BEACHLOR of BUSINESS ADMINSTRATOR Prof : Sadullaha

MUHAMMAD TARIQ 11344

M.TARIQ 11344

Haroon Sadiq 11349

M .Sufiyan 11324

Usman Sadiq 11360

Umer Farooq 11317

BBA (6) A

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Submitted To:

Submitted By:

Group Leader:

Program:

Class:

Advertising and Marketing EthicsMarketing ethics is the area of applied ethics which deals with the moral principles behind the

operation and regulation of markets. Some areas of marketing ethics (ethics

of advertising and promotion) overlap with media ethics.

Issues in Fundamental the ethics of marketing:-

Frameworks of analysis for marketing ethics

Possible frameworks:

Value oriented framework, analyzing ethical problems on the basis of the values which

they break (e.g. Honesty, autonomy, privacy, transparency). An example of such an

approach is the AMA Statement of Ethics.

Stakeholder oriented framework, analyzing ethical problems on the basis of whom they

affect (e.g. Consumers, competitors, society as a whole).

Process oriented framework, analyzing ethical problems in terms of the categories used

by marketing specialists (e.g. Research, price, promotion, placement).

None of these frameworks allows, by itself, a convenient and complete categorization of

the great variety of issues in marketing ethics

Power based analysis:-

Contrary to popular impressions, not all marketing is adversarial, and not all marketing is stacked

in favor of the marketer. In marketing, the relationship between producer/consumer or

buyer/seller can be adversarial or cooperative. For an example of cooperative marketing If the

market situation is adversarial, another dimension of difference emerges, describing the power

balance between producer/consumer or buyer/seller. Power may be concentrated with the

producer (caveat emptor), but factors such as over supply or legislation can shift the power

towards the consumer (caveat vendor).

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Is marketing inherently evil?

A popularity anti marketing stance commonly discussed in the blogosphere  and popular

literature is that any kind of marketing is inherently evil. The position is based on the argument

that marketing necessarily commits at least one of three wrongs:

Damaging personal autonomy. The victim of marketing in this case is the intended buyer

whose right to self determination is infringed.

Causing harm to competitors. Excessively fierce competition and unethical marketing

tactics are especially associated with saturated markets.

Manipulating social values. The victim in this case is society as a whole, or the

environment as well. The argument is that marketing promotes consumerism and waste.

Specific issues in marketing ethics:-

Market research:-

Ethical danger points in market research include:

Invasion of privacy.

Stereotyping.

Stereotyping occurs because any analysis of real populations needs to make approximations and

place individuals into groups. However if conducted irresponsibly, stereotyping can lead to a

variety of ethically undesirable results. In the American Marketing Association Statement of

Ethics, stereotyping is countered by the obligation to show respect ("acknowledge the basic

human dignity of all stakeholders")

Market audience:-

Ethical danger points include:

Excluding potential customers from the market: selective marketing is used to discourage

demand from undesirable market sectors or disenfranchise them altogether.

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Targeting the vulnerable (e.g. Children, the elderly).

Examples of unethical market exclusion or selective marketing are past industry attitudes to the

gay, ethnic minority and obese ("plus-size") markets. Contrary to the popular myth that ethics

and profits do not mix, the tapping of these markets has proved highly profitable. For example,

20% of US clothing sales are now plus size Another example is the selective marketing of health

care, so that unprofitable sectors (i.e. The elderly) will not attempt to take benefits to which they

are entitled. A further example of market exclusion is the pharmaceutical industry's exclusion of

developing countries from AIDS drugs

Examples of marketing which unethically targets the elderly include: living trusts, time

share fraud, mass marketing fraud and others The elderly hold a disproportionate amount of the

world's wealth and are therefore the target of financial exploitation.

