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MMM065 ETHICS IN MARKETING AND INTERNATIONAL MANAGEMENT

ESSAY 3: ADVERTISING

STUDENT NUMBER: 20003650

Instructor: Dr Dan Nunan Date: 23/04/2012

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Advertising: Doctors have recently suggested that advertising of products containing sugar be

banned or regulated in the same way as alcohol or tobacco advertising. Discuss the extent to

which advertising of unhealthy food products should be regulated to protect consumers. Consider

factors including consumer autonomy, the impact on health services and the likely effectiveness

of regulation.

Abstract:

Food advertising today is recognised worldwide as contributing to an unhealthy lifestyle in children

as well as adults. Necessary measures and actions is called for on the part of Government and other

private bodies of a country who are responsible to restrict advertising of food products that are

high in fat, sugar and salt and cause a number of health problems to consumers (such as obesity,

high blood pressure, brain dysfunction, heart problems and so on). In this essay I intend to bring

out the gaps in the Governmental regulations against advertising industry for food which has been

steadily causing damage to the health of consumers. I also discuss the extent to which action can be

taken to protect the consumers from getting misled by adverts similar to what was done in case of

alcohol and tobacco advertising years ago. Lastly I consider the two normative theories; Utilitarian

and Kantian in light of food companies and how ethical norms are being ignored by them. Since

rules and bans by Governments are less forthcoming in the advertising industry marketers have

been constantly taking advantage of this situation and have been enjoying the huge potential they

are open to in the market today.

Advertising Industry; concerns among Consumers:

In this age of globalization if there is an industry that is steadily growing in attracting consumers it is

the food industry or the dietary industry. Multiple factors are responsible for influencing eating

behaviour of human beings and one major factor today is advertising in this media-saturated

environment. With technology having far reaching effects on lives of consumers all over the world

food companies can now reach every consumer in any part of the world with the desired food

product. A growing concern among citizens and Governments of almost all the countries today is

the impact of media on the life of a regular human being. A multitude of advertisements are

bombarded on the consumer via networking channels such as television, newspapers, radio

channels, magazines, hoardings, tube trains, buses and so on. Research according to BBC, UK (2009)

suggests that average human being is exposed to 3000 advertisements per day in form of any kind

of media channel. And an average American child watches an estimate between 25,000 to 40,000

television commercials per year and in the UK it is about 10,000. Out of the 3000 adverts per day

the study shows that 60.4% is food adverts and this has been on a rise from 38% in the year 2007.

Out of 60% food adverts shown no less than 35% of them are about unhealthy food products which

specifically include junk food (or fast food) aimed at children and foods that contain excess amount

of sugar than required for normal calorie intake. A very straightforward conclusion out of this study

is that companies have been slowly but steadily influencing the buying decisions of a regular

consumer; especially children on consumption of food products that are capable of causing long

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term damage to the body. A recent study conducted by Glasgow University on UK health lifestyle

suggested that the average person in the UK consumes 659g of sugar a week, and 3,144 calories a

week through non-alcoholic drinks. This is the equivalent of around 450 calories a day, or nearly a

quarter of the recommended daily calories for a woman and a fifth for men, the researchers said

(Yahoo Lifestyle Report, 2012). The researchers also found out that a regular chocolate milkshake at

a café (such as Costa Coffee or Starbucks) claims 4 teaspoons of sugar but actually contains 12,

people are and have been consuming such high amounts of sugar in milkshakes without knowledge

of actual sugar content in them since many years now.

Adverts for healthy food products like vegetables, salads, fruits, natural and organic food is rare

but an estimated £480 million is spent every year by companies in advertising foods high in fat,

sugar and salt on just TV (The Times, 2012). For instance; Mc Donald’s, the American fast food giant

spends close to $700 million on its marketing and advertising almost every year (Annual Report,

2009-2010). Obesity and high cholesterol are crucial health problem for the consumer of fast foods.

