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ETHICAL ISSUES IN MARKETING AND ADVERTISING

Presented by: Sonakshi Bhalla(49) Deeksha Saxena(14) Saba Khan(40) Manisha Chand(25) Himani Garg(18) Powerpoint Templates Pallavi Singh(29)

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INTRODUCTION
Ethics in marketing
focuses on the ensuring ethical practices in the methods of marketing and selling the products to the consumers. Seeks to ensure fairness and transparency in marketing.

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WHY ETHICS IN MARKETING


Unethical marketing practices of businesses.
E.g.:-cigarette companies reducing menthol levels to hook first- time smokers.

Focus on increasing revenues at any cost. Leading to exploitation of consumers.


Defective products being marketed to them. Harmful effects of the products like:- health hazards, other damages.

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MEANING OF CONSUMER PROTECTION


People who buy and use products with the intention of fulfilling their needs are called consumers. The idea of consumer protection
is to protect the consumers from the damages caused to them, by giving them correct and complete information In other words, to develop a sense of moral duty & responsibility on the part of business organizations.
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IMPORTANCE OF CONSUMER PROTECTION


The purpose of a business is to create customers for its products and services. They support a business. It will result in the well- being of the company.

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WHERE DOES A MANUFACTURERS DUTY TO PROTECT CONSUMERS BEGIN AND WHERE DOES THE CONSUMERS DUTY TO PROTECT SELF- INTEREST END?

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MARKETING ETHICS

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FRAMEWORKS OF ANALYSIS
Value-oriented framework: e.g. honesty, autonomy, privacy, transparency. Stakeholder-oriented framework: e.g. consumers, competitors, society as a whole Process-oriented framework: e.g. research, price, promotion, placement
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ISSUES IN MARKETING ETHICS

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Sales practices
- pressure on sales personnel to sell Violating ways - deception - manipulation
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Labeling: means for


selling product & also informing the consumer. - Fair Packaging and Labeling Act passed by congress in 1966 - Nutrition Labeling and Education Act (NLEA) (1990)
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Market research: ethical danger points in marketing research include: - Invasion of privacy - Stereotyping Market audience: ethical danger points include - Targeting the vulnerable e.g. children, the elderly - Excluding potential customers from the market:
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PRICING
Pricing: Process of determining what a company will receive in exchange for its product The moral (and legal) issues in pricing fall into two categories: ---The use of prices to engage in anticompetitive behavior that can seriously harm other firms. ---Concerns fairness in pricing , which can be violated when prices are used to deceive or manipulate consumers and when goods are overpriced in ways that Powerpoint Templates consumers cannot easily detect.

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ANTICOMPETITIVE PRICING
The major anticompetitive marketing practices are as follows: Price Fixing: Is an agreement , either explicit or implicit, among two or more companies in the same market to sell goods at a set price. Resale Price Maintenance: Products are sold on the condition that they be resold at a price fixed by the manufacturer or distributor. Price Discrimination: Charging of different prices or offering different terms of sale for goods of the same kind to different buyers. Predatory Pricing: Reducing prices to unreasonably low or unprofitable levels in order to drive competitors Powerpoint Templates out of business.

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UNFAIR PRICING
Pricing can be done in ways that treat consumers unfairly The main type of such unfair pricing are : Unconscionably high price (price gouging) Misleading prices, including prices that are difficult to determine and compare.

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DISTRIBUTION
The means by which the products are delivered from the manufacturer to the ultimate consumer The main ethical issues in distribution are : Slotting allowances to gain access to shelf space in stores Grey markets that arise from diverting and parallel importing. Three illegal abuses of power in distribution are : Reciprocal Dealing Exclusive Dealing Tying dealing
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ADVERTISING

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WHAT IS ADVERTISING?
Non personal communication About an organization and its products To a target audience Through a mass medium
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TYPES OF ADVERTISING
1.Covert Advertising
Advertising in movies

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2.TELEVISION ADVERTISING

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3.INFORMERICALS
Advertising in commercial ads .

Digital Video Camera 6M Pixel with MP3 / MP4 and Flashlight (Force /auto/off), Video recorder (with sound), Still Photos PC Camera and MP3 player, Digital voice recorder and Power control: Auto power off
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4.CELEBRITY ADVERTISING

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5. MEDIA APPROACH

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ROLE OF ADVERTISING
To build brand personality To increase the sales of the product/service To create and maintain a brand image. To introduce a new product or service.
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ETHICS IN ADVERTISING

Truthfulness in advertising To establish itself in the hearts of the customers

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UNETHICAL ISSUES IN ADVERTISING

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DECEPTIVE ADVERTISING
Advertisement creates false belief

Interferes with the ability of people to make rational consumer choices Depends not only on truth or falsity of claims but also on its impact

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DECEPTIVE ADVERTISING- ALL OF US HAVE SEEN IT..


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DECEPTIVE METHODS
Hidden fees and surcharges Rebates Inflated price comparison Cost-plus pricing Buy x, get y free Introductory offers Non-sale advertisements Disclaimers and fine print Manipulation of standards Fillers and oversized packaging Label tampering
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MISLEADING ADVERTISING
Advertising that does not literally contain falsehoods, but which causes consumers to make false inferences

Examples Strongly implied falsehoods Critical missing information

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IRRATIONAL PERSUASION
Making use of subconscious factors that influence human actions Play on human desires for security, acceptance, self esteem, etc

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DIAMOND JWELLERY AD???


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SUBLIMINAL COMMUNICATION
Interferes with freedom of choice

Acts without our knowledge and thus without consent

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Are we aware that products are being advertised without our consent ???

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SOCIAL AND CULTURAL CONSEQUENCES OF ADVERTISING

Does Advertising Make People Buy Things They Dont Need? Does Advertising Encourage Materialism?

Is Advertising Just A Reflection of Society?


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ADVERTISING AND STEREOTYPING


Portrayal of Women to Portrayal of Women to Reflect Their Changing Reflect Their Changing Role in Society Role in Society

Gender Stereotyping

Criticisms of Advertising With Regard to Stereotyping

Portrayal of Women As Sex Objects Objects

Portrayal of The Elderly

Ethnic Stereotyping/ Representation of Minorities


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DO ADVERTISERS CONTROL THE MEDIA?


Advertising Is the Primary Source of Revenue for Newspapers, Magazines, and Television and Radio Networks and Stations The Medias Dependence on Advertising For Revenue Makes Them Vulnerable To Control by Advertisers Advertisers May Exert Control Over The Media by Biasing Editorial Content, Limiting Coverage of Certain Issues or Influencing Program Content
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Social Aspects of Advertising


 Advertising Educates Consumers
Pro: Advertising informs Con: Advertising is superficial and intrusive
Is there information in this ad?

Advertising improves living standards


Pro: Ads lower the costs of products Con: Ads are wasteful and help only some
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IMPACT OF ADS FOR CHILDREN


Advocates Argue That Children: Lack the knowledge and skills to evaluate advertising claims Cannot differentiate between programs and commercials

Marketers Argue Children: Must learn through socialization Must acquire skills needed to function in the marketplace

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CONCLUSION
Advertising is not unethical if its done in the right way

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