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Saleem, Khan and Nazir 1

Ethical Implications of Target Marketing: A Review

Asfand Saleem (2013-02-0062)


Jannat Khan (2013-02-0042)
Ayesha Nazir (2013-02-0160)

ECON 449: Philosophy and Economics


Dr. Khalid Mir
May 04, 2012

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Table of Contents

Introduction

Literature Review

Main Thesis

3.1

Targeting the Young and the Children

3.2

Targeting the Ethnic Minorities

10

Targeting the Elderly

13

3.3
4

Diverging Opinions

16

Conclusion

18

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Abstract
This paper deals with the ethical implications that arise from the use of target marketing.
Target marketing is used to cater to the needs of the specific market segments. But in doing so,
the marketers ignore the ethical dilemmas that surface to the foreground. This paper explores
these ethical dilemmas in detail. The paper reveals the issues at hand from the analysis of three
examples of market segments in detail.

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1. Introduction
As the world continues to rapidly evolve into a global village, the interactions between
consumers and producers are becoming increasingly complex. With the development of the
information technology industry and increased levels of competition in the market, new
techniques of reaching out to the intended consumers are being looked into by firms. Large
amounts of resources, human and monetary, are being spent annually on marketing strategies that
aim to maximize profits.
Target marketing is a technique whereby firms aim to identify and select a smaller group
from within a larger population that they wish to persuade to purchase their goods and services
(Aaker and Grier 128). This intended audience is selected on the basis of certain properties that
must be similar across the individuals in these groups (129). Thus target marketing makes use of
the concept of segmenting society along qualities possessed by these groups which will enable
the firm to reach out to them in such a fashion that will be effective in garnering the attention and
clientele of these individuals (128).
The modern marketing concept can be briefly described as "The heart of modern strategic
marketing can be described as STP marketing--namely, segmenting, targeting, and positioning",
we can see that target marketing has been a key player in shaping the current marketing situation
in recent times (Rittenburg et al. 49). Although target marketing is essential for firms in locating
their potential consumers, for efficient allocation of resources and for overall maximization of
economic profitability, it brings with it a set of ethical limitations that must be looked at carefully
(50). Recently the scope of target marketing has been under a lot of speculation and has been
tried to be re-examined from various angles because of a violation of these set of ethics that have

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risen out of the improper planning and implementation of target marketing techniques in
practice.
Target marketing has been criticized in a large number of cases. In some it has been
because segmentation has been along discriminatory lines while in others because it has been
used on vulnerable and disadvantaged groups. Debates have gone on even to suggest that target
marketing should simply not be allowed for certain kinds of goods for example goods that are
harmful to the consumer in some way (Smith and Martin 3).
Even as far back as in the time of Aristotle, the importance of ethics and virtuous decision
making has been emphasized (Oliver and Murphy 1). This would serve not only in the best
interests of the consumers who may be harmed by unethical marketing strategies but it is also
important for the companies themselves. With increased social rights and legal awareness and a
more outspoken media than ever before, companies should be extra cautious in keeping within
the ethical limitations of target marketing to prevent defaming their own name and incurring
lawsuits (Smith and Martin 1).
As of recently, one of the aspects of target marketing that has attracted a great amount of
negative attention in the public eye is that of consumer vulnerability. The court system of the
United States defines vulnerable consumers as a group of people who, because of different
idiosyncrasies, are most at risk to the potential harmful results that are associated with using a
specific product (Cui and Chodhury 2). What is important to note is that the problem does not lie
with the product itself which may in fact be beneficial, but with the nature of the product's
marketing which may be unethical. In addition to physical harm, consumers may also suffer from
economic harm like losing out to deceptive pricing, and psychological damage from insolent
treatment which can hurt their sentiments (6). Similarly, many products can be harmful to

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consumers due to their misuse or simply because of the prevailing characteristics of that
particular group on whom the product is targeted (2). An example of such an instance is the
targeting of various alcoholic beverages at poor inner-city people, which is particularly
problematic, as these people already suffer from various alcohol-related health and social
problems as compared to other consumers in the population (2). Hence, ethical evaluations that
are related to the marketing of a particular product need to be looked at in great detail as there
are a lot of factors that are interacting with each other (2).
Even though the advent of market segmentation and target marketing puts great emphasis
on fulfilling and catering to the needs and wants of consumers, this promise, in actuality, seems
to have gotten lost or misplaced, resulting in outcomes that are less than desirable by the society
(Cui and Chodhury 1). A lack of respect for sentiments of people, complete focus on profit
maximization and ignorance of the important of ethics in marketing has led to such problems that
inevitably result in both economic and social costs (1).

