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1. BUSINESS ETHICS

2. What is business ethics?
Business ethics focuses on what constitutes
right or wrong behavior in the world of business.
 Corporate business executives have a
responsibility to their shareholders and
employees to make decisions that will help their
business make a profit. But in doing so,
businesspeople also have a responsibility to the
public and themselves to maintain ethical
principles.

3. Ethics
Although ethics provides moral guidelines,
individuals must apply these guidelines in making
decisions. Ethics that applies to business
(business ethics) is not a separate theory of
ethics; rather, it is an application of ethics to
business situations.
Although all people have ethical responsibilities,
higher ethical standards are imposed upon
professionals who serve as social models, such as
physicians, attorneys, and businesspeople.

4. Ethical Perspective
◦From an ethical perspective, corporations have certain responsibilities
and duties toward their customers and consumers in society:
◦The duty to inform consumers truthfully and fully of a product or
service’s content, purpose, and use.
◦The duty not to misrepresent or withhold information about a product
or service that would hinder consumers’ free choice.
◦The duty not to force or take undue advantageof consumer buying
and product selection through fear or stress or by other means that
constrain rational choice.
◦The duty to take “due care” to prevent any foreseeable injuries or
mishaps a product (in its design and production or in its use) may inflict
on consumers.

5. Social Contract –Consumer
rights
◦The right to safety—to be protected from harmful commodities.
◦The right to free and rational choice—to be able to select
between alternative products.
◦The right to know—to have easy access to truthful information
that can help in product selection.
◦The right to be heard—to have available a party who will
acknowledge and act on reliable complaints about injustices
regarding products and business transactions.
◦The right to be compensated—to have a means to receive
compensation for harm done to a person because of faulty
products or for damage done in the business transaction.

6. ETHICAL VIOLATIONS in
ADVERTISING

7. Stereotypes
https://www.youtube.com/watch?v=GHX2mvFVQMs
Comparative disparaging Advertisements
a. Pepsi vs COCA COLA
https://www.youtube.com/watch?v=IAlAWdY_
EAsand
https://www.youtube.com/watch?v=DoiwwoJ3
3uc
b. Rin vs Tide
https://www.youtube.com/watch?v=H742YXmT
ubQ

8. Surrogate Advertising
◦‘Men Will Be Men’ for Seagram’s IMPERIAL BLUE Superhits Music CDs.
◦In India, the Ministry of Information and Broadcasting (I&B), through The
Cable Television Networks (Regulation) Act, 1995 (‘Act’) and The Cable
Television Networks Rules, 1994 (‘Rules’) as well as other policies and
guidelines issued from time to time, has been regulating content on private
satellite channels, network of multi system operators, and local cable
operators (LCOs).
◦Rule 7 of the Rules prescribes the advertising code which has to be
conformed to by cable operators while broadcasting advertisements through
their cable service. Rule 7(2) specifically enlists advertisements that cable
operators would not be allowed to broadcast. Rule 7(2) prohibits
advertisements that“promotes directly or indirectly production, sale or
consumption of cigarettes, tobacco products, wine, alcohol, liquor or other
intoxicants.”

9. Surrogate Advertising
◦‘in a Press Release recently issued by ASCI onNovember 2, 2020. The
Press Release reiterated that advertisements for brand extensions could not
feature anything prohibited by law or that pertained to banned products nor
could it refer to or hint at such products.

10. Ethical Issues in Advertising
◦Misleadingadvertisement
◦Puffery&Hype:Exaggeratedbylegalclaims(Hallmarkcards:“When
youwanttosendtheverybest.”EverreadyBatteries:“Nothingoutlasts
anEvereadybattery”
◦NotinGoodTaste:Stereotyping(gender,race,ethnicity,age,lifestyle,
handicaps,religion)
◦StealthAdvertising:Promotionalmessagesembedded inastoryline
butnotexplicitelypresentedasadvertising
◦AdvertisingtoChildren:Controversialproducts(alcohol,tobacco,
gambling)
◦GratuitousSexualContent:Usingnudity,sexualimagery,andsex
appeal,bothexplicitlyandbyinnuendo,forthepurposeofattracting
attention,despitelittleornoinherentsexualaspectsofthe
product/service/ideabeingadvertised
◦NegativeContent:Fearappeals,guiltappeals,threats
◦ComparativeAdvertising

11. Glow……???

12. Influencers-Digital Media

13. Unethical Advertising

14. Misleading Advertisement

15. Misleading Advertising

16. Unethical Advertising

17. Comparative Advertising

18. Surrogate Advertising

19. Advertising
◦Advertising is any paid form of non-
personal presentation and
promotion of ideas, goods, or
services by an identified sponsor .

