some points to consider: Arguments for DTC Advertising: 1. Informed Consumers: DTC ads can educate consumers about health conditions and available treatments, leading to more informed discussions with healthcare providers. 2. Patient Empowerment: Some argue that DTC ads empower patients to take control of their health and seek appropriate treatment. 3. Healthcare Provider Awareness: DTC ads can raise awareness among healthcare providers about new medications, leading to better-informed discussions with patients. Arguments Against DTC Advertising: 1. Overprescription: Critics argue that DTC ads can lead to overprescription of medications, as patients may request medications they don't necessarily need. 2. Misleading Information: Some ads may oversimplify the risks and benefits of medications, potentially misleading consumers. 3. Increased Healthcare Costs: DTC advertising can contribute to higher healthcare costs, as marketing expenses are often passed on to consumers through higher drug prices. 4. Focus on Lifestyle Drugs: DTC ads tend to focus on lifestyle drugs rather than critical health issues, potentially diverting attention and resources from more serious health concerns. In conclusion, the debate over DTC advertising is ongoing, with valid points on both sides. It's essential to strike a balance between educating consumers and ensuring that advertisements are accurate, balanced, and prioritize public health over profit. Regulatory oversight is crucial to ensure that DTC ads provide meaningful information to consumers without promoting inappropriate medication use. 15.5 Why is it important to study consumer ethics? The purpose of studying consumer behavior is to understand why and how consumers make their purchase decisions. Some critics are concerned that an in-depth understanding of consumer behavior makes it possible for unethical marketers to exploit human vulnerabilities in the marketplace and engage in other unethical marketing practices in order to achieve individual business objectives. Studying consumer ethics helps prevent this exploitation. 15.6 What are the privacy implications of the increasingly widespread monitoring of online consumers by companies? The widespread monitoring of online consumers by companies has significant privacy implications. Here are some key concerns: 1. Data Collection: Companies collect vast amounts of data about individuals' online activities, including browsing history, search queries, and interactions with websites and apps. This data can be used to create detailed profiles of individuals, including their interests, behaviors, and preferences. 2. Tracking: Companies use various technologies, such as cookies and tracking pixels, to track users across websites and devices. This tracking can be used to deliver targeted advertising and personalized content but raises concerns about user privacy and consent. 3. Data Breaches: The collection and storage of large amounts of consumer data increase the risk of data breaches. If this data falls into the wrong hands, it can lead to identity theft, fraud, and other privacy violations. 4. Lack of Transparency: Many consumers are unaware of the extent to which their online activities are monitored and the data collected about them. This lack of transparency raises concerns about informed consent and consumer privacy rights. 5. Potential for Discrimination: Data collected about individuals can be used to make decisions about them, such as offering or denying services. There is a risk that this data could be used in ways that result in unfair or discriminatory treatment. 6. Regulatory Challenges: The rapidly evolving nature of online tracking and data collection presents challenges for regulators seeking to protect consumer privacy. Regulations such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) aim to address these concerns but are often complex and difficult to enforce. In conclusion, the widespread monitoring of online consumers by companies raises significant privacy concerns. It is essential for companies to be transparent about their data collection practices, obtain informed consent from users, and take steps to protect consumer data from unauthorized access and misuse. Regulatory frameworks play a crucial role in ensuring that consumer privacy rights are protected in the digital age. HANDS-ON ASSIGNMENTS 15.7 Find, bring to class and discuss ads that depict each of the following: a. Exploitive targeting of children b. Overaggressive advertising c. Direct-to-consumer advertising of pharmaceuticals d. Cause-related marketing e. Societal marketing by a not-for-profit group f. Societal marketing by a for-profit company g. Socially-undesirable representation Here are some examples for each category: a. Exploitive targeting of children: • Ads for sugary cereals with colorful packaging and cartoon characters that appeal to children. b. Overaggressive advertising: • Infomercials that use high-pressure sales tactics to push a product. • Ads that exaggerate the benefits of a product or use misleading information. c. Direct-to-consumer advertising of pharmaceuticals: • Ads for prescription medications that directly target consumers, often listing the benefits of the drug along with potential side effects. d. Cause-related marketing: • Ads that promote a product while also highlighting the company's support for a social cause, such as campaigns that donate a portion of sales to charity. e. Societal marketing by a not-for-profit group: • PSAs (Public Service Announcements) that raise awareness about social issues or encourage behavior change, often sponsored by non-profit organizations. f. Societal marketing by a for-profit company: • Ads that promote a company's efforts to be environmentally friendly or socially responsible, such as campaigns highlighting sustainable practices or community involvement. g. Socially-undesirable representation: • Ads that depict stereotypes or promote harmful behavior, such as ads that objectify women or reinforce negative racial stereotypes. These examples can provide a basis for discussion in your class. Instructor’s Discussion This exercise allows students to find examples of advertising related to ethical issues and societal marketing. You may want to have students vote for the best example in each category. 