Adverts have been seen as increasing the overall consumption of food products among consumers

by almost 72% of which children have been the major target market. Foods high in sugar, fat and

salt are considered unhealthy food products as they pose a direct threat to consumer’s health

causing heart diseases, cancer, obesity, blood pressure and diabetes. These foods are not just

responsible for these health problems but are also a major factor in reducing brain cell activity and

causing permanent damage in creating new brain tissues for normal functioning of brain. Typical

examples of these food products include processed foods, canned food, junk food (burgers, fries,

pizzas, and bread products), caffeine drinks, carbonated drinks, and juices, so on. Research

conducted by scientists of National Institutes of Health's National Institute of Neurological

Disorders and Stroke (2010) clearly states that foods high in sugar and fat cause damage to the

brain to the level of alcohol and tobacco hence the ban of these products since past decade.

Television advertising changes attitudes about drinking. Young people or adolescents report more

positive feelings about drinking and their own likelihood to drink after viewing alcohol and cigarette

ads (Austin, 1994; Grube, 1994). Hence regulation on adverts of alcohol and tobacco was enforced

from early 2005 by WHO Euro Region by implementing a framework called ‘Alcohol and Tobacco

Policy’. Under this framework restrictions and bans were imposed on advertising agencies and

alcohol companies on their advertising campaigns for these products. Today countries like UK and

America have age restrictions even in supermarkets for buying of alcohol and tobacco products.

Recent action taken by the concerned Indian Government involved increasing age limit for alcohol

consumption form 21 to 25 years because of growing percentage of young people getting addicted

to such products. In Malaysia alcohol advertising was outlawed in the year 1995 and Malaysian

televisions channels have a strict policy to not telecast alcoholic drinks adverts before 10pm.

As of 2009 30% of American children and 15% of youth are obese or suffering from over-weight

health problems. Parents play an important role in influencing eating habits of children. Increasing

number of families are now realising the harmful side effects of long term consumption of

unhealthy foods and have started appealing Governments to take actions against regulating the

sale and promotion of such food products. Supermarket chains such as Walmart, Tescos, Aldi and

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so on promote free samples of new market entrants in food products which are not necessarily

healthy. An average of £2.8 billion is spent by companies on advertising in these supermarket

stores for sampling, coupons, sweepstakes and contests which encourage consumers particularly

youth for the purchase of products. This strategy is widely adopted by companies individually also

for advertising. For example; free samples of Redbull (energy drink – high in caffeine and sugar) on

university campuses or high streets to increase brand awareness. Redbull spends a massive 35% of

the revenues for marketing and advertising each year. Main ingredients of Redbull are sugar,

caffeine and taurine. It is advertised as a drink that increases concentration and brain activity. In

spite of knowing the side effects caffeine consumption can cause these multinational companies

promote their products as fashion statements or as means of current trends which attracts

youngsters and children. Food scientists and health policy makers have time and again declared

that regular consumption of these beverages is not recommended but to what extent should

companies and Government support each other in protecting the health of country’s young

population is a matter of debate.

To what extent action can be taken and the dilemma of free choice:

Junk food is cheap to make this makes it an alternative to the otherwise expensive healthy food

stacked in super markets. For instance, products such as crips (Walkers and Pringles), savoury

snacks, carbonated beverages (Coca cola and energy drinks), biscuits and chocolate protein bars

and so on. A probable solution by the Government could be to subsidise healthy food and advertise

about its importance to have a healthy lifestyle. Tighter controls need to be implemented on

advertising and marketing campaigns of unhealthy foods and companies along with fast food

outlets promoting unhealthy foods. Government has to enforce serious and stricter regulations to

make sure those companies and fast food outlets follow the policies. In countries like UK where

Government provides for health care these policies would in turn increase the long term savings in

Health Services (NHS). Also a legal requirement to minimise sugar and do fair trade labelling on

food products should be made mandatory for all manufacturers. Companies at times mislead the

consumer by displaying incorrect or vague information about the nutritional value on packages.

Also, many subsidies in Europe and USA are not open to societal scrutiny and not made public. The

inspection reports of the European Food Standard Agencies are not open to the public. This shows

that transparency is still not widely accepted in the food industry. In some parts of UK, for example

in Wales there are no policies regarding advertising control of food products among children. Wales

does not target health problems like child obesity, healthy eating behaviour, physical and joint diet

strategies for children or the youth.