20. Advertising and Society
Advertising reflects contemporary society
and at the same time Advertising affects
society .
 The making of an ad copy, its message,
its illustrations, the product advertised, the
appeal-used all these have a social
flavour.

21. Advertising : Overstep Social
And Legal Norms
Advertising carries several responsibilities as it is one of
the most vital tools in marketing communications and
involves not only informing but also caters to persuasion.
It informs the public so that they can be aware of
products/services and make informed choices among
different products or brands. Advertising also benefits
businesses in assisting them to sell their brands.
BUT
To reach target markets and build brand equity in the
cluttered market advertisers sometimes overstep social
and legal norms

22. Overstepping Social And Legal Norms
◦Advertisers use Deceptive advertising , also known
as false advertising, which refers to use of confusing,
misleading, or blatantly untrue statements when
promoting a product.
◦It is accused of encouraging materialism and
consumption, of stereotyping, of causing us to
purchase items for which we have no need, of
taking advantage of children, of manipulating our
behavior, using sex to sell, and generally
contributing to the downfall of our social system.

23. Surrogate Advertising
◦Surrogate advertisingis a form ofadvertising which is used to
promote banned products, like cigarettes and alcohol, in the
disguise of another product. Merriam Webster defines a Surrogate as
a 'substitute'. And surrogate advertisements are just that. A surrogate
advertisement can be defined as an advertisement that duplicates
the brand image of one product to promote another product of the
same brand.
◦ Surrogate advertisements are used to promote and advertise
products of brands when the original product cannot be advertised
on mass media. Some instances of surrogate advertisements are:
Bagpiper Soda, Cassettes and CDs, Royal Challenge Golf
Accessories Sports Drink and Mineral Water, Imperial Blue Cassettes
and CDs etc.

24. Surrogate Advertising

25. Deceptive Advertising
Fair/ Gora/ Nikhar

26. Promoting Stereotypes
Promoting Stereotypes

27. Promoting Stereotypes : Black Driver
driving the Luxary Car of a White Citizen

28. The Relationship Between Law
and Ethics
◦The law is an expression of the ethical beliefs of our
society.
◦Law and ethics are not the same thing. The question, “Is
an act legal?” is different from the question, “Is an act
ethical?”
◦The law cannot codify all ethical requirements.
◦Therefore, an action might be unethical, yet not
necessarily illegal. For example, it might be unethical to
lie to your family, but it is not necessary illegal.

29. THEORIES OF ETHICAL
CONDUCT
◦Theories of ethics present standards by
which a person can analyze and evaluate
his or her own moral conduct.
◦Over the centuries, two different
philosophical frameworks developed:
ethical standards based on universal duties
(deontology) and ethical standards based
on consequences (utilitarianism).

30. Deontology
Deontology is the philosophical practice of
defining and adhering to an absolute set of
standards by which ethical behavior can be
measured.
It tries to define universal duties that serve as
moral guides to decision making. When a moral
dilemma arises, a person can apply these
universal standards to determine a course of
action that is good.

31. Deontology
◦In deontology, a person fulfills absolute
moral duties regardless of whether good
comes from the actions.
◦The act of carrying out that duty is
important rather than the consequences
of the act. An example of a set of
deontological rules would be the Ten
Commandments .

32. Utilitarianism
◦Utilitarianism is an approach to establishing
ethical standards based on the consequences
of an action. In an ethical dilemma, a person
selects the action that brings about the
greatest amount of good for the greatest
number of people. The model determines
correctness in terms of social benefit. Many
business people favor the “cost/benefit”
approach of utilitarianism.

33. Utilitarianism – Consequentialist
Adam Smith, John Stuart Mills
◦Can determine if act is good or bad based on
the outcome (consequences of the act)
◦Maximizing the overall good – “greatest good
for the greatest number”
◦Constructed as a counter-point to authoritarian
policies that aimed to benefit the political elite.
Thus the foundation of representative
democracy.

