understanding the industry’s environmental, ethical and legal issues chapter 11 copyright© 2010...

Understanding the Industry’s Environmental, Ethical and Legal

Issues

Chapter 11

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Please Note:


Opening Vignette

Snow and Associates


Ethics versus Morals

Ethics are the moral principles of conduct governing the behavior of an individual or a group

Morals are often described in terms of GOOD and BAD


Environmental Issues 5 Objectives of DMA’s Environmental

Resolution: Offering target and choice to mail recipients Questioning paper suppliers where the paper comes

from Reviewing direct mail and direct marketing pieces,

testing and downsizing when possible Encouraging suppliers to submit alternate solutions

for environmentally preferable packaging Purchasing office papers, packaging and packaging

materials made from recycled materials with post-consumer content


Environmental Issues DMA “Recycle Please” public education

campaign


The DMA Green 15: Benchmarking Environmental Progress Business Practices

(Highlights from Figure 11-3)

Paper Procurement & Use 1. Encourage paper suppliers to increase wood purchases from

recognized forest certification programs. 2. Require paper suppliers to commit to implementing sustainable

forestry practices 3. Ask paper suppliers where your paper comes from before

buying it 4. Require paper suppliers to document that they do not produce or

sell paper from illegally harvested or stolen wood. 5. Evaluate the paper you use for marketing pieces, product

packaging and internal consumption to identify opportunities for increased environmental attributes.


The DMA Green 15 (continued)

List Hygiene & Data Management 6. Comply with DMA Guidelines for list

management 7. Maintain lean mailing lists by using USPS or

commercial equivalent files 8. Apply predictive models and/or Recency-

Frequency-Monetary (RFM) segmentation where appropriate.


The DMA Green 15 (continued)Mail Design & Production 9. Review your direct mail and printed marketing pieces,

and test downsized pieces when and where appropriate. 10. Test and use production methods that reduce print

order overruns, waste allowances and in-process waste.

Packaging 11. Encourage packaging suppliers to submit alternate

solutions for environmentally preferable packaging, in addition to quoting prices on approved or existing specifications.


The DMA Green 15 (concluded)

Recycling & Pollution Reduction 12. Purchase office papers, packing and packaging

materials made from recycled materials with post-consumer content where appropriate.

13. Integrate use of electronic communications (email, Web and intranets) for external and internal communications.

14. Ensure that all environmental labeling is clear, honest and complete

15. Participate in DMA’s Recycle Please campaign and/or in another recycling campaign


DMA Guidelines for Ethical Business Practices

Visit http://www.dmaresponsibility.org/Guidelines/ for updated versions of the guidelines.

The terms of the offer Collection, use and maintenance of marketing data

Advance consent Online marketing

Marketing to children Telephone marketing

Special offers and claims

Fundraising

Sweepstakes Laws, codes and regulations

Fulfillment


DMA Ethics and Consumer Affairs

This office assists marketers in maintaining consumer and community relationships that are based on fair and ethical principles.


Services Within the Ethics and Consumer Affairs

Department

Mail Preference Service (MPS)

Telephone Preference Service (TPS)

E-Mail Preference Service (EPS)


Basic Consumer Rights

1. The Right to Safety2. The Right to Be Informed3. The Right to Selection 4. The Right to Confidentiality5. The Right to Privacy


Legislative Issues Intellectual Property

Security

Privacy


Privacy Legislation Since the 19th century, laws about consumer

rights to privacy have been constantly evolving with time and with technology. In recent years privacy has become a major issue for everyone.

The process of DM has attained new success since the explosion of credit cards to the advent of personal computers and cyberspace.

Direct marketers with customer knowledge have an edge over the ones that do not, but there is an ethical question, how much do we need to know?


Privacy Protection Study Commission

Privacy Act of 1974 -mainly concerned with databases and mailing lists


Privacy Today - Anti-Spam Laws

CAN-SPAM Act of 2003 - applies to commercial emails and its main provisions are that it: Ban false or misleading header information Prohibits deceptive subject lines Requires that your e-mail give recipients an

opt-out method Requires that commercial e-mail be

identified as an advertisement and include the sender’s physical postal address


Types of Information General Descriptive Information

Ownership Information

Product Purchase Information

Sensitive/Confidential Information Copyright© 2010 Pearson Education,

Inc. Publishing as Prentice Hall

Consumer Privacy Segments

Privacy Unconcerned

Privacy Fundamentalists

Privacy Pragmatists


DMA Commitment to Consumer Choice

An expansion of The DMA “Privacy Promise” in 1999.

The DMA Commitment to Consumer Choice provides

public assurance that all members of the DMA will be

following certain specific “practices” to protect consumer privacy.


The Four Components of the Commitment to Consumer

Choice

1. Provide customers, donors and prospects with notice of their ability to “opt-out” of information exchanges.

2. Honor customer opt out request not to have their contact information transferred to others for marketing purposes.


The DMA Commitment to Consumer Choice (con’t.)

3. Accept & maintain consumer requests to be on an in-house suppress file to stop receiving solicitations from your company.

4. Use the DMA Preference Services.


DMA Online Privacy Principles

Additional privacy principles and guidelines have been established for direct marketers operating on-line sites and state:

Marketers must make their information practices available to consumers in a prominent place on the website

Marketers must furnish consumers with an opportunity to opt out of the disclosure of such information


The Platform for Privacy Preferences Initiative (P3P)

Currently under development this initiative would

enable web browsers to read a web site’s privacy

policy automatically and compare it with the user’s

privacy preferences


Regulatory Authorities of Direct Marketing Federal Trade Commission Federal Communication

Commission United States Postal Service State and Local Regulation Private Organizations


Federal Communication Commission Established by the Communication

Act of 1934 Charged with regulating interstate

and international communications by radio, television, wire, satellite and cable

Enforces the Telephone Consumer Protection Act (TCPA) & its new DNC legislation


Federal Trade Commission The FTC is charged with regulating content of

promotional messages used in interstate commerce

FTC Act and the Wheeler-Lea Amendment (public health-foods, drugs, cosmetics and therapeutic devices)

FTC Act prohibits unfair or deceptive advertising There are many rules and guidelines that all

merchandisers must abide by Mail, telephone, fax, and computer order

merchandisersCopyright© 2010 Pearson Education,

Inc. Publishing as Prentice Hall

United States Postal Service USPS has rules

and regulations that impact the promotional activities of direct marketers


State and Local Regulation Specific organizations that use

direct marketing strategies are closely regulated by state regulation Insurance companies, lending

associations, banks and pharmaceutical companies


Private Organizations Better Business Bureaus are sponsored

by private businesses and organizations to prevent promotional abuses through common sense regulation

The Direct Marketing Association(DMA) have provided ethical guidelines for use by their members and others desiring to adhere to them


The Future: Self Regulation Or Legislation Self-regulation is the preferred method

by direct marketers - “CPO’s” Eight step self regulation program for

direct marketers to follow (see text) If direct marketers do not follow the

policies and procedures, legislation will limit their access to public information

Permission Marketing…the future?


Conclusion Upholding ethical guidelines in

carrying out direct marketing activities is crucial to the present and future success of the direct marketing industry


Chapter Case

The TCPA


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