Transcript of "Business Ethics Essay for Masters. "
MMM065 ETHICS IN MARKETING AND INTERNATIONAL MANAGEMENT ESSAY 3: ADVERTISING STUDENT NUMBER: 20003650Instructor: Dr Dan Nunan Date: 23/04/2012 1
Advertising: Doctors have recently suggested that advertising of products containing sugar be banned or regulated in the same way as alcohol or tobacco advertising. Discuss the extent towhich advertising of unhealthy food products should be regulated to protect consumers. Considerfactors including consumer autonomy, the impact on health services and the likely effectiveness of regulation.Abstract:Food advertising today is recognised worldwide as contributing to an unhealthy lifestyle in childrenas well as adults. Necessary measures and actions is called for on the part of Government and otherprivate bodies of a country who are responsible to restrict advertising of food products that arehigh in fat, sugar and salt and cause a number of health problems to consumers (such as obesity,high blood pressure, brain dysfunction, heart problems and so on). In this essay I intend to bringout the gaps in the Governmental regulations against advertising industry for food which has beensteadily causing damage to the health of consumers. I also discuss the extent to which action can betaken to protect the consumers from getting misled by adverts similar to what was done in case ofalcohol and tobacco advertising years ago. Lastly I consider the two normative theories; Utilitarianand Kantian in light of food companies and how ethical norms are being ignored by them. Sincerules and bans by Governments are less forthcoming in the advertising industry marketers havebeen constantly taking advantage of this situation and have been enjoying the huge potential theyare open to in the market today.Advertising Industry; concerns among Consumers:In this age of globalization if there is an industry that is steadily growing in attracting consumers it isthe food industry or the dietary industry. Multiple factors are responsible for influencing eatingbehaviour of human beings and one major factor today is advertising in this media-saturatedenvironment. With technology having far reaching effects on lives of consumers all over the worldfood companies can now reach every consumer in any part of the world with the desired foodproduct. A growing concern among citizens and Governments of almost all the countries today isthe impact of media on the life of a regular human being. A multitude of advertisements arebombarded on the consumer via networking channels such as television, newspapers, radiochannels, magazines, hoardings, tube trains, buses and so on. Research according to BBC, UK (2009)suggests that average human being is exposed to 3000 advertisements per day in form of any kindof media channel. And an average American child watches an estimate between 25,000 to 40,000television commercials per year and in the UK it is about 10,000. Out of the 3000 adverts per daythe study shows that 60.4% is food adverts and this has been on a rise from 38% in the year 2007.Out of 60% food adverts shown no less than 35% of them are about unhealthy food products whichspecifically include junk food (or fast food) aimed at children and foods that contain excess amountof sugar than required for normal calorie intake. A very straightforward conclusion out of this studyis that companies have been slowly but steadily influencing the buying decisions of a regularconsumer; especially children on consumption of food products that are capable of causing long 2
term damage to the body. A recent study conducted by Glasgow University on UK health lifestylesuggested that the average person in the UK consumes 659g of sugar a week, and 3,144 calories aweek through non-alcoholic drinks. This is the equivalent of around 450 calories a day, or nearly aquarter of the recommended daily calories for a woman and a fifth for men, the researchers said(Yahoo Lifestyle Report, 2012). The researchers also found out that a regular chocolate milkshake ata café (such as Costa Coffee or Starbucks) claims 4 teaspoons of sugar but actually contains 12,people are and have been consuming such high amounts of sugar in milkshakes without knowledgeof actual sugar content in them since many years now. Adverts for healthy food products like vegetables, salads, fruits, natural and organic food is rarebut an estimated £480 million is spent every year by companies in advertising foods high in fat,sugar and salt on just TV (The Times, 2012). For instance; Mc Donald’s, the American fast food giantspends close to $700 million on its marketing and advertising almost every year (Annual Report,2009-2010). Obesity and high cholesterol are crucial health problem for the consumer of fast foods.Adverts have been seen as increasing the overall consumption of food products among consumersby almost 72% of which children have been the major target market. Foods high in sugar, fat andsalt are considered unhealthy food products as they pose a direct threat to