MARKETING SEMINAR

CSR and Unethical Advertisements

(Third Meeting)

Prepared for:
Prof. Dr.Yasri, MS
Nip. 19630303 198703 1 002

Prepared By :
(1109346) Rafita Khairunnisak
(1109356) Suci Marcelina Efendi
(1109368) Dabitha Wise Maliha

STUDY PROGRAM MANAGEMENT

FACULTY OF ECONOMICS
UNIVERSITAS NEGERI PADANG
2015
INTRODUCTION

The development of a country is not only the responsibility government because

everyone in a country has a role to realize the social welfare and improvement of quality of life.
Now the business is no longer just pay attention to company's financial records (single bottom
line), but it has been covering the financial aspects, aspects of social and environmental aspects
of a regular or called triple bottom line. The synergy of these three elements is the concept of
sustainable development (sustainable development).

Along with the rapid development of the business sector as a result of economic
liberalization, various groups attempt to formulate and promote social responsibility of the
business sector in relation to society and environment. But this time, the changes are sweeping
the business oppressed by various pressures. Start from interest to improve competitiveness,
demands for implementing corporate governance, until the problem is increasing stakeholder
interests. Therefore, businesses need to look for a partnership (PPP) with all stakeholders in
order to play a role in development, while improving its performance in order to still be able to
survive and even grow into a company that able to compete.

Such efforts can be generally referred to as corporate social responsibility which intended
to encourage more ethical business world in performing activities that have no effect or a
negative impact on the community and environment. So finally, the business will be able to
survive in a sustainable manner to obtain economic benefits into the purpose of establishing the
business. At this present time, many companies conduct various forms of CSR activities, such as
the form of community development, charity or philanthropy activities.

Advertising is a form of marketing that aims to influence consumers to act like what the
content of advertising messages. The advertising also called washing human brain washing live
up to it. Not a bit of advertising, which tends to use less precise choice of words so impressed
with the intent ambiguous message should be conveyed. In fact, many consumers do not
understand what is meant by these ads.
I. Theories and Purposes of CSR (Corporate Social Responsibility)

A. Definition of CSR
According Nor Hadi, (2011: 48) CSR is a form of action that departs from ethical
considerations company aimed to improve the economy, which accompanied by an increase
in the quality of life for employees and their families, as well improving the quality of life
and society.
According to Darwin (2004), CSR is a mechanism for an organization to voluntarily
integrate social and environmental concerns into its operations and interactions with
stakeholders, which exceeds the responsibility of the organization in the field of law.
Johnson and Johnson (2006: 46) gives the definition of "Corporate social responsibility
(CSR) is about how companies manage the business processes to produce an overall positive
impact on society."
Essentially, CSR is a business operation that committed not only to increase the profits of
the company financially, but also for socio-economic development of the region holistically,
institutionalized and sustainable.

B. Basis Theory of Corporate Social Responsibility

1. The theory of the social contract

The main principle of the social contract theory states that society is composed
series of implicit and explicit contracts between individuals, organizations and
institutions. This contract evolved so the exchange can be made between the parties in a
harmonious environment and mutual trust.
According to this theory, social, companies and organizations entered into a
contract with other community members and receive raw materials, goods and social
approval to operate in exchange for good behavior from the company. According to
Davis (1960), the resulted are not only the strength of the company's internal social
enterprise, but also external companies.
 2. Stakeholders theory
Stakeholder theory is interconnected with legitimacy theory which suggests that
companies should reduce between the expectation gap and surrounding communities to
remind the public recognition. Stakeholder is all internal and external parties which have
good relationship affected directly and indirectly by the company (Lk, Yau, Tse, Alan,
Sin, Leo and Raymond,2005; 93).
Based on the basic of the stakeholder theory, companies cannot escape from the
social environment around the company. The company also needs to maintain the
legitimacy of stakeholders in a framework of policy and decision-making, so it is to
support the achievement of corporate objectives, stability and assurance efforts.
(Adam.CH, 2002; 95)

3. Legitimacy Theory
Legitimacy is a psychological state alignments people who are very sensitive to the
surrounding environment symptoms in both physical and nonphysical. O'Donovan (2002)
argues the legitimacy of the organization can be seen as a community that given to the
company and something desired or sought the company of the community. Thus, the
legitimacy is the benefits or potential resource for companies to survive (going concern).