A large percentage of consumers do not wish to be protected but they do want to be informed and

heard. As long as food companies are ready to change their approach and include society

participation in issues that need to be addressed from consumer perspective, consumers are willing

to consider that. Food ethicists and the discipline of food ethics is faced with a moral debate today

on whether protecting consumers by forcing bans and policies on companies should be adopted or

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letting consumers decide for themselves but providing a platform for their voices to be heard and

concerns to be addressed should be the approach.

Ethical standards in Advertising industry for unhealthy food products:

In ethics, consumer’s rights can be justified from at least three different perspectives. These

perspectives frame consumer sovereignty (consumer autonomy). First, deontological position, i.e.

Kant’s philosophy that strongly advocates undeniable sovereignty; Second, utilitarian perspective

which talks about pursing your own good in your own way unless it deprives others of theirs;

Thirdly, pragmatist perspective, essential for social developments (Korthals 2004).

Utilitarianism holds true value when acts that are most useful to society and its growth are

performed. It is a relativist theory. When faced with a moral dilemma a utilitarianist would think of

all possible outcomes to all possible choices and act on whichever one they think benefits society

most i.e. greater good for the greater number of people (Bishop, 1949). F. P. Bishop in his work

‘Ethical Standards for advertising’ suggests that ethical standards for advertising should meet

practical requirements of the society and people. And Governments today find it highly challenging

to implement strict rules and regulations for food companies or fast food outlets since demand is

always on the rise. Companies like Mc Donald’s argue on the context that they are providing meals

at a cheaper price and helping consumers save time and money both. Fast food chains such as

Burger King, Mc Donald’s and KFC generally have self-service and provide excellent customer

service which helps them retain customers. What they don’t make customers aware of is the harm

the burgers and fries they are selling are causing to them which is clearly unethical. Consumers

tend not to realise the downside of consumption of these unhealthy food products when young.

But eventually after years of consumption the body starts to show the side effects of this food

consumption. Even when parents try to educate children about the side effects of unhealthy food

consumption, children get used to the habit because of continuity and advertising forms a major

influential factor in this kind of addiction to unhealthy food habits among children and adolescents.

A probable question that arises here is; does the sale and marketing of unhealthy food products

including those high in sugar lead to any benefits or increase overall utility of the society? The

answer is no as companies are aware about the harm they are causing to the people and which is

actually decreasing overall utility of the society since people in the long run are going to face health

problems. These health problems in turn impact the health services of the country. Cost of

providing medical care increases and Government has to spend relatively more amount of money

on health institutions like hospitals.

Utilitarians suggest that overall increase in the policies and regulations for advertising can help in

creating benefit for the society. If companies are taxed and pricing of unhealthy food products is

increased it can reduce the sale thereby decreasing risky behaviour among children or consumers.

On the contrary, when alcohol and cigarette prices were raised 40% (from 1981-1988) the demand

stayed level; proof that simply taxing or raising prices as a means of regulating the consumption

cannot change behaviours. Consumers will still be vulnerable to health risks of unhealthy food

products even if pricing factor is increased. Thus according to Utilitarian theory there is a need for

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ethical behaviour among companies first in terms of limiting advertising campaigns and marketing

of food products to create overall utility in terms of benefiting the society. Educating consumers

about making right choices while selecting food products from retail outlets (Walmart, Tescos and

so on) and creating in-school campaigns about healthy eating habits for children are some of the

measures that Utilitarians suggest. Estimating total utility effects of the companies in this situation

is hard to conclude but it is reasonable to accept the fact that unhealthy food products are seen to

cause irreparable damage to one’s health which gradually leads to loss of life. Short term happiness

derived from them to the consumers and profits made by the companies do not outweigh the fact

that companies are causing serious health accidents among consumers by misleading them and

therefore advertising and marketing by them is unethical.