consumer’s healthcausing heart diseases, cancer, obesity, blood pressure and diabetes. These foods are not justresponsible for these health problems but are also a major factor in reducing brain cell activity andcausing permanent damage in creating new brain tissues for normal functioning of brain. Typicalexamples of these food products include processed foods, canned food, junk food (burgers, fries,pizzas, and bread products), caffeine drinks, carbonated drinks, and juices, so on. Researchconducted by scientists of National Institutes of Healths National Institute of NeurologicalDisorders and Stroke (2010) clearly states that foods high in sugar and fat cause damage to thebrain to the level of alcohol and tobacco hence the ban of these products since past decade.Television advertising changes attitudes about drinking. Young people or adolescents report morepositive feelings about drinking and their own likelihood to drink after viewing alcohol and cigaretteads (Austin, 1994; Grube, 1994). Hence regulation on adverts of alcohol and tobacco was enforcedfrom early 2005 by WHO Euro Region by implementing a framework called ‘Alcohol and TobaccoPolicy’. Under this framework restrictions and bans were imposed on advertising agencies andalcohol companies on their advertising campaigns for these products. Today countries like UK andAmerica have age restrictions even in supermarkets for buying of alcohol and tobacco products.Recent action taken by the concerned Indian Government involved increasing age limit for alcoholconsumption form 21 to 25 years because of growing percentage of young people getting addictedto such products. In Malaysia alcohol advertising was outlawed in the year 1995 and Malaysiantelevisions channels have a strict policy to not telecast alcoholic drinks adverts before 10pm.As of 2009 30% of American children and 15% of youth are obese or suffering from over-weighthealth problems. Parents play an important role in influencing eating habits of children. Increasingnumber of families are now realising the harmful side effects of long term consumption ofunhealthy foods and have started appealing Governments to take actions against regulating thesale and promotion of such food products. Supermarket chains such as Walmart, Tescos, Aldi and 3
so on promote free samples of new market entrants in food products which are not necessarilyhealthy. An average of £2.8 billion is spent by companies on advertising in these supermarketstores for sampling, coupons, sweepstakes and contests which encourage consumers particularlyyouth for the purchase of products. This strategy is widely adopted by companies individually alsofor advertising. For example; free samples of Redbull (energy drink – high in caffeine and sugar) onuniversity campuses or high streets to increase brand awareness. Redbull spends a massive 35% ofthe revenues for marketing and advertising each year. Main ingredients of Redbull are sugar,caffeine and taurine. It is advertised as a drink that increases concentration and brain activity. Inspite of knowing the side effects caffeine consumption can cause these multinational companiespromote their products as fashion statements or as means of current trends which attractsyoungsters and children. Food scientists and health policy makers have time and again declaredthat regular consumption of these beverages is not recommended but to what extent shouldcompanies and Government support each other in protecting the health of country’s youngpopulation is a matter of debate.To what extent action can be taken and the dilemma of free choice:Junk food is cheap to make this makes it an alternative to the otherwise expensive healthy foodstacked in super markets. For instance, products such as crips (Walkers and Pringles), savourysnacks, carbonated beverages (Coca cola and energy drinks), biscuits and chocolate protein barsand so on. A probable solution by the Government could be to subsidise healthy food and advertiseabout its importance to have a healthy lifestyle. Tighter controls need to be implemented onadvertising and marketing campaigns of unhealthy foods and companies along with fast foodoutlets promoting unhealthy foods. Government has to enforce serious and stricter regulations tomake sure those companies and fast food outlets follow the policies. In countries like UK whereGovernment provides for health care these policies would in turn increase the long term savings inHealth Services (NHS). Also a legal requirement to minimise sugar and do fair trade labelling onfood products should be made mandatory for all manufacturers. Companies at times mislead theconsumer by displaying incorrect or vague information about the nutritional value on packages.Also, many subsidies in Europe and USA are not open to societal scrutiny and not made public. Theinspection reports of the European Food Standard Agencies are not open to the public. This showsthat transparency is still not widely accepted in the food industry. In some parts of UK, for examplein Wales there are no policies regarding advertising control of food products among children. Walesdoes not target health problems like child obesity, healthy eating behaviour, physical and joint dietstrategies for children or the youth.A large percentage of consumers do not wish to be protected but they do want to be informed andheard. As long as food companies are ready to change their approach and include societyparticipation in issues that need to be addressed from consumer perspective, consumers are willingto consider that. Food ethicists and the discipline of food ethics is faced with a moral debate todayon whether protecting consumers by forcing bans and policies on companies should be adopted or 4
