4.01 Describe the use of business ethics in promotion
Ethics in Marketing defined as: Ethics are a collection of principles of right conduct that shape the
decisions people or organizations make. Practicing ethics in marketing means deliberately
applying standards of fairness, or moral rights and wrongs, to marketing decision making,
behavior, and practice in the organization. http://www.enotes.com/business-financeencyclopedia/ethics-marketing
A. Explain ethical issues associated with fear-based advertising.
1. Fear-Based Advertising defined as:
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A proven set of marketing strategies and tactics used to motivate target audiences to take
massive action quickly.
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Desired outcomes are achieved quickly through persuasive techniques that tap into powerful
emotions.
The objective is to focus attention on the painful consequences of inaction contrasted with the
hope of a desired future.
These marketing techniques are best used when credible threats are combined with
uncertainty and doubt.
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FUD = Fear, uncertainty, and doubt
Gene Amdahl after he left IBM to found his own company: “FUD is the fear, uncertainty, and doubt
that IBM sales people instill in the minds of potential customers who might be considering [Amdahl]
products.” The idea, of course, was to persuade them to go with safe IBM gear rather than with
competitors' equipment.
Fear-based advertising s upon a potential customer’s fear of missing out, to stimulate them into
purchasing a product before they’re ready to do so.
Ex. “Buy before it’s too late!” (Because of sale or low inventory.)
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Fear is also used as a way to suggest that, if you don’t purchase the product, all sorts of bad
things will happen to you. You won’t make a million in 30 days, you won’t be able to quit your
day job, people won’t like you, etc.

o Ex. Allstate‘s Mayhem Commercial Series
o Ex. Direct TV’s - Get rid of cable. “Don’t wake up in a roadside ditch, become a
zombie, etc.”
2. Begin with three-powerful words: "In my experience..." For instance, "In my experience,
I wouldn't be here today without the help of (fill in the blank) drug, car, doctor, etc."
3. Then take message frequency and pair it with something relevant, and you have fearbased advertising.
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TARGETING - finding and reaching the maximum number of qualified prospects at the
lowest possible cost - in part by leveraging proven high-tech marketing systems that
enable you to measure and manipulate every aspect of your online marketing campaigns in
seconds at the click of a button; and,
POSITIONING - persuading the maximum number of your prospects to buy from you by
using high-touch sales techniques that tap into the most powerful motivating emotions FEAR and HOPE.
Think about the following: A major decisions that we've made in our lives, they are a result of
fear. Don't get an A in chemistry = don't go to a good college = don't make any money = end
up homeless = end up alone = end up in Potter's Field.
4. Tapping into our fear is a huge marketing tool. Why? Because we humans respond to
bad news, situations, stories, etc. The fear factor causes us to act. It’s basically the “fight or
flight” response. Some of you may be questioning my message today. That’s OK. I won’t scare
you into believing what I’m saying, but do this little homework assignment – think about some of
the major decisions you’ve made in your lives. They are likely to be a result of fear. So the next
time you are watching the news or listening to a speech or advertisement, think about the
message: Is it happy and exciting? Or, is it kinda scarin’ you? If so, remember, Franklin D.
Roosevelt’s famous words, “the only thing we have to fear is fear itself.”

Ex. Ads showing effects of prolonged tobacco/alcohol use, texting while driving, etc.
5. Fear is the strongest human motivator.
Parents use fear to get their child to act or react to situations from when they were an
infant. Here are a few of favorites:
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"Don't play with (interject any long, slim object) or you will poke your eye out." It must
work, because I have never met anyone who has actually ever poked his or her eye out.

"If you pull a face like that it will stick like that." Yep, we all know a few people this has
happened to.
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"If you fall out of that tree and break your legs don't come running." Makes sense.
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"Don't sit so close to television or you'll go blind." I still don't sit close to the television.
6. Effective use of fear in advertising when:
 They provide (1) high levels of a meaningful threat or important problem
 (2) high levels of efficacy or the belief that an individual’s change of behavior will reduce the
threat or problem. That is, fear appeals work when you make the customer very afraid and
then show him or her how to reduce the fear by doing what you recommend.
7. Fear-based advertising is unethical when:
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engendering perceptions or attitudes that are negative or unethical, e.g.,
overly dramatic and graphic,
lacks social responsibility,
exploitative,
stimulates unneeded demand, and
involves inappropriate manipulative techniques
B. Discuss sexism/stereotyping in advertising.
Discuss sexism/stereotyping in advertising.

