Philosophy 223

1. Philosophy 223 Marketing Advertising, Information and Vulnerability

2. Moral Dimensions of Marketing • The aim of all marketing strategies or techniques is the sale. Producing and pricing goods is an important element of this, but advertising and product placement are the means by which the sale is promoted. • We often assume that these aspects of marketing are a relatively benign aspect of contemporary business. After all, they involve no violation of employee rights or responsibilities, and no obvious abdication of corporate responsibility. • Furthermore, advertisement is directed at free individuals who are not externally coerced to accept the claims made by the advertisers. Despite these facts, there are significant ethical issues that arise in these contexts.

3. A Question of Influence • The aim of marketing and product placement is to influence the purchasing decision of the consumer. • Common moral opinion suggests that there are ethically acceptable and unacceptable means of influencing consumer behavior. • Acceptable means include persuading, asking, informing and advising. • Unacceptable ways include threats, coercion, deception and lying.

4. Influence and Manipulation • The unacceptable means of influencing people share a common feature: they all aim at manipulating the consumer. • Manipulation seeks to guide behavior without the consent or awareness of the target. • Manipulation is not control; it’s more subtle. • The better you understand how people think, the more effectively you can manipulate them. • Manipulation should be contrasted with forms of rational influence like persuasion.

5. Manipulative Marketing • It should be easy to see that critics of advertising and product placement techniques focus on instances where the intent of the techniques is clearly manipulative. • Another area of concern is marketing research, in particular research aimed at consumer psychology.

6. Is There Anything Wrong with Manipulation? • Before we examine some of the particular concerns raised by ethicists and business people, we should answer this question. • All of the general ethical approaches we’ve examined raise important objections to many forms of manipulation. • Manipulation is characterized by a failure to treat others with respect by treating them as a means rather than an end. • Manipulation thus tends to decrease overall utility by making social interaction more difficult. • Manipulation conflicts with many of the most commonly articulated virtues (ex. honesty).

7. Deceptive and Unfair Marketing • Some marketing techniques are obviously unethical. • Prominent among these are techniques that seek to deceive consumers or seek an unfair advantage over competitors. • Is the “Sales at World Camera and Electronics” case (336) an example of deceptive or unfair marketing.

8. Deception and Manipulation in Advertising • Given the harms that arise from deceptive and unfair advertising, society has good reasons to target these forms of advertising. • The focus on intent seems promising. Perhaps we could target advertising that intends to deceive. • However, intent is difficult to discern, so some have argued that we should focus on effects. • In both cases, it seems necessary to agree on some definition of the qualities of a “reasonable consumer.”

9. Galbraith and the Dependence Effect • Economist John Kenneth Galbraith argued that contrary to common assumptions, advertisement doesn’t just respond to demand, it in large measure creates it. Galbraith labeled this capacity the “Dependence Effect.” • Galbraith went on to argue that there are three negative consequences of the DE: • It reverses the law of supply and demand, making demand a function of supply. • It creates and encourages irrational consumer desires, which limit the efficiency of markets. • Advertising that creates demands undercuts consumer autonomy.

10. Some Implications of the Dependence Effect • If Galbraith’s concerns are legitimate, there are a number of important consequences. • Undercutting consumer autonomy would violate traditional ethical standards. • Market exchanges which appear to increase overall satisfaction would actually not do so. • The reversal of the law of supply and demand significantly undercuts the democratic nature of markets and makes it difficult to justify the accumulation of wealth by a few individuals on the ground of their supposed responsiveness to consumer demand.

11. The Dependence Effect and Autonomy • The thin wedge of this issue is the question of autonomy. • Is it the case that common forms of advertising undercut consumer autonomy? • Answering this question requires a distinction prepared for in our analysis of manipulation. • We saw there that undercutting autonomy does not require actually controlling a person. • That is, a person can act without constraint, but still not be acting autonomously.

12. Autonomous Behavior vs. Autonomous Desire • We can account for the gap between action and autonomy, by noting a difference between autonomous behavior and autonomous desires. • If I act without constraint, I can in one sense be said to be behaving autonomously. • However, if the desires upon which I act are not autonomously chosen, then the lack of constraint does not guarantee autonomy. • Is the drug addict acting autonomously when they, without external interference, use drugs?

13. A Framework for Understanding Desire • A way of understanding the apparent conflict lived by an addict it to draw a distinction between first-order and second-order desires. • A first-order desire is any desire I have at the moment. A second-order desire is one I have on the basis of a reflective consideration of my interests. • Autonomy requires this capacity for reflection. • It is thus the capacity to form and act in accordance with second-order desires which makes a person autonomous.

14. Autonomy and the Addict • The addict may have strong first-order desires for that to which they are addicted, but any reflective individual in that situation is going to have strong second-order desires to be free of the addiction. • Given the analysis just offered, to the extent that the addict acts on their first-order desires rather than their second-order desires, they act non-autonomously.

15. Autonomy and Advertising • Under what conditions are the desire-creating capacities of advertising going to be consistent with the autonomy of consumers? • Only in that situation where the creation of first-order desires does not conflict with legitimate, reflectively established second-order desires. • This is reflected in the “cooling-off” periods common in consumer protection law. • In other words, the fact that consumers often respond favorably to desire creating marketing techniques is no evidence of their acceptability. • Willingly participating in “therapeutic shopping” is not enough. The individual would have had to reflect upon the nature of such an enterprise and determined its appropriateness.

16. Further Complications • Even this picture may fail to address the full complicity of advertising in undercutting consumer autonomy. • Persuasive advertising actively contests the development of the critical, reflective skills necessary for the formation of autonomous second-order desires. • The sheer volume of advertising which bombards us everyday renders even the most critical and reflective individuals incapable of immunizing themselves from autonomy-limiting first-order desire creation.