15.8 Online, find three examples of advertising embedded within entertainment content and discuss them in class. Here are three examples of advertising embedded within entertainment content: 1. Product Placement in TV Shows or Movies: • Many TV shows and movies feature products from real-life brands as part of the storyline. For example, a character might be seen drinking a specific brand of soda or using a particular smartphone. 2. Branded Content or Sponsored Posts on Social Media: • Influencers and celebrities often create content on social media that is sponsored by brands. This can range from a simple product mention to a full video or post dedicated to promoting the brand's products. 3. Native Advertising on News Websites or Blogs: • Native advertising is designed to blend in with the regular content on a website or blog. For example, an article on a news website might be sponsored by a brand and promote their products or services in a subtle way. These examples show how advertising can be integrated into entertainment content in ways that may not always be obvious to the audience, raising questions about transparency and the impact on consumer behavior. Instructor’s Discussion Again, ask students to vote on the best example. Be sure to ask students to defend why the ad brought to class represents covert advertising. 15.9 Compile a list of consumption behaviors that you consider unethical. For each behavior listed, explain why you view it as wrong. Also, for each behavior listed, discuss the possible reasons a person engaging in that practice may use to justify doing so Here is a list of consumption behaviors that are often considered unethical, along with explanations for why they are viewed as wrong and possible justifications that individuals might use: 1. Counterfeit goods: Purchasing counterfeit goods harms the legitimate companies that produce the original products, leading to lost revenue and potential job losses. It also often involves unethical labor practices and can fund criminal activities. • Justification: Some may justify buying counterfeit goods by arguing that they cannot afford the genuine product or that the quality of the counterfeit is similar enough to the original. 2. Excessive consumerism: Excessive consumption can lead to environmental degradation, resource depletion, and waste generation. It can also contribute to social inequality and place undue emphasis on material possessions. • Justification: People may justify excessive consumption by citing personal fulfillment, social status, or the belief that buying more will lead to greater happiness. 3. Greenwashing: Greenwashing refers to the deceptive practice of making unsubstantiated or misleading claims about the environmental benefits of a product, service, or company. It can mislead consumers and undermine genuine efforts to promote sustainability. • Justification: Companies may justify greenwashing as a way to appeal to environmentally conscious consumers without making substantial changes to their practices. 4. Planned obsolescence: Planned obsolescence involves designing products to become obsolete or non-functional after a certain period, encouraging consumers to buy new versions. This contributes to waste and resource depletion. • Justification: Companies may justify planned obsolescence as a way to stimulate demand, promote innovation, or ensure profitability. 5. Unethical labor practices: Supporting products made with unethical labor practices, such as child labor or exploitative working conditions, contributes to human rights violations. • Justification: Some may justify buying products made with unethical labor practices by arguing that they are unaware of the conditions or that they have no alternative options. 6. Animal cruelty: Purchasing products made from animals that have been subjected to cruelty (e.g., fur, exotic animal skins) contributes to animal suffering. • Justification: Individuals may justify buying such products by citing cultural norms, fashion trends, or a lack of awareness about the origins of the products. 7. Misleading advertising: Advertising that is deceptive or misleading can manipulate consumers into making purchases based on false information. • Justification: Advertisers may justify misleading advertising as a way to attract attention, compete with other brands, or create a positive image for their product. 8. Exploitative marketing to children: Marketing practices that target children with the intention of exploiting their vulnerability or lack of understanding can lead to unhealthy consumption habits and contribute to social issues. • Justification: Companies may justify marketing to children by arguing that parents ultimately make the purchasing decisions and that marketing is a part of free market competition. These behaviors are often unethical because they harm individuals, communities, or the environment, either directly or indirectly. However, individuals may justify these behaviors based on personal, social, or economic reasons, highlighting the complexity of ethical decision-making in consumption. Instructor’s Discussion This exercise should provoke a lively discussion. Typically students disagree on what is and is not unethical. Encourage students to thoroughly explain their reasoning for believing a behavior is wrong. 15.10 Visit the news section at www.caru.org. Select three of the press releases featured there (other than those discussed in the chapter) and illustrate how they depict the unethical applications of learning or perception concepts in targeting children. You would need to visit the news section at www.caru.org and select three press releases that illustrate unethical applications of learning or perception concepts in targeting children. Unfortunately, I cannot access external websites, so I can't provide specific examples. However, I can suggest a general approach to answering this question: 1. Select Press Releases: Go to www.caru.org and find the news section. Look for press releases that involve advertising or marketing campaigns targeted at children. 