Marketing Ethics in a Post-Terrorist Economy: What is the Right Pitch?Published: November 21, 2001 in Knowledge@Wharton
At the Topps Company, the maker of baseball and other collectible cards, the tragedy of September 11 is seen as an historic marketing opportunity. The company quickly prepared a 90-card set - targeted at 7- to 12-year olds - called "Enduring Freedom" and rushed it to Wal-Mart, Target and other major retailers.
Now, children and collectors have a choice between owning a Barry Bonds, Mark McGuire, Luis Gonzalez, and Mickey Mantle card or ones with the faces and stats of Secretary of Transportation Norman Mineta, Director of Homeland Security Tom Ridge, National Security Advisor Condoleezza Rice, President George Bush - and Osama bin Laden. The Topps set also includes cards depicting heroic New York City firemen and policemen, Yasir Arafat giving blood, and a whole array of military hardware, from aircraft carriers to EA-6B Prowlers, as well as U.S. military leaders.
If there is one new rule in the ethics of marketing following the events of Sept. 11, says Nien-hê Hsieh, an ethics professor in the legal studies department, it’s that "advertising and marketing are happening in relation to a major public event and tragedy where there is a political and military response and a debate about what’s going on in the world." When it comes to marketing ethics, Hsieh adds, the question becomes, what role do advertisers and marketers have in helping to influence that debate, and "what kinds of responses are they going after?"
Topps is one of those companies that speedily brought a product to market targeted, in this case, to young children in America. "Topps has a long tradition of chronicling significant events in history for kids," says CEO Arthur Shorin. "We think our cards deliver the story of September 11 and the aftermath in a medium that is familiar and comfortable to kids, and is an instructive alternative to the repetitive violent images in the media."
A Question of Taste
A big issue facing marketers and advertisers since the September 11 terrorist attacks is what do they sell and how do they sell it in a changed world. Not only do companies and agencies have to deal with the "War on Terror" and the "all-anthrax-all-the-time" 24-hour cable news networks, but they also must deal with the triple whammy of recession, slumping consumer confidence, and the largest increase in unemployment in five years.
"The economy was headed for the toilet as it was," says Stephen J. Hoch, professor of marketing. "The terrorist incident has given everyone the same label to attach to bad economic times so we will never really know [what kind of shape] we would have been in without the events of September 11. What clearly happens in bad economic times is that people tend to hunker down. This, in addition to the ‘siege’ mentality we have developed, has pushed everyone further down that road."
The challenge for marketers is huge. Should they try "patriotic" marketing? Should they sell "fear?" Is it price, like 0% auto financing, or customer service?
"Every American company has thought about the ‘Made in the U.S.A.’ pitch," says Hoch. "That strikes me as very myopic and my guess is that most firms won’t go there. It’s opportunistic and not in their best long-term interests. Wal-Mart took that position for many years, but they don’t do it any more because in the long run the consumer cares more about cost and quality than where something is made. Everyone is feeling more patriotic than they normally do, but we have gone too far down the path of globalization and people are comfortable buying goods from around the world."
Whether it’s "patriotism" or "fear" marketing – including the current big push for gas masks and safety gear - a key issue is not what is being marketed but how it is being hawked. What it comes down to, marketing ethicists say, is a question of taste. Today, how a company or industry markets and what they do is being scrutinized more closely than ever.
"It’s really a matter of good taste or bad taste," says Tom Donaldson, professor of legal studies at Wharton. "It’s not really a matter of ethics. The dividing line between the two is blurry."
When it came to the issue of taste at Topps, the decision-maker was its chief executive officer. Shorin reviewed every picture for the 90-card set and personally approved all images. The "Enduring Freedom" cards have been the subject of news stories on CBS, CNN’s "Larry King Live," and other major news outlets.
"It’s ultimately my taste," says Shorin. "I have some very talented, creative and responsible people, but the buck stops here. During the selection process, I saw every single picture. I saw what was turned down and what was recommended. Our set is all it should be and nothing it shouldn’t be. We went through hundreds of shots of rubble and didn’t choose one. The last thing we wanted to do was take kids through the despicable act of September 11 all over again."
Different groups will see the appropriateness of the Topps "Enduring Freedom" cards with different views on taste. Some may be offended by the entire 90-card set, or by individual cards, such as Arafat or Bin Laden. Others may consider them a terrific teaching tool. What products like this do, however, are help shape the tenor and tone of the public debate, marketing experts say.
