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DISSERTATION REPORT
The Need for Ethical Advertising: Consumer Response to Advertising Practices




Dissertation submitted in partial fulfillment
of the requirements for the degree of


MASTER OF BUSINESS ADMINISTRATION
By
ELINA PASHA
MBA3Y02103-147


Faculty of Management Sciences
Lahore Business School
Lahore, Pakistan.
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DISSERTATION
The Need for Ethical Advertising: Consumer Response to Advertising Practices

Project report submitted in partial fulfillment
of the requirements for the degree of

MASTER OF BUSINESS ADMINISTRATION
By
ELINA PASHA
MBA3Y02103-147


The Dissertation of Miss Elina Pasha is approved by:


_____________________________________
Prof. Waqar-ul-Qayum
Project Advisor, LBS



_____________________________________
Prof.
Co-Assessor, LBS
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Table of Contents
Abstract ......................................................................................................................................................... 4
Executive Summary ....................................................................................................................................... 4
Objectives of the Study ................................................................................................................................. 5
Introduction .................................................................................................................................................. 5
Literature Review .......................................................................................................................................... 6
Variables ..................................................................................................................................................... 11
Ethical Marketing .................................................................................................................................... 11
Unethical Advertising .............................................................................................................................. 11
Consumer Response to Advertisements ................................................................................................. 12
Methodology ............................................................................................................................................... 12
Primary Source ........................................................................................................................................ 12
Secondary Source .................................................................................................................................... 12
Limitations of the Study .............................................................................................................................. 13
Findings ....................................................................................................................................................... 13
Deception in Advertising ......................................................................................................................... 14
The Use of Stereotypes in Advertising .................................................................................................... 14
Offensiveness in Advertising ................................................................................................................... 15
Conclusion and recommendations ............................................................................................................. 17
Bibliography ................................................................................................................................................ 19





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Abstract
Over the years, more and more people have become affected by the advertising practices and
therefore competition has arisen. Advertisement usually contain emotional or psychological
attractions to gain the attention and interest of the consumers, and this way global marketers
usually create an interest in those consumers who generally do not have a need for those
products.
Executive Summary
This research paper was written to understand the perceptions of consumers towards
advertising practices and how they respond to the lack of morals or ethics being depicted in the
advertisements. In order to understand this, first of all, the term advertising needs to be
understood. This research paper first discusses advertising and then covers ethical advertising.
There are more than one dimensions of how ethical advertising can be perceived; one, the
content used in advertising and secondly the product or service being advertised. People often
do not appreciate advertisements of cigarettes or alcohol and usually have a negative response
towards them. On the other hand, the use of gender discrimination or highlighting sexual
appeal to promote a product or service is often disapproved by consumers. Again the mindset
of each individual may differ, but the average consumer does not appreciate these elements to
be incorporated in order to advertise some product.
This thesis basically aims to highlight the kinds of unethical advertising practices present in the
market and how consumers respond to these practices. Furthermore, the concept of this thesis
also opens a platform for another prospective area of research as to how important it is to
understand the perspective, traditions, culture and mindset of the target market.
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Objectives of the Study
This research paper is written to have a better understanding of the ethics of advertising and to
realize the following objectives.
To pin point the factors and elements that trigger a consumers response to advertising
To find out what level of ethics and morals drive a consumer
To determine and highlight the effect that advertising has on the behavior of the
consumers

