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Regulatory, Ethical, and “Green” Issues in Marketing Communications 3 When Is Regulation Justified? Benefits 1. Consumer choice is improved 2. Product quality tends to improve 3. Reduced prices Costs 1. Enforcement costs 2. Unintended side effects Regulation of Marketing Communications Federal Trade Commission (FTC) The U.S. government agency that has primary responsibility for regulating matters such as deceptive and unfair business practices and advertising Regulation of Deceptive Advertising When will the FTC find a business practice deceptive? Elements of Deception • Misleading • Reasonable consumer • Material Misleading? • Misleading • Reasonable consumer • Material Federal Regulation • • • • • Regulation of deceptive advertising Regulation of unfair practices Information regulation Regulation of product labeling (FDA) Regulation of prescription drug ads (FDA) Information Regulation Corrective advertising Information Regulation Corrective advertising Which firm in 1975 was ordered to spend $10 Mill to correct a misleading campaign? Information Regulation Current Events Which firm in 2005 was ordered by U.S. District Court to halt and remove a misleading claim? What was the claim? Ethical issues in marketing Communications Ethics in our context involves matters of right and wrong, or moral conduct pertaining to any aspect of marketing communications Enhancing Ethical Behavior Two core values Ethical issues in marketing Communications See text for ethical issues in: • Targeting • Advertising • Public relations • Packaging communications • Sales promotions • Online marketing communications Criticisms of Advertising • • • • • • Criticism of Advertising An Appeal to Insecurity Enhancing Ethical Behavior The Golden Rule Act in a way that you would want others to act toward you The Professional Ethics Take only actions that would be viewed as proper by an objective panel of your professional colleagues The TV test “Would l feel comfortable explaining this action on television to the general public?” Response to Environmental Problems Green advertising Packaging response Seal-of-Approval programs Cause-Oriented Programs Point-of-Purchase Green Advertising • Relationship between product and environment • Promote a green lifestyle • Corporate responsibility Green Advertising Green Advertising Promoting an Image of Environmental Responsibility Green Advertising Corporate Responsibility Green Advertising Mercedes-Benz Leo Burnett Company, Inc. Response to Environmental Problems Green advertising Packaging response Seal-of-Approval programs Cause-Oriented Programs Point-of-Purchase Package Response • Recyclable bottles • Polystyrene to paperboard • Plastic to cardboard • Smaller packages Response to Environmental Problems Green advertising Packaging response Seal-of-Approval programs Cause-Oriented Programs Point-of-Purchase Seal-of-Approval Programs • Designed to assist consumers in identifying environmentally friendly products and brands • Green Seal of Approval • “Chasing arrows logo” Response to Environmental Problems Green advertising Packaging response Seal-of-Approval programs Cause-Oriented Programs Point-of-Purchase Cause-Oriented Programs Cause-Oriented programs Response to Environmental Problems Green advertising Packaging response Seal-of-Approval programs Cause-Oriented Programs Point-of-Purchase Point-of-Purchase Programs Use the point-of-purchase as a vehicle for promoting a brand’s environmental virtues Appropriate Environmental Claims • • • •