34. Sales And Advertising and Its
Connect To External Stakeholders
Advertising constitutes a vital stream among the marketing
functions of a business; it being a major driver of the firm‟s
integrated promotions for pushing sales in today‟s highly
competitive business environment. Sales and especially
advertising are two areas which are directly connected to the
external network of a firm. While most companies revere the
pursuit of their businesses on a regular moral understanding,
there are some firms which continue to follow both good and
bad business practices. The issue of ethics in advertising bears
great concern to all firms engaged in business worldwide, and
to consumers likewise.

35. Consumer Protection Act 2018
◦Expectedtocompletelyoverhaulthecurrentlaws
stipulatedunderthearchaicConsumerProtectionAct,
1986.
◦ThenewActtakesintoaccountthechangingnatureof
theIndianeconomy,whichhasseengrowingconsumer
awarenessandamarkedevolutionoftheeconomic
landscape,especiallyintheonlinesphere.

36. ◦Forthefirsttime,IndiawillhaveaCentralConsumer
ProtectionAuthority,whichwillactasanationalregulator
fortheprotectionofconsumerrights.Designedalongthe
linesoftheUnitedStatesFederalTradeCommission,this
agencywillhavethepowertotakeactionagainst
companiesindulginginunfairtradepracticestothe
detrimentofconsumers.
◦TheActintroducesclassactionlawsuitstoIndia,which
meansthatagroupofpeoplewiththesameorsimilar
injuriescausedbythesameproductoraction,cansuethe
companyasagroup.Iftheverdictgoesintheirfavour,all
consumersinthegroupstandtobenefit.

37. ◦Intheeventofaconsumersufferingfrominjury,deathordamage
resultingfromanydefectintheproductasaresultoffaulty
manufacturing,construction,design,testing,packagingand
labelling,amongotherfacetsoftheproductionprocess,the
manufacturingcompanywillbeheldliable.
◦Oneofthekeynewfeaturesofthebillareprovisionsdealingwith
disputesthatpertaintoonlinepurchase.TheoldLawwasnotclear
aboutrefundsordisputesettlementforonlineshoppers.Underthe
presentlaw,theconsumercanfileacomplaintelectronicallyorat
theconsumercourtclosesttohis/herresidence.

38. ◦The new Act also has provisions that subscribe hefty penalties and jail
terms for adulteration and misleading advertisements by companies.
Moreover, celebrities found to endorse such advertisements are liable to
pay a hefty fine, endure a ban on any endorsement and even suffer a
jail term.
◦On misleading ads, the Act provides for fine and ban on celebrities. In case of
the first offence, the fine will be up to Rs 10 lakh and a one-year ban on any
endorsement. For the second offence, the fine will be up to Rs 50 lakh and up
to three years’ ban
◦For manufacturers, the penalty is a Rs 10 lakh fine and a two-year jail term for
the first offence. Repeat offenders will suffer fines up to Rs 50 lakh and a five-
year prison term
◦In a bid to deter consumers from filing false or frivolous complaints, the bill seeks
to raise the penalty from Rs 10,000 to Rs 50,000

39. Indian Advertising Industry
◦Theadvertisingindustryisprojectedtobethesecondfastest
growingadvertisingmarketinAsiaafterChina.ItBy2018,the
shareofadspendinIndia’sGrossDomesticProduct(GDP)was
around0.45percent
◦India’sdigitaladvertisementmarketisexpectedtogrowata
compoundannualgrowthrate(CAGR)of33.5percenttocross
theRs25,500crore(US$3.8billion)markby2020
◦TheInternet'sshareintotaladvertisingrevenueHASgrown
twofoldfromeightpercentin2013to16percentin2018.Online
advertising,whichwasestimatedatRs2,900crore(US$435
million)in2013,jumpedthreefoldtoRs10,000crore(US$1.5
billion)infiveyears,increasingatacompoundannualrateof28
percent

40. Advertising Standards Council
of India
◦TheAdvertisingStandardsCouncilofIndia(ASCI)
(1985)hasadoptedaCodeforSelf-Regulationin
Advertising.Itisacommitment tohonest
Advertisingandtofaircompetitioninthemarket-
place.Itstandsfortheprotectionofthe
legitimateinterestsofconsumersandall
concernedwithAdvertising-Advertisers,Media,
AdvertisingAgenciesandotherswhohelpinthe
creationorplacementofadvertisements.

