Business Ethics: Tobacco Marketing
BUSINESS, ETHICS

Business Ethics: Tobacco Marketing

Thursday, January 28, 2021

The Ethics of Marketing Death to the Youngest Client Possible

There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits as long as it stays within the rules of the game, which is to say, engages in open and free competition without deception and fraud -Milton Friedman

When famous economist Milton Friedman made this statement it was intended to encapsulate a broad view of ethical business standards. While capitalist views such as this sound good, they often lack the critical understanding of business ethics. The lack of understanding is best understood when examining specific products, such as tobacco. Generally speaking, tobacco companies operate within the scope of the law but far outside what most people would consider ethical. One of the most powerful examples of how tobacco companies operate in an unethical manner can be seen through the company Philip Morris. Philip Morris is one of the most profitable tobacco producer and seller in the world. Often referred to in the context of Big Tobacco, the company is a multi-billion dollar operation that spans the globe (NBC News, 2007). The Philip Morris company has been accused and convicted of fraudulent advertising and was one of the main targets in one of the largest lawsuits in US history which amounted to an initial settlement of over $206 billion dollars (Master Settlement Agreement, 2008). Despite lawsuits, legal restrictions on advertising, and monumental bad press; tobacco companies continue to find effective means for advertising its products. Despite policies and laws concerning tobacco advertising to young people, specifically children; the marketing message is still being voiced and heard.

Marketing to Children

In order to analyze the ethics of the tobacco business, one must understand the product. Tobacco is a unique product because it is inexpensive to produce and when properly marketed it will create many years of revenue through repeat customers. The reality of marketing tobacco is that companies such as Philip Morris need to promote their products to the youngest possible market in order to obtain lifelong customers. Philip Morris specifically target markets young people (teens and young adults) with its advertising. This is specifically intended to garner the largest percentage of tobacco users at the youngest age possible in order to maximize profit. Understanding the product and the purpose of the marketing one can then begin to see the ethical issues attached to the marketing of tobacco.

How does a company market a product to a target market that is legally age restricted from using it? This marketing is accomplished through intensive and deceptive advertising that is legally acceptable. In this R. J. Reynolds advertisement the audience is men and takes advantage of cultural shifts in views of women, though still objectifying. The ad is specifically designed to take advantage of ideas such as "strong female heroine," "robots," and "warrior," targeting young men who science fiction and these other ideas appeal.

Business Ethics: Tobacco Marketing
(Stanford) Fair Use.

The obvious use of the pretty girl in the skimpy outfit links the product sexually as well as humorously. Like most tobacco ads, the ad attempts to take link positive or sexual ideas with tobacco to forward the harmlessness of the product. 

The Effectiveness of the Marketing Message

In the United States, tobacco use has been on a decline for 40 years. Recently, tobacco use statistics leveled at around 19% of the population since the 1990’s (Maugh, 2010). Heavy taxation and education concerning the health concerns of smoking have led to a sharp decline in the number of users. However, the industry still promotes smoking and has managed to maintain the 19% through creating campaigns which produce a positive message about the product (Maugh, 2010).

The above ad successfully links tobacco with youth and the positive view that most people hold with being young. The same linking of ideas mentioned before has a specific appeal to young men. When young men see this ad they do not think of the health risks associated with smoking but instead think of the positive feelings evoked by the ad’s sex appeal and sports fun. For this reason, ad’s such as this are strategically placed to further take advantage of the positive message it delivers. Although these images are banned from magazines and television, they are still available at sporting events and expos (Master Settlement Agreement, 2008).