In Kantianism, there are a number of maxims, or principles, upon which people, Kant believes,

should act. Therefore it is an absolutist theory (as opposed to relativist). We cannot universalise a

practice of promoting a non-universalisable practice, and encouraging unhealthy eating habits is

not a universal practice. Promotion of the same means that one is treating people/consumers as

‘means’ and this subverts them as rational ends. On Kantian grounds this is unethical and should

not be practiced. Also all advertising that is not purely informational many a time it is an attempt to

distort the rational judgement of the buyer. This clearly contravenes the Kantian emphasis on a

rational will. Since humanity and human society depend on rational judgement a practice that is

aimed at damaging people’s rational judgement is not universalisable. Consumers are to be treated

as means and not as rational ends by the companies and marketing executives.

A Kantian approach would ask "Is it morally right for companies such as KFC, Pizza Hut (pioneers in

junk food), Red bull, Coca cola (beverages consisting high amounts of sugar and caffeine), Cadbury,

Rowntree (chocolate products high in fat and sugar) to advertise this unhealthy eating habits and

lifestyle? The answer is that food companies advertising their food as desirable enticing everyone

to consume it eventually leading consumers to health problems and fatal diseases is naturally

considered to be immoral on the part of the company and its executives who support the act. But

at the same time there is a possibility that fast food chain marketer or any other unhealthy food

product company executive may argue that they always mention the nutritional values on their

packaging and are thus morally not performing an unethical act in terms of misleading or lying to

consumers. If this were to be accepted by Governments or consumers then Kantian arguments

would not be that significant. Also, Kant proposes that an adult is educated and has capability to

make his own decisions i.e. autonomy while he chooses his food lifestyle. Since consumption

choices include one’s autonomy, consumers should have a right to all the types of food products

and determine for themselves what suits them.

Conclusion:

The issue of current food industry and Government’s role in promoting healthy lifestyles is quiet

complex. Obesity and heart problems among young people today because of their eating habits

needs to be addressed and limitations on the factors that promote this lifestyle has to be brought

into effect. I believe as population of a country grows health care costs grow as well and these

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costs with the present situation would never go down unless very strict action is taken and

effectiveness of this action is tested. In my opinion factors such as customer autonomy do prove as

a challenge when Government has tried addressing the issue of unhealthy eating habits in the past

but with voluntary efforts by major companies in food industry such as ‘The Organic Delivery

Company’ in UK which promotes and sells healthy food (completely low or without sugar, fat and

salt).

Ethical standards in advertising as set by Federal Trade Commission Act (FTC) emphasize specially

on truth-in-advertising laws when applied to children. FTC defines that statements and promotions

that are deceitful and likely to harm consumers are unfair and unethical on the part of the

company. Different countries have different perspectives on advertising of food products and it is

important to have a striking balance between consumer’s personal choices and independence and

regulations that could possibly affect consumer’s right to choose.

Bibliography and References:

Atkin C: Observation of parent-child interaction in supermarket decision-making. Journal of

Marketing 1978, 42:41-45.

BBC News Health Report for February 2012

Retrieved 10 April 2012

From http://www.bbc.co.uk/news/health-17041347

Evans, N.; Farkas, A.; Gilpin, E.; Berry, C.; and Pierce, J. P. (1995). "Influence of Tobacco Marketing

and Exposure to Smokers on Adolescent Susceptibility to Smoking." Journal of the National Cancer

Institute 87(20):1538545.

Federal Trade Commission (1998). Federal Trade Commission Report to Congress for 1997 Pursuant

to the Federal Cigarette Labeling and Advertising Act

Kennedy, N. (2008). “Stop In The Name Of Public Policy: Limiting “Junk Food” Advertisements During

Children’s Programming”. Pg. 506-510

Molteni R, Barnard RJ, Ying Z, et al. (2002). “A high-fat, refined sugar diet reduces hippocampal

brain-derived neurotrophic factor, neuronal plasticity, and learning”. Neuroscience. Pg. 803-14

Schuster, C. P., and Powell, C. P. (1987). "Comparison of Cigarette and Alcohol Controversies."

Journal of Advertising 16(2):263.

Stanford Encylopedia of Philosophy: Kant’s Moral Philosophy Retrieved 16th April 2012-04-19 From http://plato.stanford.edu/entries/kant-moral/