2. Literature Review
While researching this topic, we came across various papers by well-reputable authors.
Kramer and Schor are the two main authors that have talked about the negative impacts that
target marketing has on youth. Kramer in his paper talks about how corporations have hired
psychologists in order to manipulate the youth into buying products that may even be harmful for
them (291). He cites various studies to support his claims. He goes on to explain how the
American Psychological Association (APA) needs to regulate their code of ethics more strictly ad
maybe even revise it. Schor too, has written profusely about the adverse effects of advertising

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and consumerism. for the purpose of this paper we have looked mainly at one of her papers
which she published for Yale and her book Born to buy.
Most of the research regarding ethnicity and marketing has been taken from Pires and
Stantons book. In their book they talk about accepting cultural and ethnic diversity in the world
and its importance. They provide a systematic exposition of the ways in which ompanies can
develop an effective marketing strategy that can be used to target ethnic groups in a way that is
not harmful to them and does not disrespect them or hurt their sentiments in any way. They
therefore, not only recognize the importance of advertising to ethnic groups but the challenges
that come with this task.
Similarly Minkler examines the stereotype that the business sector has perpetuated of the
elderly and how they use this to exploit the groups weaknesses. She goes on to raise questions
about the lack of ethics in the way the old are targeted and asks for correction of this issue. In
addition to this, Lee et al have argued how targeting the elderly is unethical simply because this
act isolates them and excludes them from the general population, which is very harmful because
a lot of elderly already feel alienated from the general population.

3. Main Thesis
In order to better understand how the lack of understanding of ethics creates such
problems by harming consumers who are targeted specifically, both physically and mentally, we
will be looking at three segments of the consumer market that are very popularly targeted. These
three consumer segments that we are putting under the microscope are ethnic groups, children
and youth and the elderly.

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3.1 Targeting the young and the Children
Children between the ages of zero and twelve are a segment of the consumer market with
rapidly growing purchasing power. Because of this unprecedented market power, the market that
they represent has become one of the most dynamic and fastest-growing areas of advertising
(Kramer 294). Innocent children become victims of marketing-related diseases (293) and
advertising agencies are engaging in a hostile takeover of childhood (Schor 29). Some of the
advertising techniques that are used to target this particular market are deemed unethical by
many, because of the many negative effects that they may intentionally or unintentionally have
on children and the youth. All of these will be looked at in this section.
One of the major ways of reaching out to consumers is through the internet. It is
impossible to surf the internet without being bombarded by an array of online advertisements,
ones that you wish to see and ones that you not (Schor 32).The internet thus has become a vastly
commercialized medium which includes very few non commercial sites for children (32). This
has led to an eclectic variety of problematic practices, which violate industry guidelines for
advertising to children (32). Children are often exposed to content that is not age-appropriate for
them on many web sites. Some examples of such situations include children coming across
advertisements for products that should be aimed for more mature audiences such as those for
alcoholic beverages, condoms, cigarettes etc (Cui and Choudhury 2).
Advertising and marketing to children directly is also considered unethical because critics
believe that very young children from the ages of two to eight do not have the adult
understanding and reasoning that would allow them to adequately understand and resist the
messages delivered in advertisements (Kramer 297). Advertisements are known for
misrepresenting facts and young children cannot distinguish the lies from the truths (Schor 34).