41. ASCI
◦ASCI seeks to ensure that advertisements conform to its Code for
Self-Regulation which requires advertisements to be:
◦Honest Representations: Truthful and Honest to consumers and
competitors.
◦Non-Offensive to Public: Within the bounds of generally accepted
standards of public decency and propriety.
◦Against Harmful Products/Situations: Not used indiscriminately for the
promotion of products, hazardous or harmful to society or to individuals
particularly minors, to a degree unacceptable to society at large.
◦Fair in Competition: Not derogatory to competition. No plagiarism

42. ETHICAL VIOLATIONS PERTAINING TO THE MESSAGE
The message of the ad is the single most element of
advertising communication strategy, which is subject to
the greatest and most varied extent of ethical violations.
These violations are resultant from various aspects of
message portrayal, right from its basic language, show,
and pictorial viewing to its underlying hidden meanings
and connotations. There are three main categories—
deceptive claims
Appeals and
stereotyping—
under which ethical issues pertaining to the message can
be subsumed

43. Deceptive Claims
◦J. Walter Thompson had once
quoted"Advertising is a non-moral force, like
electricity, which not only illuminates but
electrocutes. Its worth to civilization depends
upon how it is used."

44. Deceptive Claims
◦Half-truth : An advertisements made claims like
"4 out of 5 doctors surveyed recommend Brand
Y." This became widely known as a half-truth
because there was never any indication of
how many doctors had been consulted. Did
the 80 percent of doctors mean 4 of the 5
doctors consulted, or 4,000 of 5,000 doctors
consulted, or some other actual number? The
public had no way of knowing.

45. Appeals
◦Use of subtle forms of advertising like psychoactive ads
needs to be given serious ethical consideration from a
human welfare perspective.
◦A psychoactive ad is any emotion-arousing ad that can
cause a meaningful, well-defined group of viewers to feel
extremely anxious, to feel hostile toward others, or to feel
a loss of self-esteem (Hyman and Tansey, 1990), and thus,
causes a negative impact on the target group (Huang,
1997)
◦Ex – Envy in Onida

46. Fear Appeal
Whereas the fear appeal might be
useful for preventing young adults from
drunk driving or from the use of drugs, it
is still questionable to what extent the
fear appeal should be used. In a study
published in theJournal of Media
Psychology, researchers from
theUniversity of Missourifound that
showing viewers a combination of
threatening and television public service
announcements (PSAs) caused viewers
to experience the beginnings of strong
defensive reactions.

47. Fear Appeal
◦In examining the ethical issues pertaining to the use of a
marketing technique such as the use of fear appeals
when targeting elderly audiences, a key issue is the
assumed vulnerability of the audience. The elderly are
termed as psychologically vulnerable, or more sensitive
than younger adults to shocking promotional messages
(Hyman and Tansey, 1990).
◦In addition, they have to be aware that non-target
viewers would also be exposed to the advertisement.

48. Stereotyping role of women
◦Many ads present appeals which reflect upon
weak roles of women, showing them as
submissive and in need of constant alteration or
improvement . Such messages tend to seriously
offend the concerned gender or groups, as the
ads would wrongly influence believers of such
messages to disrespect the inflicted groups.
Such messages also create degrading role
models for women

49. The use of humorous appeals

50. The use of humorous appeals
On the one hand, humor can lead to consumer
well-being as it attracts and persuades
consumers to buy a specific product. On the
other hand, humor deflects from essential
positive and/or negative facts of the product,
thereby making it unethical (Shabbir and
Thwaites, 2007). Sternthal and Craig 1973
pointed out that humor can be so distractive
that the main product-information can get lost
and the advertisement seemingly becomes
persuasive.

51. Disguised Advertisement
Disguised advertising mostly deals with the way
messages are presented to audiences, and
whether the sender discloses himself in an
appropriate and traceable way. In a broader
sense, deceptive claims are an inherent part of
advertising messages (Kimmel, 2001), and a
primary concern in advertising ethics (Hyman 13
et al., 1994).

