MEMO

To:	Don Washington, Director of Marketing, Rewards Membership Alva Ramirez, Director of Sales, Rewards Membership Anne Hernandez, CEO
From:	[Insert your name.]
Subject:	Addressing Legal Team Concerns on Low-Income Marketing and Sales Plan

Executive Summary

I appreciate your efforts in going through the proposal and recommending some changes. Following the legal and ethical concerns that you highlighted, the marketing and sales department has come up with recommendations to address the issues. The recommendations center around ensuring truth and evidence are incorporated in the marketing communication and considering an alternative to including high school students. Additionally, recommendations about ensuring under redemption and under-use practices, clarity, and transparency of the language, which data will be collected, and how it will be protected are provided.

Addressing the Two Legal Requirements

Truth in advertising: Analysis and recommendations

Marketing is not about getting more customers; it is about offering the best information within the boundaries of laws, societal norms, and ethics. Telling the truth is a requirement by law that all marketers must adhere to when doing sales and marketing. In this case, the legal department’s plan for legal issues revolve around being precise in making statements, non-deceptive, and substantiating implied superiority claims. By being precise, the marketers must ensure their words are marked with accuracy or exactness to avoid confusing the community. Non-deception means that they must avoid lying to the community at all costs. For example, the marketers must not lie that the membership cards help the community get products for free. In the proposal, the issues occur where the marketers fail to be precise, are deceptive, and cannot substantiate implied superiority claims about the program in the ad lines.

To address the issue of preciseness, the marketers need to use accurate words that the community can relate to. This is about engaging emotional truth by using a novel experience that they can relate to. About being non-deceptive, the marketers need to tell the community the benefits they will receive from the program addressing both the positive and negative impact of the membership programs. Additionally, they need to substantiate the claims by giving a concrete example of a community person who has benefited from the program. For example, they can ask any person who has benefited from the program to give a testimony about their experience with the program.

Based on the US Federal Commission, all advertisements need to be truthful and supported by evidence. My recommendations meet this requirement because using a novel or getting to the audiences’ emotional part helps them relate to the marketers’ information. Besides, having a testimony of a person who has benefited from the program ensures evidence is provided, which validates the truth. However, the individual to give the testimony must be able to show that they indeed benefited and have not been hired by the marketers to deceive the community.

Data collection and privacy: Analysis and recommendations

This plan requires that marketers ensure the community understands what information they are giving out, why, and how it will be used and protected. It ensures consumers are not exploited through an unlawful collection of private data and sharing their data among third parties. This means that they have the right to know what information a marketer collects, opt-out anytime they wish and delete their personal information from a company’s database anytime they want. This proposal’s leading data collection and privacy issue occurs in terms of the marketers’ audiences. High school students are some of the major consumers of beauty products and the company in particular. However, considering most of them are under 18 years, it is illegal for the marketers to collect their personal data or ask them to purchase the rewards membership cards.

For this case, the marketers have to come up with an alternative way of how the high school students will be engaged in the program and which will require them not to purchase or provide personal data. The recommendation is that the marketers can come up with active and inactive membership cards. They can give the high school students inactive cards just to ensure that they are engaged in the program as one of the top consumers of the company’s products. They can then allow them to accumulate points but redeem them when the cards are activated through their national identity cards. By this, the marketers will ensure that they have not collected any personal data and have not lured the students into purchasing the cards before they reach the required age.

This recommendation meets the legal requirement in that it is considerate of the age of students and the privacy of their data. For example, when the cards are inactive, it means they only have an identification number but are not tied to the student’s personal data. When the student reaches 18 and has a national identity card, they activate the card using their data such as age and gender, and the credentials replace their card number. Hence, their data is protected by not giving it at that time, but they will still benefit from the cards in the future.

