Transcript 10. Marketing and Advertising

Ethics and the Conduct of Business
Eighth edition
Chapter 10
Marketing and
Advertising
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Modules (1 of 2)
• Introduction: Marketing and Advertising
• 10.1: Marketing Ethics Framework
• 10.2: Sales Practices and Labeling
• 10.3: Pricing and Distribution
• 10.4: Development and Research
• 10.5: Deceptive Advertising
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Modules (2 of 2)
• 10.6: Irrational Persuasion
• 10.7: Impact of Advertising
• 10.8: Internet Advertising
• 10.9: Social Advertising
• Conclusion: Marketing and Advertising
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Learning Objectives (1 of 3)
•
•
•
10.1: Explain how principles of fairness, freedom, and wellbeing are challenged by marketing practices and why an
ethical framework is necessary
10.2: Analyze unethical sales practices, the difficulties sales
personnel face in avoiding them, and issues with the
sufficiency of information on product labels
10.3: Evaluate the nature and effects of unethical pricing
and distribution practices on consumers and the fairness of
markets
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Learning Objectives (2 of 3)
•
•
•
10.4: Identify the ethical issues with product development
and market research and how companies can conduct
these essential marketing tasks responsibly
10.5: Describe the difficulties in defining what constitutes
deceptive advertising and how it interferes with consumers’
ability to make rational choices
10.6: Recognize how different advertising practices use
irrational persuasion techniques to influence consumers’
choices and the ethical arguments against these practices
Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Learning Objectives (3 of 3)
•
•
•
10.7: Assess the potential harm advertising poses to
individuals and society and the responsibility of companies
to consider the consequences of their marketing efforts
10.8: Examine how Internet advertising and the online
collection and use of personal information challenge the
rights of individuals to privacy, autonomy, and fair treatment
10.9: Summarize the significance of social advertising and
the ethical issues associated with it
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Introduction: Marketing and Advertising
• Essential function of business
• Advertising is an indispensible marketing tool
• Four Ps of marketing
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10.1: Marketing Ethics Framework
Objective: Explain how principles of fairness, freedom, and well-being are challenged by
marketing practices and why an ethical framework is necessary
•
Fairness
•
Freedom
•
Well-being
•
Four point bill of rights
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Figure 10.1: Ethical Problems in
Marketing
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10.2: Sales Practices and Labeling (1 of
2)
Objective: Analyze unethical sales practices, the difficulties sales personnel face in
avoiding them, and issues with the sufficiency of information on product labels
• 10.2.1: Deception and Manipulation
– Deception
– Manipulation
• 10.2.2: Information Disclosure
– Overview
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10.2: Sales Practices and Labeling (2 of
2)
Objective: Analyze unethical sales practices, the difficulties sales personnel face in
avoiding them, and issues with the sufficiency of information on product labels
• 10.2.3: Labeling
– Information
– How much information should be provided
– GMO labeling
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10.3 Pricing and Distribution (1 of 2)
Objective: Evaluate the nature and effects of unethical pricing and distribution practices
on consumers and the fairness of markets
• 10.3.1: Anticompetitive Pricing
– Anticompetitive marketing practices
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Table 10.1: Anticompetitive Marketing
Practices
Practices
What is it?
What is the effect?
Anticompetitive
Marketing Practices
Any marketing practice that reduces
competition, raises prices, or reduces
quality
A monopoly (or oligopoly) that can
charge higher prices or offer lower
quality than in a fair, competitive market
1. Price-Fixing
Two or more companies sell goods at a
set, higher price, with or without an
explicit or implicit agreement
Rival goods and companies can be
driven out of the market, reducing supply
and consumer choice.
2. Resale Price
Maintenance
Products are sold on the condition that
they be resold at a price fixed by the
manufacturer or distributor
Retailers put more effort into promotion
and services; products gain prestige from
artificially higher prices.
3. Price
Discrimination
Sellers give preferential treatment by
charging different prices or offer
different terms for the same goods to
different buyers. Large buyers demand
better prices and terms than others.
Same as price-fixing; consumers must
shop at preferred retailers or deal with
limited choices and higher prices
elsewhere.
4. Predatory Pricing
Prices are reduced to unreasonably low
or unprofitable levels to drive
competitors out of business and then
charge above-market rates.
Same as price-fixing; discourages new or
other companies from entering the
market.
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10.3 Pricing and Distribution (2 of 2)
Objective: Evaluate the nature and effects of unethical pricing and distribution practices
on consumers and the fairness of markets
• 10.3.2: Unfair Pricing
– Price gouging
– Misleading price
• 10.3.3: Distribution
– Anticompetitive practices
– Slotting allowances
– Gray markets
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10.4 Development and Research
Objective: Identify the ethical issues with product development and market research and
how companies can conduct these essential marketing tasks responsibly
• 10.4.1: Product Development
– Ethical issues
• 10.4.2: Marketing Research
– Overview
– Ethical issues
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10.5 Deceptive Advertising
Objective: Describe the difficulties in defining what constitutes deceptive advertising and
how it interferes with consumers’ ability to make rational choices
• 10.5.1: Defining Deceptive Advertising
– Deceptiveness
– Obstacles to definition
• 10.5.2: Applying the Definition
– Case study
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10.6 Irrational Persuasion
Objective: Recognize how different advertising practices use irrational persuasion
techniques to influence consumers’ choices and the ethical arguments against these
practices
• 10.6.1: Threats to Free Choice
– Subliminal advertising
– Other advertising techniques
• 10.6.2: Dependence Effect
– John Kenneth Galbraith concept
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10.7 Impact of Advertising
Objective: Assess the potential harm advertising poses to individuals and society and the
responsibility of companies to consider the consequences of their marketing efforts
• 10.7.1: Impact on Persons
– Overview
• 10.7.2: Impact on Society
– Overview
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10.8 Internet Advertising
Objective: Examine how Internet advertising and the online collection and use of personal
information challenge the rights of individuals to privacy, autonomy, and fair treatment
• 10.8.1: Online Placement
– Google AdSense
– Facebook
• 10.8.2: Ethics of Placement
– Ethical issues
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10.9 Social Advertising
Objective: Summarize the significance of social advertising and the ethical issues
associated with it
•
Overview
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Conclusion: Marketing and Advertising
• Marketing ethics requires honesty and fairness
• Pricing, labeling, and advertising can be done in ways
unfair to consumers
• Advertising has social consequences
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