In the case of children, the main products are unhealthy food, fashionware and entertainment

goods. Children are a lucrative market: "...children 12 and under spend more than $11 billion of

their own money and influence family spending decisions worth another $165 billion", but are

not capable of resisting or understanding marketing tactics at younger ages ("children don't

understand persuasive intent until they are eight or nine years old. At older ages competitive

feelings towards other children are stronger than financial sense. The practice of extending

children's marketing from television to the school ground is also controversial (see marketing in

schools). The following is a select list of online articles

Donnell Alexander and Aliza Dichter, Ads and Kids: How young is too young?

Rebecca Clay, Advertising to children: Is it ethical? (Monitor on Psychology, Volume 31,

No. 8 September 2000), American Psychological Association

Media Awareness Network. How marketers target kids.

Other vulnerable audiences include emerging markets in developing countries, where the public

may not be sufficiently aware of skilled marketing ploys transferred from developed countries,

and where, conversely, marketers may not be aware how excessively powerful their tactics may

be. See Nestle infant milk formula scandal. Another vulnerable group is mentally unstable

consumers. The definition of vulnerability is also problematic: for example, when

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should indebtedness be seen as a vulnerability and when should "cheap" loan providers be seen

as loan sharks, unethically exploiting the economically disadvantaged?

Preaching ethics:-

List of unethical pricing practices.

Bid rigging

Dumping (pricing policy)

Predatory pricing

Price discrimination

Price fixing

Price skimming

Price war

Supra competitive pricing

Variable pricing

Ethics in advertising and promotion:-

Ethical pitfalls in advertising and promotional content include:

Issues over truth and honesty. In the 1940s and 1950s, tobacco used to be advertised

as promoting health. Today an advertiser who fails to tell the truth not only offends against

morality but also against the law. However the law permits "puffery" (a legal term The

difference between mere puffery and fraud is a slippery slope: "The problem is the slippery

slope by which variations on puffery can descend fairly quickly to lay. See main article: false

advertising.

Issues with violence, sex and profanity. Sexual innuendo is a mainstay of advertising content

(see sex in advertising), and yet is also regarded as a form of sexual harassment. Violence is

an issue especially for children's advertising and advertising likely to be seen by children

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Delivery Channels :-

Direct marketing is the most controversial of advertising channels, particularly when

approaches are unsolicited. TV commercials and direct mail are common examples.

Electronic spam and telemarketing push the borders of ethics and legality more strongly.

Shills and gastro are examples of ways of delivering a marketing message under the guise

of independent product reviews and endorsements, or creating a supposedly independent

watchdog or review organizations. For example, fake reviews can be published on

Amazon Shills are primarily for message-delivery, but they can also be used to drive up

prices in auctions, such as Ebay auctions

Deceptive Advertising and Ethics:-

Another breach of marketing ethics has to do with the use of deceptive advertising. This form of

advertising is not specific to one target market, and can sometimes go unnoticed by the public.

There are a number of different ways in which deceptive marketing can be presented to

consumers; one of these methods is accomplished through the use of humor. In a study

conducted by Hassib Shabbir and Des Thwaites, 238 advertisements were assessed and 73.5% of

them were found to have used deceptive marketing practices. In those advertisements that were

conducted deceptively, 74.5% of them used humor as a masking device in order to mislead

potential customers. Part of what drives this study is the idea that humor provides an escape or

relief from some kind of human constraint, and that some advertisers intend to take advantage of

this by deceptively advertising a product that can potentially alleviate that constraint through

humor. Through the study it was also found that all types of humor are used to deceive

consumers, and that there are certain types of humor that are used when making certain deceptive

claims.

It is important to understand that humor is not the only method that is used to deter consumer’s

minds from what a product actually offers. Before making important purchases, one should

always conduct their own research in order to gain a better understanding of what it is they are

investing in.

The use of ethics as a marketing tactic:-

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siness ethics has been an increasing concern among larger companies, at least since the 1990s.

