MGX3100 WEEK 10 ETHICAL ISSUES IN MARKETINGPresentation Transcript
Business and Economics
Management Ethics and
Overall Essay Feedback
Group Presentations: Ethical Issues in Marketing
Case: British American Tobacco’s expansion into
What are the central ethical issues in each of these cases?
Are there any lessons that BAT might learn from Nestle’s
BAT: A snapshot
• Moving into emerging markets:
1. Populations in emerging markets are expected to grow
leading to increased smoking among young adult populations - the
tobacco industry’s main consumer target.
2. Also, as income continues to rise in developing countries,
consumers may switch to higher-priced premium brands of cigarettes,
leading to greater profits.
Nicandro Durante, BAT’s Chief Operating Officer, recently highlighted
BAT’s strength against its competitors in emerging markets. He
described BAT as having the “best exposure to developing
markets” of all publicly traded TTCs which gives the company an
advantage because emerging markets are “likely to be more
resilient than developed markets
Marketing and Advertising
Exploiting weak regulations in emerging economies: Many of the marketing techniques
created and perfected by the tobacco industry in developed markets are now being used
in emerging markets where tobacco control regulations are weak.
– For example, the fraudulent marketing campaign of “low-tar” tobacco products is
now being recycled from the U.S. and other developed markets to developing
countries throughout the world.
– Companies target kids by putting cartoon characters on cigarette packs, and
stores still sell cigarettes to children.
Target audience is young adults, women and poor:
Some strategies and tactics include cigarettes smuggling, recruiting of new and young
smokers, denying the health consequences of smoking, manipulating governments to
delay tobacco control legislations and the sponsoring of health professionals and
academic institutions to act in their favour.
Explosion of smoking of babies
What happened at Nestle: Infant Formula
Marketing first world consumer products in third world countries.
Water quality, Lack of education: couldn’t read the instructions, Over
dilution, Aggressive marketing, Bottle-feeding instead of breast-feeding
Public issue life cycle and 4 phases
Phase 1: increased awareness and sensitivity to the facts of the
Phase 2: Issue becomes politicized
Phase 3: Development of formal or governmental action
Phase 4: institutionalization: implementation of the policy.
Can we apply this to BAT
Tobacco causes harm: we know that, not so much with the instant formula.
In terms of the public life cycle where do you think Tobacco Advertising is right now?
How can BAT avoid backlash?
Products that are appropriate and suitable in one social environment may not be suitable
in a different environment.
Even good products may be harmful if the market doesn’t know how to use them safely.
Companies have to take after sales responsibility as well: who is using it how are they
Unsafe products need to be demarketed/ removed from the market.
Marketing strategies should be appropriate to the condition of the customer.
Don’t exploit a condition of consumer vulnerability.
Marketing strategies should permit flexibility and adaptation to new circumstances
BAT and PM are advertising Tobacco products in emerging economies:
– Is there anything ethically objectionable about the practice of informing the public
about the availability of a particular product?
– Is there anything ethically objectionable about the practice of trying to persuade
the public to buy that product?
According to Galbraith and Hayek,
Nothing wrong, this is the purpose of Marketing, to give information to customers
Beauchamp Bowie and Arnold argue that,
advertising should not prevent informed choice about the product or service
advertisements should be persuasive and are ethically/morally inappropriate when
they are manipulative
– Interference with Liberty
Therefore WEAK PATERNALISM: weak paternalism involves the protection of
individuals from harming themselves in situations where their decisions are
Impaired decision making, harm to others, harm to personal well being
Stakeholder and Shareholder CSR perspectives
Lets consider the ethical issues again