letting consumers decide for themselves but providing a platform for their voices to be heard andconcerns to be addressed should be the approach.Ethical standards in Advertising industry for unhealthy food products:In ethics, consumer’s rights can be justified from at least three different perspectives. Theseperspectives frame consumer sovereignty (consumer autonomy). First, deontological position, i.e.Kant’s philosophy that strongly advocates undeniable sovereignty; Second, utilitarian perspectivewhich talks about pursing your own good in your own way unless it deprives others of theirs;Thirdly, pragmatist perspective, essential for social developments (Korthals 2004).Utilitarianism holds true value when acts that are most useful to society and its growth areperformed. It is a relativist theory. When faced with a moral dilemma a utilitarianist would think ofall possible outcomes to all possible choices and act on whichever one they think benefits societymost i.e. greater good for the greater number of people (Bishop, 1949). F. P. Bishop in his work‘Ethical Standards for advertising’ suggests that ethical standards for advertising should meetpractical requirements of the society and people. And Governments today find it highly challengingto implement strict rules and regulations for food companies or fast food outlets since demand isalways on the rise. Companies like Mc Donald’s argue on the context that they are providing mealsat a cheaper price and helping consumers save time and money both. Fast food chains such asBurger King, Mc Donald’s and KFC generally have self-service and provide excellent customerservice which helps them retain customers. What they don’t make customers aware of is the harmthe burgers and fries they are selling are causing to them which is clearly unethical. Consumerstend not to realise the downside of consumption of these unhealthy food products when young.But eventually after years of consumption the body starts to show the side effects of this foodconsumption. Even when parents try to educate children about the side effects of unhealthy foodconsumption, children get used to the habit because of continuity and advertising forms a majorinfluential factor in this kind of addiction to unhealthy food habits among children and adolescents.A probable question that arises here is; does the sale and marketing of unhealthy food productsincluding those high in sugar lead to any benefits or increase overall utility of the society? Theanswer is no as companies are aware about the harm they are causing to the people and which isactually decreasing overall utility of the society since people in the long run are going to face healthproblems. These health problems in turn impact the health services of the country. Cost ofproviding medical care increases and Government has to spend relatively more amount of moneyon health institutions like hospitals.Utilitarians suggest that overall increase in the policies and regulations for advertising can help increating benefit for the society. If companies are taxed and pricing of unhealthy food products isincreased it can reduce the sale thereby decreasing risky behaviour among children or consumers.On the contrary, when alcohol and cigarette prices were raised 40% (from 1981-1988) the demandstayed level; proof that simply taxing or raising prices as a means of regulating the consumptioncannot change behaviours. Consumers will still be vulnerable to health risks of unhealthy foodproducts even if pricing factor is increased. Thus according to Utilitarian theory there is a need for 5