C. The importance of CSR

CSR was affected by the phenomenon of DEAF in the industrialized world. DEAF is an
acronym of Dehumanization, Emancipation, Aquariumisasi, and Feminization (Suharto,
2007a: 103-4):

1. Dehumanization industry.
Efficiency and mechanization increased momentum in the industrialized world has
created problems for the humanitarian workers in the company, as well as the
surrounding community. "Merger mania" and downsizing the company has unleashed a
wave of layoffs and unemployment. Expansion and exploitation industry has given rise to
social inequality; pollution and environmental degradation.
2. Emancipation of public rights.
Society increasingly aware of their rights to hold accountable the company on various
social issues that often caused by the operation of the company. This awareness is
increasingly demanding corporate concern not only in the production process, but also to
caused various social impacts.
3. Aquariumisasi industry.
The business competitiveness now is more transparent and open like an aquarium.
Companies that only hunt economic rents and tend to ignore the legal, ethical and
philanthropic principles will not receive public support. In fact, in many cases, the public
demanded that companies like this will be collapsed.
4. The feminization of the workforce.
Women who work are increasingly demanding adjustments the company which not only
to the internal organization, such as the provision of maternity leave, health and safety,
but also to the emergence of social costs, such as child neglect, juvenile delinquency, due
to a reduction or loss of the mother's presence -Mother at home and certainly in the
community. The establishment of educational facilities, health and child care (child care)
or centers of sports and recreational activities for youth is some form of a response to this
issue.

Questions about why CSR is important, not quite answered by stating that the CSR has
been mandated by law. If CSR only considered important because the Act, companies will
tend be forced to implement CSR. Therefore, the companies must understanding about the
philosophical and ethical commitment to CSR.

The importance of CSR needs to be based on the awareness of the company to the fact of
the existence of the more gaping chasm between prosperity and poverty, both at the global
and national level. Therefore, it is mandatory or not, CSR should be a genuine commitment
and concern of business people to take part reducing human sorrow.
D. Principles of CSR

According to Crowther & Aras (2008: 11), CSR consists of three main principles which are:

1. Sustainability
The actions taken today will give impact to the options which available in the future. If
the resources are utilized in the present, then there will not be enough resources in the
future, and this is particular concern if the resource has a limited amount.
2. Accountability
Accountability regard to the recognition of the company will affect the external
environment. Therefore, the companies are responsible for their taken actions and
decisions. This principle affects the count due to the effects of actions taken by the
company both internal and external organizations.
3. Transparency
Transparency means the internal consequence of the actions of the organization can be
ascertained from the report made the organization and the fact that there is not hidden in
the report. Thus, all the result of actions taken by the organization, including internal
impact, should appear evident to all through the use of information provided
organizational reporting mechanisms.

CSR began in the era which awareness of the long-term sustainability of the companies is
more important than profitability. CSR activities will ensure the sustainability of the
business. It is because:

The reduced social disruption often occurs due to environmental pollution, even to
cultivate support or defense of the local community.
Ensuring the sustainable supply of raw materials for the long term.
An added advantage of the new business unit, which was originally a CSR activities
designed by the corporate.
There are 5 pillars CSR activities, which are:

1. Development of human resource capacity in the internal environment and communities.

2. Strengthening regional economic communities around working area of the company.
3. Maintenance relational relationship between corporate and social environment that is not
managed properly and it is often invites vulnerability conflict.
4. Improvement of good corporate governance
5. Protecting the environment, include physical environment, social and cultural.
II. Two Companies and Their CSR

A. PT. Indofood

Indofood conduct CSR to getting closer to community. Therefore, during 2011, Indofood
continued social responsibility program (Corporate Social Responsibility or "CSR") which
reflect the Company's mission of "Providing Welfare contribution to society and the
environment in a sustainable manner ". The cornerstone objectives used in implementing
CSR programs of the Company are: Creating a Better Life Every Day, which then poured
into the five pillars of CSR, namely Human Resources Development, Active Participation in
Community Activities, Increased Economic Value, Caring for the Environment, and Human
Solidarity.

