PRINCIPLES OF

MARKETING
(MODULE)

ROMEO B. NUQUI JASMINE I. REY

MARIA TERESA MUNJI ANTONINO MARILOU P. PASCUAL

Introduction

The goal of every company in investing in business is to earn profit, Companies produce, manufacture
goods or offer services not because they just want to, but because of the income they get from the
clients patronizing their goods. What every businessman or company should understand though is that,
there is not only profit that should be concerned with. Every company must observe business ethics and
be socially responsible. To understand what this chapter is about, terms are defined as follows:

1. Ethics. Refers to the moral principles and values that govern the action and decisions of an
individual or group
2. Laws. Society's standards and values that are enforceable in court
3. Culture. A set of values, ideas and attitudes tons came one shared among the members of a group

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4. Business Culture. Consists of effective rules of the game and the boundaries between competitive
and unethical behavior
5. Consumer Bill of Rights. Certifies the ethics of exchange between buyers and sellers "Caveat
emptor the buyer beware emphasizes the rights of consumers regarding a product such as choice,
safety and quality upon demand.
6. Ethics of Competition. Pertains to the collection of trade secrets such as the original contents or
recipe of the product
7. Code of Ethics. Sets the guidelines of the roles of conduct in a company or in a particular group
8. Whistle Blowers. Employees who report unethical or illegal actions to their employers
9. Moral Idealism. Pertains to individual rights such as personal opinion.
10. Social Responsibility. Refers to the idea that organizations are part of the larger society and are
accountable to the society for their actions
11. Green Marketing, pertains to a company's efforts to produce environmentally sensitive products
that are biodegradable, less toxic and eco-friendly

Ethics

The study concerned with moral Judgment is called ethics. It is the code of morals of a group of
people in an organization. It pertains to the principles of how people should behave in particular, say in
a certain group in a place, in a situation, etc. in business, ethics is defined as the behavior that a
company observes in dealing with its clienteles and the world. In marketing, ethics deals with the
company's behavior in aspects like advertising and promotion of its products. As mentioned in the
introduction, a company should not just be concerned with the profit its products earn, but also to how
the company deals with its environment Money-making may be the primary objective of a business,
which is of course normal, but it should look into how its behavior affects others as well.

For example, some companies, like health insurance have excluded potential customers, like the
elderly in their coverage, because the latter will not give as much profit they can get from the younger
ones.

Or a manufacturer of clothesline for example: Decades back, one cannot find plus sizes for
obese or people who are big in size.

Social Responsibility

A company that makes decisions and takes actions that work well for its customers, the society
and the world is socially responsible. Social responsibility is a company's commitment and obligation
toward the people and the world. For example, the tsunami that struck Japan in March of 2011 brought
great concerns all over the world. The long-time debate on nuclear power plants has again, been the
subject of news and commentaries after several of Japan's nuclear power plants threatened its people.
Rich and powerful countries like Japan and the US have nuclear plants which are used to supply them
electric power. These countries might have seen the advantages these power plants can give their
country and people, that they have chosen to go on with their operation despite the threats to the
people's safety and health. Another example is the tobacco industry that has continued to produce

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cigarettes despite the health risks at stake. Do you think the people behind the decision to pursue the
examples given were socially responsible? This is where social responsibility comes in. How can a
company be responsible and are there roles or policies that govern this issue?

A lot of companies have already started being responsible to the society, Products, like the ones
below have been produced to help the environment.

In the local setting, some companies have also shown how they can be socially responsible

1. Some department stores and supermarkets have adapted the use of biodegradable plastic bags,
others required the use of environment- friendly packaging on certain days.
2. Aside from the use of suggestion boxes, and comment or evaluation cards or forms that some
establishments ask their customers to fill out, some companies have created websites so they
can easily be reached for queries, comments and suggestions
3. Warnings such as "Smoking is dangerous to your health" for cigarette ads and "Drink in
moderation" for alcoholic drinks have been printed in. the package
4. Reminders are given by companies producing infant formulas that breastfeeding is still best for
babies from age 0 to 2.

