Contemporary Food Marketing - Challenges & Ethical Issues


By

Dr. Venkatesh Tamlurkar
MBA, Ph.D
Faculty
ICFAI School of Marketing Studies, ICFAI University
Hyderabad–500 034
 


Introduction:

Today's consumers are more flirtatious gazing for an increasing level of fun and variety. Anything that surrounds them for too long jades them. With the dawn of every fresh day, these modern day customers demand for quality and healthy food that is offered as per their convenience and changing cultural needs. The survival of any food outlet or the industry is also highly dependent on them – their palate can either make or break the existence of these companies. This has wrought a great challenge on the marketers of the food industry who intentionally resort to unethical practices that had sourced many lively international debates on ethical and marketing practices of the food industry besides the intervention of regulatory authorities to implement necessary legislation wherever required to reduce the ill-effects on the society.

There has been an increase in the number of tourists (both in-bound and out-bound) due to the boost in tourism resulting in the exchange of cultural and traditional ideas among different countries; the development of communication, infrastructure, and information technology due to the liberalization, globalization and various other good reasons has turned the world into a global village; the spending capacity of the middle-class people has also risen due to availability of highly disposable income and increasing economy of the country for the past few years. All these reasons were enough for the food industry to bring into the country a multitude of different gastronomy from across the globe – like the pastas & spaghettis from Italy, the ever-popular chowmein from China, the tacos and enchiladas from Mexico, the Continental pizzas and burgers, the French flambé etc., to name a popular few which were normally ever heard of and were limited within the precincts of star hotels and among those people who could afford them. But of late, there have been a slew of contemporary foods pouring into the market at affordable prices that are targeted at the growing numbers of fashionable consumers. Some of the latest additions to the already existing modern foods include –

- the ready instant mixes that consumes less cooking time (like the idli mix, dosa mix, sambar powder and so on that are added with preservatives to increase their shelf life),

- the ready-to-eat foods like ITCs paneer butter masala, nav ratan kurma, dal makhani and so on (under the Aashirvaad's ReadyMeal brand),  that just requires pre-heating through a baine-marie1,

- the fusion of cuisines customizing to Indian palate - Italian pizza in the form of Indian Tandoor pizza.

With increasing demands largely from the perpetually growing niche segment – the children and the young adults, there is also rigorous sale of junk foods that mainly includes energy-dense fast foods like the puff pastries and burgers containing large quantity of margarine, mayonnaise, butter or cheese; carbonated soft drinks with high calorie content like Pepsi or Coke; sugary breakfast cereals like the Kelloggs Choco Pops; salty snacks like Haldirams or Leher namkeens; and other baked goods like patties, cookies, doughnuts etc.,

Though these food products are claimed to be manufactured using the best technology under most hygienic standards by trained professionals, they generally tend to be nutrient-poor and High in Fats, Sugars and Salt (HFSS foods) contributing to an environment of more obese people with diet-related non-communicable diseases like the cardiovascular diseases, diabetes, osteoporosis, certain forms of cancer, and high blood pressure.

The pill with a sugar coat:

The marketers exploit many innovative practices and use wide unethical deeds and techniques to promote their products to capture the gullible segment. Though most of the practices used by the food marketers seem upright and lawful, it would be found to be immoral only when appropriately examined where it becomes difficult for one to judge and draw a clear line between normal marketing practice and unethical behavior of the marketer.

