Download Marketing, Advertising & Product Safety II

Lecture
7
Marketing, Advertising and Product Safety II
BBA361
Business Ethics and Corporate Governance
Department of Business Administration
S.Chan
Reference:
Chapter 10, “Ethics and the Conduct of Business”,John R. Boatright
Consumer Council website
1
Ethics in Labeling and Packaging
Labeling
•
Correct and adequate information on the label
(Ethical question: how much information is a manufacturer
obligated to provide?
•
Fair packaging: Package list the the identity of product,
name and location of manufacturer packer, net quantity,
the number of per serving, etc;
2
Ethical issues in Advertising
Criticism on Advertising
•
Exaggerated claims and outright falsehoods
•
Lack of taste, irritating repetition
•
Offensive character
•
Morality of ad such as alcohol/tobacco;
excessive sex/ violence, negative stereotypes
of certain groups
•
Role of advertising on creating culture of
consumerism, potentiality of behavior control;
3
Ethical problems in Advertising
1.Deceptive Adverting
•
Deceptiveness of an ad not only depends on the truth of the claims it
makes, but also on the impact on people who see/hear it. E.g. Tire: the
smoothest, safest ride; Pain reliever: the quickest, gentlest relief;
•
E.g. 1991, Campbell Soup was charged by Federal
Trade Commission for ads stressing low fat, low
cholesterol content which made consumers associated
with reduced risk of heart disease; The ads failed to
mention the high in sodium which increases some form
of heart disease.=> Consumers who try to avoid heart
disease end up easily get heart disease.
4
Ethical problems in Advertising
2. Irrational Persuasion
•
Techniques of advertising and its
influence on human desires for security,
acceptance, self-esteem
•
E.g. inducing fear
•
Laudable, sinister, exploits deep seated
emotions
5
Ethics in Product Safety
“ The right of consumers to be protected
from harmful products”
Due Care Theory:
manufacturers have an obligation to exercise due
care -- they should take all reasonable
precautions to ensure products on market are
free of defects.
•
•
•
•
•
•
Design
Materials
Production
Quality Control
Packaging, labelling and warnings
Notification
6
Ethics in Product Safety
Due Care Theory:
manufacturers have an obligation to
exercise due care -- they should take all
reasonable precautions to ensure products
on market are free of defects.
• Design
• Materials
• Production
• Quality Control
• Packaging, labelling and warnings
• Notification
7
Ethics in Product Safety
Design
 products
and services should meet
all governmental regulations and
specifications and be safe under all
foreseeable conditions, including
misuse by the consumer
Ethics in Product Safety
Materials
 materials
should meet
governmental regulations and
durable enough to withstand
reasonable use
Ethics in Product Safety
Production
 products should be made without
defects
Quality Control
 products
should be inspected
regularly for quality
Ethics in Product Safety
Packaging, labelling and warnings
 products
should be safely
packaged, should include clear,
easily understood directions for
use, and should include a clear
description of any hazards
Ethics in Product Safety
Notification
 manufacturers should have
a system in place to recalls
products that prove to be
dangerous at some time
after manufacture and
distribution