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Marketing issues, as they relate to business ethics, extend across a wide range of business activities that characterize a company's relationship with its customers (product manufacturing and integrity; disclosure, labeling and packaging; marketing and advertising; selling practices; pricing; and distribution). In recent years the scope of marketing issues has expanded, including new problems like an environmental responsibility, a firm's relationship to its competitors etc. Companies now are expected to bear a greater responsibility for the integrity, use and consequences of their products and services. Companies' concerns with satisfying society needs have a very rational explanation: if a company will not care about welfare of society, it may ultimately cease to exist, because it operates by community consent to oblige its requirements.
For that reason, firms put a lot of effort in dealing with the issue of corporate social responsibility, recognizing the importance (and potential benefits) of doing so. There are plenty of external standards for marketing practices: codes of ethical behavior (e. g. ones established by the American Marketing Association), industry specific guidelines developed by different trade associations and legal standards set forth by national and local governments. These laws and codes provide assistance to companies in establishing their marketing policies. Some of the examples of such policies are as follows (web): Sears, Roebuck- the company's Code of Conduct states, ."..
you (employee) are expected to deal fairly, honestly and responsibly with all customers, fellow associates and anyone else you come in contact with while representing Sears. With regard to customers, this duty requires you to conduct sales in a truthful and accurate manner, always maintaining the highest of ethical standards... " USAA: the company's Core Values Statement reads: "We will consistently behave in ways that are ethical, earning the respect of members and customers by being steadfast in our commitment to act in both their best interests and the interests of the Association, regardless of any business, social, economic or personal pressures to the contrary. " In what follows, we will focus on the topic of ethical ramifications of certain advertising practices, which are rarely covered by the companies' policies; namely on utilizing emotion-arousing ads. The American Marketing Association (AMA), for example, in its code states that one of the basic marketer's responsibilities is not to harm customers (Sign, 1999). It also recommends avoiding false and misleading advertising, but there is no annotation regulating advertising by appealing to customer's emotions. There are at least two explanations for that: emotion-arousing ads are commonly used and seem to work; the regulation of the utilizing this type of ads is very difficult to convey (e. g.
there are no objective standards for it). Emotion-arousing ads are widely used and are commonly perceived to be very effective. There is an empirical evidence indicating, that subjects better remember and more regularly recall ads awakening fear, than they do warm or with no emotional content ones (Thorson and Friestad, 1985). Advertisers try to evoke emotional responses for the following reasons (Hyman and Tansey, 1990): Emotions can be an important benefit derived from product or brand. Emotions can help to communicate the benefits of product or brand.
Emotions can directly influence attitudes. Each of these functions help companies sell products / services , and that is precisely the reason for using ads in the first place, right? It is not surprising then, that we are bombarded by commercials, that try to grab our attention by provoking emotional response, such as fear, sadness or just simply annoyance. Yet, some critics feel, that these ads may be unethical, because they can expose a person to harmful and offensive images (Snipes, La Tour and Bliss, 1999). Not only that, others say, emotion-arousing ads prey on vulnerable customers by exposing them to emotional responses, they cannot freely choose or control (Hyman and Tansey, 1990). One type of emotion-arousing ads seems to be especially morally controversial: a psychoactive ad. "A psychoactive ad is any emotion-arousing ad that causes a meaningful, well-defined group of viewers to fell extremely anxious, to feel hostile toward others, or to feel a loss of self-esteem" (Hyman and Tansey, 1990).
Given that these ads can actually hurt viewers, some believe that it is unethical to carelessly produce and use such ads (Hyman and Tansey, 1990). If not for sake of caring about society, people responsible for advertising practices should be aware of the possible audience reactions to the use of such ads. When customers feel that specific advertising practices are unethical, they may exhibit an unwanted behavior; ranging from indifference to the products, to boycotts or demands for government regulations (Snipes, La Tour and Bliss, 1999). Such actions can be very costly for a company and may tarnish its image permanently. To illustrate potential problems with using emotional-arousing ads we will examine more closely marketing practices of Benetton Group. The company's controversial ads have won awards and United Colors of Benetton has become the third most recognized brand in the world-following Coca-Cola and McDonald's (web).
On the other hand, the company has faced a lot of problems tied to its marketing practices (strong negative responses from customers from all over the world, including boycotts; legal suits form retailers who claim that company's advertising is sabotaging their sales). We are going to discuss three major reasons why we think the company's ads can be perceived as an unethical, or at least morally hazardous. First, most of the advertising is irrelevant to the products / services sold by the company. Secondly, the ads evoke strong emotions that sometimes cannot be control or that are unwelcome by viewers.
Lastly, they can be perceived as psychoactive ("Death Row" campaign). We start with the short company information, then we look at the history of company advertising practices and finally we finish by presenting the recent changes in company practices. To get more information about Benetton Group we turned to its website (web) where we found following information about company: "Larger, more international and closer to the market, a new Benetton Group emerged from the integration of design and production capabilities in the textile and clothing sector (present with the world-famous brands United Colors of Benetton and Sisley), with the strong image and reputation of the sport brands Playlife, Prince, Rollerblade, Nordica and Killer Loop. (... ) Benetton is a unique global group, where design and manufacturing know-how in the textile-clothing sector are combined with the strong identity and image of the some of the world's leading sports brands (... ). The clothing sector includes both casual and sportswear (... ), which has an annual production above 90 million garments. With a total turnover, before retailing, of 4, 000 billion lire (more than 1. 7 billion dollars), the Benetton Group is today a global company. Setting a new way of experiencing sport and leisure at the center of its philosophy, it offers a range of clothing that satisfies all requirements and, thanks to the US brands Rollerblade and Prince, it has achieved an improved balance in terms of world presence, also in the competitive North American markets.
The Benetton family's holding company, Edizione Holding, includes companies operating worldwide in various sectors: textile-apparel, sports equipment and accessories, highway and commercial catering; infrastructures and services for transportation and communication; real estate and agriculture and others (for details look at the organization's chart). Edizione Holding's total aggregated turnover reaches 13, 000 billion lire (more than 5. 7 billion dollars). The average number of personnel in the Group exceeds 30, 000 units. T...
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