Major corporations increasingly fear the damage to their image associated with press revelations

of unethical practices. Marketers have been among the fastest to perceive the market's preference

for ethical companies, often moving faster to take advantage of this shift in consumer taste. This

results in the expropriation of ethics itself as a selling point or a component of a corporate image.

The Body Shop is an example of a company which marketed itself and its entire product

range solely on an ethical message.

Greenwash is an example of a strategy used to make a company appear ethical when its

unethical practices continue.

Liberation marketing is another strategy whereby a product can masquerade behind an

image that appeals to a range of values, including ethical values related to lifestyle and

anti consumerism.

"Liberation marketing takes the old mass culture critique consumerism as conformity fully into

account, acknowledges it, addresses it, and solves it. Liberation marketing imagines consumers

breaking free from the old enforcers of order, tearing loose from the shackles with which

capitalism has bound us, escaping the routine of bureaucracy and hierarchy, getting in touch with

our true selves, and finally, finding authenticity, that holiest of consumer grails.

Neuromarketing ethics :-

Neuromarketing Nero marketing and its precursor, neuroeconomics, uses clinical information

about brain functions and mechanisms to help explain what is happening inside of the “black

box” so prevalent in many explanations of consumer behavior. In order to do so, specialists use

neuroimaging techniques and record brain responses to different stimuli. The Neuromarketing

Science & Business Association has launched on November 2012 a Neuromarketing Code of

Ethics. This is a first step towards adopting international standards applied to using

neuroscientific methods to study the effectiveness of advertising campaigns, packaging and

product design, as well as communication campaigns from non-profit organizations and

government institutions.

Marketing strategy:-

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The main theoretical issue here is the debate between free markets and regulated markets. In a

truly free market, any participant can make or change the rules. However when new rules are

invented which shift power too suddenly or too far, other participants may respond with

accusations of unethical behaviour, rather than modifying their own behavior to suit (which they

might not be able to anyway). Most markets are not fully free: the real debate is as to the

appropriate extent of regulation.

Further issues in marketing ethics:-

Marketing ethics overlaps with environmental ethics in respect of waste problems associated

with the packaging of products.

Some, such as members of the advocacy group No Free Lunch, have argued that marketing

by pharmaceutical companies is negatively impacting physicians' prescribing practices,

influencing them to prescribe the marketed drugs rather than others which may be cheaper or

better for the patient.

Ethically thinking is responding to situations that deal with principles concerning human

behavior in respect to the appropriateness and inappropriateness of certain communication and to

the decency and indecency of the intention and results of such actions. In other words, ethics are

distinctions between right and wrong. Businesses are confronted with ethical decision making

every day, and whether employees decide to use ethics as a guiding force when conducting

business is something that business leaders, such as managers, need to instill. Marketers are

ethically responsible for what is marketed and the image that a product portrays. With that said,

marketers need to understand what good ethics are and how to incorporate good ethics in various

marketing campaigns to better reach a targeted audience and to gain trust from customers.

Marketing ethics, regardless of the product offered or the market targeted, sets the guidelines for

which good marketing is practiced. When companies create high ethical standards upon which to

approach marketing they are participating in ethical marketing. To market ethically and

effectively one should be reminded that all marketing decisions and efforts are necessary to meet

and suit the needs of customers, suppliers, and business partners. Ethical behavior should be

enforced throughout company culture and through company practices.

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Ethical Marketing:

Ethical marketing refers to the application of marketing ethics into the marketing process.

Briefly, marketing ethics refers to the philosophical examination, from a moral standpoint, of

particular marketing issues that are matters of moral judgment. Ethical marketing generally

results in a more socially responsible and culturally sensitive business community. The

establishment of marketing ethics has the potential to benefit society as a whole, both in the

short- and long-term. Ethical marketing should be part of business ethics in the sense that

marketing forms a significant part of any business model. Study of Ethical marketing should be

included in applied ethics and involves examination of whether or not an honest and factual

representation of a product or service has been delivered in a framework of cultural and social

values.