Introduction
Advertising (Dr. Curtis, 2013)
In the business world, Advertising is a tool used in marketing communication to persuade,
encourage and manipulate the consumers or audience to want to purchase and eventually
purchase a product or service. Advertising is done through all means of media available such as
television, radio, print media, internet, events and campaigns etc.
Advertising is a content of mass media that is meant to persuade listeners, readers and viewers
to take some positive action towards products and services. The concept behind advertising is
to motivate the consumer perception a certain way with respect to a service or product.
Advertising is the paid, one-way impersonal marketing strategy that uses persuasive
information via mass communication to promote products or services.
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Ethical advertising is something that is within the moral boundaries of the intended consumers.
Legal boundaries and ethical boundaries are two different things and therefore there is a need
for the advertising practitioners to ensure that they keep a few things in mind when coming up
with campaigns. Honesty, social responsibility, truthful testimonials and presentations, claimed
results, children and young people and many other aspects need to be considered when
advertising products of services.
Unethical advertising is a very broad term, but following are a few elements that cover the
basic concept of unethical marketing. (Advertising Standards Bureau)
Using discrimination in advertising
Representing gender in a degrading manner
Using of foul language
Contradicting basic safety and health measures
Literature Review
(Lowrey, Shrum, & McCarty, 2005) State that advertising is a very captivating science and it is
perhaps the most important and interesting element used to attain the customers attention.
However, it isnt an exact science and therefore there is both negative and positive feedback by
the consumers. Viewers usually set up recording devices to record their shows, so they can
avoid interruptions from advertisements, but on the other hand Super Bowl is an event where
advertisements are planned and showed at high costs and are unavoidable.
According to (Framing Ethical Decisions in UK Advertising Practice, 2013) in the current era,
advertising is an important tool in the game of persuasion. It affects the choice, lifestyle,
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tradition and culture by ethical, social and economical game play. Creating needs, merging
education with advertisement, selecting and targeting oblivious customers and playing with
behavior patterns are some of the ways how advertisement practices work. In the recent years,
the effect of advertising and the number of people susceptible to it have increased, resulting in
increased competition. Advertisers now often use controversial methods or moot and
debatable tactics to make their word stand out. The Advertising Standards Authority or ASA
have recently been getting more and more complaints due to these advertising practices. The
questions and objections raised on the practice of advertisers are therefore very important to
be studied and explored. The understanding of the practitioner about the controversies of
advertising practices and campaigns and ethical decision making was the focus of this paper, to
bring light to ethical behavior in marketing.
Advertising holds the power to determine the attitude of people towards a product or a
company. The consumer behavior reflects in accordance with the advertising practices.
Businesses nowadays need to present their product in such a way that the customer is not only
satisfied but is also impressed enough to have a positive response towards it. The main
impulses that advertisers have to target in their consumers are the emotional, psychological
and behavioral. (Jakstiene, Susniene, & Narbutas, 2008)
The most common argument relating to advertising practices is the deceptive nature of
advertisements. If the customer is not satisfied by their purchase then that means there wont
be any further purchases by that customer, resulting in a loss for the customer. The product or
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service needs to live up to the expectations created by the advertisements or else the customer
dissatisfaction will be detrimental to both the buyer as well as the advertiser. (Arens, 2004)
The term ethical advertising refers to the act and perception that an advertiser believes to be
the right element in a particular situation. On the other hand social responsibility is something
that is done in the best interest of the general public. Put them together and it becomes a
moral obligation for the advertisers to stay well within the limits of expectations and morals of
their customers, even if there are no legal ramifications. According to (Arens, 2004) there are
many evidences that give considerable insight into how consumer reacts to marketing and
advertising communication strategies.
(Waller, Fam, & Erdogan, 2002) conducted a survey to look into how much religion effects the
perception of consumers towards advertising practices. In this study, the four religious groups
selected were Islam, Buddhism, Christianity and Hinduism, and these groups were spread
across China, Malaysia, New Zealand, Turkey, Taiwan and Britain. (Waller, Attitudes towards
offensive advertising, 1999) further evaluated this study by adding Western images in order to
observe any negative response from the Asian community. The results showed that advertising
the socially sensitive and contentious products often have a negative impact on the consumers
because of their cultural and traditional beliefs and this can prove to be detrimental for the
companys reputation. International marketers need to understand the norms and values of
their target market and advertise their products globally accordingly in order to maintain the
trust of the consumers in their brand.
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The major reason behind the controversies and debates arising on the ethical implications of
the marketing and advertising is because of the public opinion that the perception of people
towards products and towards themselves is highly influenced by the advertising practices.
(Foley, 1999)
In order for the advertisers to get through to the consumers, advertising practices need to be
effective and most importantly legit. The major reason why advertisers get away from being
deceptive and puffing up their campaigns is, because it is well within the legal bounds. Ethics
begin where the law ends is a statement by Ivan Preston that complements this theory quite
well.
According to (Tenbrunsel & Smith-Crowe, 2008) the decision making or how practitioners look
into their decisions is directly linked with the moral grounds of each decision maker.
