Product - PowerPoint Presentation

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Product

Ethical concerns can arise in the

development

 of

products/services

. Marketers are supposed to identify and satisfy needs of consumers

.

Products offered do not always contribute to satisfying existing needs but sometimes create new needs through the promotion of materialism. It appears not to be ethical from marketers to forget the first role of marketing at the benefit of mercantilism.Slide3

Product

Ethical concerns can also appear in the

performance

of

products/services

. Ethical marketing activity should prevent poorly made and unsafe products. Products not made well or products delivering little benefit or less benefit than promised are commonplace criticism made to marketers.Slide4

Product

More questionable is the case of harmful products due to

poor design

or

lack of quality

. Marketers should refer to the maxim ‘Do unto others, as you would have them do unto you’ to judge whether a product is acceptable or not. The quality of a product should always have the priority on economic concerns. Moreover, pre-tests should be conducted to ensure the compliance of products to safety standards.Slide5

Product

Packaging

can also be a source of ethical concerns. Exaggerating packaging (for example through design) or misleading labels cannot be considered ethical, because they aim at deceiving consumers by making them believe a pack contains more product than it does in reality or by giving unclear/incomprehensible information.

A company sells a litchi/raspberry juice that claims to be a “refreshing and exotic”.

Yet, this fruit juice contains more apple than litchi plus raspberry together. The ingredient label indicates 27% of apple juice, 15% of litchi juice and 8% of raspberry juice (plus water, sugar and citric acid). The product is sold as a raspberry/litchi juice, while it is closer to an apple juice.Slide6

Promotion

The most commonplace ethical concern in promotion is

deception

. The American Federal Trade Commission (FTC) defines deception as “a misrepresentation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer’s detriment”.

Deception

is commonplace in

advertising

. For example,

overstating

a product’s feature or performance is contrary to the ethics. Deception in advertising can be either an exaggeration of products’ attributes (for example, a shampoo that helps fighting dandruff in 2 weeks whereas results are significant only after one month) or a unrealistic statement about products’ performance (for example, a pill that would help lose 30 Lbs. in one week).Slide7
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A campaign by a famous beauty brand is to be mentioned: an actress was engaged to promote a false eye lash mascara… but the actress wore fake eyelashes in the TV commercial! The company

undercame

negative feedback from offended consumers.Slide9

Deception

can also appear in

sales promotion

. Consumers desire to obtain more for the same price and are therefore sensitive to sales promotion like free gift, price reduction or special offers. The ethical risk is that companies may be tempted to take advantage of customers by making promises and promotions that cannot be kept.

Most frequently found problems are rigged

contests

or

games

(e.g., when winners are known by marketers before the end of the contest or when no one wins the game) and the use of deceptive or false promises (e.g., failure to provide a promised premium or failure to provide a gift in conformity to what was promised).Slide10

Another ethical concern is the

invasiveness

of marketers in the everyday life of consumers and the threats to consumers’ rights to privacy. For example, it is not ethical from marketers to send unwanted

spams

to consumers, because such emails violate regulations about consumers’ privacy.Slide11

Price

Marketers should be allowed to charge any price they want provided there is

no price discrimination

among consumers and that prices are all inclusive.

However, too high prices are not ethical, when they do not reflect the existing cost structure but are a means to take advantage of consumers. This is especially true in the case of

monopolies

,

oligopolies

or

cartels

.

Besides, advertised prices should always be

realistic prices

that consumers will find in stores.Slide12

The

odd-pricing

and

partitioned

prices

practices can also be questionable on ethical grounds. With odd-pricing, marketers resort to odd numbers (e.g., 29.99€) instead of rounded numbers (e.g., 30€) because consumers tend to associate 29.99 with 20 rather than 30. Partitioned prices aim at sharing the total price in several sub prices to make consumers believe the price is lower than in reality. If not used with sensitivity, these methods cannot be considered as ethical, because marketers manipulate consumers’ expectancies.Slide13

Place

Consumers can be manipulated without knowing it through subtle

marketing techniques

in

distribution

outlets. For example, shelves at lower heights target children, and stores can be

organised

in such a way that it encourages consumers to pass through more shelves. The ethical concern of such practices is whether subliminal incentives are morally acceptable: would consumers have bought the products even if those marketing techniques had not been used? In that case, is it possible to talk about ‘forced purchases’? Can those techniques cause economic hardships to shoppers by making them buy more than they can afford

?Slide14

Ethical concerns are also linked with the

segmenting

,

targeting

and

positioning

process.

Efforts to target consumer populations can be subject to unethical attitudes (e.g.: particularly vulnerable consumer populations, such as children, the poorest minorities, and the uneducated).

For example, the issue of higher insurance premiums to people with poor credit ratings is morally questionable.

Marketing to children

also raises ethical concerns. Wharton marketing professor Lisa Bolton asks the question: “Can [children] really make fully-informed choices or are they being flooded with marketing material that is going to alter their behaviour?”. That is the reason why candies have been suppressed from the shelves before the tills in French supermarkets.Slide15

Recommendation

Marketers should always consult the following guidance levels :

Statutory regulation

of the countries they operate in as well as the current self-regulation in their profession and industry. Those regulations are a first condition to ensure ethical marketing practices but are not sufficient.

Internal procedures

are to be set to guarantee conformed marketing practices. Such a procedure should be compulsory and systematic. This process would imply that every marketing decision has to be submitted to a ‘

ETHICS check

’ before it is implemented (e.g.: before a product launch, an advertising campaign, a change in prices…). The ‘ETHICS check’ stands for:

E – Effect

: does the decision harm anyone?

T – Transparency

: does the company mind if the decision is disclosed publically?

H – Harmony

with regulations: does the decision conform to statutory and self-regulations?

I – Interests

:  is the decision in the long-term interest of the firm?

C – Consumers

: would consumers consider the decision as fair?

S – Sovereignty:

is consumers’ purchasing sovereignty respected?Slide16

The marketing campaigns could only be launched if they pass the ‘ETHICS check’.

Pre-tests with

consumers

could also help marketers implement more ethical marketing decisions. Marketing projects should be systematically submitted to a

consumers sample

to check how consumers react to the projects and make the required changes in case consumers declare the projects not conformed to ethics on their points of view.

Asking consumers’ opinions before the effective implementation of marketing decisions seem the most appropriate way to ensure ethical marketing practices.