"That’s not usually something that’s there when you think about the ethics of marketing," says Wharton’s Nien-hê Hsieh. "… Baseball cards are very American. I read a commentary in an Asian-American publication that praised the fact that Norm Mineta was on one of the Topps cards. It made Asian-Americans feel very proud given what baseball cards mean to American culture; it is very positive in a multicultural sense to see Mineta on that card."
How companies profit from the events of September 11 also concerns Hsieh.
"Are companies and marketers selling goods and services in an appropriate manner given the national climate?" asks Hsieh. "Are they tapping into sentiments that they should not? When it comes to gas masks, are advertisers actually creating demand or feeding the demand created by the news media?"
And what about the idea that Topps is marketing "instant history" to children?
"There’s a question of how responsible does Topps have to be, and how comprehensive they are, in telling the whole story of the events and aftermath of September 11," says Hsieh. "Should they profit from these events? We can go back and forth on that question, as well as whether they have sanitized the events for children, which will affect [a child’s] understanding of it. But Topps has a history of doing cards like these and it certainly seems like Topps has thought this out well and understands its responsibility."
Hsieh also points to the Advertising Council’s highly effective "I Am an American" campaign as a "very positive ad" in helping influence the public discussion.
To Shop, or Not to Shop
Another major challenge for marketers in this changed economic and social environment is getting people to take any action at all. When American consumers are under duress, as they are today, they are more likely to maintain the status quo and choose to minimize their negative emotions.
"I find that emotion and coping influence consumer choice, and right now there is a lot of both in the marketplace," says marketing professor Mary Frances Luce. "Marketers are in a quandary. Since September 11, it looks like people’s goals are changing because they are saying, ‘The economy isn’t very good right now and I am more concerned for my safety.’ The effect emotion has on consumer decision making is to change buying priorities."
Slumping consumer confidence and what it could do is also of deep interest to marketing professor George S. Day.
"Somehow or other we have to rebuild consumer confidence," says Day, "because that’s what will have the most devastating effect going ahead. That’s where the system unwinds on itself. Consumer confidence drops, there’s not much purchasing, jobs are unstable and you cut back on spending. The events of September 11 and after, combined with a recession, may lead to a turning inward from an era of economic prosperity."
With the media saturated with messages about anthrax, Afghanistan and terrorism, consumers are being bombarded with many conflicting negative and positive messages that make it difficult for marketers to ignore. Additionally, politicians from New York City Mayor Rudy Giuliani to President George Bush are telling Americans to buy, buy, buy as a patriotic act.
"I think patriotism and how to act patriotic is not clear to many people," says Luce. "Can patriotism be translated into a consumer action? People may love America, but highlighting the patriotic message may cause them to avoid making any buying decisions. I think it will take time for consumers to respond and decide whether going to a Broadway show is patriotic or flying in an airplane is patriotic. Some of this patriotism could set up interesting conflicts for people."
Continues Luce: "On the one hand, we’re told to go out and spend. But then we’re told the malls may not be safe. That raises a real conflict because now we have a unique economic and political situation wrapped up in our daily lives. So, do we take the kids to the mall or not? Often the decision is not to act in order to avoid the conflict, and it is difficult for marketers to overcome those emotions."
The way America’s major sports leagues have wrapped themselves in the flag touched a nerve with Stephen Hoch when he attended the Philadelphia 76ers opening game of the NBA season.
"There was all of this patriotic stuff going on," says Hoch. "They unfurled a big flag, had a big American spotlight, and coach Larry Brown, who looked like he really just wanted to play the game, thanked all of the safety forces. I felt two things that I think many other people felt. First, this was obviously an opportunistic way for the NBA to wrap itself in the American flag, and I also felt emotion and patriotism. My guess is that everybody has some mix of both feelings … that it’s patriotic and opportunistic. The question is, when do people become saturated with all of this and see through it as just another crass attempt on the part of a marketer to make a buck wrapping themselves in the flag?"
Is buying something today a patriotic act? Should people go to Broadway shows, buy computers, autos and more Christmas toys to show they are good Americans?
"It sounds like a good excuse to me," says Hoch. "But Japan tried it and it didn’t work. The government wrote checks to people and said, ‘Buy.’’ They didn’t. "I don’t think it’s going to work for us either," Hoch adds.
Winners and Losers
If one industry has been most affected by the events of September 11, it is the U.S. airline industry. Already in serious financial trouble before the terrorist attacks, the steep decline in airline travel since then and the increased aggravation of flying continues to depress the industry. After a 50% decline in the weeks immediately after September 11, airline travel is still off 25%, according to the latest industry figures.
