ZeePedia buy college essays online


Business Ethics

<<< Previous ADVERTISING IN TODAY’S SOCIETY:GENERAL RULES, Substantiation Next >>>
 
img
Business Ethics ­MGT610
VU
LESSON 43
The self-regulatory system comprises three bodies: the Advertising Standards
Authority (ASA), the Advertising Standards Board of Finance (ASBOF) and the Committee of
Advertising Practice (CAP). Their work is described below.
60.2 The strength of the system depends on the long-term commitment of all those involved in
advertising, sales promotions and direct marketing (marketing).
Practitioners in every sphere share an interest in seeing that marketing communications are
welcomed and trusted by their audience; unless they are accepted and believed they cannot
succeed. If they are offensive or misleading they discredit everyone associated with them and
the industry as a whole.
60.3 The Code and all ASA rulings together with ASA and CAP guidance on a wide range of
topics are available on www.asa.org.uk and www.cap.org.uk. The
ASA and CAP update their websites regularly.
In the UK, the British Code of Advertising, Sales Promotion and Direct Marketing (the Code)
is the rule book for non-broadcast advertisements, sales promotions and direct marketing
communications (marketing communications). The Code is primarily concerned with the
content of marketing communications and not with terms of business or products themselves.
Some rules, however, go beyond content, for example those that cover the administration of
sales promotions, the suitability of promotional items, the delivery of products ordered through
an advertisement and the use of personal information in direct marketing. Editorial content is
specifically excluded from the Code, though it might be a factor in determining the context in
which marketing communications are judged.
The Committee of Advertising Practice (CAP) is the self-regulatory body that creates, revises
and enforces the Code. CAP's members include organizations that represent the advertising,
sales promotion, direct marketing and media businesses. Through their membership of CAP
member organizations, or through contractual agreements with media publishers and carriers,
those businesses agree to comply with the Code so that marketing communications are legal,
decent, honest and truthful and consumer confidence is maintained.
Some CAP member organizations, for example the Direct Marketing Association and the
Proprietary Association of Great Britain, also require their members to observe their own codes
of practice. Those codes may cover some practices that are not covered in this Code. The Code
supplements the law, fills gaps where the law does not reach and often provides an easier way
of resolving disputes than by civil litigation or criminal prosecution. In many cases, self-
regulation ensures that legislation is not necessary. Although advertisers, promoters and direct
marketers (marketers), agencies and media may still wish to consult lawyers, compliance with
the Code should go a long way to ensuring compliance with the law in areas covered by both
the Code and the law. By creating and following self-imposed rules, the marketing community
produces marketing communications that are welcomed and trusted. By practicing self-
regulation, it ensures the integrity of advertising, promotions and direct marketing.
The value of self-regulation as an alternative to statutory control is recognized in EC
Directives, including those on misleading and comparative advertising (Directives 84/450 and
97/55 EC), and self-regulation is accepted by the Department of Trade and Industry and the
Office of Fair Trading as a first line of control in protecting consumers.
104
img
Business Ethics ­MGT610
VU
The Advertising Standards Authority (ASA) is the independent body that endorses and
administers the Code, ensuring that the self-regulatory system works in the public interest. The
ASA's activities include investigating and adjudicating on complaints and conducting research.
A leaflet describing the ASA's complaints procedure is available on request and full
information
is available on www.asa.org.uk.
The vast majority of advertisers, promoters and direct marketers comply with the Code. Those
that do not may be subject to sanctions. Adverse publicity may result from the rulings
published by the ASA weekly on its website. The media, contractors and service providers may
withhold their services or deny access to space. Trading privileges (including direct mail
discounts) and recognition may be revoked, withdrawn or temporarily withheld. Pre-vetting
may be imposed and, in some cases, non-complying parties can be referred to the Office of Fair
Trading for action, where appropriate, under the Control of Misleading Advertisements
Regulations. The system is structured so that it does not operate in an unfair or anti-competitive
manner or restrict free speech unjustifiably. ASA decisions are subject to independent review,
including in exceptional cases by the Administrative Division of the High Court. The full text
of the Code is available on www.cap.org.uk. Copyright The Committee of Advertising Practice
2005.
