Amity Business School

Name of Institution

ADVERTISING & SALES

PROMOTION
MBA CLASS OF 2011
 Amity Business School
Name of Institution

“Values matter to each one of us…the beliefs we

hold as special. Ethics are rules for deciding right
and wrong and the code of conduct based on our
decisions…”

CLASS IN DISCUSSION with your Facilitator Prof.

Aparna Goyal
 Amity Business School
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Ethics

AAAA
Marketing
Marketing
Marketing
Marketing or
or Marketers
Marketers Must
Must
Not
Not All
All Issues
Issues Promotion
Promotion Action
Action Make
Make Decisions
Decisions
Can
Can BeBe May
May BeBe Legal
Legal but
but Regarding
Regarding the
the
Regulated
Regulated Not
Not Considered
Considered Appropriateness
Appropriateness
Ethical
Ethical of
of Their
Their Actions
Actions

Advertising Society
 Amity Business School
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Advertising Society

• Economics
– The effects of advertising on our economy
• Ethics
– The effects of advertising on our society
• Regulation
– Our attempts to manage those effects
 Amity Business School
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Viewpoints:
Shape-versus-Mirror debate:
Advertising can shape and mirror
values
 Amity Business School
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Proponents
Proponents of
of Advertising
Advertising

Encourages
Encourages Creates
Creates Jobs
Jobs and
and
Provides
Provides AA Higher
Higher Standard
Standard Helps
Helps New
New Firms
Firms
Information
Information Of
Of Living
Living Enter
Enter aa Market
Market

Promotes
Promotes
Competition
Competition in
in
The
The Marketplace
Marketplace

Critics
Critics of
of Advertising
Advertising

Promotes
Promotes
Creates
Creates Needs
Needs and
and Is
Is More
More Materialism,
Materialism,
Wants
Wants Among
Among Propaganda
Propaganda Insecurity
Insecurity and
and
Consumers
Consumers Than
Than Information
Information Greed
Greed
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Role of Advertising in the Economy

Making
Making Consumers
Consumers Aware
Aware of
of
Products
Products and
and Services
Services

Providing
Providing Consumers
Consumers With
With
Information
Information to
to Use
Use to
to Make
Make
Purchase
Purchase Decisions
Decisions

Encouraging
Encouraging Consumption
Consumption
and
and Fostering
Fostering Economic
Economic
Growth
Growth
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Effects
Effects on
on Consumer
Consumer Choice
Choice
•• Differentiation
Differentiation
•• Brand
Brand Loyalty
Loyalty

Effects
Effects on
on product
product costs
costs and
and prices
prices
•• Advertising
Advertising as
as an
an expense
expense that
that
increases
increases the
the cost
cost of
of products
products
•• Increased
Increased differentiation
differentiation
 Amity Business School
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Advertising’s Societal Role

• Does advertising create a materialistic culture or

does it simply reflect it?
– Critics believe that advertising has the power to shape
social trends and the way people think and act
– Advertising professionals believe advertising mirrors
values rather than sets them
 Amity Business School
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Determining What is Ethical

• The social ethic Social responsibility

motivates a business
• The professional to make a positive
ethic impact on society
• The personal
ethic
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• The social ethic • Industry standards

help with a decision
• The professional about what is ethically
ethic correct
• The personal • A code of standards
ethic identifies how
professionals should
respond when facing
an ethical dilemma
 Amity Business School
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• The social ethic • Personal judgment

and moral reasoning
• The professional rests on an intuitive
ethic sense of right and
• The personal wrong
ethic • Advertising
professionals must be
aware of industry
standards as well as
ethical questions
 Amity Business School
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Controversial Issues in Advertising:

1. Puffery
2. Offensiveness
3. Stereotyping
4. Children
5. Controversy
6. Deception
7. Comparisons
8. Endorsements
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9. Demonstrations
10 “Bait & Switch”
11. False Promises
12. Partial Disclosures
13. Misleading Claim
14. False Testimonials
15. Small-Print Qualifications/ Subliminal
Ads
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Regulations

• Purpose for advertising regulation

– To protect competition
– To protect consumers from economic or physical harm
• Regulations are concerned with
– Deceptive or unfair content
– How advertising is delivered
– Protection of susceptible groups (kids, etc.)
 Amity Business School
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Government Regulatory Groups:

