Ethics and the Conduct of Business Eighth edition Chapter 10 Marketing and Advertising Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright â 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Introduction: Marketing and Advertising • Essential function of business • Advertising is an indispensible marketing tool • Four Ps of marketing Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Figure 10.1: Ethical Problems in Marketing Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 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 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 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 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright â 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 10.9 Social Advertising Objective: Summarize the significance of social advertising and the ethical issues associated with it Overview Copyright â 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 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 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved ... 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... (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:... Reserved 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