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Ethics of Marketing & Advertising - Coggle Diagram
Ethics of Marketing & Advertising
4Ps: Product, Place, Price, Promotion
Products & services developed at prices customers are willing to pay
Ethical Egoism: Each individual's pursuit for self-interest will create overall benefits for the economy
Product Issues
Life Cycle Responsibility:
Idea that the manufacturer has the responsibility to manage the product over its life-cycle
Product Development:
(Based on Economic responsibility in CSR) Discover new resources & Improve current technologies
Product Safety:
Lower safety standards means lower costs & better affordability in developing countries, based on Utilitarian Cost benefit analysis
Price Issues
According to Adam Smith, the Invisible Hand in free markets will manage the D&S and determine prices
However, free market may fail at times
Monopoly:
Single seller of a products or majority market share
Cartel:
A group of producers that work together to protect their interests & to fixed prices
Pricing Tactics
Drip pricing:
Adding mandatory/optional fees, final pricing higher than advertised
Pre-ticked boxes:
Purchase addition products/services that suppliers have pre-selected
Strikethrough Pricing:
Representing a discount on a product where original price is crossed out (misleading)
Pressure Selling Technique:
Create false sense of urgency to make purchase based on inaccurate info (eg: Fire Sale)
Place Issues
Method of distributing goods & services is subject to ethical concerns
Targeted marketing:
Marketed to specific segments that share common characteristics (eg: Opening a grocery store in poor areas)
Vulnerable population:
Marketed towards children, wood, poor, uneducated, old (eg: Marketing casinos to pioneer generations)
Promotion Issues
Physical Vulnerabilities:
Targeting those with physical ailments (those with specific physical issues)
Cognitive Vulnerabilities:
Targeting the immature or senile
Motivational Vulnerabilities:
Targeting those who have serious illnesses or are in grief (eg: Undertaking service promoting outside mortuary)
Social Vulnerabilities:
Targeting the low income earners or less empowered (Eg: Sim cards sold at Lucky Plaza)
Consumer Sovereign: Fairness, Freedom & Well-being
Right to be protected from harmful products (well-being)
Right to be provided with adequate information about product (Fairness)
Right to be offered a choice that includes the product that consumers truely want (Well-being & Freedom)
Right to have voice in the making of major marketing decisions (Freedom)
Fairness
Each party gives up something of value in exchange for something they value (eg: Money for clothes)
Search Costs: Cost for the seller providing the information is a lot cheaper than search costs to buyer
eg: Charcoal Thai 1 (limited period only) & Hua Wei ($54 phone promotion)
Problems with Fairness
Are seller & buyer obliged to provide complete information?
Canveat Emptor (let the buyer beware):
Buyer have the full responsibility
to judge quality of goods and claims made by seller (eg: reveal info to protect them from "you never tell me before" situation)
Canveat Venditor (Let the seller be aware): Seller has the responsibility to reveal quality of goods sold to
protect against unethical buyers filing false claims against them
Freedom
Concerns about the range of consumer options
Absence of Force in an transaction
Concerns privacy of personal data
Well-being: Right to safe products
Due Care Theory
Manufacturers are obligated to take all reasonable precautions to ensure products sold are defect free & safe
Manufacturers are liable for damages if they fail to carry
This view is supported by
Aristotlean principle of compensatory (corrective justice)
- something is owed by a person who inflicts wrongful harm onto another
Due care does not cover consumer misuse of the product (eg: misuse of whistleblowing)
Eg: Ford Pinto -> Unethical as did not take all reasonable precaution under Due Care Theory but Ethical according a Classical view
Issue with Due Care Theory
Justice Learned Hand Proposed:
The Probability of Harm
The Severity of Harm
The Burden of Protecting against Harm
Due care theory focuses on the Conduct of the manufacturer rather than the Condition of the product - this is difficult to prove
On the flip side, a defective product is not enough to accuse a manufacturer of failing due care
Protecting manufacturers from Due Care Theory
Contributory negligence:
Accusing consumer is barred from compensation if they contribute to their own injury due to their negligence
Assumption Risk:
Accusing consumer is proven to have known the risks involved in activity or using the product during the time of the risks
Advertising
Utilitarian View:
Advertising facilitates market exchange, efficiency & overall happiness
Kantian View:
Advertising is potentially harmful & immoral (invasive to mind space & manipulate them into buying what they don't need), violates Formula 2 (Humanity Principle) where companies use consumers as mere means (increase profits)
Use of Psychology in Advertising
Framing: Focusing attention on one aspect of an issue and leaving other aspects out
Attribute framing:
Highlighting 1 characteristic of a situation in either +ve or -ve light (eg: 75% fats vs 25% lean)
Goal Framing:
Emphasis on -ve outcomes of not participating (FOMO, afraid to miss out, negative associations)
Risky Choice Framing:
Tend to take more risks when options highlight the avoidance of losses (eg: 200 saved & 400 dies)
Advertising: Sex
Teleological Research:
To assess effectiveness of sexual appeals through understanding how these appeals might work
Deontological Approach:
Focuses on whether such appeals are morally appropriate, apart from their effects
Unintended Consequences:
Construed as promoting sexual preoccupation, dissatisfaction, and pornography
Unintended consequences of AIDS & unwanted pregnancies (due to restrictions on condoms advertisement)
Effects on Children
Fosters an atmosphere of disrespect & objectification of women
Idealized images of how women should look & act