Why it is important to study:
o It is important because it not only focuses on the use of sexual appeals in advertising,
o How ethical it is to do so

Three areas of focus
o (1) if sex actually sells and if so, when and where is it being used in advertising,
o (2) the use of men and women in ads of a sexual nature,
o (3) the role that ethics plays in the use of sexual appeals in advertising.

Define beefcake ad and cheesecake ad
Consider the following research: Jones, Stanaland, and Gelb (1998) conducted an
experiment to see how men and women responded to beefcake and cheesecake ads. A
beefcake ad is an ad that has a sexy male model as the center of the ad. A cheesecake ad
is an ad that has a sexy female model as the center of the ad. The study found that women
had higher recognition scores for the ad showing a nonsexy male model than for the
beefcake ad, and men had higher recall scores for the ad showing a nonsexy female than
for the cheesecake ad. The study also found that women had lower recognition scores than
men for the beefcake ad, and women viewing the cheesecake ad had higher recognition
scores than women viewing the beefcake ad. Also, men had lower recall than women for
the cheesecake ad.

What can Advertisers do to ease public concerns:
o (1) targeting commercials as carefully as possible to avoid unnecessary conflict and to
minimize the viewing of sexual appeals by people who might be disconcerted by them,
o (2) heightening their own awareness of the impact of their sexual appeals on the public
at large as well as on their target market,
o (3) testing the effects of their commercials, not only on their target, but also on other
members of the public who might see their commercials, and
o (4) considering the effects of their commercials in prompting individuals, whether in their
target or not, to take actions that have negative consequences
Activity 1
Locate two ads in a magazine – one that stereotypes or uses sexism towards men and one
that does the same towards women. Staple to the back of your paper and answer the
following for each ad:
1. How do you think this ad is stereotypical/sexist towards that gender?
2. How could the company change the ad to make it not stereotypical/sexist?
C. Explain ethical issues associated with promotion to children.
Children are an important marketing target for certain products.

Why are children vulnerable:
o Because their knowledge about products, the media, and selling strategies is usually
not as well developed as that of adults
o Children are not aware of marketing tactics and messages. For example, studies linking
relationships between tobacco and alcohol marketing with youth consumption resulted
in increased public pressure directly leading to the regulation of marketing for those
products.
o The use of the Internet to market to children also raises ethical issues. Sometimes a few
unscrupulous marketers design sites so that children are able to bypass adult
supervision or control; sometimes they present objectionable materials to underage
consumers or pressure them to buy items or provide credit card numbers. When this
happens, it is likely that social pressure and subsequent regulation will result.
In the United States, marketing to children is closely controlled. Federal regulations place limits
on the types of marketing that can be directed to children, and marketing activities are
monitored by the Better Business Bureau, the Federal Trade Commission, consumer and
parental groups, and the broadcast networks. These guidelines provide clear direction to
marketers.
Activity 2
Visit the following websites and read about the different ways these two organizations protect
children:
BBB - http://nwnc.bbb.org/children-advertising-review-unit/parents-corner/
FTC - http://www.ftc.gov/bcp/menus/consumer/data/child.shtm
For each site, summarize what you read in a paragraph each using specific examples of ways
children are protected.
ETHICAL ISSUES IN MARKETING TO MINORITIES
o Concerns:
o Ethical issues arise when marketing tactics are designed specifically to exploit or
manipulate a minority market segment.
o Offensive practices may take the form of negative or stereotypical representations of
minorities, associating the consumption of harmful or questionable products with a
particular minority segment, and demeaning portrayals of a race or group.
o Ethical questions may also arise when high-pressure selling is directed at a group,
when higher prices are charged for products sold to minorities, or even when stores
provide poorer service in neighborhoods with a high population of minority customers.
Such practices will likely result in a bad public image and lost sales for the marketer.
When targeting minorities:
o Firms must evaluate whether the targeted population is susceptible to appeals because of
their minority status.
o The firm must assess marketing efforts to determine whether ethical behavior would cause
them to change their marketing practices.
D. Discuss the ethical issues associated with sales promotion sweepstakes, samples, rebates,
and premiums.