All of us have encountered the marketing gimmicks of many companies in some form or the other – like the buy two get one free; the offer is only for employees of certain organizations; some pop-ups sprouting on the screen when browsing the Internet informing that we have won a prize; or a banner of some sponsor placed at the venue during an event attended, etc. Once the consumer gets attracted by this publicity stunt, he is further lured to become a customer and then a permanent customer. As Vikram Bakshi, MD, McDonald's puts it in one of his recent interviews2-

"McDonald's is a family restaurant. We believe that we are here to make our customers feel at home and enjoy their time out with their family when they are at McDonald's. Extra care has been taken to make our restaurants child friendly, by providing play areas wherever possible so that the parents can relax and have a good time when they are visiting McDonald's. Our tables are rounded so that a child does not hurt himself while in the restaurant, our counters are low and the menu pictorially depicted so that a child can order a meal for himself very easily and his parents don't have to bother. At McDonald's, customer always comes first. Every employee strives to provide 100 percent customer satisfaction – for every customer – for every visit. This includes friendly and attentive service, accuracy in order taking, and anticipation of customer's needs. We have hostesses who keep circulating in the lobby helping children and adults alike with straws, napkins, soufflé cups, sauce sachets etc, and any other assistance that they may require".

Anyone would hardly resist such royal treatment. These food outlets take into concern not only the comfort and convenience of their guests, but also to convert their first time visitors into repeat business. Meticulous plan is done as per the behavioral patterns and feedback from the target consumers – like from "McDonald's mein hai kuch baat" caption when it first started operations ten years back in India to "Toh aaj McDonald's ho jaye" after getting established properly in the market. Notice the change of talk from the experience of a first time visit to about an everyday experience i.e. the customers are encouraged to visit more often with their family and enjoy their time out. And the segment that wishes to have the food delivered at its place, then there is Domino's Pizza at the neighborhood, a global 'Pizza Delivery Expert' known world over for providing freshly baked pizzas topped with quality ingredients and cheese. This was the first pizza chain in the world committed to the promise of delivering pizzas in 30 minutes or less and most of their outlets in India are delivery-based with only about 25% being both delivery and "sit-down" outlets.

None would get misled or infer anything wrong with the above points against the food industry or its strategies used. As already stated, it is very difficult to draw a clear line between normal marketing practice and unethical behavior. But how far it is ethical on the part of the food companies to offer junk and unhealthy food to its valued customers and again chase them to visit almost daily? Mind you, there is nothing to criticize the food industry here as such with regard to its quality of products or services offered or even doubt on its credibility. It is only on the type of food that they offer that is having its negative impact on the society. It is agreed that there is nothing called bad food as such, but it is mainly the kind of food that does not add any value or significance to the health of the people. It rather acts as nutrition-less junk food showing its ill effects on the health that affects the mortality rate of the civilization. Again concurring that the modern day consumer is too busy and insists on such kind of food, but how far is it good on the part of the marketer to lure and tempt these innocent gullible with attractive offers and promotions who are unaware or limitedly aware of the consequences. The insistence from the consumer to provide such food does not come on its own unless shaped by the industry in order to survive and earn huge profits. This is created through the heavy dose of advertisements and promotions, the peer pressure, and with the rapid expansion and opening of new branches even in smaller towns of the country.

Ethical Challenges

Naturally, a company will exist and grow in the market by expecting repeat business only when it satisfies its customers' needs i.e. it understands what its customer wants. But, there are some instances where the customers' wants are not good for him or her. Like a child buying a cigarette for his father but smoking himself or an obese patient having more of sweets, oily food. Similarly, it may also happen that some demands of the customers may be good for them but are not good for the society or the environment like the recent killings of the extinct, endangered species to celebrate a high profile dinner, a pre-marital abortion, etc.

Examining these points from different perspectives i.e.

a) interests and behaviors of the marketers,

b) the extent of consumers' concern to reduce the negative side effects of the products they buy and

c) the steps to be taken to reduce the consumption of products that have ill-effects on the general public at large and the appropriate intervention.

a. Interests and behaviors of the marketers:

