Belch & Belch - Chapter 21 - Evaluating the Social, Ethical and Economic Aspects of Advertising and Promotion

1. Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Chapter 21
Evaluating the
Social, Ethical,
and Economic
Aspects of
Advertising and
Promotion

2. Advertising
Proponents’ arguments
• Provides information to consumers
• Encourages higher standard of living
• Promotes competition
• Helps new firms enter a market
• Creates jobs
• More propaganda than information
• Creates consumer needs and faults
• Promotes materialism, insecurity, and greed
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
Critics’ arguments
2

3. Advertising and Promotion Ethics
 Ethics: Moral principles and values that govern the
actions and decisions of an individual or group
 Marketing or promotion action may be legal but not
ethical
 Marketers must base their decisions on ethical
considerations
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
3

4. Advertising as Untruthful or Deceptive
 Consumers rely on word of mouth
 Difficult to prove deception
 Projects only positive points
 Exists more at the local level
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
4

5. Advertising as Offensive or in Bad Taste
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
 Sources of distaste
 Ads of personal products or services
 Ads of products and brands that consumers do not use or would not buy
 Type of appeal or the manner of presentation
 Sexual appeal in ads
 Offensive and tends to demean women or men
 Promotes a decline of moral and social values
 Shock advertising: Using nudity, sexual suggestiveness, or
other startling images to get consumers’ attention
5

6. Advertising and Children
 Popular medium - TV and the Internet
 Critics argue that children:
 Lack the knowledge and skills to evaluate advertising
claims
 Cannot differentiate between programs and commercials
 Marketers’ arguments
 Children must deal with advertising
 Consumer socialization process: Acquiring skills needed to
function in the marketplace
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
6

7. Advertising and Children
 Existing restrictions are adequate
 Greater knowledge of the marketplace required for teens
 Areas of potential concern
 Cable television programming
 Internet ads
 Increase in ads encouraging children to call 900
numbers
 Increase in toy-based programs
 Marketing of violent entertainment
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
7

8. Guidelines for Advertising Directed to
Children
 Level of knowledge, sophistication, and maturity of
the audience should be taken into account
 Should refrain from unfair exploitation of the
imaginative quality of children
 Should not advertise products and content
inappropriate for children directly to them
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
8

9. Guidelines for Advertising Directed to
Children
 Information should be communicated in an
accurate manner and in a language understandable
to children
 Advertisements should portray positive and
beneficial social behavior
 Minority groups should be incorporated in
advertisements
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
9

10. Social and Cultural Consequences
 Advertising influences and transmits social values
 Advertising agencies should consider the impact of
the advertising messages they create
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
10

11. Advertising Encourages Materialism
 Materialism: Preoccupation with material things
rather than intellectual or spiritual concerns
 Advertisements that contribute to materialism:
 Seek to create needs
 Surround consumers with images of the good life
 Suggest it leads to contentment and happiness
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
11

12. Arguments Favoring Materialism
 Protestant ethic: Stresses on hard work, individual
effort, and initiative
 Views the accumulation of material possessions as
evidence of success
 Does not rule out interest in intellectual, spiritual,
or cultural values
 Advertisements only reflect the values of society
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
12

13. Advertising Makes People Buy Things
They Don’t Need
 Critics’ argument - Advertising should only provide
information useful in making purchase decisions
 Defenders’ argument
 Advertising is informational in nature
 Advertising should not be limited to dealing with
basic functional needs
 Consumers are free to choose
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
13

14. Advertising and Stereotyping
 Gender stereotyping
 Portrayal of women
 Preoccupied with beauty, household duties, and
motherhood
 Decorative objects or sexually provocative figures
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
 Portrayal of men
 Constructive, powerful, autonomous, and achieving
14

15. Advertising and Stereotyping
 Advertisers are striving to:
 Increase the incidence of minority groups
 Avoid ethnic stereotyping
 Develop advertising that has specific appeals to
various ethnic groups
 Be sensitive to the portrayal of specific groups of
people in their ads for ethical and commercial
reasons
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
15

16. Advertising and the Media
 Ads are the primary source of revenue for
newspapers, magazines, television, and radio
 Advertisers have an influence over media
 Economic censorship - Media present biased news
coverage in compliance with the advertiser
 Reasons for media not being influenced by
advertisers
 Public confidence should be retained by being fair, accurate, and truthful
 Advertisers need the media more than the media need any one advertiser
 The Wall
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
16

17. Economic Effects of Advertising
 Effects on consumer choice - Helps achieve:
 Differentiation: Products or services of large advertisers are perceived as
unique or better than competitors’
 Brand loyalty
 Effects on competition - Large firms with huge budgets:
 Act as a barrier to entry, resulting in less competition and higher prices
 Can achieve economies of scale
 Effects on product costs and prices
 Increases the cost of products and services
 Increases product differentiation that adds to the perceived value of the
product in consumers’ minds
 Lowers prices by making a market more competitive
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
17

18. Figure 21.6 - Two Schools of Thought
on Advertising’s Role in the Economy
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
18