Ethics In Marketing a snapshot

Promotion
Sexual and shock appeals Inappropriate product labelling Inappropriate and comparative advertising Marketing to children and the obesity debate

Price - Price discrimination - Price collusion

Place (distribution)

- Collusion - Abuse of monopoly status - Supply chain exploitation

Ethics In Marketing a snapshot

1. Ethical Issues in Marketing Research
2. Comparative Advertising - Infringement of Trademark by Comparative Advertising

3. Surrogate Advertising
4. Ethical Issues in Sales Promotion

Ethical Issues in Marketing Research case of L&H

Management Pressure An Ethical Issue? Budgetary Pressure An Ethical Issue? Questionnaire Design, Field Research, Data Analysis Ethical Issues Client Confidentiality An Ethical Issue Marketing Researchers Personal Issues An Ethical Issue?

Ethics in Sales Promotion

Providing incomplete and misleading Information Hiding crucial details in fineprints Using vague or ambiguous terms Not delivering on promises Making sale products such as cigarettes or alcoholic drinks near religious places or educational institutions constitute unethical distribution practice.

.......Are some of the most commonly used unethical practices in sales promotion.

Ethics in Sales Promotion.......Contd....

Sales Promotion activities refer to short-term incentives given to customers to generate more sales.

.....The incentives could be

- Price discounts - free gifts tied to purchases - prizes through draws in contests - coupons redeemable against purchase of some product - more quantity at the same price - BOGOF schemes - cross promotion purchase of one item brings price cut on another item.

Ethics in Sales Promotion.......Contd....

Providing Incomplete and Misleading Information

Discretion comes into play when contests or coupons are involved.

'Become a credit card holder and fly to Singapore'; 'Win 1 kg of gold on purchase of items worth Rs 2,000'; 'Write a slogan and zip off to Disneyland' ......These slogans are to grab attention and ignorant customers get fooled at face value. ......The riders attached are not known unless probed or fineprints decoded.

Ethics in Sales Promotion.......Contd....

Providing Incomplete and Misleading Information 1. The credit card membership does not automatically qualify a customer to enjoy the proclaimed prize. The terms and conditions wherein he has to redeem the card for certain amount within a specified period ....

Waiver of annual membership fee for the first year for new credit card members.

Enquiries reveal that the fee waiver is linked to spending a fixed amount within a given time.

Ethics in Sales Promotion.......Contd....

Providing Incomplete and Misleading Information 2. 'Win 1 kg of gold on purchase of Rs. 2000'

This usually links the reward to purchase of a select few brands and not all products.

3. 'Discounts upto 60%'

Different discount rates are available for different products and th emaximum rate is announced as though it applies to all items.

4. Writing a slogan and gaining reward - slogan is deligently inserted inside the packaging of a product. Thus unless one purchases the product, one doesn't even get the form on which the slogan can be written.

Ethics in Sales Promotion.......Contd....

Details in Fineprint....

Retailers and manufacturers are reaching to deal-oriented shoppers. Being value-conscious in their purchases, these shoppers are those who buy when promotion is on.

They maximise their value proposition in almost all of their purchases and are not loyal to brands.

Operating in such situation offers no choice to marketers but to resort to promotions.

Ethics in Sales Promotion.......Contd....

Details in Fineprint.....

Invariably the fineprint is very reader-unfriendly......

....The font size is so small that the reader i sput off after a few lines. ....In other cases it is too long and tests readers' patience. ....A combination of small font and long description is all the more effective in ensuring that none will read the details.

Ethics in Sales Promotion.......Contd....

Details in Fineprint.....

Even short and clear fineprints are used for unethical sales promotions..

....'Valid upto available stocks' ....'Limited period offer' ....'Product available without this offer' ....'At select outlets'

All of the above specially the second statement offer lasts when the sale soent happen and even if sale response is overwhelming, the last statement offer is available in select outlets as well as in other outlets.

Ethics in Sales Promotion.......Contd....

Undelivered Promises

As part of sales promotion, many promise to deliver rewards later on ....especially in...