MEMBERS OF THE COMMITTEE OF ADVERTISING PRACTICE
Advertising Association
Broadcast Advertising Clearance Centre
Cinema Advertising Association
Direct Marketing Association
Direct Selling Association
Incorporated Society of British Advertisers
Institute of Practitioners in Advertising
Institute of Sales Promotion
Interactive Advertising Bureau
Mail Order Traders Association
Newspaper Publishers Association
Newspaper Society
Outdoor Advertising Association
Periodical Publishers Association
Proprietary Association of Great Britain
Radio Advertising Clearance Centre
Royal Mail
Scottish Daily Newspaper Society
Scottish Newspaper Publishers Association
INTRODUCTION
This eleventh edition of the Code comes into force on 4 March 2003. It replaces all previous
editions.
The Code applies to:
Advertisements in newspapers, magazines, brochures, leaflets, circulars, mailings, e-mails, text
transmissions, fax transmissions, catalogues, follow-up literature and other electronic and
105
img
Business Ethics ­MGT610
VU
printed material posters and other promotional media in public places, including moving
images
- Cinema and video commercials
- Advertisements in non-broadcast electronic media, including online advertisements in
paid-for space (e.g. banner and pop-up advertisements)
- View data services
- Marketing databases containing consumers' personal information
- Sales promotions
- Advertisement promotions
The Code does not apply to:
a. Broadcast commercials. (The BCAP Advertising Standards Codes set out the rules that
govern broadcast advertisements on any television channel and radio station licensed by
Ofcom.)
b. The contents of premium rate services, which are the responsibility of the Independent
Committee for the Supervision of Standards of Telephone Information Services (ICSTIS);
marketing communications that promote these services are subject to ICSTIS regulation
and to the Code
c. Marketing communications in foreign media. Direct marketing that originates outside the
UK but is targeted at UK consumers will be subject to the jurisdiction of the relevant
authority in the country where it originates so long as that authority operates a suitable
cross-border complaint system. If it does not, the ASA will take what action it can. All
members of the European Union, and many non-European countries, have self-regulatory
organizations that are members of the European Advertising Standards Alliance (EASA).
EASA co-ordinates the cross-border complaints system for its members (which include the
ASA).
d. Health-related claims in marketing communications addressed only to the medical, dental,
veterinary and allied professions
e. Classified private advertisements, including those appearing online
f. Statutory, public, police and other official notices/information, as opposed to marketing
communications, produced by public authorities and the like
g. Works of art exhibited in public or private
h. Private correspondence, including correspondence between companies and their customers
about existing relationships or past purchases
i. Live oral communications, including telephone calls
j. Press releases and other public relations material, so long as they do not fall under 1.1
above
k. Editorial content, for example of the media and of books
l. Regular competitions such as crosswords
m. Fly posting (most of which is illegal)
n. Packages, wrappers, labels, tickets, timetables and price lists unless they advertise another
product, a sales promotion or are visible in a marketing communication
o. Point of sale displays, except those covered by the sales promotion rules and the rolling
paper and filter rules
p. Election advertisements as defined in clause 12.1
q. Website content, except sales promotions and advertisements in paid-for space
r. Sponsorship; marketing communications that refer to sponsorship are covered by the Code
s. Customer charters and codes of practice.
106
img
Business Ethics ­MGT610
VU
These definitions apply to the Code:
a. A product encompasses goods, services, ideas, causes, opportunities, prizes or gifts
b. A consumer is anyone who is likely to see a given marketing communication, whether in
the course of business or not
c. The United Kingdom rules cover the Isle of Man and the Channel Islands
d. A claim can be implied or direct, written, spoken or visual
e. The Code is divided into numbered clauses
f. A marketing communication includes all forms of communication listed in 1.1
g. A marketer includes an advertiser, promoter or direct marketer
h. A supplier is anyone who supplies products that are sold by distance selling
i. marketing communications (and may also be the marketer)
j. A child is anyone under 16.
k. A corporate subscriber includes corporate bodies such as limited companies in the UK,
limited liability partnerships in England, Wales and N. Ireland or any partnerships in
Scotland. It also includes schools, hospitals, Government departments or agencies and other
public bodies. It does not include sole traders or non-limited liability partnerships in
England, Wales and N. Ireland.