2. Identify Unethical Practices: Read through the press releases and identify any practices that could be considered unethical. This could include using misleading or deceptive advertising, exploiting children's vulnerability, or encouraging unhealthy behaviors. 3. Link to Learning or Perception Concepts: For each press release, identify the learning or perception concepts that are being exploited. For example, if an advertisement uses subliminal messaging to influence children's behavior, this would relate to perception concepts. 4. Illustrate the Unethical Application: Describe how the press releases illustrate the unethical application of these concepts. Provide specific examples and explain why these practices are considered unethical. 5. Conclusion: Summarize your findings and discuss the importance of ethical considerations in marketing to children. Suggest ways in which companies can engage in responsible marketing practices. Remember to cite the specific press releases you are referring to and provide a clear and well-structured answer. Instructor’s Discussion The website lists quite a number of press releases. Students easily should be able to find three that they are interested in. Many cases mention legal precedents for decisions. Students may find this historical perspective fascinating. S.T.A.R. PROJECTS Ethical Issues in Consumer Behavior S.T.A.R. Project #1 As a student at a large university, you have been asked by a state senator to attend a meeting to discuss youth and obesity. When you arrive at the meeting, you discover the real purpose of the invitation. The state senator is considering sending a bill to the legislature requiring that all colleges and universities in the state be required to use only organic food in all residence halls. In addition, the senator wants to require a reduction in sugars, fats and starches served and an increase in nutrients. The senator believes strongly in the societal marketing concept and feels that it is the social responsibility of all colleges and universities to. The reason students have been invited is to sign a petition supporting this bill. Consider this issue from two perspectives. Given the senator’s agenda was not clearly stated, was the invitation ethical? Is the senator’s bill truly societal marketing? Why or why not? The invitation from the state senator raises several ethical questions. On one hand, it's not inherently unethical to invite students to a meeting under false pretenses, as this can be a common tactic in politics. However, it does raise concerns about transparency and honesty in communication. Regarding the senator's bill, whether it truly qualifies as societal marketing depends on the perspective. Societal marketing aims to balance consumer satisfaction, company profits, and societal well-being. In this case, the senator believes that promoting organic food and healthier diets in universities is in the societal interest, aligning with the societal marketing concept. However, some may argue that mandating these changes could infringe on individual freedom of choice and could be seen as overly paternalistic. From a practical standpoint, implementing such a bill could be challenging and costly for colleges and universities, potentially leading to increased costs for students. It's important for the senator to consider these factors and engage in open dialogue with students and university officials to address concerns and find a balanced approach to promoting health and well-being on campus. Instructor’s Discussion This scenario asks students to evaluate an ethical issue from different perspectives. The reason for the meeting was not clear. Does this make a difference in how students perceive the senator’s actual cause? Should students continue with the meeting? Societal marketing requires that all marketers adhere to the principles of social responsibility in the marketing of their goods and services. Yet, they should endeavor to satisfy the needs and wants of their target markets in ways that preserve and enhance the well-being of consumers and society as a whole. Lead students through their responses. Does organic food meet the qualifications of societal marketing? Will organic food coupled with lower sugars, fats and starches reduce obesity? And, importantly, will students be amenable to these changes and will the colleges and universities still be able to operate profitably, given these requirements? S.T.A.R. Project #2 Online advertisers are able to track your behavior. As you move through the internet, advertisers track where you click, how frequently you visit a site and how long you spend on a site. This knowledge enables advertisers to then tailor offers directly to you. Your assignment is to consider tracking from your personal perspective and the perspective of advertisers. Should your exploration through the internet be private or public? Who is to decide? What rights do advertisers have? After you have considered these questions (and others you consider relevant), visit the Federal Trade Commission web site and read their recommendations on self-regulation principles for online behavioral advertising. Do you agree or disagree with their position? From a personal perspective, the exploration through the internet should be private by default. Individuals should have the right to control their online privacy and decide what information is collected about them. This includes the right to opt out of tracking and to have transparency about how their data is used. On the other hand, advertisers may argue that they have the right to track user behavior in order to provide more relevant and targeted advertisements. They may argue that this benefits both consumers, who receive more personalized offers, and businesses, who can more effectively reach their target audience. The decision about whether online exploration