Any food manufacturer will always strive to increase the sale of his product or service to the maximum extent and leave the negative consequences to be the result of the free choice of consumers – a natural phenomenon. Some food products like burgers, sweets, and carbonated soft drinks are not so harmful as compared to alcoholic drinks, cigarettes or drugs etc., but as mentioned are poor in nutrients with rich fat, sugar and salts content causing obesity and other diseases. Most people especially the young children and the teenage group get addicted to them quickly mainly due to reasons like emulating of Western culture, the environment of nuclear family with sometimes both the parents working, peer coercion in the school/college/office etc. These addicted categories are the company's treasures who later become heavy users as the days pass by accounting for their high profits. Let us understand this with an example:

Presume a teenager is addictive of eating a cheese pizza daily. This promises the company a patron for life and each such new addict expectedly generates a 25-year to 30-year profit stream for the pizza company if the consumer continues to favor the same brand. Suppose the teenager starts eating at the age of 15, eats for 25 years and stops further consumption due to obesity and doctor's advice. If she spends an average of Rs. 10,000/- a year on the pizza, she will spend Rs. 2,50,000/- till she reaches 40. If the company's profit rate is 20%, she is worth Rs. 50,000/- to the company. Which company will not try to attract such a heavy user who is contributing Rs. 50,000/- to its profits? And this profit is the minimum as the lady stopped eating at 40. What if the addiction continued and she consumed the same for another few years neglecting its ill effects? This is the thing that generally happens, as most of the people are unable to control themselves due to the temptations created by these food marketers with their innovative methods.

Are you aware that Coca-Cola is aiming to get people to start drinking Coca-Cola for breakfast instead of orange juice?

Then, McDonald's is encouraging customers to choose a larger hamburger, a larger order of French fries, and a larger cola drink.

And with best of the marketers working for them, it is just a cakewalk to transform the consumer eating habits.

b. Consumers' concern to reduce the negative side effects:

Would anybody be ready to reduce their sales or restrain consumption of their products? Never. Hence, there should be at least some kind of pressure from the government or the public. Recently, in the interest of the consumer, the Cola companies were directed by Supreme Court to list the composition of contents on all bottles including the pesticide residues but the company is utilizing the opportunity of time given to approach the High Court on the phraseology.

Surrogate advertising though banned is still observed and continued on television, generally seen at places like sports stadiums, art exhibitions in the form of sponsorships of the event. Some of them under close scrutiny of the regulations are McDowell's Mera Number One, Gilbey's Green Label ads, Bagpiper soda water, Kingfisher mineral water, 8PM apple juice, ITC-GTD's (greeting cards division) Expression Greeting Cards, Red & White Bravery Awards and Wills sportswear as they are the titanic advertisers under this category.

Most of the companies, as part of their Corporate Social Responsibility give a statutory warning on their products. For example, like the statutory warning on the  cigarette packs, some of the food companies also warn in similar way – on products that contains Monosodium Glutamate (MSG) i.e. Ajinomoto. MSG if consumed in large quantities causes migraines, hormonal disorders and Chinese restaurant syndrome. But still people keep continue to buy such product and the companies who just try to behave in a socially responsible manner know this and are aware that the sales loss resulting from their CSR 'cooperation' is very slight.

On the other hand, there is sometimes resistance from the consumers themselves when the companies genuinely struggle to find avenues to reduce the ill effects of too much consumption of their products. When Mc. Donald's offered a reduced-fat hamburger or salad, consumers rejected it. Keeping the calorie conscious people in mind, Coca-Cola and Pepsi introduced the Diet Coke and Pepsi One brand with low calorie content. Coca-Cola also recently announced the launch of Coca-Cola Zero, a new, zero-calorie cola drink sweetened with a blend of aspartame and acesulfame potassium4.

All these modifications and new product development from the company are the results of feedback and behavior from the consumers themselves as well as the pressures from the Government.