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Also, disclaimers and explanations such as assembly necessary or batteries required, that are
meant as warnings and to evade unrealistic expectations have been seen to be useless with young
children (Comstock 109). Children are vulnerable and therefore easy targets for profit-hungry
companies wanting to maximize their profits (Comstock 109). To achieve success, many such
companies hire professionals and experts who have backgrounds in anthropology, sociology and
psychology to come up with marketing strategies, which may often be unethical, that are then
applied to manipulate childrens tastes and choices (Kramer 293).
Another problem with such proliferous marketing is that it creates needs that do not exist.
Thus, the children of today have become very brand conscious and materialistic (Kramer 294).
The young generation has espoused materialistic values because of the general material culture
created through advertising that hassled children to define themselves through material
possessions, as opposed to ethical purpose and community (294). For this very reason, a lot of
research has been done on the topic. Titles such as Age Difference in Product Categorization
(John & Sujan, 1990), All I Want for Christmas: An Analysis of Childrens Brand Requests to
Santa Claus (Otnes, Kim, & Kim, 1994), and Childrens Emergent Preferences for Soft Drinks:
Stimulus-Equivalence and Transfer (Smeets & Leiden, 2003) give an idea of the heightened
consumerism of youngsters and children.

This overindulgence in consumerism has caused a lot of damage to kids as findings show
that children are worse off today, both physically and emotionally, than they were 10 or 20 years
ago. The 1997 Child Development Supplement discovered that there is a direct relationship
between consumerism and mental states such as anxiousness, fearfulness, unhappiness, sadness,
depression, and being withdrawn (Kramer 294). A research, carried out in Boston showed that

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high levels of consumer involvement reduce childrens self-esteem in the areas of peer and
family relationships (Schor 173) and that higher levels of consumer involvement result in
worse relationships with parents (170) which results in greater depression and anxiety. The
study also established that being depressed or anxious or having low self-esteem does not cause
higher levels of consumer involvement (168). The studies reveal that consumerism results in all
these problems and not vice versa.
Physical effects of harmful advertising are also irrefutable. Childhood obesity has
reached ground breaking levels in the last ten years and there has been a subsequent increase in
medical diseases such as hypertension and type II diabetes in kids. Critics believe that food
marketing is to be blamed for the recent shift to unhealthy diets dominated by added sugar, fat
and salt. (Kramer 293) Evidence for this is the billions of dollars that are spent on food
advertising and marketing every year (Schor 29). Estimates show that the food related
corporations spend thirty-three billion dollars every year in direct advertising and increasingly
those dollars are targeted to children (Nestle 22). Seventy percent of expenditures are for
convenience foods, candy and snacks, alcoholic beverages, soft drinks and desserts. Fruits,
vegetables, grains and beans comprise only 2.2%. (22). On the other hand, alcohol and tobacco
along with other harmful products continue to be extensively advertised to children (Schor 35).
This is problematic not only because this increases the use of these harmful products by children
but also in that the way these products are advertised promotes immoral, reckless, even
dangerous behavior (37).

3.2 Targeting the Ethnic Minorities

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As the world rapidly continues to converge towards what seems to be close to a global
village, another aspect used in target marketing techniques has risen to the forefront. Market
segmentation on the basis of ethnicity has often been used as a means to optimize profits and
market shares. This has however brought with it much criticism for a variety of reasons.
As Pires and Stanton have explained in their book, one unethical dimension of this type
of market segmentation has to do with the vulnerability of these ethnic factions (220). In todays
multicultural world, people belonging from the same ethnic sub group tend to identify with one
another and share a common sense of trust with one another (225). Where these subgroups are
found in a minority, it is but natural for them to rely on feedback and suggestions from other
members of their community regarding the market choices that these individuals make (225).
Ethnic minorities may often face a language barrier problem as well which limits their
knowledge of the market and often can be easily manipulated by what is presented to them by
marketing agencies thus they can be classified under disadvantaged groups in a society as they
are more likely to fall prey to unethical commercial practices (225). Target marketing can be seen
as a way of exploiting the vulnerability of these ethnic minority groups by taking advantage of
their lack of knowledge (Rittenburg et al. 49). Due to this asymmetric information, companies
may often be tempted to cross the ethical boundaries necessary while marketing their products.
Not only is this exploitation wrong in principle alone, simply because these ethnic
minority groups are naturally at a disadvantage, but this can even lead to harmful products being
marketed to these ethnic minority groups. Often while selecting these ethnic groups, firms tend
to overlook the requirements that are highly important and specific to these people and thus may
end up selling products that are in fact detrimental to these consumers. For example certain kinds

