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