C. Right to Intervene and reduce the consumption:

Infinite numbers of debates ensued with regard to the right to intrude by the government or any public interest groups in the free choices of individuals whether to reduce or ban the consumption of foods that show their ill effects on the health of the people in due course. On one end, it is detested with remarks like the job of marketer is not to make society a better place or to save the world. He is mainly there to sell more and earn good profits for the shareholders in a legal way. On the other side, there are few people concerned with the personal and societal costs of unregulated consumption. Very sensitive issues are created on certain food products and statistics are developed on the heavy health costs of various diseases caused because of failure to reduce the consumption of such kind of products. These costs affect everyone as they lead to higher medical costs and taxes. Thus, even those who don't consume such products are harmed because of unenlightened behavior of others.

The finale act:

What legislations have to be brought out by the regulatory authority that would create a check on the marketers while promoting and selling of their products? What ethical practices does the marketer need to carry out in order to create a good image among his customers and also to develop a healthy society? Let us look at this issue from both the perspective.

Promotional Regulations:

The regulatory authority of various countries have brought into force various regulations and restrictions with regard to the promotional activities of the food marketers in order to reduce its usage and avoid the related ill effects on the society. As the marketers particularly target the children and the young adults who are found to be the most influential decision makers during any purchases, their promotional activities have created a very high impact on the society that have shown more of negative results. Let us observe few of the strategies of the marketers and the legislations put upon them by the legal authorities.

1. Television : The strongest of all the media in the modern world, television is highly used by food marketers to advertise their products with particular target on children. Breakfast cereals, soft drinks, snacks, and fast foods are the common food products advertised frequently through this medium. The effect has been so great over the past few years that there have been strong proposals to restrict television advertising, particularly to children in many countries including India, Australia, Brazil, Germany, United Kingdom, Ireland, Italy, New Zealand, Poland and France. Television ads carried various clauses emphasizing companies not to exploit the credulity of people; be harmful to their physical, mental or moral health; make them feel inferior to others who possess the products; or induce them to unduly pressurize their parents/guardians into purchasing the product.

2. In-premises marketing: The food marketer visits the place of customer like schools, colleges, offices or homes and promotes the products. This strategy is used to target all categories of people as all of them would gather together at their respective places. This strategy is found to be second best to television advertising as it has also attached lot of controversy and debate in recent years. The techniques used are direct advertising (eg. Signage in canteens), indirect advertising (eg. Sponsorship of events) and product sales. Most of the items like soft drinks, confectionary, snacks, ice-creams, instant noodles, etc, which do not even contain the minimum nutritional value (MNV) required are usually sold. Some of the restrictions used especially in schools are prohibiting commercial solicitation, non-distribution of advertisements and other marketing material without the consent of the parents in advance, not allowing the marketing activities unless the head teacher believes it has an educational objective. In Japan, the meal provided under the school lunch program is the only food to be eaten within school premises.

3. Sponsorship: In sponsorship, the food companies provide funds and other resources to an event or activity in return for access to the exploitable commercial potential associated with that event. Sponsorship has the benefits of reaching globally at less cost than conventional advertising when the event sponsored is broadcast worldwide. Food companies sponsor wide range of activities like sporting events, television programs and musical events. The main advantage to the marketer under this strategy is that being a sponsor, he may have influence on the program content and cause program dilution where much publicity for his company and products would be demanded and created among the audience. Some of the regulations under sponsorship include banning sponsorship of children's program, not encouraging purchase or rental of the products or services of the sponsor, etc.

4. Product Placement: Under product placement, a visual or graphic uses the message, logo, or object of the food company in exchange for payment. It is found in many forms of visual entertainment like films, television programs, music videos, computer games, etc. This powerful marketing tool of 'surreptitious advertising' and indirect or non-regular advertising is widely used to market food and beverage products. It is a cost-effective technique when compared with the purchase of normal airtime, it is less disruptive than commercial breaks as the viewer is held captive, giving the product his undivided attention because it is part of the program. It is explicitly banned in countries like Austria, Belgium, UK, Norway and is used with restricted time in Philippines.