(Tenbrunsel & Messick, 2004) Also say that when making an ethical decision, the moral is
automatically triggered, as compared to other legal or business decision making where moral
awareness is neither awakened nor necessary, resulting in practical and amoral decisions.
According to (Jakstiene, Susniene, & Narbutas, 2008)the customer and the product/service
itself lie in the middle of the advertising. The advertising practices revolve around the three
impulses of a consumer and the main aim is to make the consumer want to buy the product
and most importantly, the customer making the actual purchase.
Stereotypes, cultural values and norms are all influenced by marketing and advertisements and
global marketing strategies and advertising practices toy with the mindset of consumers at
large. (Borgerson & Schroeder, 2002)
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(Friestad & Wright, 1994) explain that a persons response to attempts of persuasion via ad
campaigns is directly proportional to the amount of knowledge they have about the attempts
of persuasion hidden in those advertisements. If they know about it, they will be less likely to
fall prey to them. There are three aspects that both advertisers and consumers have access to.
How the consumers are less susceptible to attempts of persuasion by advertising practitioners:
They are knowledgeable about the product
They are aware of the persuasion tactics
They have knowledge about the manufacturer or advertiser
(Drumwright, 2005) clearly define in their research the type of approaches sometimes
advertising practitioners have to try in order to make their clients understand the importance
of maintaining a certain ethical ground in their advertisements. According to them, following
are a few steps that are usually taken to ensure this.
Analyze and consider the situation with a long term perspective
Educate the client about their responsibility towards the society
Always provide alternatives or more than one solution to the client to choose from
Always use persuasive and authentic arguments to win the client over
As per an online poll conducted by (Eskimon, 2009), the following response is seen. The poll
was basically to judge the categories that people considered unethical and would not advertise
for these services or products on ethical grounds.
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Variables
The variables studied in this research paper are as follows:
Ethical Marketing
Ethical marketing is basically a term that defines the marketing practices that follow the law
as well the norms of the society. Ethical marketing practices cater to the cultural, religious
beliefs of the consumers and works around them to provide them good advertising.
Unethical Advertising
Unethical advertising can be classified into three factors; deceptive advertising, advertising
of alcohol or cigarettes and lastly using sexual appeal in advertising. The moral values begin,
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where the legal implications end. Although certain practices may be legal, but they are
unethical and are therefore create a negative image in the minds of the consumers.
Consumer Response to Advertisements
Consumer response refers to the way a consumer responds to the advertising practices.
Sometimes consumers are very impressed by advertising and make the purchase, while at
times if the advertisement has left a negative impression, not only will they not make a
purchase, but by word of mouth they can share their reservations.
Methodology
The thesis is based on qualitative research and therefore the methodology used to collect the
data is basically work done by other people. Both the primary and secondary sources of
information and data are explained below.
Primary Source
This research paper was written as a qualitative paper and therefore most of the research
conducted was through existing research papers, articles and websites. Some of the major
sources that we used to gather our information were Scribd, Jstor, Google Scholar, magazines,
newspaper articles etc.
Secondary Source
In order to understand the response first hand and to give this research paper an authentic
flair, two types of interviews were conducted. The first category of interviews were conducted
with two members of two different advertising agencies in order to gain insight into what their
limitations were when coming up with ideas for their clients. The second set of interviews
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(question hour session) was conducted with two students of marketing, in order to see their
perspective of how ethics and advertising is linked.
Limitations of the Study
There were a few limitations of conducting this study. The first limitation to consider is that this
thesis is based on researches conducted by other people. None of the information mentioned
in the thesis has been experienced firsthand. Working with researches of other people, the
most prominent limitation is that the scope is limited to the information already available.
The second limitation is that sometimes the data available is not up to date. These are the
factors that were encountered while writing this paper.
Findings
The comparison between the interviews of people practicing it and those studying ethics and
advertising were poles apart. Where some theory or point may look good on paper the practical
implications differ. For example, the students were keen on adopting an out of the box
approach, incorporate bold ideas into advertisements and public media but the members of
agencies had a different approach. According to them the client has a very limited scope to his
thinking and has a predetermined idea in his mind, and there is very little flexibility for them to
work with. These responses further reinforce the theoretical data collected where most of the
researches show that the consumer response is rigid and therefore careful marketing needs to
be done to stay well within the acceptable ethical limits.
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Deception in Advertising
Well, it is true the most-short term arguments about the advertising is nothing but it is some
sort of deceptive. The professor Ivan Preston spells the prerequisite of a market place lies in the
willingness of buyers and sellers to undergo the commercial transactions. It is overt and covert
fact anything mistrust and detracting from satisfaction of transaction may arise losses of
activity and as such both the parties suffer. It is necessary the product may in line with the
advertisement, else it will lead to dissatisfaction, and as such the result in the long term both
the advertiser and the buyer had to bear losses. If you like your advertisement be effective, and
the buyer must have some confidence in it, your product must in consonance with the
advertisement. Any sort of deception to this effect may lead to evoke the risk of being self-
defeating.

