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, labelling and packaging; marketing and advertising; selling practices; pricing; and distribution). In recent years the scope of marketing issues has expanded, including new problems like 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 the 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 into dealing with the issue of corporate social responsibility, recognizing the importance (and potential benefits) of doing so.
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There are plenty of external standards for marketing practices: codes of ethical behaviour (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 (http://www.bsr.org/):
*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 (Sirgy, 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 a piece of 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 a product or brand.
- Emotions can directly influence attitudes.
Each of these functions helps 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 an emotional response, such as fear, sadness or just simply an 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 feel 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 behaviour; 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 (http://www.bsr.org/). 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 (http://www.benetton.com/) 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 sports 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 is 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 centre 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. The Benetton Group “constitutes the traditional and innovative “heart” of the system”.
The Benetton Group operates in 120 countries, with the 6,000 stores, but it gets only 5% of sales in the world’s biggest market, the US (Sansoni, 1998). “Our products are maybe too frivolous for American tastes,” says Luciano Benetton (Sansoni, 1998). Critics say that clothing is not a problem: the company’s practices of using advertisement based on provocation and playing on customer’s emotions, are responsible for the situation.
Benetton has a specific approach to the issue of corporate social responsibility. It is expressed by the company’s ad philosophy, which is rooted in social awareness and changes. Oliviero Toscani, creative director of the Benetton Group, says that the advertising industry does not recognize its power to influence culture for the better. He states, that just advertising a product is a waste of communication. He also claims, “Advertising is the richest and most powerful form of communication in the world. We need to have images that will make people think and discuss” (www.benetton.com).
Founder, Luciano Benetton, adds: “Advertising has a habit of portraying only the rich, beautiful and blonde. We need images of normal people, to help us see the world differently” (the same source). The company positions on the role of marketing have received mixed reaction; from very positive, perceiving its practices as a genuine expression of involvement in social problems, to ferocious attacks of others, who claim that company is putting a facade of social responsibility, just to cover an intention of getting publicity by any means possible (even if it means offending a lot of people).
Benetton’s web site summarizes the history of its advertising quite adequately: United Colors Divided Opinions. Since the beginning, Benetton’s advertising has faced controversy: gathering awards and recognition on one side, and at the same time getting strong negative reactions from others. It started out quite innocently though. In 1984, the company ad showed six adorable children of different races wearing colourful ethnic clothing with the headline “All the World’s Colors”. This campaign appeared in 14 countries and along with the prize from the Dutch magazine “Avenue” came the refusal to print the ads in publications reserved for whites in South Africa.
For the next few years company’s messages were peace and brotherhood. The advertising was refreshingly different and it worked. The following campaign addressed the issue of racism. To describe a few of the posters: black woman breastfeeding a baby, black and white child on potties. Again public voices were split. Even though the campaign was aiming at presenting the equality between blacks and whites, the African American community in the U.S. opposed strongly to the first ad, claiming that it perpetuates the stereotype of the black nanny, relegated to a subordinate role. Internationally, this photo became the most awarded image in Benetton’s advertising history.
In 1991, peace and brotherhood have been replaced by the desire to shock and provoke customers, as some of the opponents claim. Ads became more aggressive and attention-grabbing. First came a giant poster showing a cloud made up of multicoloured condoms, after that the priest-kissing-a-nun poster, which drew protests from around the world, followed by a newborn child covered with blood. In 1993, Benetton launched Aids and Safe Sex Campaign, with its very graphic and controversial posters.
The list goes on. The ads initially succeed in rising brand’s profile, but eventually began to cause problems with customers and retailers. In 1995, German retailers sued Benetton, claiming the ads sabotage their sales effort.
In the U.S., the company had even more problems. By 1995 stores had all but disappeared. Sensationalism bred more sensationalism, but not sales. Advertising Age reported surveys in which 83% of customers said Benetton ads did not persuade them to shop for the company products (Famina, 2000).
In the late nineties, to boost up sales in the U. S., Benetton tried to team up with the Sears, Roebuck. It could have worked if it was not for the upcoming advertising promotion. In January 2000, Benetton launched “We, on Death Row” campaign. In it Benetton reveals the real faces of the prisoners on the death row along with an explanation: “(…) this project aims at showing to the public the reality of capital punishment so that no one around the world will consider the death penalty neither as a distant problem nor as news that occasionally appears on TV” (www.benetton.com).
The pictures of faces of 27 incarcerated men and one woman, along with the interviews, first appeared as a 98-page ad insert in the February issue of ‘Talk’ magazine. Toscani explains, “We wanted to talk about how it feels to be on death row. What do they dream about? What are they afraid of?” (ibid)
Many were outraged, claiming that Benetton wants to “(…) increase its sales on the backs, on the misery, on the fates of condemned men and women, and their slaughtered victims” (Garfield 2000). It is difficult to guess if Mr Benetton or Mr Toscani have anticipated the outcome of the campaign. In Europe, the issue has not initiated such strong reactions, but in the U. S. the company got a crushing blow. Within weeks of the first ads, Benetton was hit by a lawsuit from the state of Missouri, along with boycotts organized by National Organization of Murder Children etc. All the controversy proved to be lethal to Benetton’s contract with Sears, Roebuck & Co.
In June 2000 the Advertising Standards Authority brushed aside 144 complains that Benetton’s ‘Death Row” campaign was offensive and disturbing, insisting its validity lay on grounds of the adviser’s right to free speech. Nevertheless, the company’s image and sales suffered.
In the light of recent events, many have asked if using attention-grabbing ads, completely irrelevant to its product, is ethically right. How showing a convict can help a company sell T-shirts? Are they allowed to use a shield of “improving society” in their marketing practices? Toscani statement that he is just taking pictures not selling clothes (www. Benetton.com) raises even more questions.
The vagueness of the company’s campaign goals does not help either; although many of the social issues Benetton publicized in its advertising had been supported by the company’s efforts beyond marketing (e.g. in 1993 “Clothing Redistribution Project”), some still feel it was done as a facade for the real cause: raising the brand’s profile.
The ethicality of the company’s advertising practices have been questioned for another reason as well: the high exposure (billboards, TV) increases the inability to control how many see them and how many can be offended by them. The company does not take any steps to ensure that viewers can choose whether they want to be exposed to the images presented (it could be done by using special warnings). The Benetton does just the opposite: it wants everybody to see it because this is the only way they can change society (awareness).
The ads may be perceived as psychoactive, and therefore ethically incorrect (e.g. the “Death Row” campaign had an enormous negative impact on relatives of the murders’ victims).
The problems with the campaign eventually led to the departure of Toscani from the company (after 18 years of collaboration). The parties had claimed that it had nothing to do with the last campaign, but critics took it as Benetton’s acknowledgement of wrongdoing. In the summer of 2000, the Benetton advertising practices have changed as well: they turned from using the death row as a means of publicity, towards doing shows on fashion runways.
Many of the industry observers anticipate that the company will convert to more traditional fashion advertising in order to increase its sales. They predict it will help the stock as well (Sloat, 2000). The results of rethinking the advertising philosophy are yet to be seen. Judging by recent developments, the Benetton approach to social responsibility issues have not been entirely successful.