5. Internet marketing: Consumers at present are widely targeted with this new but rapidly expanding strategy with a range of internet-based marketing techniques. The cross-border marketing is especially changing the entire world into a global village. The ideal target group under this strategy is mainly young people, as they tend to browse the net for longer durations. The strategies used are interactive games and activities, competitions, attractive sites with flashy graphics, chat and e-mail facilities. Keeping the children and teenagers in mind, the website is made more interactive, providing free downloadable games & general information. Subsequently, personal data of the visitors are collected for future promotions and sale of database.

There are statutory guidelines and restrictions with self-regulatory codes specific to Internet marketing, e-commerce, data collection, consumer protection, broadcast advertising, link to other websites which are still in the budding stages.

6. Sales promotion: Under the sales promotion technique, the marketer creates an incentive scheme to make the consumer buy a product or service at the point-of-sale. Door-to-door selling, ballyhoo6, prizes, hawking, price discounts all come under sales promotion. With regard to sales promotion, there are very general regulations like sales promotion must be fair and sometimes are very specific like not allowing any sweepstakes7, etc.

Likewise, the food companies may reflect on the following few brief opinions that would act as guidelines for meeting their challenges without foregoing the ethical values. Some of the international food marketers may be already treading on them while some may make use of these for exercising in their organizations.

1. Following the basic ethical norms and values: The first and foremost being marketers must do no harm and work for which they are appropriately trained for by adhering to applicable laws and regulations. This will automatically make them actively add value to their organizations and customers. The products should be appropriate for their intended and promoted uses for which intentionally deceptive or misleading communication should be avoided. The ethical values should be embraced, communicated and practiced so as to improve the consumer confidence; they should show honesty by being truthful or forthright in their dealings with customers, employees, investors, Government and other stakeholders. They should be responsible and accept the consequences of any marketing decisions and strategies, should be fair by trying to balance justly the needs of the buyer with the interests of the seller, respect the basic human dignity of all stakeholders, be open by creating transparency in their marketing operations and finally fulfill the economic, legal, philanthropic and societal responsibilities that serve the stakeholders in a strategic manner.

2. Using appropriate and ethical marketing strategies: The ethical and appropriate marketing strategies include the packaging or serving the food in reasonable portion sizes without encouraging overeating that generally food marketers do to increase their product sale. The products also should be reformulated to reduce the size of the portions, the amount of calories, the sodium content along with refined sugars and saturated fats. Emphasis should be to improve the nutritional value of the food by concentrating more on fruits, vegetables, whole grains and low-fat milk contents in the food products. There should be strenuous efforts to promote healthy eating habits by portraying healthful foods in a positive way. The advertisements should not focus on nutritionally poor food products especially on those channels that are particularly watched by children.

3. Concentration on some specific issues: Marketers should concentrate on some specific issues as given below particularly in case of marketing the food products for children –

a. Not to mislead the child regarding the emotional, social or health benefits of a product.

b. Not to market any food by negatively portraying the parents, teachers or any other popular personalities.

c. Not to suggest that a person who buys a certain product for the child is better than the person who does not.

d. Not to link the child's self-image to consumption of his company's food, use any peer pressure or arouse any kind of unrealistic expectations in relation to consuming his company's food (like a child will be more fit physically, will be more happy or popular if he eats a particular food).

e. Not to use pictures of healthful foods like fruits or vegetables to market the low-nutrition foods.

4. Making safer products: The foods to be manufactured and marketed to the consumers should be lighter with minimum quantities of fat and calories. This can be done alternatively by means of selling more of salads and healthy sandwiches. The beverage companies can think of producing non-alcoholic beer in huge quantities as the young population largely consumes it, soft drinks companies can focus on increasing their packaged drinking water that are healthier than carbonated soft drinks. The soft drinks that are sold in underdeveloped countries can be added with nutrients and vitamins so as to deliver better health benefits to the deprived people there.