It is invincible fact that the advertising itself by its very nature does not give complete
information in their advertisement. It has always been found in the favor of advertiser and the
brand. They would rather feel proud of their products and feel less ashamed if they puffed their
product out up to a certain extent. This comes under the exaggeration purview if the
advertisers cross the line between simple giving their point of view and visualizing false
expectation. This is the point from where people start objecting it and the acceptability of
product may start declining.
The Use of Stereotypes in Advertising
It has always been taken seriously and criticized the advertising effect with respect to
surrounding the nature, the environment, and other; irrespective of the fact you are fascinated
it or not. The marketing and advertising is the field which is supposed to be carried out by a
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professional student of communication process and consumer behavior. These students are
taught how to take care of customers. But unfortunately they are least concerned and touchy
with the people they are trying to approach them.
Offensiveness in Advertising
Offensiveness in advertising has never been termed as a good attempt. Rudeness is another
short-term style disagreement that also spells to externalities. It is believed, people just dont
like their children bared to messages that they deem dishonest, unpleasant, or strictly adult-
oriented. Some customers get so offended by both marketing and TV programming that they
shun sponsors products. Of course, they also have the choice to just change the channel. Both
of these are effectual strategies for consumers because, ultimately, the marketplace has
proscription power.

Principled advertising is the way of doing what the advertiser and the advertisers peers believe
is ethically right in a given circumstances. Social responsibility is the other way of doing what
society views seems best for the welfare of people in broad-spectrum or for a specific
community of people. Together, ethics and social responsibility can be seen as the moral
responsibility of advertisers not to infringe our basic economic assumptions, even when there is
no legal compulsion.

The main aim of advertising is to create positive culture and attitude towards the ad and the
brand until customer purchases that product and through this positive approach create
touching response in the mind of consumer. That is the basic aim of advertising to give
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confidence people to buy things and creates responsiveness. As per traditional attitude theory
of consumer behavior is predicted from consumer attitude when consumers buy the brand,
which they like the most. An attitude may be defined as acquire behavioral disposition.
However some expert explained that behavior is produced by touching response, which is
created by three factors:
Pleasure: the state of mind in which a person feel good, glad, or blissful in a particular
situation and surrounding.
Arousal: the state mind or feeling that is varying from person to person in different
situations and surroundings like excitement, active, bored, or sleepy mood.
Dominance: this spells, person feelings, which are in manage of or free to act in a
particular situation.


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As per this diagram, it is clear that there are three levels of offensiveness that are perceived in
response to unethical advertising. In the Pakistani community, religious factor is the strongest,
followed by gender differences.
Conclusion and Recommendations
In the end, it can be concluded that in the current era, advertising plays an important role in the
day to day decision making of consumers. Therefore the advertising practitioners need to be
extra careful when they come up with marketing strategies, so as to satisfy their consumers as
well as potential consumer base. Advertisers need to be extra careful because at times, the
norms and traditions of the consumers are very sacred to them and if anything triggers them
negative or does not present itself according to their satisfaction, then the practice goes to
waste; it may even have a negative impact.
The concept of ethical and unethical advertising has clearly been explained and defined in this
paper. It can be concluded that there are more than one ways of rendering unethical
advertising practices and that there are mixed responses of consumers to these practices.
For motivating consumers to respond favorably to advertising are identified as brand image,
the product quality, advertising messages. However the frequency of adverts may have also
been seen as determining factors which create the awareness and draws the attention of
consumers of the existence of a product. The frequency of adverts may also help creating
customers some likeness for the product. The adverts that mostly attract respondent were the
innovative adverts most of the respondent sought more information on the product before
making decision to buy.
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Unethical practices are not limited to legal boundaries. Some things may be legal, but are not
ethically acceptable. For example, religious practices, or some cultural aspect that may be
legally correct but not acceptable by the norms and values of the consumers. An example that
comes to mind is the Danish food and items, that are otherwise legal, but some Muslim
countries have boycotted these items, because they are owned by Jews. These are some of the
aspects that are uncertain and need to be catered to.
The most important element that came to light while the composing of this paper was that
advertising practices and catering to the needs of the consumers is not an exact science.








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