In the area of promotions:
• avoidance of false and misleading advertising;
• rejection of high-pressure manipulations, or misleading sales tactics;
• avoidance of sales promotions that use deception or manipulations. (AMA Code of
Ethics)
Ex. Pop-up ad that claims you will win an iPad if you “click here now” only to lead you to another
website to complete a survey and ask for personal information with no prize.
Activity 3
Read the following article about false advertising:
http://dca.lacounty.gov/tsfalseadvertising.htm.
Answer these questions:
1. Define false advertising.
2. List five common examples of false advertising listed and describe each.
3. What are two tips to help you avoid false advertising?
E. Explain the use of stealth marketing.
Explain the use of stealth marketing.
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In stealth marketing people are paid to use or pitch products in public settings without
disclosing the fact that they are being paid to do so.
FTC states that "the failure to disclose the relationship between the marketer and the
consumer would be deceptive unless the relationships were otherwise clear from the context."
Four areas of concern:
o 1) it's deceptive,
o 2) it's intrusive,
o 3) it can take advantage of the kindness of strangers (like the camera phone example),
and
o 4) it can turn family and friends into corporate spokespeople, eroding bonds of trust.
Ex. Sony Ericsson hired 60 actors and had them approach strangers and ask them: “Would you
mind taking my picture?" The actor then handed the stranger a brand new picture phone while
talking about how cool the new device was. "And thus an act of politeness was converted into a
branding event."
Activity 4
Do a search online to find an example of stealth marketing besides the one listed above and
describe it in your own words.
F. Discuss ethical issues associated with use of customer information obtained on the
Internet.
Privacy
Information collected from customers should be confidential and used only for expressed purposes.
All data, especially confidential customer data, should be safeguarded against unauthorized access.
The expressed wishes of others should be respected with regard to the receipt of unsolicited e-mail
messages.
Ownership
Information obtained from the Internet sources should be properly authorized and documented.
Information ownership should be safeguarded and respected. Marketers should respect the integrity
and ownership of computer and network systems.
Access
Marketers should treat access to accounts, passwords, and other information as confidential, and
only examine or disclose content when authorized by a responsible party. The integrity of others’
information systems should be respected with regard to placement of information, advertising or
messages.
Activity 5 - On a separate sheet of paper, number & answer these questions:
1. What does it mean to Opt-out?
2. List three things you as a consumer could opt-out of?
3. Should social networking sites allow outside parties to have access to user
information?
G. Describe ways that businesses use socially responsible promotions.
Socially responsible companies are increasing their charitable contributions and committing to
making the world, or their community, a better place. What is CSR? CSR is short for corporate social
responsibility, a concept whereby businesses and organizations perform a social good or take
responsibility for the impact of their activities.
Examples:
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A company investing in responsible drinking and not just in promoting their alcoholic beverages.
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Tyson Foods launched a campaign in Austin in which it agreed to donate 100 pounds of chicken
to the Capital Area Food Bank of Texas for every comment posted on its blog. They received 658
comments in two hours and loaded up two trucks filled with chicken for the hungry

Haagen-Dazs: Honeybees are disappearing at an alarming rate — and that’s bad news for the
global food chain. Haagen-Dazs decided to create a microsite to raise awareness about the issue:
“Honey bees are responsible for pollinating one-third of all the foods we eat, including many of the
ingredients that define our all-natural ice creams, sorbets, frozen yogurt and bars.” Again, smartly
tying it back to the company’s core mission.
The company is donating a portion of proceeds from its Haagen-Dazs honeybee brand to
research on the topic, and it launched a modest Twitcause campaign through the
#HelpHoneyBees hashtag, raising $7,000 in two days last November (“Bee Buzz generated:
643,748 tweets”).
Activity 6 - Read the article “Corporations taking advantage of ‘socially responsible
advertising.’” Number & answer the following on a separate sheet of paper:
1. Define altruism.
2. What does the author say is a corporation’s goal?
3. How do they give their extra profits?
4. What are corporations today afraid of?
5. Why are many businesses are becoming affiliated with non-profits?
6. Explain what Starbucks does, but does not do.
7. What is important for consumers to ask? What is meant by that question?
8. Do you believe companies are truly being socially responsible? Why or why not?
Activity 7 – Fear Based Advertising Project – SEE SEPARATE ASSIGNMENT SHEET.