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Evaluating the Social, Ethical, and Economic Aspects of Advertising and Promotion Ethical Evaluating the Social, Ethical, and Economic Aspects of Advertising.

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Presentation on theme: "Evaluating the Social, Ethical, and Economic Aspects of Advertising and Promotion Ethical Evaluating the Social, Ethical, and Economic Aspects of Advertising."— Presentation transcript:

1 Evaluating the Social, Ethical, and Economic Aspects of Advertising and Promotion Ethical Evaluating the Social, Ethical, and Economic Aspects of Advertising and Promotion Ethical 22 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

2 Advertising and Promotion Viewpoints Creates consumer needs, wants Promotes materialism, insecurity, and greed More propaganda than information Provides information Creates jobs Encourages higher standard of living Promotes competition Proponent arguments Critic arguments Helps new firms enter a market

3 Ethics in Advertising and Promotion Not all issues can be regulated A marketing or promotion action may be legal but not ethical Marketers must decide the appropriateness of their actions Ethics: Moral principles and values that govern the actions and decisions of an individual or group.

4 Promoting Responsible Drinking

5 Benettons Death Row Ad Offensive

6 Advertising and Untruthful or Deceptive General mistrust of advertising among consumers. Many do not perceive ads as honest or believable General mistrust of advertising among consumers. Many do not perceive ads as honest or believable Abuses involving sales promotions such as contests, sweepstakes, premium offers Unethical and/or deceptive practices involving mail order, telemarketing and other forms of direct marketing Unethical and/or deceptive practices involving mail order, telemarketing and other forms of direct marketing Internet scams and abuses

7 Advertising as Offensive or in Bad Taste Sexual appeals Sexual appeals Objectionable products Shock ads

8 Test Your Knowledge Advertisers are using shock advertising to: A) Test their First Amendment rights B) Get ads noticed in the midst of clutter C) Make a statement against self-regulation D) Test the ethics of the advertising industry E) Act as advocacy ads for company management

9 Advertising and Children Children's TV Watching Behavior Children ages 2-11 watch an average of 22 hours of TV per week and see 30,000 commercials per year 80% of all advertising targeted to children falls in four product categories: Toys, cereal, candy & fast food restaurants 80% of all advertising targeted to children falls in four product categories: Toys, cereal, candy & fast food restaurants

10 Perspectives on Ads for Children Advocates Argue That Children: Marketers Argue Children: Lack the knowledge and skills to evaluate advertising claims Cannot differentiate between programs and commercials Cannot differentiate between programs and commercials Must learn through socialization Must learn through socialization Must acquire skills needed to function in the marketplace

11 Do TV Networks Have a Double Standard?Standard

12 Social and Cultural ConsequencesConsequences Does advertising encourage materialism? Does advertising encourage materialism? Does advertising make people buy things they dont need? Does advertising make people buy things they dont need? Is advertising just a reflection of society? Is advertising just a reflection of society?

13 Does advertising affect Society?

14 Advertising and Stereotyping Portrayal of women to reflect their changing role in society Portrayal of women as sex objects Portrayal of women as sex objects Ethnic stereotyping/ representation Ethnic stereotyping/ representation Gender stereotyping Gender stereotyping Sexual orientation Criticisms of Advertising With Regard to Stereotyping Criticisms of Advertising With Regard to Stereotyping

15 What is your opinion of this ad? Is this woman portrayed as a sex object? Does this ad contain cues that are sexually suggestive? Does this ad contain cues that are sexually suggestive? Does this ad present an image of sexual submissiveness?

16 Dove Challenges the Norms of Beauty

17 Test Your Knowledge Groups such as the National Organization for Women (NOW) are critical of advertising that: A) Portrays women in traditional sexist roles B) Contributes to violence against women C) Is insulting to women D) Stereotypes women E) Does any of the above

18 Advertising Can Address Social Problems *Click outside of the video screen to advance to the next slide

19 Do Advertisers Control the Media? Advertising is the primary source of revenue for newspapers, magazines, television and radio Advertisers may exert control over the media by biasing editorial content, limiting coverage of certain issues, or influencing program content Medias dependence on advertising for revenue makes them vulnerable to control by advertisers

20 Do Advertisers Control the Media? They must report the news fairly and accurately to retain public confidence Advertisers need the media more than the media need any one advertiser Media maintain separation between news and business departments The Wall

21 U.S. Government Discourages Drug Use

22 Role of Advertising in the Economy Makes consumers aware of products and services Provides consumers with information to use to make purchase decisions Encourages consumption, fosters economic growth

23 Economic Impact of Advertising Effects on Consumer Choice Differentiation Brand Loyalty Effects on Consumer Choice Differentiation Brand Loyalty Effects on Product Costs and Prices Advertising as an expense that increases the cost of products Increased differentiation Effects on Product Costs and Prices Advertising as an expense that increases the cost of products Increased differentiation Effects on Competition Barriers to entry Economies of scale Effects on Competition Barriers to entry Economies of scale

24 Test Your Knowledge From an economic perspective, advertising might lower the cost of a product by: A) Creating barriers to entry for less efficient firms B) Moving consumers to the consumer socialization stage of the buying process C) Making it possible for firms to realize economies of scale through expansion of sales volume D) Allowing firms to advertise at high levels along with competitors E) Doing none of the above

25 The Economic Value of Advertising *Click outside of the video screen to advance to the next slide

26 Summarizing Economic Effects Change consumers tastes Reduces competition Lowers sensitivity to price Builds brand loyalty Advertising Equals Market Power Leads to higher prices Leads to fewer choices Results in higher profits

27 Summarizing Economic Effects Provides useful information Pressure for lower prices Increases price sensitivity Increases competition Advertising Equals Information Forces inefficient firms out Pressure for high quality

28 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. Excerpters is from a speech given by Leo Burnett on the American Association or Advertising Agencies 50th anniversary, April 20,1967


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