should be private or public is ultimately a complex one that involves balancing individual privacy rights with the needs of businesses and advertisers. However, it is important that any tracking or data collection is done transparently and with the consent of the individual. Regarding the Federal Trade Commission's recommendations on self-regulation principles for online behavioral advertising, it is important to review their guidelines to provide a more informed opinion. However, in general, I would likely agree with the principles of transparency, consumer control, and data security outlined by the FTC. These principles align with the idea that individuals should have the right to control their online privacy and be informed about how their data is being used. Instructor’s Discussion This assignment is a good way for students to think about their own opinions and weigh them against the desires of advertisers. They can then compare both to the Federal Trade Commission’s report on tracking, targeting and technology. Small Group Project S.T.A.R. Project #3 Your group’s assignment is to find advertisements that members feel are unethical. Each group member must bring at least three examples to the discussion. Debate among members the ethical/unethical nature of the ads. Why might some members feel an ad is ethical while others might disagree? Vote on each ad. Are some product categories more susceptible to unethical advertising? Why or why not? For this assignment, each group member should find three advertisements they believe are unethical. These advertisements could contain misleading information, promote harmful stereotypes, or manipulate emotions unfairly. During the discussion, members can present their ads and explain why they consider them unethical. Debates may arise because ethical judgments can be subjective and influenced by personal values and perspectives. Some members might feel an ad is ethical because they focus on its creativity or effectiveness in promoting a product, while others might view the same ad as unethical due to its impact on society or its use of deceptive tactics. Voting on each ad can help the group gauge the overall consensus on its ethicality. It's important to discuss differing opinions and understand the reasons behind them, as this can lead to a deeper understanding of ethical issues in advertising. Certain product categories might be more susceptible to unethical advertising due to factors such as competition, target audience, and societal norms. For example, industries like tobacco, alcohol, and fast food have faced scrutiny for their advertising practices, as they often involve health-related concerns or target vulnerable populations. However, unethical advertising can occur in any product category, depending on the specific context and execution of the ad. Instructor’s Discussion This discussion makes the point regarding the sometimes difficulty of agreeing on ethical or unethical advertising. You can guide the conversations by asking who should decide on ethics policy and how ethics policies are created. S.T.A.R. Project #4 Your assignment is to watch either two hours of television or a movie. While watching, you are to record every incidence of product placement. Also record whether the product placement was overt (the brand was named or pointed to) or less obvious. Which placement was more effective? Why? Did or will the placement cause you to purchase the product? How do you feel about the newly formed consumer advocacy group, Commercial Alert, which is asking for legislation requiring upfront disclosure of ad designed as product placements? An interesting twist would be to assign this project to students in pairs. However, the members, making up the pair, cannot watch the shows together. After the members have recorded their data, compare to see if both recognized the same number of product placements and the same incidences of product placements. This assignment is focused on observing and analyzing product placements in television or movies. Here's how you could approach it: 1. Watching Content: Each student watches two hours of television or a movie, noting down every instance of product placement and whether it was overt or less obvious. 2. Recording Data: Create a table or spreadsheet to record the details of each product placement, including the brand, how it was placed, and any notes on its effectiveness. 3. Analyzing Effectiveness: After watching, analyze which placements were more effective. Consider factors such as visibility, integration into the storyline, and potential impact on purchasing behavior. 4. Personal Impact: Reflect on whether any of the placements are likely to influence your own purchasing behavior or if they have already done so. 5. Opinion on Commercial Alert: Consider the perspective of the consumer advocacy group, Commercial Alert, which is advocating for upfront disclosure of ad designed as product placements. Formulate your opinion on whether such legislation would be beneficial or not. 6. Comparing Data: In pairs, compare the data collected to see if both students recognized the same number of product placements and the same incidences. Discuss any discrepancies and reasons for them. This assignment provides a hands-on experience in understanding the prevalence and impact of product placements in media, as well as encouraging critical thinking about advertising practices and consumer rights. Instructor’s Discussion This project will aid the students in recognizing product placements. Lead them through the following questions. Because their awareness is heightened, do they believe they see more product placements? When they are more passively watching television, do they believe they see less? Have the students explain their answers. Is one situation more ethical than another? Why or why not? How do the students feel about Commercial Alert’s call for legislation? Solution Manual for Consumer Behaviour Leon G. Schiffman, Leslie Lozor Konuk, S. Ramesh Kumar 9789332555099, 9780134734828
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