Ethical influences

• TODO ethical influences notes 📅 2024-04-18

• SYLLABUS

  • Students learn to: Examine why ethical behaviour and government regulation are important.

Ethical criticisms of marketing

• businesses are often subject to ethical criticisms such as:
  ?

• The creation of needs through materialism

• Stereotypical images of men and women

• Use of sex to sell products

• Product placement

  • blurs line between entertainment and ads

• Invasion of privacy

  • tracking in online advertising

• materialism is :: an individual’s desire to constantly acquire possessions

• product placement is :: the inclusion of advertising in entertainment

Truth and accuracy in advertising

• SEE Advertising

• Advertising is :: a paid, non-personal message that is communicated through a mass medium.

• Three main unethical marketing practices are :: (Untruths due to concealed facts, Exaggerated claims, Vague statements)

• Untruths due to concealed facts is :: when information is purposely omitted from an advertisement, causing a breach of consumer trust

• Exaggerated claims (Puffery) is :: exaggerated praise, specifically used for promotional purposes, that no reasonable person would believe as factual. (very colloquial)

• Vague statements are :: ambiguous words that the consumer could misinterpret as the intended message.

Good taste in advertising

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• Marketers must ensure that their advertisements are not offensive and are in good taste.

  • be aware of and take into account community sensitivities
    • to maintain reputation

• recently, concerns regarding widespread publicity of the sexualisation of children in advertising?? (KFC example)

  • Businesses must not engage in this practice.
    • 😭😭😭

Products that may damage health

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• (AUS) has set restrictions on children’s advertising
  • no advertising is allowed to be shown during programs for pre-school children.
  • specifically in response to criticism of increasing advertisements promoting junk food to children
    • contributing to childhood obesity rates

Engaging in fair competition

• the marketplace is very intensive

• businesses may be tempted to engage in unfair marketing practices

  • to achieve a better position compared to competitors.

• the Competition and Consumer Act 2010 aims to deter and regulate anti-competitive behaviour, including;
  ?

• Cartel conduct

  • two (or more) competing businesses agree to cooperate (fix prices, etc.)

• Anti-competitive agreements

  • agreements that lessen competition in a market

• Misuse of market power

  • using market power to prevent new competitors from entering the market

• Exclusive dealing

  • When a person/business trades with another but imposes conditions onto them
    • (e.g. “i will supply your business with my … only if you refuse to sell our competitor’s …“)

• Resale price maintenance

  • A supplier (in an Intermediate market) demanding a specific price (range) for their goods to be resold at.
    • they are only allowed to suggest

• Mergers and acquisitions

  • prohibited if the merger will result in a significant reduction in competition in a market.

Sugging

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• Sugging is : selling under the guise of a survey
  • a sales technique disguised as market research.
• sugging is not illegal but rather unethical.

A marketing code of ethics

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• In 2012 a code of ethics was developed for marketers in relation to advertising

• Ad Standards manages the complaint resolution process of the advertising self-regulation system.

• self-regulation is :: a system by which a business or industry controls its own activities rather than being publicly regulated by an outside organisation such as the government

Examine why ethical behaviour and government regulation are important in marketing

• why ethical behaviour is important in marketing (for businesses):
  ?

• ultimately links back to corporate social responsibility

• beneficial in the long-run for a business

  • better publicity
    • → more brand loyalty
    • → better employment relations
    • → more appealing to investors (especially ‘ethical’ superannuation funds)

• why government regulation is important in marketing:
  ?

• protect consumers

• protect businesses

• increase consumer trust in businesses

• promotes competition and fair trade