Lecture

1. 7 Lecture Marketing, Advertising and Product Safety IIBBA361 Business Ethics and Corporate Governance Department of Business AdministrationS.Chan Reference: Chapter 10, “Ethics and the Conduct of Business”,John R. Boatright Consumer Council website

2. Ethics in Labeling and Packaging Labeling Correct and adequate information on the label (Ethical question: how much information is a manufacturer obligated to provide? Fair packaging: Package list the the identity of product, name and location of manufacturer packer, net quantity, the number of per serving, etc;

3. Ethical issues in Advertising Criticism on Advertising Exaggerated claims and outright falsehoods Lack of taste, irritating repetition Offensive character Morality of ad such as alcohol/tobacco; excessive sex/ violence, negative stereotypes of certain groups Role of advertising on creating culture of consumerism, potentiality of behavior control;

4. Ethical problems in Advertising 1.Deceptive Adverting Deceptiveness of an ad not only depends on the truth of the claims it makes, but also on the impact on people who see/hear it. E.g. Tire: the smoothest, safest ride; Pain reliever: the quickest, gentlest relief; E.g. 1991, Campbell Soup was charged by Federal Trade Commission for ads stressing low fat, low cholesterol content which made consumers associated with reduced risk of heart disease; The ads failed to mention the high in sodium which increases some form of heart disease.=> Consumers who try to avoid heart disease end up easily get heart disease.

5. Ethical problems in Advertising 2. Irrational Persuasion Techniques of advertising and its influence on human desires for security, acceptance, self-esteem E.g. inducing fear Laudable, sinister, exploits deep seated emotions

6. Ethics in Product Safety “ The right of consumers to be protected from harmful products” Due Care Theory: manufacturers have an obligation to exercise due care -- they should take all reasonable precautions to ensure products on market are free of defects. Design Materials Production Quality Control Packaging, labelling and warnings Notification

7. Ethics in Product Safety Due Care Theory: manufacturers have an obligation to exercise due care -- they should take all reasonable precautions to ensure products on market are free of defects. Design Materials Production Quality Control Packaging, labelling and warnings Notification

8. Design products and services should meet all governmental regulations and specifications and be safe under all foreseeable conditions, including misuse by the consumer Ethics in Product Safety

9. Materials materials should meet governmental regulations and durable enough to withstand reasonable use Ethics in Product Safety

10. Production products should be made without defects Quality Control products should be inspected regularly for quality Ethics in Product Safety

11. Packaging, labelling and warnings products should be safely packaged, should include clear, easily understood directions for use, and should include a clear description of any hazards Ethics in Product Safety

12. Notification manufacturers should have a system in place to recalls products that prove to be dangerous at some time after manufacture and distribution Ethics in Product Safety