Belch 10e ch21_ppt

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Chapter 21Evaluating the Social, Ethical,and Economic

Aspects of Advertising and

Promotion


Advertising

• Provides information to consumers• Encourages higher standard of living• Promotes competition • Helps new firms enter a market• Creates jobs

Proponents’ arguments

• More propaganda than information• Creates consumer needs and faults• Promotes materialism, insecurity, and greed

Critics’ arguments

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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

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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

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Advertising as Offensive or in Bad Taste 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

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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

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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

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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

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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

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Social and Cultural Consequences

Advertising influences and transmits social values

Advertising agencies should consider the impact of the advertising messages they create

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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

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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

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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

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Advertising and Stereotyping

Gender stereotyping

Portrayal of women

Preoccupied with beauty, household duties, and motherhood

Decorative objects or sexually provocative figures

Portrayal of men

Constructive, powerful, autonomous, and achieving

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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

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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

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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

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Figure 21.6 - Two Schools of Thought on Advertising’s Role in the Economy

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