Ethics in Advertising

An advertisement is for the public to see. Magazines, broadsheets, television, billboards and
other printed ads contain advertisements or commercials that promote products and persuade people
to buy. Whatever is said in the advertisement is expected to stimulate audience response. Nowadays,
advertising companies try hard to attract the attention of potential customers by coming up with eye-
catching lines, hiring celebrities as models, posting provocative pictures, etc. But the question is, are
these companies considering ethics in any way or are they just focused on the impact their ads will give
their sales? The statement, Positive or negative publicity is still publicly, hos then seemed to have been
adopted by them as well. Where does ethics come in then? Like socially responsible people, these
advertisers or companies must see to it that they deliver the message well, and have considered ethical
ways in promoting their product. The questions, "What to show" and "How to show and "What to say
and "How to say it" should be the advertisers' concern Advertising must present the truth. It should not
persuade people to think for from what the product can offer. The advertisers or the company should
keep in mind that although a lot of consumers believe the promise of the advertisement in the past
years, the public at present is intelligent enough to know the difference between what is true and what
is half true. For example, are whitening products that promise a whiter complexion in one week or a few
competing shampoos which vouch that falling hair will be stopped after 7 days. The ads might have
folded the truth, that the whitening product may lighten the complexion, but one week would be an
exaggeration. At the same time, the shampoo that promised less hair fall in 7 days might also be telling
the truth, but may also be misleading, making the public conclude that it will do wonders after 7 days.
What if the user of the product does not shampoo his or her hair dally? Is the advertisement implying
that the consumer uses the product every day in 7 days? A thorough analysis of the statement may
mean that the "7 days" quoted in the advertisement would be 7 times of using the shampoo. This is half
the truth. The principle truth in advertising must be considered at all times and advertisers should keep
in mind that successful companies do not lie in their advertisements

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 The KBP or Kapisanan ng mga Broadcaster sa Pilipinas (Association of Philippine Broadcasters),
in coordination with the Advertising Board (Adboard), regulates the ethical and legal execution of any
advertising material in whatever form before it is finally allowed for public exposure. The advertising
board which was established on May 3, 1974 is composed of ten (10) national organizations Involved in
advertising that are unified together to uphold the progress of Philippine Advertising through self-
regulation (adboard.com.ph)

The Need for an Advertising Code Advertisers

Advertisers must be aware that the viewing public is comprised of different ages. It is very
critical thot advertisements that show violence, sex, varied cultures different from ours), obscenity not
only in pictures but in language as well should be filtered. Care should be observed in showing
commercials that may Influence the minds of the public, especially of an Information that may be taken
seriously by the viewing consumers. Take the case of a known burger company that showed a family
eating the product. The father asked the child who did she get her features from, etc. The child pleased
the father by answering that her qualities were from him. The commercial showed a happy family,
typical of a Filipino. Then, the camera shifted from the faces of the characters to two pairs of hands
hidden under the table. It revealed then, that the child favored the father, because the latter was giving
her French fries: Maybe, the advertisers of the said commercial wanted to show how a Filipino family
loved to eat at the burger chain to bond. But they did not realize that what was given more focus is Its
negative impression of bribery at an early age.

Another example is a courier and delivery service that showed a girl being asked by a teacher to
spell a word that is a description of what the company does. The company might have overlooked the
impact or influence it gave the viewers, especially the children who could be able to watch it between
6AM to TOPM.

Advertisers and companies are free to promote their products in many ways. But they should
also take responsibility as to what, how and when to promote them. What people see on TV or read in
print may affect them to their disadvantage

The Regulatory Aspects of Advertising

Although there are some restrictions given by the government on some issues or products, ad agencies
are still able to advertise in a manner that intertwines the economic issues with advertising. In the
Philippines, advertisers are free as long as there are no complaints on the ad, it is deemed good. Below
are some promotion regulations observed in the US as discussed by John Lander and Catherine Cappozi
(e How.com, retrieved March 24, 2012).

1. Truth in Advertising. The company must ensure that what they advertise Is true and should be
backed up by proofs.

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 a: False Advertising. This is a situation when consumers are misled by the presentation of the ad
according to the quality, effect, and price of the product
b. Unfair Advertising. This is about promotions that make use of false testimonials
2. Free Claims. In advertising free products, the customer should be furnished with all information
regarding the terms and conditions of the claimed merchandise to avoid deception
3. Bait Advertising. This is promoting a product that does not really exist, then offering o different
product, which is the product actually being sold by the company.
4. Bargain Promotion. The price of the product being bargained must be based on the real price
before the sale.

CASELET

The Case of Brandy A

"Nakatikim ka na ba ng kinse anyos?" read a billboard that earned millions of criticisms from
consumers. The ad was posted a few years back in the major areas of Metro Manila, the populated
areas in particular People from different sectors government, church, women's organizations like the
Gabriela and others criticized the ad, because of the double meaning the state constated the
advertisement was about an alcoholic drink, said to have been stored for 15 solid years. The emphasis
was on the years spent to age the alcoholic drink because of the idea that the longer the wine or
alcoholic drink is stored the better it tastes.

Questions.

1. After reading the case, analyze the text used in the ad and how it was perceived by the general public.

a. Do you find the ad ethical or unethical?

b. If unethical, what makes the whole ad unethical to the public What about to its target market?

2. if you were to correct the ad, how would you rephrase it to make it more acceptable to public?

3. if you feel there is nothing wrong with the advertisement, how would you convince the public?

End of Chapter 4

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