17. Arrington, “Advertising and Behavior Control” • This article considers whether or not a common technique of advertising, puffery, illegitimately interferes with consumer autonomy via manipulation. • The author argues that generally it does not. • His argument rests on analysis of the concepts of desire, free choice, and manipulation.

18. Puffery • Puffery is the practice of a seller making exaggerated or fanciful claims about a product or service. • Some argue that the use of puffery constitutes manipulation. • Examples: “Better ingredients, better pizza.” • Axe Body Spray

19. Arrington on Autonomy and Desire • Autonomous Desire • We act autonomously when we act in a manner consistent with our second-order desires. • Autonomous Desire and Choice • Based on knowledge of information relevant to choice. Desire is only autonomous when it’s rational (ensures consistency). • Free Choice (Acting Freely) • We act freely when we do things for a reason.

20. What about Manipulation? • As Arrington understands it, manipulation involves: • Intention • Causality • Guaranteed Control of Outcome

21. Arrington’s Conclusion • Arrington argues that persuasive advertising typically does not undermine autonomy. • Consumers typically act freely (on reasons). • Consumers typically act on reasons they take to be good ones. • Consumers typically act on their second-order desires. • Consumers typically are not manipulated.

22. Holley, “Information Disclosure in Sales” • This essay defends a rule or principle of disclosure for ethical sales. • How much information are sales people ethically required to disclose? Five levels of disclosure: • Minimal Information: buyer is solely responsible; • Modified Minimal Information: disclose only what is necessary to avoid risk; • Fairness Rule: safety information plus unavailable information; • Mutual Benefit Rule: safety information plus information needed for a reasonable judgment; • Maximal Information Rule: all relevant information.

23. What’s Required? • Holley first considers if it would be appropriate to merely consider the interests of the consumer. What rule would you want if you were the consumer (the Golden Rule)? • Holley thinks that this focus ignores the appropriate advocacy of the salesperson. • This leads him to consider the two versions of the minimal information rule, but this seems to ignore legitimate interests of consumers. • Addressing the various ways in which consumers are informationally vulnerable leads him to reject the fairness rule. • He thus concludes that the mutual benefit rule is best, as it allows for product advocacy but protects consumer interests.

24. Nature and Types of Vulnerability Vulnerability refers to a susceptibility to harm; more specifically it refers to factors that individuals possess that makes them more susceptible than their fellows. Individuals exhibit General Vulnerability when a physical or psychological feature they exhibit makes them susceptible to some harm. Elderly, addicts. Individuals exhibit Consumer Vulnerability to the extent that their ability to participate in rational exchanges is impaired. Children

25. Marketing to Vulnerability Marketing techniques can target general vulnerabilities or consumer vulnerabilities. Clearly techniques that target consumer vulnerabilities are illegitimate, on the grounds of our analysis of autonomy. Just as clearly, many general vulnerabilities make individuals vulnerable as consumers. Elderly, infirm are vulnerable to ads that play on their anxieties. Low income people vulnerable to high priced consumer goods.

26. Brenkert, “Marketing and the Vulnerable” This essay defends the view that some consumers lack “market competency” and that such vulnerable individuals should not be targeted by marketers in ways that take advantage of their vulnerability. Basically, market competency refers to the knowledge and context appropriate to a reasonable consumer, which includes: The ability to determine differences in quality and optimal pricing. Knowledge of legal rights. Knowledge of the products and their characteristics. Possession of appropriate resources.

27. An Account of Vulnerability Vulnerable individuals operate with conditions or incapacities that impede their ability as normal market participants. Physical vulnerabilities Cognitive vulnerabilities These vulnerabilities are magnified when we think about their implications. Less able to protect their interests Possess these vulnerabilities due to factors beyond their control Often unaware of their vulnerabilities Vulnerabilities render them susceptible to harm

28. Justified Market Relations Morally justified market relations require: that all participants be capable of exhibiting market competency; that the markets are characterized by free competition; the competition is open; deception and fraud are not used. On this basis, we can conclude that it is not morally acceptable to market goods to especially vulnerable people with the intention of taking advantage of their vulnerability. Individuals who are simply lazy (do not do their homework) should not count as vulnerable.

29. Elliot, “The Drug Pushers” The context of Elliot’s article is the potential conflict between the duties of doctors to their patients and the goals of pharmaceutical reps (to get doctors to prescribe their companies’ medications). Though not necessarily conflicting, the different foci of these two parties can present significant moral concerns.

30. Gene Carbona As the anecdotes of Mr. Carbona, supported by other participants in the industry and studies in the medical literature, demonstrate, the persuasive efforts of drug reps have a significant impact on drug sales. In and of itself, this should pose few concerns. However, when the drugs in question are of little benefit, or even pose possible risks to patients, concerns are legitimate.

31. Should we be concerned? Consider the following, all gleaned from Elliot’s article: In 1997, the average ROI on a dollar spent on drug repping was $10.29 (twice that on print advertising to physicians and 7 times on print advertising to consumers). The pharmaceutical industries lobbying organization is the largest in the country. 9 out of 10 medical students have been asked or required to attend a pharmaceutical industry sales event. The pharmaceutical industry provides ~90% of the annual monies spent on continuing education for doctors.

32. Two General Concerns First, referring back to our initial considerations, we should probably wonder about the autonomy of doctors influenced by reps. Particularly in connection two the relationship between first and second order desires. Secondly, there are a number of vulnerabilities to be concerned about: patients, doctors and their staffs, and even, as Elliot suggests at the end of his article, the reps themselves.