5. Support the efforts to foster healthy eating habits: As most of the people have limited proficiency in nutritional aspects of any food, the companies who have extensive expertise in persuasive techniques should make it a point to support the Government in communicating the effects of various foods on the health of a person. Hence, communicating with the target audience by means of effective media like television through cartoon characters, celebrities, contests etc., about the low-nutrition foods that does not benefit in any way and rather harm their health, along with discouraging them from buying cigarettes, drugs or alcoholic beverages etc., will indirectly help the society to improve itself.

6. Restrict the sale or use of certain products: Whenever a product is of any harm to the consumer, such items should be either restricted or totally banned from the market. There have been successful and unsuccessful attempts of frequent prohibitions of alcoholic beverages in different states of the country at different times. Such products should also neither be advertised nor promoted to prevent any illegal usages. This could be effective only with the adequate support of the companies who should take responsibility and show more concern for the society than on its own profit motive. Of course, equal support is required from the society as well to make it a successful accomplishment.

Conclusion

The regulatory authority has put itself on the static end by turning a Nelson's eye simply ignoring the misdeeds of the marketers and giving them more opportunity and space to create a situation which has an unbearable effect on the society. The marketers, being the responsible citizens should be concerned more about the civilization and the environment instead of focused concentration on their company's bottom-line. To conclude, it is not only in the hands of the food companies or the Government or the interested groups at large to create a healthy society but a more patronage and sustaining is required from the consumers themselves to make the world a better place to lead a quality life.

References:

1. Fast food as a sign of the times, http://www.healthandage.com/Home/gm=20!gid2=2662

2. Breakfast cereals, marketing madness. http://www.choice.com.au/viewArticle.aspx?id=104609&catId=100286&tid=100008&p=2

3. Marketing Food to children: the global regulatory environment by Dr. Corinna Hawkes; World Health Organization.

4. Brand Speak by Vikram Bakshi, MD, McDonald's http://www.exchange4media.com/Brandspeak/brandspeak.asp?brand_id=22

5. Wrestling with Ethics: Is marketing ethics an oxymoron? Philip Kotler, November/December 2004, Marketing Management.

6. Television advertising leads to unhealthy habits in children: says APA task force, February 23, 2004, http://www.apa.org/releases/childrenads.html

7. Allergic to food additives? http://www.health24.com/dietnfood/Food_causing_disease/15-737-740,30647.asp

8. Junk foods more available in middle schools. Libby Quaid, http://www.junkfoodnews.com/

9. Surrogate Advertising - Is ban the way out? http://stories.indobase.com/article_121.shtml

10. Choose your statutory warning. http://timesofindia.indiatimes.com/articleshow/956278.cms

11. Code of ethics: Ethical norms and values for marketers.
http://www.marketingpower.com/content435.php

Abstract:

With the increasing demand from the modern day consumers on the contemporary foods, the marketers are facing various challenges to provide their customers with what they want. Most of them not only resort to unethical practices that could not be clearly identified unless examined with an eagle's eye, but are also creating an ill effect on the society through the use of various media. These necessitated the need to create many regulations and restrictions on the marketing practices in most of the countries and also to advice the marketers of food industry in particular to follow some basic ethics in their work culture.


---------------------
1. A container placed in heated water to gently warm the food within.
2. Brand Speak, http://www.exchange4media.com/Brandspeak/brandspeak.asp?brand_id=22
3. A burning feeling in the chest, with neck pain and flushing, headaches and rapid heartbeat
4. Aspartame C14H18N2O5, formed from aspartic acid; acesulfame potassium (C4H4NO4KS) – Both are calorie free artificial sweeteners
5. Hidden advertising that might mislead the public
6. Creating sensational advertising or publicity
7. A lottery in which participant's contributions form a fund that is awarded as a prize to one or several winners
 


Dr. Venkatesh Tamlurkar
MBA, Ph.D
Faculty
ICFAI School of Marketing Studies, ICFAI University
Hyderabad–500 034
 

Source: E-mail March 06, 2006

    

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