....Coupons....Slogans....Lucky draws

It is possible to remember many coupons-based promotions, but it is difficult to recall announcements of the winning coupon numbers. Similarly ....rarely do firms propogate the winners of a slogan-writing competition.

Lucky draws may not be conducted at all.

Sustainable Marketing
Define

Meeting present needs of consumers & businesses & preserving ability of future generations to meet their needs

Now
Needs of consumers Marketing concept Strategic planning concept Eg. McDonald

Future

Societal marketing concept

Now Needs of Business

Sustainable marketing concept Future

Social Criticisms of Marketing

Marketing's Impact on Individual Consumers

High Prices

- High costs of distribution - High advertising and promotion costs - Excessive markups

Deceptive practices High pressure selling

Shoddy, harmful and unsafe products

Planned obsolescence Poor service to disadvantaged consumers

Some Morally difficult situations in Marketing

You work for a cigarette company. Public policy debates over the past many years leave no doubt in your mind that cigarette smoking and cancer are closely linked.

Although your company currently runs an If you don't smoke, don't start promotion campaign, you believe that other company promotions might encourage young (although legal age) nonsmokers to pick up the habit. What would you do?

Some Morally difficult situations in Marketing........Contd....

Your R&D department has changed one of your products slightly.

It is not really new and improved, but you know that putting this statement on the package and in advertising will increase sales. What would you do?

Some Morally difficult situations in Marketing......Contd....

You are thinking of hiring a product manager who has just left a competitor's company. She would be more than happy to tell you all the competitors plans for the coming year.

What would you do?

Some Morally difficult situations in Marketing......Contd....

One of your top dealers in an important territory recently has had family troubles, and his sales have slipped.

It looks like it will take him a while to straighten out his family trouble.
Meanwhile you are losing many sales. Legally, on performance grounds, you can terminate the dealer's franchise and replace him. What would you do?

Some Morally difficult situations in Marketing......Contd....

You have heard that a competitor has a new product feature that will make a big difference in sales.

The competitor will demonstrate the feature in a private dealer meeting at the annual trade show.
You can easily send a snooper to this meeting to learn about the new feature. What would you do?

Some Morally difficult situations in Marketing.......Contd...

You have to choose between three ad campaigns outlined by oyur agency. The first (a) is a soft-sell, honest, straight -information campaign.

The second(b) uses sex-loaded emotional appeals and exaggerates the product's benefits. The third (c) involves a noisy, somewhat irritating commercial that is sure to gain audience attention. Pretests show that the campaigns are effective in the following order: c,b, and a. What would you do?

Some Morally difficult situations in Marketing......Contd...

You are interviewing a capable female applicant for a job as salesperson.

She is better qualified than the men just interviewed.

Nevertheless, you know that in your industry some important customers prefer dealing with men, and you will lose some sales if you hire her.

What would you do?

EXAMPLES OF COMPARATIVE ADVERTISEMENTS

Jurisdiction Sl.No. Examples Status Court INDIA 1 Reckitt & Colman v. KIWI Disparaging Advertisement KIWI Ujala in campaign for with of the Concept

comparison

Cherry Blossom 2 Reckitt & Colman v. Disparaging in comparison with Robin Blue pertaining to price 3 New Pepsodent v. Colgate Disparaging New Pepsodent in comparison with Colgate pertaining to the superiorit y of the product. 4 Colgate Palmolive v. HLL Not Disparaging New Pepsodent v. Colgate case on Suraksha Chakra . 5 Pepsi Co v. Hindustan Coca- Disparaging Cola 6 Dabur v. Colgate Palmolive Disparaging Thumps - UP v. PEPSI

Ramachandran

pertaining to PAPPI Pertaining to degrading qualit y of the other

Britannia v Unibic

Disparaging

Good Day v. Great Day use of tagline wouldnt

Kingfisher v. Jet Airways

Not entered the If Court of Law

entered

clearl y

indicate the remedy based on the existing statute.

