Social Responsibility & Ethics in the Global Market Place

International Advertising

Social Responsibility in the Global Market Place

• There have been well publicized events which did basic violation of local ethical values.

• Secondly Consumer Protection Groups are fast coming up which are pointing out the misleading aspects of advertising.

• In addition to this both in developed and developing countries have sharply increased regulations of their promotional activities.

• In growing number of countries advertising agencies share the responsibility with the advertiser for any violation of policies. So both the parties are fined and penalized equally.

• This situation clearly calls for implementation / adoption of Code of Ethics.

Social Responsibility in the Global Market Place

• This situation clearly calls for implementation or adoption of Code of Ethics.

• So what is consumerism? It is the right of the consumer to know. What he is eating? How long the product will last? What are the ingredients in the product? What will the product really do and what it will not do?Etc.

Social Responsibility in the Global Market Place

The Consumer Rights Protection Organizationshave made demands in basically three areas:• Data about products and services offered for sale and

information to assist specific buying decesion.• The development of the knowledge base of the

consumer to make him more intelligent. Basically how to deal with the people and institutions one encounters.

• The call for government and regulatory bodies to safeguard consumer rights, protect against deceptive practices, and set health and safety standards.

Social Responsibility in the Global Market Place

• Social Responsibility and Marketing MixProducts should be high quality, safe andenvironment friendly as far as being culturallysensitive.• Advertising agencies must question whetherthey will represent clients whose products donot live up to such standards.• Some of the pharmaceutical products which werebanned in developed countries were then exported todeveloping countries where product controls did notexist.• Germans dumped expired products in Poland.

Social Responsibility in the Global Market Place

Pricing Responsibility refers to charging onlywhat the market will bear.Some societies have restrictions on priceincrease of pharmaceutical and other products.At times companies introduce products at lower

prices keeping in perspective the buying power of that particular market.

Social Responsibility in the Global Market Place

Place responsibility refers to manufacturingabroad. • Child labor is a big issue.• Occupational Health & Safety rules have to beapplied the same way they are applied in theparent country.

Social Responsibility in the Global Market Place

• It is also the responsibility of the internationalbusinesses to take their product to not soaffluent consumers or the consumers who livefar from the distribution channels. • Whirlpool in India made special arrangementsto distribute their appliances in every nook andcorner of India.

Social Responsibility in the Global Market Place

• Promotional responsibility refers not just toadvertising message but to all promotionalactivities.• Cultural and local values offences are thebiggest areas of concern.

Social Responsibility in the Global Market Place

• Environmental Concerns in the Global Market Most work in this area was done in 1990s.• Often manufacturing plants are shifted fromdeveloped countries to under developedcountries.• This was mainly done due to environmentefficient technology replacement.• Environmental promise advertising.• Product Technology and Process Technology are

the areas of concern.

Social Responsibility in the Global Market Place

• Over commercialization of local mediaresulting in decline of local programming unlessprotected by local laws.• One argument also says that they sell usproducts which we don’t really need but byvirtue of some effective advertising they areable to do that.

Social Responsibility in the Global Market Place

• The International Advertising Association (IAA) states in its mission statement that it “is the one global organization committed to fight unwarranted regulation on behalf of all those engaged in responsible commercial speech and to act as an advocate for freedom of choice across all consumer and business markets” The IAA is determined to educate society in the following benefits of advertising:

Social Responsibility in the Global Market Place

• Advertising informs and inspires consumers so they can choose how to enrich their lives

• Advertising stimulates competition among companies• Advertising encourages product innovation• Advertising plays a part - through the process of sparking

demand - in creating jobs in thousands of industries• Advertising enables an independent, pluralistic,

affordable media, the very foundation of democracy itself

• Advertising also subsidizes a large part of the entertainment industry - particularly sports, music, and theatrical events (IAA Website)

Social Responsibility in the Global Market Place

• Criticisms of international advertising, especially in developing countries, does not focus on retail advertising, which brings together buyers and sellers and provides consumers with information about the local market, nor does it focus on industrial advertising where businesses are targeted not the consumer

• The brand-name products like soft drinks, sweets, alcoholic beverages, and cigarettes are most often the targets of criticism

Social Responsibility in the Global Market Place

THE BOTTOMLINE

“A legal product should have the right to be promoted”

Advertising allows consumers to “compare goods,which often results in lower prices and improvedproduct quality; advertising stimulates the economyby encouraging consumption; and it has thepotential to improve living standards”