52. Disguised Advertisement
Disguised advertising mostly deals with the way
messages are presented to audiences, and
whether the sender discloses himself in an
appropriate and traceable way. In a broader
sense, deceptive claims are an inherent part of
advertising messages (Kimmel, 2001), and a
primary concern in advertising ethics (Hyman 13
et al., 1994).

53. Disguised advertising
◦Disguised advertising messages are, also
for instance, those that individuals may
not perceive as being sponsored
because the source of the message is
unclear, or because they are presented
as editorial material, rather than
advertisements (Nebenzahl and Jaffe,
1998).

54. Disguised Advertisement

55. ETHICAL VIOLATIONS PERTAINING TO THE
MESSAGE

56. Deceptive Advt.
An ad or ad campaign is
considered deceptive when it
leaves consumers with other
than reasonable knowledge
(required to make an informed
purchasing decision) about the
product in question (Carson et
al., 1985). It tends to mislead the
viewer by providing incorrect or
insufficient information, with the
deliberate initiative to result in a
sale.

57. Other forms of Deceptions
Critical attention in the mass
media to such highly visible
practices as deceptive
advertising, bait-and-switch
selling tactics, the invasion
of consumer privacy,
deceptive pricing, and
selling under the guise of
marketing research has
raised a number of ethical
concerns and threatens to
seriously tarnish the image
and reputation of legitimate
marketing practitioners

58. Puffery
Another technique resorted of marketers
in this context is the use of puffery (Belch
and Belch, 2007) in the form of injecting.
Puffery is defined as ‘advertising or other
sales representations, which praise the
item to be sold with the subjective
opinions, superlatives or exaggerations,
vaguely and generally, stating no specific
facts’
Superlatives like “biggest” or “best”.
Untruthful and deceptive claims made in
ads concerning products and services
lead to violations of the veracity of the ad,
and viewers feel mislead by the incorrect
or insufficient information.

59. Disparagement
◦Disparagementoccurs ‘when a
advertiser intentionally and
misleadingly presents an
identifiable competitor in negative
light so as to establish the
superiority of its brand’.

60. Infusing Hedonic Culture Among
Individuals And Escalated Purchases
Beyond Consumers Means.
Advertising is blamed to tend to ratchet up the quest
for material gain, leading consumers to believe that
happiness depends on attaining a high material
standard of living, and acquiring more and more things
(Cohan, 2001). People accordingly connect with such
messages and tend to be drawn towards material
possessions beyond their range of need and
affordability, thereby straining their expendable
budgets. A look at the sub prime crisis will make it
amply clear. They promote a culture of borrowed
living.

61. Advertising on the Internet
In the context of electronic marketing the potential
harm results from the fact that an organization
developing user profiles can accumulate potentially
sensitive information about a user, based on his or her
Internet activities (Charters, 2002). Practices like
matching user profiles with personally identifiable
information, and selling this data to other internet
marketers becomes unethical as it constitutes an
invasion/loss of consumers‟ privacy. Consumers feel
threatened by the intrusiveness of such online
advertising and electronic monitoring activities.

62. Spamming
Spamming continues to be a disturbance and privacy issue with
unsolicited information regarding products and services flooding
users‟ e-mails (Miller and Weckert, 2000). Ethical consumer-
oriented e-commerce websites now ask customers' permission to
send sale announcements or newsletters (Miller and Weckert,
2000). Considering the Internet advertising industry's current
actions, computer users and government regulators would be
well advised, both practically and ethically, to move to a user
control model in electronic monitoring .Users are provided with
choices regarding whether they wish to remain or opt out of
services pertaining to monitoring online, and whether they wish
to have their information distributed to other marketers online
who may then advertise to them.

63. Stereotyping
A study of Taylor and Lee 1994 showed
that Asian-Americans are very often
used in ads for technological product
advertisements. Women are also often
stereotyped in advertising. Most of the
time they are shown in situations where
someone has to take care of the
household or when cosmetics or
hygiene products are needed

64. Marketing communication depends largely on visual
representation to produce meaning, brand images and
spectacular simulations that create associations in
consumers' minds . Representations that are sexist, or racist
bear the potential to damage the reputation of the
represented group, and associated group members, as
viewers create meanings and subjective interpretations of
such ads which are believed to construct reality as part of
the lived experience (Hughes, 2000). Individuals or groups
who comprise of this communication, thereby impacted by
stereotyping, feel insulted, subordinated and oppressed as
they would lose control of how they, their society, and their
culture are being portrayed and interpreted.
Stereotyping

