© 2010 South-Western, a part of Cengage Learning All rights reserved. PowerPoint Presentation by Charlie Cook The University of West Alabama Eighth Edition Ethical, Regulatory, and Environmental Issues CHAPTER 21 1. Appreciate the ethical issues associated with advertising, sales promotions, and other marcom practices. 2. Understand why the targeting of marketing communications toward vulnerable groups is a heatedly debated practice. 3. Explain the role and importance of governmental efforts to regulate marketing communications. 4. Be familiar with deceptive advertising and the elements that guide the determination of whether a particular advertisement is deceptive. Chapter Objecves After reading this chapter you should be able to: © 2010 South-Western, a part of Cengage Learning. All rights reserved. 21–2 5. Be acquainted with the regulation of unfair business practices and the major areas where the unfairness doctrine is applied. 6. Know the process of advertising self-regulation. 7. Appreciate the role of marketing communications in environmental (green) marketing. 8. Recognize the principles that apply to all green marcom efforts. Chapter Objecves (cont’d) After reading this chapter you should be able to: © 2010 South-Western, a part of Cengage Learning. All rights reserved. 21–3 © 2010 South-Western, a part of Cengage Learning. All rights reserved. 21–4 Ethical Issues in Marketing Communications Ethical Issues in Marketing Communications • Ethics in Marcom Ethics in Marcom  Involves matters of right and wrong, or Involves matters of right and wrong, or moral moral , conduct , conduct pertaining to any aspect of marketing communications pertaining to any aspect of marketing communications  Honesty, honor, virtue, integrity Honesty, honor, virtue, integrity • Ethical Conduct Ethical Conduct  Lack of consensus about what it is Lack of consensus about what it is  Ethical lapses and moral indiscretions occur under Ethical lapses and moral indiscretions occur under pressures of trying to meet business goals and pressures of trying to meet business goals and attempting to satisfy the demands of the financial attempting to satisfy the demands of the financial community community © 2010 South-Western, a part of Cengage Learning. All rights reserved. 21–5 Sources of Ethical Issues Sources of Ethical Issues Ethical Issues in Marketing Activities and Communications Advertising Targeting Marcom Public Relations Internet Marketing Sales Promotions Packaging Communications © 2010 South-Western, a part of Cengage Learning. All rights reserved. 21–6 The Ethics of Targeting The Ethics of Targeting • Ethical Debate Ethical Debate  Is it ethical to target products Is it ethical to target products and communications efforts to and communications efforts to segments that vulnerable or segments that vulnerable or put at risk by these actions? put at risk by these actions? • Is Targeting Unethical or Is Targeting Unethical or Just Good Marketing? Just Good Marketing?  When does a good targeting When does a good targeting strategy become a method of strategy become a method of unfair (unethical) advantage? unfair (unethical) advantage? © 2010 South-Western, a part of Cengage Learning. All rights reserved. 21–7 Is Targeting Unethical or Is Targeting Unethical or Just Good Marketing? Just Good Marketing? • Positive Positive  Targeting benefits Targeting benefits rather than harms rather than harms consumers—providing consumers—providing them with products them with products best suited to their best suited to their particular needs and particular needs and wants wants • Negative Negative  Targeting is not Targeting is not concerned with fulfilling concerned with fulfilling consumers’ needs and consumers’ needs and wants, but rather with wants, but rather with exploiting consumer exploiting consumer vulnerabilities vulnerabilities © 2010 South-Western, a part of Cengage Learning. All rights reserved. 21–8 The Ethics of Targeting The Ethics of Targeting Targeting Food and Beverage Products Targeting Tobacco and Alcohol Products Targeting Miscellaneous Products Ethical Issues in Targeting Children and Teens © 2010 South-Western, a part of Cengage Learning. All rights reserved. 21–9 Targeting to Children and Teens Targeting to Children and Teens • Negative Targeting Outcomes Negative Targeting Outcomes  Products targeted to kids are unnecessary and the Products targeted to kids are unnecessary and the communications involved are exploitative communications involved are exploitative  Posters, book covers, free magazines, advertising, and other Posters, book covers, free magazines, advertising, and other so-called learning tools that are ads for products so-called learning tools that are ads for products  Movies with tie-in merchandise programs Movies with tie-in merchandise programs  Targeting adult products (e.g., beer) to pre-adults Targeting adult products (e.g., beer) to pre-adults  Using unacceptable cartoon-like images (e.g., Joe Camel) Using unacceptable cartoon-like images (e.g., Joe Camel)  Promoting adult-oriented entertainment (e.g., violent films, Promoting adult-oriented entertainment (e.g., violent films, video games, and music products) to children and teens video games, and music products) to children and teens  Marketing food products (e.g., high-fat, high-calorie snacks) Marketing food products (e.g., high-fat, high-calorie snacks) that contribute to childhood obesity that contribute to childhood obesity © 2010 South-Western, a part of Cengage Learning. All rights reserved. 21–10 Targeting to Economically Disadvantaged Targeting to Economically Disadvantaged Consumers Consumers • Billboards advertising tobacco and alcohol Billboards advertising tobacco and alcohol disproportionately appear in inner-city areas disproportionately appear in inner-city areas • Examples: Examples:  R.J. Reynolds attempt to market new brands R.J. Reynolds attempt to market new brands cigarettes to African-Americans and downscale young cigarettes to African-Americans and downscale young women women  Heileman Brewing Company’s targeting of “Power Heileman Brewing Company’s targeting of “Power Master” high-alcohol malt liquor to inner-city Master” high-alcohol malt liquor to inner-city neighborhoods neighborhoods