COMPARATIVE ADVERTISEMENTS
Indian Court Granted Injunction: Britannia v.Unibic Biscuits India (2007) Unibic India launched a biscuit named Great Day along with its tag line Why have a Good Day, When you can have a Great Day!. This was a direct comparison to Britannias Good Day biscuits which states that consumers must not try any mere biscuit when Great Day biscuit is available. The plaintiff alleged that the defendant has infringed their registered TM Good Day and in turn has tried to emphasize on it through their tagline. Bangalore City Civil Court on December 12 in 2007 led to the grant of an injunction to the defendant for disparaging Good Day biscuits by exaggerating the facts and making an impression that no other facts hold true.

Recent Example: Did not enter the Court of Law: Kingfisher v. Jet Airways (2007)
In contrast to Unibics Great Day case of injunction, Kingfisher airlines came up with a similar advertising campaign without being subject to any injunction. Jet Airways and Kingfisher started flights to New York on a daily basis. To initiate their campaign, Jet put up a hoarding this displayed the tag line Weve Changed which was immediately competed by Kingfisher airlines by putting up a hoarding just above Jet Airways hoarding saying We Made Them Change. Although there was no disparagement of the product nor there was any use of Jets TM on Kingfishers hoarding, still Jet could file for injunction as it was directly relating to them for exaggeration of facts. But Jet immediately put off their hoarding which was a good move as the present law doesnt have any law in place for Jet or any other company in such situation to sue Kingfisher.

Surrogate Advertising: Is it Ethical

Surrogate means

Is replacement & not removal - substitute the brand name with another product

Surrogate Advertising

- Adopted by companies whose products are banned - Intention is to make sure the customers of the banned product don't forget it. - Concept highlightes brand extension

Surrogate Advertising: Is it Ethical.......Contd....

The Indian liquor industry was in the news during early 2000's for its surrogate advertising practices generated lot of criticism from various quarters The industry was dominated by (SWC) Shaw Wallace & United Breweries - 53% of the total market On an average liquor companies spent 10-12% of sales revenue on advertising consumer promotions pgms, sponsorships, print and electronic media ads.

Spent heavily on electronic media due to its reach of satellite and cable TV (cos spent 3-4% of sales revenue on TV alone).

Surrogate Advertising: Is it Ethical.......Contd....

The Advertising code of conduct banned the broadcasters from airing advertisements that related to or promoted cigarettes and tobacco products, liquor, wines and other intoxicants,......

However, the telecast of such advertisements continued blatantly over the years. ----This was because the code was only a code a conduct, not a legally enforcing code.

Surrogate Advertising: Is it Ethical.......Contd....

With pressure increasing from public to ban liquor ads, the government made amendments to the Cable TV Act 1995. The cable operators were punishable under Indian Law. Due to the ban liquor companies focused on promotions for brand building. They started sponsoring events that projected glamour of the brands, like track racing, car rellies, corporate advertising by distributing free gifts like caps and T-shirts with the brand name and using glow-signs outside the retail outlets -

-----Thus began the concept of surrogate advertising

Surrogate Advertising: Is it Ethical.......Contd....

Liquor companies entered new segments under the liquor brand entered packaged water segment, such as Kingfisher Mineral Water, McDowell's mineral water and soda brands etc. SWC marketed through its range of golf accessories under the liquor brand Royal Challenge. It also launched golf sets, golf bags, caps, gloves and also started quarterly golf publication.

SWC also entered packaged water market under its beer brands HiFive nad Lal Toofan.

Surrogate Advertising: Is it Ethical.......Contd....

In June 2002, The I&B Information & Broadcasting Ministry of India ordered TV broadcasters to ban the telecast of two surrogate ads of liquor brands McDowell's No.1 and Gilbey's Green label.

----

The Ministry also put on 'watch list' brands Smirnoff vodka, Hayward's 5000, Royal Challenge Whiskey and Kingfisher beer.

-----------These developments led to heated debates over the issue of surrogate advertising by liquor companies.

Surrogate Advertising: Is it Ethical.......Contd....

Example According to an analyst....

We see a brown liquid poured into a glass under a well-known brand name, and we are told the man is drinking apple juice! The girl who is avidly watching him immediately rewards him with a kiss. ........In this way water, soda and other harmless liquors stand in for hard liquor and beat the ban

NOTE: According to broadcasters, the government should put inplace a 'reasonable policy' which somehow struck a balance between social and monetary aspects of the business of alcohol.