It promotes qualitative benefits to its customers, which other similar companies, products or

services fail to recognize. The concern with ethical issues, such as child labor, working

conditions, relationships with third world countries and environmental problems, has changed

the attitude of the Western World towards a more socially responsible way of thinking. This has

influenced companies and their response is to market their products in a more socially

responsible way.

The increasing trend of fair trade is an example of the impact of ethical marketing. In the 'Ethical

Shoppers Price Index Survey' (2009), trade was the most popular ethical badge products could

have. It also revealed that many consumers distrusted green claims. (The idea of fair trade is that

consumers pay a guaranteed commodity price to a small group of producers, the producers agree

to pay fair labor prices and conserve the environment - a fair deal for everyone.)

The philosophy of marketing is not lost with this newfound ethical slant, but rather hopes to win

customer loyalty by reinforcing the positive values of the brand, creating a strong citizen brand.

However, this new way of thinking does create new challenges for the marketer of the 21st

century, in terms of invention and development of products to add long term benefits without

reducing the product's desirable qualities.

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Many brands have tried to use ethics to make themselves look responsible, often spinning

environmental claims which has led to the term greenwash (see greenwashing) In research

consumers have shown to have even less trust of ethical claims in ads than ordinary ads. media

attention on ethics has resulted in many top brands suffering consumer boycotts. Although many

brands have tried to use green issues, it has been noted that in research 2/3 of consumers

responded more to ethical claims that relate to people rather than to than environment.

Ethical marketing should not be confused with government regulations brought into force to

improve consumer welfare, such as reducing sulfur dioxide emissions to improve the quality of

the air. A government regulation is a legal remedy intended to mitigate or correct an ethical

issue, such as pollution of the air that we all share. Enlightened ethical marketing is at work

when the company and marketer recognize further improvements for humankind unrelated to

those enforced by governments or public opinion. By way of example, the Coop Group refuses

to invest money in tobacco, fur and any countries with oppressive regimes.

False advertising:-

False advertising or deceptive advertising is the use of false or misleading statements in

advertising. As advertising has the potential to persuade people into commercial transactions that

they might otherwise avoid, many governments around the world use regulations to control false,

deceptive or misleading advertising. "Truth" refers to essentially the same concept, that

customers have the right to know what they are buying, and that all necessary information should

be on the label.

False advertising, in the most blatant of contexts, is illegal in most countries. However,

advertisers still find ways to deceive consumers in ways that are legal, or technically illegal but

unenforceable.

Bait and switch:-

Bait and switch is a form of fraud used in retail sales but also practiced in other contexts. First,

customers are "baited" by merchants' advertising products or services at a low price, but when

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customers visit the store, they discover that the advertised goods are not available, or the

customers are pressured by sales people to consider similar, but higher priced items ("switching"

Function:-

The intention of the bait-and-switch is to encourage purchases of substituted goods, making

consumers satisfied with the available stock offered, as an alternative to a disappointment or

inconvenience of acquiring no goods (or bait) at all, and reckoning on a seemingly partial

recovery of sunk costs expended trying to obtain the bait. It suggests that the seller will not show

the original product or service advertised but instead will demonstrate a more expensive product

or a similar product with a higher margin.

Legality:-

In the United States, courts have held that the purveyor using a bait-and-switch operation may be

subject to a lawsuit by customers for false advertising, and can be sued for trademark

infringement by competing manufacturers, retailers, and others who profit from the sale of the

product used as bait. However, no cause of action will exist if the purveyor is capable of actually

selling the goods advertised, but aggressively pushes a competing product.

Likewise, advertising a sale while intending to stock a limited amount of, and thereby sell out, a

loss leading item advertised is legal in the United States. The purveyor can escape liability if

they make clear in their advertisements that quantities of items for which a sale is offered are

limited, or by offering a rain check on sold out items.

In England and Wales it is banned under the Consumer Protection from Unfair Trading

Regulations 2008. Breaking this law can result in a criminal prosecution, an unlimited fine and

two years in jail.