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of addictive products may be more addictive depending upon the genetics of the consumer
(Benowitz et al. 49).
Target marketing that focuses on the ethnicity of a group can also often cross over into
the boundaries of racism. This is another prominent reason why segmentation techniques have
often been criticized. Advertisements that make use of racial stereotypes can be seen as being
highly offensive and many might even consider them to be misrepresentations of the actual
community it is meant to attract in the first place. The problem with stereotyped representations
of these ethnicities in the media lies also in the reason that, even within one ethnic group, many
other smaller sub groups may exist which may have varying and at times even opposing outlooks
towards a subject. Hence a formulaic depiction within a marketing strategy that may appeal to
one sub group may be highly offensive to another (Pires and Stanton 235-236). This
methodology fits well within the mold of the fundamental principles of economics which make
use of assumptions that are common to most members within a group but this approach is not
always well suited to such situations.
An example of a case that took place where target marketing led to an unfavorable
outcome in recent years was in 1989, when R J. Reynolds planned to market a menthol cigarette
specifically marketed towards Philadelphias African American population. Before the product
could even be officially launched, the idea collapsed due to an outraged public that demanded
that it be withdrawn immediately. The marketing campaign for the cigarettes was centered on
popular beliefs regarding African American culture and what was perceived to be appealing to
their community. This strategy was seen as being derogatory towards their community as it made
use of a very typecast representation based on racial depictions. Also, The World Health
Organization (WHO) released data that reflected a higher degree of smoking related health

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problems in this demographic, thus categorizing the cigarettes as what are now known as,
potentially harmful products (PHPs) for this population(Elise T. Sautter, Nancy A. Oretskin
1011). This case perfectly illustrates how disregard shown towards the values and needs of an
ethnic community, whether it is unintentional and purely by chance, has been a proponent in the
argument against the use of target marketing and its ethical limitations.
Even if the information gathered by marketers in order to develop an advertising
campaign is extremely thorough and precise, it is extremely difficult to gauge how the intended
audience will respond. Also, while devising a targeted marketing plan another obstacle that can
often later create problems is that of identifying and defining the boundaries of an ethnic group.
The line separating the ethnic group from the sample population may very often be thin and
blurry (Guilherme D. Pires, P. John Stanton, 229). Thus targeted marketing for ethnic groups
remains a very tricky turf as there will always be some degree of uncertainty regarding the data
collected and how the intended consumers may respond to these strategies.

3.3 Targeting the Elderly


The ageing market is a lucrative segment of society from the perspective of marketers
(Minkler 17). The industry catering to this segment has developed from serving a small
consumer base to a multi billion industry in the United States alone (18). Elderly consumers are
highly vulnerable and are very receptive to marketing influences (Lee et al. 215). The growth and
exploitability of the elderly consumer segment has led the marketers to resort to manipulation
through the use of fear appeals, fraudulent schemes and creation of newer wants which were not
present earlier (Minkler 21). The prevalence of such practice calls into question the ethics of
doing so.

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Households of elderly consumers spend twice as much on prescription drugs and medical
supplies and thrice the amount on health insurance as compared to young households (Benet et
al. 52). Hence, it makes sense for the health insurance companies to target elderly consumers.
However, the way in which these elderly consumers are targeted is chiefly through fear appeals
(46). The advertisements targeted at this ageing segment contain frightening messages such as:
Medicare won't pay all costs todayand you could end up with deductibles, co payments
totaling thousands of dollars" (45). Such messages bring to surface the issue of ethics.
Threat-based ads openly use the might of dread to try to maneuver behavior of the elderly
(Hastings et al. 932). It has been argued that such kind of marketing reduces free choice and
compromises their ability to reach a rational conclusion (972). It has also been suggested that
these people are exposed to upsetting images and future possibilities unwillingly thus making it
unethical to do so (972). Studies have shown that such fear appeals can evoke maladaptive
responses (974). They can cause an increase in anxiety, and in turn result in psychological
responses which are meant to help cope up with the threat and not the actual risk at hand (974).
They also may lead the elderly to process information in a flawed manner and hence causing
them to draw biased conclusions. (974). Deontological theory also supports the claim of such
marketing appeals being unethical on the basis that it is morally wrong to instill anxiety and
distress, whatever the societal consequences may be (972).
Studies have shown that more and more of the ageing population is living alone in the
modern industrialized societies and this has led to a serious problem of social disconnection for
the elderly because of the inimical effect it can have on wellbeing and happiness (Findlay 647).
The need for social connection and general vulnerability has caused the fraudulent marketers to
target the elderly population (Lee et al. 208). It has been estimated that as much as eighty percent