These criteria apply to the Code:
a. The ASA Council's interpretation of the Code is final
b. Conformity with the Code is assessed according to the marketing communication's
probable impact when taken as a whole and in context. This will depend on the medium in
which the marketing communication appeared, the audience and its likely response, the
nature of the product and any additional material distributed to consumers
c. The Code is indivisible; marketers must conform with all appropriate rules
d. The Code does not have the force of law and its interpretation will reflect its flexibility. The
Code operates alongside the law; the Courts may also make rulings on matters covered by
the Code
e. An indication of the statutory rules governing marketing is given on www.cap.org.uk;
professional advice should be taken if there is any doubt about their application
f. No spoken or written communications with the ASA or CAP should be understood as
containing legal advice
g. The Code is primarily concerned with the content of advertisements, promotions and direct
marketing communications and not with terms of business or products themselves. Some
rules, however, go beyond the content, for example those that cover the administration of
sales promotions, the suitability of promotional items, the delivery of products ordered
through an advertisement and the use of personal information in direct marketing. Editorial
content is specifically excluded from the remit of the Code (see 1.2k), although it might be
a factor in determining the context in which marketing communications are judged.
h. The rules make due allowance for public sensitivities but will not be used by the ASA to
diminish freedom of speech unjustifiably
i. The ASA does not arbitrate between conflicting ideologies.
GENERAL RULES
Principles
2.1 All marketing communications should be legal, decent, honest and truthful.
2.2 All marketing communications should be prepared with a sense of responsibility to
consumers and to society.
107
img
Business Ethics ­MGT610
VU
2.3All marketing communications should respect the principles of fair competition generally
accepted in business.
2.4 No marketing communication should bring advertising into disrepute.
2.5 Marketing communications must conform with the Code. Primary responsibility for
observing the Code falls on marketers. Others involved in preparing and publishing marketing
communications such as agencies, publishers and other service suppliers also accept an
obligation to abide by the Code.
2.6 Any unreasonable delay in responding to the ASA's enquiries may be considered a breach
of the Code.
2.7 The ASA and CAP will on request treat in confidence any genuinely private or secret
material supplied unless the Courts or officials acting within their statutory powers compel its
disclosure.
2.8 The Code is applied in the spirit as well as in the letter.
Substantiation
3.1 Before distributing or submitting a marketing communication for publication, marketers
must hold documentary evidence to prove all claims, whether direct or implied, that are capable
of objective substantiation. Relevant evidence should be sent without delay if requested by the
ASA or CAP. The adequacy of evidence will be judged on whether it supports both the detailed
claims and the overall impression created by the marketing communication. The full name and
geographical business address of marketers should be provided without delay if requested by
the ASA or CAP.
3.2 If there is a significant division of informed opinion about any claims made in a marketing
communication they should not be portrayed as generally agreed.
3.3 Claims for the content of non-fiction books, tapes, videos and the like that have not been
independently substantiated should not exaggerate the value, accuracy, scientific validity or
practical usefulness of the product.
3.4 Obvious untruths or exaggerations that are unlikely to mislead and incidental minor errors
and unorthodox spellings are all allowed provided they do not affect the accuracy or perception
of the marketing communication in any material way.
Legality
4.1 Marketers have primary responsibility for ensuring that their marketing communications are
legal. Marketing communications should comply with the law and should not incite anyone to
break it.
Decency (i.e. avoiding serious or widespread offence)
5.1 Marketing communications should contain nothing that is likely to cause serious or
widespread offence. Particular care should be taken to avoid causing offence on the grounds of
race, religion, sex, sexual orientation or disability.
Compliance with the Code will be judged on the context, medium, audience, product and
prevailing standards of decency.
5.2 Marketing communications may be distasteful without necessarily conflicting with 5.1
above. Marketers are urged to consider public sensitivities before using potentially offensive
material.
5.3 The fact that a particular product is offensive to some people is not sufficient grounds for
objecting to a marketing communication for it.
108
img
Business Ethics ­MGT610
VU
Honesty
6.1 Marketers should not exploit the credulity, lack of knowledge or inexperience of
consumers.
Truthfulness
7.1 No marketing communication should mislead, or be likely to mislead, by inaccuracy,
ambiguity, exaggeration, omission or otherwise.
Matters of opinion
8.1 Marketers may give a view about any matter, including the qualities or desirability of their
products, provided it is clear that they are expressing their own opinion rather than stating a
fact. Assertions that go beyond subjective opinions.
