132243 Business & Social Responsibilities Advertising Ethics - - PowerPoint PPT Presentation

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132243 Business & Social Responsibilities Advertising Ethics and Consumer Privacy

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Commercial Advertising

Definition: communication between a seller and potential buyers that is publicly addressed to a mass audience and is intended to induce members of this audience to buy the seller’s products. Characteristics:

Public communication aimed at a mass audience Intended to induce members of its audience to buy the seller’s products Succeeds by creating a desire for the seller’s product

• r a belief that a product will satisfy a preexisting

desire

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Social Effects of Advertising

Psychological Effects:

Advertisements are boring, insipid, and insult the intelligence of viewers. Advertisements develop nonmaterialistic attitude.

Advertising and Waste:

The costs of resources consumed by advertising are (wasted) selling costs. Advertising does nothing more than shift demand from one firm to another. Increasing consumption are a cause of pollution and resource depletion problems.

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Social Effects of Advertising (cont.)

Advertising and Market Power:

Adverting reduces competition and raises barriers to entry into markets.

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Social Effects of Advertising (cont.)

Advertising Lovers:

Difficult to change people’s beliefs and attitudes Advertising produces and transmits information Advertising produces a beneficial rise in demand for all products No statistical connection between advertising intensity and market concentration

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Advertising and the Creation

• f Consumer Desires

2 desires:

(Finite) Physical desires: food and shelters (Infinite) Psychological desires: goods that give a person psychological rewards

John K. Galbraith

Advertising create new demands by manipulating the psychic desires. Production is not modeled to serve human desires, rather, human desires are modeled to serve the needs of production. Advertising violates right to choose: it manipulates the consumers.

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Advertising and the Creation

• f Consumer Desires (cont.)

Some advertisements intend to manipulate, especially ones that aim at children. Advertising Lovers:

New wants are created by the invention of novel and attractive products

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Advertising and Consumer Beliefs

Deceptive advertising can take several forms:

deceptive mock-ups Untrue paid testimonials Inserting the word guarantee where nothing is guaranteed No defects disclosed Misleadingly disparaging a competitor’s goods Stimulating well-known brand names

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Advertising and Consumer Beliefs (cont.)

Deceptive advertising violates consumers’ rights to choose for themselves (Kantian argument) and generates a public distrust

• f advertising that diminishes the utility of

this form and even other forms of communication (the utilitarian argument).

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Advertising and Consumer Beliefs (cont.)

Deceptive Advertising Is a Function of

The author’s intent to make the audience believe what is known to be false The media’s communication of the false message The audience’s vulnerability to deception

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Consumer Privacy

Advances in computer processing power, database software, and communication technology reduce consumer privacy (e.g. medical history, credit information, personal information, etc.). 2 types of privacy

Psychological privacy is privacy with respect to a person’s inner life. Physical privacy is privacy with respect to a person’s physical activities.

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Consumer Privacy (cont.)

Right to privacy; the right of persons to determine what, to whom, and how much information about themselves will be disclosed to other parties. Importance of privacy:

Protects individuals from shame, interference, hurting loved ones, self- incrimination Enables the development of personal relationships, professional relationships, distinct social roles, and self-determination

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Consumer Privacy (cont.)

Several keys to balance consumers’ rights and legitimate needs of businesses:

Relevance Informing Consent Accuracy Purpose Recipients and security