Tobacco advertising in this way has proven very effective at transmitting its message. The effectiveness of this type of advertising can be seen in the fact that the starting age for tobacco users has not changed despite heavy legislation (Maugh, 2010). Most tobacco users begin in high school before the age of 18 and this statistic has remained the same despite the fact that the number of smokers has decreased. The American Lung Association (2010) reported

The 1998 Master Settlement Agreement (MSA) prohibited tobacco companies from advertising their products in ways that target youth. However, this has not accomplished its intended goal of curtailing tobacco exposure in children.16 Since the MSA, the average youth in the U.S. has been exposed to 559 tobacco ads.17 The impact of the MSA has been weakened as Big Tobacco switched the target of their marketing resources to young adults, seen as a primary role model by older teens.18

Exposure to pro-tobacco marketing and media more than doubles the chances (2.2 times) of children and adolescents starting tobacco use (American Lung Asociation, 2010).

One can see the effectiveness of this advertising in that since the inception of the MSA smoking has plateaued 19% of the population and maintains its traditional starting age. The effectiveness of tobacco advertising highlights the conviction and effort that companies such as Philip Morris have placed into their campaigns.

Ethical Discussion

Tobacco is legal and many people do not understand the complexity of ethics in this product’s sales and distribution. When one considers the extreme effort and thought that has gone into tobacco advertising which is directly aimed at young adults and children, one must question the ethical practices of this business. If a gun dealer were marketing guns with a focus on appealing to gangs and criminals this would be immediately attacked by the moral majority. However, when Big Tobacco targets young people their advertising is subtle and placed in ways that is not always seen as harmful. It would be different if Big Tobacco had a billboard outside of a school with a kid smoking, but the deceptive nature of these ads does not reflect that form of obvious targeting.

There are two major ethical issues in question in the debate over tobacco advertising. The first ethical issue is the argument of free speech. Should tobacco companies be allowed to advertise their products in spite of the fact that their product is inherently dangerous? There are many individuals and organizations that feel that by limiting the tobacco industry’s ability to advertise that the government is infringing on the industries civil liberties. Although freedom of speech is already limited legally in commercial usage, the tobacco industry is limited more severely than other similar industries (Manfredi, 2001). The main argument is why the tobacco industry should be prohibited from advertising when there are other similar industries that market products that are just as dangerous. This is perceived by many as violation of freedom of speech (Manfredi, 2001).

For instance, the alcohol industry campaigns in every media outlet available but is arguably selling a product that is just as dangerous as tobacco. Alcohol advertising appeals to young people and uses many of the same strategies as tobacco advertising. More than 100,000 U.S. deaths are caused by excessive alcohol consumption each year (CDC, 2009). Direct and indirect causes of death include; drunk driving, cirrhosis of the liver, falls, cancer, and stroke (CDC, 2009). This number by comparison is only a quarter of the deaths created by smoking, approximately 400,000 however the loss of life is substantial (University Minnesota, 2009). As well, as substantial loss of life the majority of alcohol advertising is directed at young people, specifically ages 21 to 35. Statistically, alcohol advertising has been linked to underage drinking in the same manner that tobacco advertising was linked to underage smoking. Again the ethical issue remains as to whether tobacco advertising bans are an infringement upon freedom of speech (University Minnesota, 2009).

The second major ethical issue is whether the tobacco industry is immoral for selling and advertising a product that arguably has no beneficial purpose but instead has a completely negative effect on the consumer. Tobacco unlike other similar products has no beneficial purpose (CDC, 2009). When comparing alcohol with tobacco there have been many studies that have shown that moderate drinking can have physical benefits (Mayo Clinic, 2010). Tobacco on the other hand has no positive effects no matter how moderately it is used. There are many other drugs and chemicals that compare in this manner that have been outlawed. For instance, drugs such as heroin and cocaine, which have had some medicinal purposes, have been outlawed because of the obvious dangers in their recreational use. Yet, the tobacco industry, because it commands billions of dollars in revenue, has managed to fight regulation and maintain itself as an over-the-counter product.

Because of these two ethical issues, the morality of the tobacco industry has been called into question. The opinions of the many stakeholders vary considerably on these issues. The single worst problem with these issues is that the opponents and proponents for the tobacco industry seem to lack an ethical framework from which to make decisions. This seems absurd when one considers the fact that there is almost no ethical argument that supports the use of deceptive advertising to sell a dangerous product to children; other than freedom of speech (Manfredi, 2001).