Fear and distress
9.1 No marketing communication should cause fear or distress without good reason. Marketers
should not use shocking claims or images merely to attract attention.
9.2 Marketers may use an appeal to fear to encourage prudent behavior or to discourage
dangerous or ill-advised actions; the fear likely to be aroused should not be disproportionate to
the risk.
Safety
10.1 Marketing communications should not condone or encourage unsafe practices. Particular
care should be taken with marketing communications addressed to or depicting children (see
section 47).
10.2 Consumers should not be encouraged to drink and drive. Marketing communications
should, where appropriate, include a prominent warning on the dangers of drinking and driving
and should not suggest that the effects of drinking alcohol can be masked.
Violence and anti-social behavior
11.1 Marketing communications should contain nothing that condones or is likely to provoke
violence or anti-social behavior.
Political advertising
12.1 Any advertisement or direct marketing communication, whenever published or distributed,
whose principal function is to influence voters in local, regional, national or international
elections or referendums is exempt from the Code.
12.2 There is a formal distinction between Government policy and that of political
parties. Marketing communications (see clauses 1.1 and 1.2) by central or local government, as
distinct from those concerning party policy, are subject to the Code.
Protection of privacy
13.1 Marketers should not unfairly portray or refer to people in an adverse or offensive way.
Marketers are urged to obtain written permission before:
109
img
Business Ethics ­MGT610
VU
a. Referring to or portraying members of the public or their identifiable possessions; the
use of crowd scenes or general public locations may be acceptable without permission
b. Referring to people with a public profile; references that accurately reflect the contents
of books, articles or films may be acceptable without permission
c. Implying any personal approval of the advertised product; marketers should recognize
that those who do not wish to be associated with the product may have a legal claim.
13.2 Prior permission may not be needed when the marketing communication contains nothing
that is inconsistent with the position or views of the person featured.
13.3 References to anyone who is deceased should be handled with particular care to avoid
causing offence or distress.
13.4 Members of the Royal Family should not normally be shown or mentioned in marketing
communications without their prior permission. Incidental references unconnected with the
advertised product, or references to material such as books, articles or films about members of
the Royal Family, may be acceptable.
13.5 The Royal Arms and Emblems should be used only with the prior permission of the Lord
Chamberlain's office. References to Royal Warrants should be checked with the Royal Warrant
Holders' Association.
Testimonials and endorsements
14.1 Marketers should hold signed and dated proof, including a contact address, for any
testimonial they use. Unless they are genuine opinions taken from a published source,
testimonials should be used only with the written permission of those giving them.
14.2 Testimonials should relate to the product being advertised.
14.3 Testimonials alone do not constitute substantiation and the opinions expressed in them
must be supported, where necessary, with independent evidence of their accuracy. Any claims
based on a testimonial must conform to the Code.
14.4 Fictitious testimonials should not be presented as though they are genuine.
14.5 Unless they are genuine statements taken from a published source, references to tests,
trials, professional endorsements, research facilities and professional journals should be used
only with the permission of those concerned.
14.6 Marketers should not refer in marketing communications to advice received from CAP or
imply any endorsement by the ASA or CAP.
Prices
(see CAP Help Notes on Lowest Price Claims and Price Promises and on Retailers' Price
Comparisons)
15.1 Any stated price should be clear and should relate to the product advertised.
Marketers should ensure that prices match the products illustrated (see 48.7).
15.2 Prices quoted in marketing communications addressed to the public should include VAT
and other non-optional taxes and duties imposed on all buyers. In some circumstances, for
example where marketing communications are likely to be read mainly by businesses able to
recover VAT, prices may be quoted exclusive of VAT or other taxes and duties, provided
prominence is given to the amount or rate of any additional costs.
15.3 If the price of one product is dependent on the purchase of another, the extent of any
commitment by consumers must be made clear.
15.4 Price claims such as `up to' and `from' should not exaggerate the availability of benefits
likely to be obtained by consumers.
15.5 A recommended retail price (RRP), or similar, used as a basis of comparison should be
genuine; it should not differ significantly from the price at which the product is generally sold.
110
img
Business Ethics ­MGT610
VU
Availability of products
16.1 Marketers must make it clear if stocks are limited. Products must not be advertised unless
marketers can demonstrate that they have reasonable grounds for believing that they can satisfy
demand. If a product becomes unavailable, marketers will be required to show evidence of
stock monitoring, communications with outlets and swift withdrawal of marketing
communications whenever possible.