65. ETHICAL VIOLATIONS PERTAINING
TO THE TARGET AUDIENCE

66. Children
Children constitute a very important and potent target group for
marketers, as they have a strong effect on families‟ consumption
habits.
Advertising to children via varied media like television, print, or
internet raises special concerns for parents and society, as
children lack analytical/judgment abilities, have only rare
experience of life (Armstrong and Brucks, 1988), and are thus,
vulnerable to stray influences (Brucks et al., 1988; Preston, 2004)
When inducing varied purchases within this growing market with
spending potential, ads can pose danger if inappropriate
content, language, speech, terminology or indecency of any
sort is displayed in the ads to these innocent minds via any
medium of exposure.

67. Children
Parents, government, industrial groups advocating self-
regulation, advertising personnel, and Internet marketers
are all responsible for insuring children's safety on the
Internet or any other medium of exposure.
Children generally lack the developmental ability to give
consent to the release of personal information to an
advertiser. This is an even greater problem for children
when they are offered incentives for providing personal
information, or when personal information is required
before they are allowed to register for contests, join a kids'
club, or play games.

68. Women
 Women's advertising redefines attractiveness from
something natural to an unattainable ideal. Compared
to men, women are positioned differently (Pringle, 1992;
Mayne, 2000). The unnatural styles of flawlessness
depicted in models with impossible youth and perfection
accomplished with professional makeup, hair, and photo
retouches tend to project women in a very different light.
Treating women as things instead of autonomous,
rational beings runs contrary to the spirit and intentions
which ground our laws on gender equality. Such
advertising appeals tend to erode women's self-esteem.

69. The Dilemma?
◦Ethical discussions about the right or
wrong nature of such female
stereotyping, attitudes towards
controversial ads by the target group
are changing over time in terms of
being less critical.

70. The Dilemma?
Marketing professionals exhibit a head/heart trait
imbalance; head traits associated with thinking and action
are treated more important compared to heart traits
associated with feeling and sentiment when dealing with
consumer marketing.
 Attempts to avoid the unpleasantness which results from
unethical behavior have resulted in some firms developing
training programs aimed at improving the ethical sensitivity
of employees. Marketers from companies with codes of
ethics rank honesty higher than those from companies
without codes of ethics.

71. ETHICAL CODES PERTAINING
TO THE SENDER/AGENCY
Members of the advertising community sometimes fail to
assume their social responsibility when trying to balance
their loyalties to the advertiser, the agency, and the
media in pursuit of for-profit business-orientation.
Corporations attempt to address the situation by
establishing codes of conduct and punishing unethical
behavior, but some still seem to neglect their
responsibility or are not even aware of the issue .Many
professional associations that seek self-regulation of
advertising adopt codes of conduct, to which
practitioners are expected to adhere (Pratt and James,
1994).

72. The Normative and Regulative
Pillar
The regulative pillar will hold when regulatory
bodies and responsive agencies impose
restrictions and rules in the industry, thereby
requiring firms to curtail the extent of ethical
violations in their advertising/promotions
function.
Food Safety & Standards Act, 2006 prohibits
unfair trade practices and “misleading and
deceiving advertisements”.

73. The Normative and Regulative
Pillar
The restrictions are that advertisements cannot disparage
“good dietary practice”, encourage “excessive
consumption”, suggest “portion sizes” that may be
appropriately consumed and so on. The Code practically
makes puffery illegal by prescribing that “advertisements
should not mislead consumers…to believe that the
consumption of the product advertised will result directly
in personal changes in intelligence, physical ability or
exceptional recognition, unless supported with adequate
scientific evidence”. It also requires that “celebrities or
prominent” people not promote food in such a way as to
“undermine a healthy diet”.

74. Regulative Pillar
◦Drugs and Magic Remedies Act (DMR Act) and the Drugs and Cosmetics (D&C)
Rules.
◦Food Safety Standards Authority of India recently renewed its Memorandum
of Understanding (MoU) with ASCI as a reflection of its successful association
in the first year. The MoU gives ASCI a suo moto monitoring mandate to co-
regulate and curb misleading advertisements in F&B sector.