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Non retail use:-

Bait and switch tactics are frequently used in airline and air travel advertising. Hotels widely use

the form of bait-and-switch tactics known as 'resort fees'. They first attract customers by

advertising the lower price (which appears on all promotional materials and rate comparison

engines), and charge customers the mandatory "resort fee" when they arrive for check-in.

Politics:-

In lawmaking, "caption bills" that propose minor changes in law with simplistic titles (the bait)

are introduced to the legislature with the ultimate objective of substantially changing the wording

(the switch) at a later date in order to try to smooth the passage of a controversial or major

amendment. Rule changes are also proposed (the bait) to meet legal requirements for public

notice and mandated public hearings, then different rules are proposed at a final meeting (the

switch), thus bypassing the objective of public notice and public discussion on the actual rules

voted upon. While legal, the political objective is to get legislation or rules passed without

expected negative community review.

Planned obsolescence:-

Planned obsolescence or built-in obsolescence in industrial design is a policy of planning or

designing a product with a limited useful life, so it will become obsolete, that is, unfashionable

or no longer functional after a certain period of time. Planned obsolescence has potential benefits

for a producer because to obtain continuing use of the product the consumer is under pressure to

purchase again, whether from the same manufacturer (a replacement part or a newer model), or

from a competitor which might also rely on planned obsolescence.

For an industry, planned obsolescence stimulates demand by encouraging purchasers to buy

sooner if they still want a functioning product. Planned obsolescence is common in many

different products, including but not limited to wheeled can openers, ear phones, ear buds, shoes,

automobile batteries, and bicycle tires. There is however the potential backlash of consumers

who learn that the manufacturer invested money to make the product obsolete faster; such

consumers might turn to a producer (if any exists) that offers a more durable alternative.

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Estimates of planned obsolescence can influence a company's decisions about product

engineering. Therefore, the company can use the least expensive components that satisfy product

lifetime projections. Such decisions are part of a broader discipline known as value engineering.

Marketing warfare strategies:-

Marketing warfare strategies are a type of strategies, used in business and marketing, that try to

draw parallels between business and warfare, and then apply the principles of military strategy to

business situations, with competing firms considered as analogous to sides in a military conflict,

and market share considered as analogous to the territory which is being fought over. It is argued

that, in mature, low-growth markets, and when real GDP growth is negative or low, business

operates as a zero sum game. One person’s gain is possible only at another person’s expense.

Success depends on battling competitors for market share

Media ethics:-

Media ethics is the subdivision of applied ethics dealing with the specific ethical principles and

standards of media, including broadcast media, film, theatre, the arts, print media and the

internet. The field covers many varied and highly controversial topics, ranging from war

journalism to Benetton advertising.

Consumerism:-

Consumerism is a social and economic order that encourages the purchase of goods and services

in ever greater amounts. Criticisms of consumption are already present in the works of Torstein

Veblen (1899). Veblen's subject of examination, the newly emergent middle class arising at the

turn of the twentieth century, comes to full fruition by the end of the twentieth century through

the process of globalization. In this sense, consumerism is usually considered a part of media

culture.

The term "consumerism" has also been used to refer to something quite different called

the consumerists movement, consumer protection or consumer activism, which seeks to protect

and inform consumers by requiring such practices as honest packaging and advertising, product

guarantees, and improved safety standards. In this sense it is a movement or a set of policies

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aimed at regulating the products, services, methods, and standards of manufacturers, sellers, and

advertisers in the interests of the buyer

In economics, consumerism refers to economic policies placing emphasis on consumption. In an

abstract sense, it is the consideration that the free choice of consumers should strongly orient the

choice what is produced and how, therefore the economic organization of a society (compare

producers, especially in the British sense of the term). Also this vote is not "one man, one voice",

but "one dollar, one voice", which may or may not reflect the contribution of people to society.

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