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of the fraudulent telemarketing firms have directed their efforts at marginalizing the elderly
(208). Social activity and integration theorists have argued that the elderly are more susceptible
to fraudulent schemes and marketing efforts because of their openness towards such schemes
(209). This has been primarily so because the elderly feel less linked to friends and family and in
the absence of support systems, they are more likely to respond more to the marketers who give
careful consideration to them (209). Theorists have also argued that this social detachment has
been brought about as a cause of lost roles, which have brought on a critical interruption in an
individual's relationship to society (209). Further reasons for the vulnerability of elderly
consumer particularly in relation to fraudulent schemes include lower education as compared to
the general population and an increased concern for getting value for money and exceptional
bargains as the resources available to this market segment are limited (Zaltman et al. 247). The
question of ethics in this respect becomes increasingly important as an already disadvantaged
group of the society is being led to a greater disadvantage (Lee et al. 210). The elderly are
already socially isolated, and such practices would ensure that this distance is solidified and
remains unbridgeable (210). The elderly would get more and more skeptical of the people
around, and this would cause them to keep everyone at arms length (210).
With the development of the elderly consumer as an important market segment,
marketers have shifted their focus to fulfilling the needs and wants which cater specifically to the
elderly (Minkler 20). It has been argued that targeting the elderly has been for the better, as they
now have products and services that are specifically designed for them (20). However, the
picture on the other side of the coin is not as bright. There is a thin line between the creation of
targeted goods and services that the elderly need or want and creating of goods and worries that
were non-existent beforehand (20). Magazines designed to enhance the image of women in

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popular culture have included the advertisements of products intended at instilling in women a
perceived need to look younger than their actual age such as anti-ageing supplements (20).
Strong ethical concerns emerge out of such a situation and one sided drive to modify, improve,
annul, retard or in some way manipulate the living course of action of biological process of aging
leads to the impoverishment of meaning in life instead of facing the natural progression (21).
Marketers, in their incessant pursuit of ever greater profit sometimes reinforce age
separatist approaches to profit off of. An example of the case in point is that of resort style life
care communities in the US (Minkler 21). Marketers have put a great emphasis on the marketing
on these communities and the number of such resort operating in the US went up from 880 in
1986 to 4,400 communities in 1995 thus creating a $46 billion dollar industry (21). Ethical
problems arise out of such a situation. Estes has argued that promulgation of such communities
instills the image of the elderly as being separate and different and thus requiring different basic
human services (191). This may lead to increasing the social and psychological distance between
the elderly population and the rest of the society (Minkler 21).

4. Diverging Opinions
Although ethnic target marketing has been heavily criticized, it is important to note that it
is a technique that can potentially be used to bring about benefits for producers and ethnic
consumers alike. As Swenson has put it, it requires a substantial rethinking of marketing
strategies and approachesvaluing these segments enough to learn about their needs, attitudes,
culture, activities, heroes and lifestyles (Guilherme D. Pires, P. John Stanton, 204)
In an increasingly competitive market scenario where target marketing has zoomed in down to
even individuals, firms can increase their competitive advantage by developing a thorough and