ethical behaviour among companies first in terms of limiting advertising campaigns and marketingof food products to create overall utility in terms of benefiting the society. Educating consumersabout making right choices while selecting food products from retail outlets (Walmart, Tescos andso on) and creating in-school campaigns about healthy eating habits for children are some of themeasures that Utilitarians suggest. Estimating total utility effects of the companies in this situationis hard to conclude but it is reasonable to accept the fact that unhealthy food products are seen tocause irreparable damage to one’s health which gradually leads to loss of life. Short term happinessderived from them to the consumers and profits made by the companies do not outweigh the factthat companies are causing serious health accidents among consumers by misleading them andtherefore advertising and marketing by them is unethical.In Kantianism, there are a number of maxims, or principles, upon which people, Kant believes,should act. Therefore it is an absolutist theory (as opposed to relativist). We cannot universalise apractice of promoting a non-universalisable practice, and encouraging unhealthy eating habits isnot a universal practice. Promotion of the same means that one is treating people/consumers as‘means’ and this subverts them as rational ends. On Kantian grounds this is unethical and shouldnot be practiced. Also all advertising that is not purely informational many a time it is an attempt todistort the rational judgement of the buyer. This clearly contravenes the Kantian emphasis on arational will. Since humanity and human society depend on rational judgement a practice that isaimed at damaging people’s rational judgement is not universalisable. Consumers are to be treatedas means and not as rational ends by the companies and marketing executives.A Kantian approach would ask "Is it morally right for companies such as KFC, Pizza Hut (pioneers injunk food), Red bull, Coca cola (beverages consisting high amounts of sugar and caffeine), Cadbury,Rowntree (chocolate products high in fat and sugar) to advertise this unhealthy eating habits andlifestyle? The answer is that food companies advertising their food as desirable enticing everyoneto consume it eventually leading consumers to health problems and fatal diseases is naturallyconsidered to be immoral on the part of the company and its executives who support the act. Butat the same time there is a possibility that fast food chain marketer or any other unhealthy foodproduct company executive may argue that they always mention the nutritional values on theirpackaging and are thus morally not performing an unethical act in terms of misleading or lying toconsumers. If this were to be accepted by Governments or consumers then Kantian argumentswould not be that significant. Also, Kant proposes that an adult is educated and has capability tomake his own decisions i.e. autonomy while he chooses his food lifestyle. Since consumptionchoices include one’s autonomy, consumers should have a right to all the types of food productsand determine for themselves what suits them.Conclusion:The issue of current food industry and Government’s role in promoting healthy lifestyles is quietcomplex. Obesity and heart problems among young people today because of their eating habitsneeds to be addressed and limitations on the factors that promote this lifestyle has to be broughtinto effect. I believe as population of a country grows health care costs grow as well and these 6
costs with the present situation would never go down unless very strict action is taken andeffectiveness of this action is tested. In my opinion factors such as customer autonomy do prove asa challenge when Government has tried addressing the issue of unhealthy eating habits in the pastbut with voluntary efforts by major companies in food industry such as ‘The Organic DeliveryCompany’ in UK which promotes and sells healthy food (completely low or without sugar, fat andsalt).Ethical standards in advertising as set by Federal Trade Commission Act (FTC) emphasize speciallyon truth-in-advertising laws when applied to children. FTC defines that statements and promotionsthat are deceitful and likely to harm consumers are unfair and unethical on the part of thecompany. Different countries have different perspectives on advertising of food products and it isimportant to have a striking balance between consumer’s personal choices and independence andregulations that could possibly affect consumer’s right to choose.Bibliography and References:Atkin C: Observation of parent-child interaction in supermarket decision-making. Journal ofMarketing 1978, 42:41-45.BBC News Health Report for February 2012Retrieved 10 April 2012From http://www.bbc.co.uk/news/health-17041347Evans, N.; Farkas, A.; Gilpin, E.; Berry, C.; and Pierce, J. P. (1995). "Influence of Tobacco Marketingand Exposure to Smokers on Adolescent Susceptibility to Smoking." Journal of the National CancerInstitute 87(20):1538545.Federal Trade Commission (1998). Federal Trade Commission Report to Congress for 1997 Pursuantto the Federal Cigarette Labeling and Advertising ActKennedy, N. (2008). “Stop In The Name Of Public Policy: Limiting “Junk Food” Advertisements DuringChildren’s Programming”. Pg. 506-510Molteni R, Barnard RJ, Ying Z, et al. (2002). “A high-fat, refined sugar diet reduces hippocampalbrain-derived neurotrophic factor, neuronal plasticity, and learning”. Neuroscience. Pg. 803-14Schuster, C. P., and Powell, C. P. (1987). "Comparison of Cigarette and Alcohol Controversies."Journal of Advertising 16(2):263.Stanford Encylopedia of Philosophy: Kant’s Moral PhilosophyRetrieved 16th April 2012-04-19From http://plato.stanford.edu/entries/kant-moral/ 7