16.2 Products which cannot be supplied should not normally be advertised as a way of
assessing potential demand unless it is clear that this is the purpose of the marketing
communication.
16.3 Marketers must not use the technique of switch selling, where their sales staff criticizes
the advertised product or suggest that it is not available and recommend the purchase of a more
expensive alternative. They should not place obstacles in the way of purchasing the product or
delivering it promptly.
111
Table of Contents:
  1. INTRODUCTION:Business Issues
  2. INTRODUCTION (CONTD.)
  3. THEORY OF ETHICAL RELATIVISM
  4. MORAL DEVELOPMENTS AND MORAL REASONING
  5. MORAL REASONING:Arguments For and Against Business Ethics
  6. MORAL RESPONSIBILITY AND BLAME
  7. UTILITARIANISM:Utilitarianism: Weighing Social Costs and Benefits
  8. UTILITARIANISM (CONTD.):rule utilitarianism, Rights and Duties
  9. UNIVERSALIZABILITY & REVERSIBILITY:Justice and Fairness
  10. EGALITARIANS’ VIEW
  11. JOHN RAWLS' THEORY OF JUSTICE:The Ethics of Care
  12. THE ETHICS OF CARE:Integrating Utility, Rights, Justice, and Caring
  13. THE ETHICS OF CARE (CONTD.):Morality in International Contexts
  14. MORALITY IN INTERNATIONAL CONTEXTS:Free Markets and Rights: John Locke
  15. FREE MARKET & PLANNED ECONOMY:FREE TRADE THEORIES
  16. LAW OF NATURE:Theory of Absolute Advantage, Comparative Advantage
  17. FREE MARKETS AND UTILITY: ADAM SMITH:Free Trade and Utility: David Ricardo
  18. RICARDO & GLOBALIZATION:Ricardo’s Assumptions, Conclusion
  19. FREE MARKET ECONOMY:Mixed Economy, Bottom Line for Business
  20. COMPETITION AND THE MARKET:Perfect Competition
  21. PERFECT COMPETITION
  22. MONOPOLY COMPETITION:Oligopolistic Competition
  23. OLIGOPOLISTIC COMPETITION:Crowded and Mature Market
  24. OLIGOPOLIES AND PUBLIC POLICY:Ethic & Environment, Ozone depletion
  25. WORLDWATCH FIGURES:Population Year, Agriculture, Food and Land Use
  26. FORESTS AND BIODIVERSITY:The Ethics of Pollution Control
  27. THE ETHICS OF POLLUTION CONTROL:Toxic Chemicals in Teflon
  28. THE ETHICS OF POLLUTION CONTROL
  29. THE ETHICS OF POLLUTION CONTROL:Recommendations to Managers
  30. COST AND BENEFITS:Basis of social audit, Objectives of social audit
  31. COST AND BENEFITS:The Ethics of Conserving Depletable Resources
  32. COST AND BENEFITS:The Club of Rome
  33. THE ETHICS OF CONSUMER PRODUCTION AND MARKETING:DSA Comments
  34. THE ETHICS OF CONSUMER PRODUCTION AND MARKETING:Should Consumers Bear More Responsibility?
  35. THE CONTRACT VIEW OF BUSINESS' DUTIES TO CONSUMERS
  36. THE CONTRACT VIEW OF BUSINESS' DUTIES TO CONSUMERS:The Due Care Theory
  37. THE SOCIAL COSTS VIEW OF THE MANUFACTURER’S DUTIES
  38. ADVERTISING ETHICS:The Benefits of Advertising, The harm done by advertising
  39. ADVERTISING ETHICS:Basic Principles, Evidence, Remedies, Puffery
  40. ADVERTISING IN TODAY’S SOCIETY:Psychological tricks
  41. ADVERTISING IN TODAY’S SOCIETY:Criticism of Galbraith's Work
  42. ADVERTISING IN TODAY’S SOCIETY:Medal of Freedom
  43. ADVERTISING IN TODAY’S SOCIETY:GENERAL RULES, Substantiation
  44. ADVERTISING IN TODAY’S SOCIETY:Consumer Privacy, Accuracy
  45. THE ETHICS OF JOB DISCRIMINATION:Job Discrimination: Its Nature