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correct understanding of the needs and values of ethnic communities. Rossman feels that this is
key if firms wish to harness any further maximization of opportunities (204).
On the other hand, consumers too can benefit from proper implementation of ethnic
targeting. Ethnic consumers may very often have special demands that need to be catered to.
These very specifics cannot be recognized and hence met without the use of target marketing
(Geng Cui 124). Thus it has become increasingly important to restructure the target marketing
phenomenon in light of ethnicity related audiences if it is to be used to extract maximum
benefits.
Not everyone believes that youth marketing is a lost cause. Supporters emphasize on the
fact that the same medium of target marketing can be used for respectable and constructive
results such as to gain support for social causes (Kotler and Zaltman 3). Hence, target marketing
can be used to convey positive messages to the youth as well. Supporters of this view further
contend that all the negative impacts of advertising harmful products can be countered by
counter advertising such as anti-smoking and anti-drinking messages. A research paper by
Wakefield et al. looks at exactly such an anti-smoking campaign and concludes that it is most
effective for pre-adolescent kids. Similarly, another paper by Quinn et al. discusses a study that
they conducted which was used for the development of a social marketing campaign that was
designed to reduce youth violence among middle school students in a large, urban central Florida
school district.
A study done by Benet et al. reveals that even though it is commonly perceived that the
elderly are vulnerable, the mass marketing appeals in the current market situation do not seem to
effect the elderly as it is widely claimed (Benet et al. 46). Thus the presumption of the elderly
being a particularly vulnerable group does is not true (46). These results are further corroborated

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by Fererro and LaGrange who argue that the elderly are not anxiety prone as it is commonly
assumed, and thus not as victimized as it is generally believed. Furthermore, a report by the
AARP shows that elderly consumers are very much aware of their legal rights, and have not
found them to be prone to reporting a bad buying experience (48).
Moreover, it has also been argued that targeting the elderly has actually been for the
better because of the ability of targeted products and services to cater to the specific needs of the
elderly (Minkler 21). Products which cater to everyone cannot maximize the satisfaction of
specific consumer segments such as the elderly (21). Market surveys targeted at the elderly help
the marketers to identify specific needs of the segment so that businesses can later create
products and services which are tailored for them (21). This avoids the issue of social exclusion
and neglect of the elderly in the mainstream media and commercial markets as it had been the
case prior to the 1950s in the United States of America (20).

5. Conclusion
This paper has tried to elucidate the moral and ethical dilemmas that arise due to the
practice of target marketing. Target marketing has been proven to have adverse mental and
physiological effects on the targeted segments. Through the use of socially irresponsible tactics,
the target marketers have debilitated the positive aspects of target marketing and brought to
surface the moral dilemmas that arise with it. Their disregard for ethics and subsequent problems
it causes, has been evident in the case of the youth, the elderly and the ethnic minorities. The
marketers have promulgated the ideas of age separation in the society. They have also reinforced
the notions of the superiority of materialism by targeting products at the consumers leading to the

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creation of previously non-existing wants. Furthermore, they have resorted to fear appeals to sell
to the elderly, ignoring social liability and raising anxiety in the society.

Even though many scholars are critical of the current target marketing practices and their
arguments hold weight, we see that the practice still is prevalent in the modern markets. The
reason why it has been so is because of its ability to target specific groups and their needs and to
reach out to people. The practice of target marketing is not inherently evil, what makes it
unethical is the way it is handled. Target marketing has brought with itself tailored products for
the people, and even though many would view it critically, it cannot be claimed that these
tailored products have solely harmed the targeted population in every way. Target marketing has
served to create new products, and has served to making the lives of the elderly easier as well.

What is needed is an effective control over target marketing practices, so as to do away


with the ethical dilemmas that it carries with itself. Government should intervene where it is felt
that the moral code of conduct and industry guidelines for marketing are being breached. Many
would argue that this is not entirely possible, as all ethical dilemmas cannot be resolved through
government regulations and public policy. However, even though such regulations are not the
solution to all the ethical problems that arise from the practice of target marketing, they can still
serve to have an impact on minimizing the negativity associated with target marketing. The
specifics of the methods of controls and the nature of government regulations that should be put
in place is an area open to future research. Governments should research and formulate policies
which are the most practical, and relevant given their relative contexts and settings.
Word Count: 4670

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