The programs conducted by Indofood are:

1. Development of Human Resources

Indofood believe that education as a major factor in the development of human resources.
Then, company opens the opportunities for people to participate in formal and non-
formal education, support research development, and improve the competence of
teachers.

2. Beasiswa Indofood Sukses Makmur (BISMA) or Scholarships of Indofood.

Each year Indofood provides scholarships for children of employees who have excellence
in academic. During 2011, approximately 1,570 children gained scholarships that given
from elementary school until college. Through this educational assistance, the Company
wants to encourage students who are sons and daughters of employees of Indofood to
fully explore the potential of them self. More than 15,000 children have received these
scholarships. During 2011, Indofood also collaborate with Karya Salemba Four, provides
scholarships to 226 students from universities in Indonesia such as Universitas Indonesia,
Institut Pertanian Bogor, Institut Teknologi Bandung, Universitas Padjajaran, Universitas
Gadjah Mada, Institut Teknologi Sepuluh Nopember and Universitas Andalas. The
students from disadvantaged families are obtaining scholarships for tuition needs, the cost
of books, internet and shelter.
3. Assistance Program Education Facility
To support education, SIMP, one of the subsidiaries of Indofood manages schools located
around the plantation areas covering Elementary School to High School and Vocational
High School. These schools have now been equipped with various facilities including
computer labs and biology, library, as well as sports and other extracurricular activities
such as band drum kit. In 2011, SIMP performed additional 22 classrooms in schools
under its management. Attention Indofood for the education of children is a potato farmer
who built a business partner realized in the form of construction of the library and
playground in PANGALENGAN and Kertasarie, West Java

4. Car Service Clinic SUN

As a company that produces quality food products, Indofood through its subsidiary ICBP
seeks to help provide education about the importance of nutrition. Indofood providing
health services, consulting and nutrition education for the community. The units are
equipped with the equipment of ultrasonography to monitor the growth of the baby
during pregnancy. ICBP has received the Millennium Development Goals (MDG) Award
from the Office of the Special Envoy of the President Republic of Indonesia to the
MDGs, for their participation in improving the health of children and pregnant women
through Car Service Clinic SUN program.

5. Active Participation in Community Activities

Indofood also participates for the development of the communities in which the
Company's operating units are located.
6. Rehabilitation House Live
Indofood also collaborate with the Tzu Chi Foundation Indonesia to support
rehabilitation programs houses in bad condition. These companies have been improving
houses in slums in Cilincing, North Jakarta.

7. Social and Religious Activities

The Company also participates and contributes in a variety of social activities,

especially related to education and religious activities.
 Indofood Sharing Love, held in commemoration of religious holidays such as Ramadan
and Christmas. Concern is realized in the form of a package of products and school
supplies to communities in need.
MTQ is a program managed since 1974 by Lonsum. The program aims to improve the
ability to read the Quran for children of employees of Indofood and communities
around the plantation area.
Each year, the Company and its subsidiaries also provide sacrificial donation to
commemorate Eid given to communities around the operational areas of the Company

B. CSR (Corporate Social Responsibility) of BCA Corporation

As a responsible corporate citizen, the BCA does not just want to be known as a leading
banking company in Indonesia. Moreover, the BCA also has a strong commitment to make
sense of his presence in the community through awareness and various contributions efforts to
achieve sustainable development, which includes three major components: economic
development, ecological balance and social welfare.

Besides, BCA is also aware the interdependence between sustainability growth of the
company and development of community prosperity. Companies can continue to grow when
the communities in which it is also grown up with. That is why, for BCA, CSR is not just a
form of regulatory compliance, but an important part that determines the future of the
company.