Addressing the Three Ethical Concerns

Direct marketing to low-income populations: Analysis and recommendations 

The plan for the ethical issue is about how to market directly to low-income populations. The issue asserts that people are different, and marketing approaches should be different depending on the financial stability. The specific ethical issue is marketing to vulnerable populations to make them more vulnerable. It is unethical to market a product to vulnerable people who are trying to make ends meet, only to make them spend a lot of money in buying the product without any benefit just to benefit the company. For the proposal, the ethical issue is evident in under-redemption rules and under-use practices where the marketers expect the community to be redeeming their cards just like other members who renew and do not make enough purchases to cover up the renewal cost. The marketers, therefore, have to come up with a way of helping the community enjoy the special discounts and purchases, even though some may not renew their cards. The issue also occurs in applying incentives for signing new members.

One framework that applies is Blanchard-Peale, which questions whether an action is legal, fair, and how it makes one feel. It could not be fair to make the vulnerable populations renew their cards annually to be able to get discounts on purchases considering they might not have money to renew. Besides, it would make them feel used by the company because the company benefited from purchasing the cards, and then they have to renew for them to benefit.

The recommendation for this issue is to have the individuals willing to enroll into the program prove their level of income so that the company can exempt them from renewing their cards with the same amount as other well-off individuals. This way, they will benefit from the program and not consider it a disadvantage. Another change to address the issue is to have two types of membership cards where those who renew their cards can enjoy premium discounts on purchases while those who do not renew can also enjoy limited discounts. By that, the vulnerable populations will still benefit from the program, and the company will still benefit from their purchases. This will solve the company’s issue, making them spend money that they might not have to get a discount on a product. The recommendations meet the ethical concerns in that the community will not have to purchase the membership card and then fail to see its fruits. They will still enjoy the benefits, which will improve their lives.

Transparency in language: Analysis and recommendations

This plan ensures that consumers can understand the language used in marketing. It is concerned with how well the consumers get the point and actually comprehend its meaning. Ethical marketing needs to be articulated in a language that the consumer understands to make them make informed decisions. For example, if a consumer does not understand English fully, and a marketing message is in complex English words, it would be unethical to lure them into purchasing the product, considering they have not understood the message. Their understanding of the marketing message should guide the decisions they make. In the proposal, the ethical issue occurs in terms of the complexity of the pro-rate coupon method the marketers will use to calculate discount shares. Also, there is an issue in the language used to describe the donation plans to local charities and schools. Specifically, the language is ambiguous and imprecise on what the contribution will be based on, how they will be reported, and the kind of costs involved.

The Blanchard-Peale ethical framework applies because it is not fair enough to make people who do not understand a method sign for it. Since the community is vulnerable and of low income, it means that most of them could have a low educational background and, thus, do not understand the pro-rate coupon method. Telling them that their discounts will be calculated through that method makes no difference because they do not understand, making it unfair to lure them into registering for the program without a better understanding of what they will benefit from. One change I would recommend for this issue is to come up with a simple method that the population will understand. Alternatively, the marketers can have a translator to help them understand what the program, discounts, and charity work are all about in their native language. This will meet the ethical concern in that they will understand how the discounts will be calculated and what the charity work is about, making informed decisions.

Collection and use of consumer data: Analysis and recommendations

This plan is about the wrong collection and use of consumer data. It is particularly concerned about using consumers’ data to create more issues for the populations, leading to vulnerabilities. Sometimes companies collect consumers’ data and use it for purposes other than what the consumer consented to to when giving out the information. For example, they can use data collected for registering a membership card to advertise other products to the members, which is unethical. Also, some could sell the information to third users. For this proposal, the legal department is particularly concerned about marketers asking older adults information about their grandchildren and children’s birthdates and ages without their consent.

A framework that applies to this situation is Markkula Center, which is concerned with the virtue approach. Marketers need to employ ethical virtues such as honesty when collecting information to explain how they will use the data without lying. One recommendation is that the marketers can opt to ensure that questions about children or grandchildren are not included for recommendations and changes. This means they should come up with a list of questions that will provide only helpful information. For example, the birthdates might not be important and so should not be asked. Alternatively, suppose they have to ask about birthdates and other personal information. In that case, they must be able to explain how they will use the data and protect it from the third party uses to the participants. This way, an individual will make an informed decision of whether to provide the information or not.