1) FDA Packaging and labeling
2) FCC Broadcast advertising
3) Postal Service Magazines, direct mail
4) ATF Liquor labeling, advertising
5) Patent Office Trademarks
6) Library of Congress Copyrights
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Industry Watchdogs
1) NAD (National Advertising Division)
- Part of Better Business Bureau

2) National Advertising Review Board

- Represents advertisers and agencies
- A division of the NAD

• Compliance is strictly voluntary

 Amity Business School
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Advertising’s Regulatory Environment

Federal Trade Commission

• Regulating
deception • Deceptive
advertising misleads
• Regulating customers by making
substantiation claims that are false
• Remedies for
deception and unfair
advertising
 Amity Business School
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Advertising’s Regulatory Environment

Federal Trade Commission

• The advertiser
• Regulating should have a
deception reasonable basis for
• Regulating making a product
claim
substantiation
• Remedies for
deception and
unfair advertising
 Amity Business School
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Advertising’s Regulatory Environment

Federal Trade Commission • Consent Decrees

• Regulating • Cease-and-Desist
Orders
deception
• Corrective Advertising
• Regulating
• Consumer Redress
substantiation • Advertising Agency
• Remedies for Legal Responsibility
deception and
unfair advertising
 Amity Business School
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Advertising’s Regulatory Environment

Food and Drug Federal Comm. Commission

Administration
• Can issue and revoke
• Oversees package licenses to
labeling, ingredient broadcasting stations
listings, and • Can ban messages
advertising for food
that are deceptive or
and drugs
in poor taste
• Watchdog for drug
advertising
 Amity Business School
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Advertising’s Regulatory Environment

Other Regulatory Bodies International Regulations

• Bureau of Alcohol, • Marketing practices
Tobacco, and vary in legal and
Firearms regulatory restrictions
• International
• Postal Service
advertisers should
• States’ Attorneys have someone in the
General country who knows
the local laws
 Amity Business School
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Media Review of Advertising

• The media attempts to regulate advertising by

screening and rejecting ads
• The First Amendment gives any publisher the
right to refuse to publish
• The Advertising Review Council designed the
standards and guidelines used by major
television networks
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Self-Regulation

• Self-discipline • Most advertisers and

agencies have in-
• Industry self- house review
regulation procedures
• Every element of a
• Self-regulation
proposed ad should
with outside help be evaluated by an in-
house committee or
lawyers
 Amity Business School
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Self-Regulation

• Self-discipline
• Industry self- • National Advertising
Review Council
regulation – National Advertising
• Self-regulation Division
– National Advertising
with outside help Review Board
• Negotiates voluntary
withdrawal of deceptive
advertising
 Amity Business School
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Self-Regulation

• Self-discipline
• Industry self-
regulation
• Self-regulation • Local Groups
with outside help • Consumer Groups
 Amity Business School
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Do Advertisers Control the Media?

Advertising
Advertising Is
Is the
the Primary
Primary Source
Source
of
of Revenue
Revenue for
for Newspapers,
Newspapers,
Magazines,
Magazines, and
and Television
Television and
and
Radio
Radio Networks
Networks andand Stations
Stations

The
The Media’s
Media’s Dependence
Dependence onon
Advertising
Advertising For
For Revenue
Revenue Makes
Makes
Them
Them Vulnerable
Vulnerable To
To Control
Control by
by
Advertisers
Advertisers

Advertisers
Advertisers May
May Exert
Exert Control
Control
Over
Over The
The Media
Media by
by Biasing
Biasing
Editorial
Editorial Content,
Content, Limiting
Limiting
Coverage
Coverage of of Certain
Certain Issues
Issues or
or
Influencing
Influencing Program
Program Content
Content
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Do Advertisers Control the media?

They
They Must
Must Report
Report the
the News
News
Fairly
Fairly and Accurately to
and Accurately to Retain
Retain
Public
Public Confidence
Confidence

Advertisers
Advertisers Need
Need the
the Media
Media
More
More Than
Than the
the Media
Media Need
Need Any
Any
One
One Advertiser
Advertiser

The
The Media
Media Maintain
Maintain Separation
Separation
Between
Between News
News and
and Business
Business
Departments
Departments “The
“The Wall”
Wall”
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Do You Agree With Leo Burnett?

“It must be said that without advertising we

would have a far different nation, and one that
would be much the poorer-not merely in
material commodities, but in the life of the
spirit.”