Sunday, May 31, 2015

ETHICAL ISSUES IN PROMOTION


ETHICAL ISSUES IN PROMOTION
The wide range of promotional techniques that we have discussed in this chapter gives rise to several ethical questions. These are discussed below.



Misleading advertising


This can take the form of exaggerated claims and concealed facts. For example, it would be unethical to claim that a car achieved 50 miles to the gallon when in reality it was only 30 miles. Nevertheless, most countries accept a certain amount of puffery, recognizing that consumers are intelligent and interpret the claims in such a way that they are not deceptive. In the UK, the advertising slogan 'Carlsberg-Probably the Best Lager in the World' is acceptable because of this. Advertising can also deceive by omitting important facts from its message. Such concealed facts may give a misleading impression to the audience. Many industrialized countries have their own codes of practice that protect the consumer from deceptive advertising. For example, in the UK the Advertising Standards Authority (www.asa.org.uk) administers the British Code of Advertising Practice, which insists that advertising should be 'legal, decent, honest and truthful'. Shock advertising such as that pursued by companies like Benetton and FCUK are often the subjects of many complaints to the Advertising Standards Authority.


Advertising to children
 One particularly controversial issue is that of advertising to children. Critics argue that children are especially susceptible to persuasion and that they therefore need special protection from advertising. Others counter by claiming that the children of today are remarkably 'streetwise' and can look after themselves. They are also protected by parents who can, to some extent, counteract advertising influence. Many European countries have regulations that control advertising to children. For example, in Germany, advertising specific types of toy is banned, and in the UK alcohol advertising is controlled. An example of self-regulation at work was the dropping of an advertisement for a soft drink that featured a gang of ginger-haired, middle-aged men taunting a fat youth. The advertisement was withdrawn after numerous complaints were received contending that it encouraged bullying in schools.


The intrusiveness of direct marketing

Direct marketing is criticized for being intrusive and for invading people's privacy. Receiving unsolicited calls from telemarketing companies can be annoying, while many consumers fear that every time they subscribe to a club, society or magazine their names, addresses and other information will be entered on to a database, and that this will guarantee a flood of mail from the supplier. Poorly targeted mail, usually called junk mail, also irritates many people. The direct marketing industry is responding to these concerns and is becoming increasingly sophisticated in how it targets prospects. Many consumers are registering with suppression files indicating that they do not want to be recipients of direct marketing activities.


Use of trade inducements

To encourage their salespeople to push the manufacturers' products, retailers sometimes accept inducements from manufacturers. This often takes the form of bonus payments to salespeople. The result is that there is an incentive for salespeople, when talking to customers, to pay special attention to those product lines that are linked to such bonuses. Customers may, therefore, be subjected to pressure to buy products that do not best meet their needs.


Third-party endorsements
The use of third-party endorsements to publicize a product is another subject for ethical debate. In such cases, a person gives a written, verbal and/or visual recommendation of a product. A well known, well-respected person is usually chosen, but given that payment often accompanies the endorsement the question arises as to its credibility. Supporters of endorsements argue that consumers know that endorsers are usually paid, and are capable of making their own judgments regarding their credibility.


Deception by salespeople

A dilemma that, sooner or later, is likely to face most salespeople is the choice of telling the customer the whole truth and risk losing a sale, or misleading the customer in order to wrap up a sale. Such deception may take the form of exaggeration, lying or withholding important information that significantly reduces the appeal of a product. Such actions can be avoided by influencing the behavior of salespeople through training, by sales management that encourages ethical behavior, which is demonstrated through salespeople's own actions and words, and by establishing codes of conduct for salespeople. Nevertheless, from time to time evidence of malpractice in selling reaches the media. For example, in the UK it was alleged that some financial services salespeople mis-sold pensions by exaggerating the expected returns. This scandal cost the companies involved millions of pounds in compensation.

The hard sale

The use of high-pressure sales tactics to close a sale is another criticism leveled at personal selling. Some car dealerships have been deemed unethical due to their use of hard-sell tactics to pressurize customers into making a fast decision on a complicated purchase that may involve expensive credit facilities. Such tactics encouraged Daewoo to approach the task of selling cars in a fundamentally different way by replacing salespeople with computer stations where consumers could gather product and price information.






Bribery

Bribery is the act of giving payment, gifts or other inducements in order to secure a sale. Bribes are considered unethical because they violate the principle of fairness in commercial negotiations. A major problem is that, in some countries, bribes are an accepted part of business life: bribes are an essential part of competing. When an organization succumbs, it is usually castigated in its home country if the bribe becomes public knowledge. Yet, without the bribe, it may have been operating a major commercial disadvantage. Companies need to decide whether they are going to market those countries where bribes are commonplace. Taking an ethical stance may cause difficulties in the short term but in the long run the positive publicity that can follow may be of greater benefit.