The terrorist attacks caused both United Airlines and American Airlines to change their advertising campaigns. On October 16, United expanded and modified its "We Are United" spots with a more "upbeat" tone, and planned to continue them into early November using the World Series as one major venue. American rolled out a campaign featuring a fare sale called "The Great American Get-Together" promoting the extension of double frequent-flyer miles.
The $54,000-question for marketers, however, isn’t whether an "upbeat" tone or "double miles" is the better approach by an airline. The real question is whether anything will work at all. "I don’t think airlines can do anything," says Hoch. "They just have to hold on. For companies in the travel business, not only are they dealing with tight economic times, but also many people are afraid of flying and don’t want the increased hassle. I think some of United’s ads have decent emotional appeal and are putting a human face on United’s employees. I don’t think it’s as much a case of marketing as putting on a pretty face when the world is turned upside down right now."
George Day sees the current situation as one of opportunity. In the airline industry example, Day says the job of the airlines is to "reassure the flying public and to overcome a huge amount of confusion about flying … and then to assure people that your airline will be around."
The best example of an airline following that theme, Day says, is Southwest, the Dallas-based short-haul carrier. "This is working to the advantage of Southwest Airlines," he says. "They can take advantage or their low-cost position and grow while weakened competitors cannot retaliate. They are advertising much more aggressively and they will be a winner."
Day notes that during every recession of the last 20 years industry leaders have "turned up" their advertising to grab more market share.
"If you have the resources, go for it," he says. In addition to traditional marketing channels, leading companies can invest in low-cost channels such as e-mail marketing. "Winners will be those that invest in customer relationship management tools, which allow you to focus and have high returns."
Besides Southwest, Days says that American Express and Fidelity are two financial services companies he expects to emerge in a stronger position when things start improving.
"If you accept the consensus that we won’t see a turnaround until after next summer," says Day, "the issue is how a company positions itself to take advantage of this opportunity, not to just stop the bleeding. A company like American Express is struggling with the fact that people are not traveling and the financial system is in trouble. Its response has been to improve, not reduce, the level of service it is providing. Fidelity is another company that is putting a lot more emphasis on customer retention. This is a good time to put to the test the theory that when market shares are volatile … you can gain share at low cost. The market leaders can pull this off."
The auto industry, however, is another story. After having its highest volume ever in October spurred by 0% interest rate promotions, automakers now have another difficult marketing task. How do you top a 0% marketing gambit? Will consumers now wait it out until there is another 0% financing scramble? Did the auto industry cannibalize future sales to spike sales in October?
"We’ve seen a very dangerous move by the auto industry in going to a zero-percent financing," says Day. "Certainly it has had a stimulating effect on sales, but most of these sales are borrowed from the future. I’m not sure if [zero-percent financing] will have a continued, sustained effect. The net result is that when it’s over, the auto industry will have a huge hangover."
So what should a company and marketer do? What will be perceived to be in good taste or bad? There are both sins of omission and commission, say marketing experts, and then there is just gut reaction.
"A few things ethics would rule out is a blatant attempt to use the tragedy for commercial purposes," says Donaldson. "The plain truth is that in the immediate aftermath a lot of companies rushed to print with sympathy ads and it was hard to tell if the intent was pure or not. My own sense is that it’s a matter of taste. If a business has nothing to do with the tragedy, the best thing to do would be to stick with business."
But, says Donaldson, commercial images of Osama bin Laden are in bad taste. "Selling Osama bin Laden T-shirts, as they are doing in Pakistan, would be ruled out here. Another thing that would be ruled out, but may well happen, is that Madison Avenue will suddenly begin to remove the faces of Middle Eastern-looking people from ads simply because they worry the appeal will be less in these times. We have fought hard over the decades to include people of color and different genders in commercials and ads, and it would be a shame to de-Muslimize our culture. That is a huge ethical concern. If it occurs it will happen slowly and almost imperceptibly. History is not very encouraging about our response in times of national crisis to broad groups of people."
At Topps, the Osama bin Laden trading card was included on purpose to induce a reaction. Not only did Topps produce the current "Enduring Freedom" set, but it has also produced card sets on Operation Desert Storm, the Korean War, the Civil War – and the Garbage Pail kids.
"Someone asked, ‘Why is the Osama bin Laden card there?’" says Topps’ Shorin. His response: "This is not a baseball card. I wouldn’t be surprised to find kids stomp on those cards, rip them up and throw them in the garbage. We have a policy of never changing a card set once it’s printed, but we are doing it with this set for the first time. When we reprint this series we are changing the Bin Laden card to the FBI’s most-wanted poster so we can show the bad guy as the bad guy."