The demand for social responsibility in advertising may be muddled in ethical arguments but clearly there is a demand for companies to protect society. The lawsuits against the tobacco industry demonstrate this social demand. Beyond the social demand for marketing and business ethics, there are realistic and practical reasons why companies such as Philip Morris should maintain social responsibility and ethical advertising. When companies practice deceptive or driven solely for profit actions, these actions do not take into account the consumer as a stakeholder.

Advocates of the stakeholder approach generally maintain that, while the interests of shareholders should not be ignored, they are just one of many stakeholders; it is the common good of all stakeholders that is the hallmark of corporate social responsibility (Coelh, 2002).

By not accounting for consumer as a stakeholder, ultimately the company is doing harm to the most important constituents. Lack of ethics in marketing has historically hurt companies by hurting the consumer. When Ford motor company deliberately advertised the Pinto as an efficient safe car, the company came under fire when people died from the design flaw which caused the car to explode when rear-ended (Baughman et al, 2001). We see this in similar unethical practices such as in the case of Enron when management and accounting were complicit in fraudulent records keeping. Enron stock crashed and ultimately the company bankrupted and billions of dollars were lost. These examples show how when all stakeholders are not accounted for the results can be disastrous.

There is also evidence that proves that ethical marketing is beneficial to companies. In the case of Starbucks, the strict ethical standards the company has adopted both in advertising and in all its operations has continuously kept this company growing. “Our communications with our customers or potential customers must be truthful and accurate. When we say something about our products and services we must be able to substantiate it…” (Starbucks, 2010) Even during the recent recession, Starbucks was able to grow because its consumer stakeholders believed in the organization’s commitment to honest advertising.

Conclusion

Milton Friedman’s statement on business ethics, while superficially true, lacks the critical evaluation of business practices. As well, it does not account for the demand and necessity of ethical practices beyond legal requirements. Abiding by Friedman’s view, it is easy for companies such as Philip Morris to follow “…the rules of the game” but still be acting unethically.

References

American Lung Asociation. (2010, February). Children and teens. Retrieved from http://www.lung.org/stop-smoking/about-smoking/facts-figures/children-teens-and- tobacco.html

Baughman, J., Bondi, Victor., & Layman, R. (2001). The Ford Pinto Case. American Decades, 9 (1980–1989).

CDC. (2009). Alcohol use. Retrieved from http://www.cdc.gov/nchs/fastats/alcohol.htm

Coelh, P.R. (2002) The Social Responsibility of Corporate Management: A Classical Critique Retrieved from http://web.bsu.edu/cob/econ/research/papers/bsuecwp200201coelho.pdf Copyright (2007) Skoal Tobacco Retrieved from http://www.tobaccofreekids.org/ad_gallery/

Manfredi, C.P. (2001). Expressive freedom and tobacco advertising: a canadian perspective. American Journal of Public Health, 92(3), 360–362.

Master Settlement Agreement. National Association of Attorneys General. 1998. Archived from the original on 2008–06–25. Retrieved 2013–07–24.

NBC News. (2007, August 29). Altria to spin off philip morris international. Retrieved from http://www.nbcnews.com/id/20494757/ns/business-world_business/t/altria-spin-philip- morris-international/

Starbucks. (2010). Starbucks standards of business conduct. Retrieved from http://assets.starbucks.com/assets/sobc-english-2010.pdf pg.12

U.S. smoking rate hasn’t changed, CDC says September 08, 2010 By Thomas H. Maugh II, Los Angeles Times

Photo by Khai Nguyen on Unsplash

Article Updated: 11/14/2021

~Citation~

Vincent Triola. Thu, Jan 28, 2021. Business Ethics: Tobacco Marketing Retrieved from https://vincenttriola.com/blogs/ten-years-of-academic-writing/business-ethics-tobacco-marketing

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