Ethics have always been an important aspect of every business activity, although the term has meant different things at different times in different lands to different people. Nonetheless, as ethical concerns are an inseparable element of business, advertising can not ignore them. Sadly, the advertising industry has rarely cared to look beyond immediate marketing objectives. The argument in the industry is that it is the government’s job to judge what is right and what is wrong. Shirking its own responsibility for regulation, the industry has belittled business values and agencies have harmed their balance sheets.
For any business, customer is very important, and businessman attempt to communicate to all their target customers using means of communication like advertising and sales promotion. Advertising is a very powerful and most commonly used tool.
Benefits of advertising
The organization has to attract the customer and create a market for its products. For this purpose, advertising is the most powerful and widely used tool for communicating message regarding products/services to a large target audience.
o To raise the standard of living
In our developing economy, adverting with its micro and macro level influences, exerts vast and varied influences that have played key role in raising the standards of physical and material well being of the Indian society.
o To make market competitive
In India, one finds many innovations being introduced which has changed the market structure from seller’s market, and thus the result is more competitive market conditions.
o Product differentiation
It is a fact that advertising brings about products variety through real and psychological product differentiation.
Critical evaluation of advertising
Though many benefits are achieved through advertisements, the ad message is becoming more and more exaggerated. To achieve competitive advantage, advertising magnifies unimportant differences, resorts to clever, tricky product promises, and claims more and more unbelievable benefits. The customer finds many advertisements as false, deceptive, or misleading. Consumers are uncertain regarding whether or not the performance of a product purchased will in fact meet their needs. If they find that the product lacks in quality, advantage, durability etc., as advertised they might not buy it again, and develop an aversion to every other product of that company.
Advertisement is considered unethical in the following situations;
o When it has degraded or underestimated the substitute or rival’s product.
o When it gives false or misleading information on the value of the product.
o When it fails to give useful information on the possible reaction or side effects of the product. And
o When it is immoral.
Ways of misleading the consumers
o Many a time, traders entice the customers into their stores by advertising goods at a very low price, but they stock only a handful of such sale items in the store. When the advertised goods are sold out, consumers are steered towards the higher-priced stock or lower quality goods.
Retailers must ensure that reasonable supply of products is available during the sales, and retailers should not purposely avoid it. Retailers should make it clear in the advertisement that how many items on sale are available or when the sale ends.
o Sale offer should be for a limited period. Advertisement should declare that sale offer is for a limited time period. The period of the offer should be made clear in the advertisement only when the advertised goods are available for a limited period or stocks are limited.
o Traders often offer insignificant price reduction. To illustrate, a trader may advertise that the price of product is reduced to Rs.99.95, when the normal selling price is Rs.100.. The trader must include the normal selling price and discounted price in his offer .The trader sale offer is misleading if the trader claims the product is below cost , when the price is not below cost after discounts, rebates and other allowances it is misleading if the trader simply shows a fictitious higher price as normal selling price in the advertisement.
o Advertisement must clearly indicate the total price of goods or services. All price comparison must be truthful and must not intentionally or unintentionally mislead the consumers. Under the Fair Trade Practices Act, retailers have an obligation to ensure that they do not mislead or make false representations to customers with respect to price of the goods. The consumers who shop around and compare the prices of various products are less likely to be deceived by misleading claims consumers should also be aware of what is a reasonable price of goods and not take any advertised discounts at face value.
o While many sales are legitimate or genuine, the consumers should not get attracted to such sales offers i.e., “Hurry…very few days remain for sale”. The consumers should be aware of what to expect when retailers place items on sale and how to avoid being misled by discount advertisements. A marketer should take care to ensure that when goods or services are advertised to be available at a discount or as being on sale, it is a genuine discount or sale.
Remedies to overcome deceptive advertisements
o Cease-and- Desist Orders
The cease-and-desist orders, which prohibit the respondent from engaging any more in deceptive practice, are actually the only formal procedure established by the Federal Trade Commission Act for enforcing the prohibition of ‘ deceptive acts and practices.”
Restitution means the consumer is compensated for any damage caused to him by the product that had advertised claims not adequately substantiated. Restitution is rarely considered because of its severity.
o Affirmative Disclosures
If an advertisement has provided insufficient information to the consumers, an affirmative disclosure might be issued Affirmative disclosure require ‘clear and conspicuous disclosure’ of omitted information. Often the involved information relates to the deficiency or limitations of the product or service possibly relating to matters of health or safety.
o Corrective Advertising
Corrective Advertising requires the advertisers to verify past deception by making suitable amendment in any of its future commercial.
Self Regulation in Advertising
It is our responsibility to regulate our operations. And we must do it ourselves. Self regulation is not a quick-fix solution; it will be completely ineffective with out commitment from and the integrity of one and all. Self Regulation may require the following;
o The development of a self-regulatory code of conduct covering all forms of media that is sensitive to ethics, legalities, decency and truthfulness in advertising.
o Provision for monitoring and accountability, including a policy allowing for the removal of ads that violate the code.
o Greater participation of advertising professionals in the regulatory process.
o The inclusion of non-industry players in the process
o Consumer awareness of the self regulation system.
o Simplification of the complaint process against ads.
o Transparency throughout the entire system.
These reforms will achieve three goals. They will make the industry accountable for its actions. They will make regulators and critics think twice before attacking the industry and finally they will lead the public to trust ads, advertisers and agencies.
Reputable companies and advertising agencies avoid telling lies. They realize the cost of being caught. A dent in trust can prove to be much costlier than the failure of an ad campaign or for that matter, even a brand. The challenge before advertisers and agencies is to ensure that ads reflect our values. We must endeavor to see that “advertising” does not remain a dirty word.