1. Education
BCA developed continuously education programs, such as:
Accounting Education Program (PPA) Non-Degree
This program aims to provide a non-degree education free of charge for high school
graduates or equivalent that have academic achievement but have financial
constraints that cannot continue their education to a higher level.
Information Technology Education Program (PPTI) Non-Degree.
 In order to offset the increase in human resources needs and development of
Information Technology BCA, starting in 2013 opened BCA Information Technology
Education Program (PPTI BCA) Non-degree, educational programs equivalent non-
degree S1 is free of charge and is intended for high school graduates (high school)
and school SMK (SMK) who want to continue their education or develop skills in the
field of information technology

2. Public health
Cataract surgery
BCA have collaboration with the Association of Cataract Blindness Prevention
Section Ophthalmologist Indonesia (SPBK Perdami), so BCA actively facilitating
cataract surgery services for disadvantaged communities.
Blood Donor Bakti BCA
Development of Health Services for poor people.
Improve and develop appropriate housing.

3. Field of culture
BCA also efforts to preserve and supports the development of national culture, which is
embodied in the program "BCA for Indonesian Wayang".

4. Environment
Green Building BCAs tower
The glass exterior of the building also insulated glazing technologies that can reduce
the heat into the room without significantly reducing the light intensity.
Participate in Earth Hour
Earth Hour is a global event initiated by WWF and held every last Saturday in March
in each year. BCA was participated in Earth Hour by turning BCA logo lighting and
other outdoor lighting for one hour, on March 23, 2013 between 20:30 until 21:30.
Extinction is done in some office BCA, ie BCA Tower Building, Wisma Asia II and
Wisma Pondok Indah.
 Implementation and support environment
As one form of corporate social responsibility program under the umbrella of Bakti
BCA BCA, especially Synergy Solutions BCA, BCA cooperate with the agency or
organization that has the competence and credibility in environmental management.
III. Benefit and Losses If The Company Running The CSR Program

A. Benefits of CSR for companies

Four benefits of CSR to the company (Wikipedia, 2008):
1. Brand differentiation.
In an increasingly competitive market competition, CSR can provide a distinctive
corporate image, good, and ethical in the public eye, which creates customer loyalty.
The Body Shop and BP (with flag "Beyond Petroleum" it), often regarded as having a
unique image-related environmental issues.

2. Human resources.
CSR programs can assist in the recruitment of new employees, especially those with
high qualifications. When the interview, candidates who have higher education and
experience are often asked about CSR and business ethics, before they decided to
accept the offer. For a long staff, CSR can also increase the perception, reputation and
dedication to work.

3. License to Operate.
The company that runs the CSR can encourage the government and the public to give
"permission" or "blessing" business. They have to meet the standards of operation and
concern for the environment and society at large.

4. Risk management.
Risk management is a central issue for any company. The reputation of the company
that built many years could collapse in an instant by a corruption scandal, personal
injury, or damage to the environment. Building a culture of "doing the right thing" is
useful for companies in managing business risks.

According to Lako (2011: 95) the company's commitment to implement sustainable CSR
brings many benefits, such as:
 Social investment that becomes a source of competitive advantage for the company.
Strengthening the company's financial performance.
Increased accountability and appreciation from the community and investors,
creditors, suppliers, consumers, governments and society.
Increased commitment, work ethic, efficiency and productivity of employees.
Decreasing the vulnerability of social unrest and resistance from the surrounding
communities as valued and appreciated the company.
Increased reputation, goodwill and the value of the company in the long run.

B. Losses of CSR for companies

CSR cannot respond to the needs of the community and the public's attention. One of the
basic characters of CSR is empowerment; it became increasingly distant from the
achievement of the objectives of CSR. CSR implementation trapped above can change the
abbreviations and the meaning of CSR into: Opium, Hostages and Poison.

Opium.
CSR previously intended to empower people, even just creating dependency poor
beneficiaries;
Hostages.
CSR was a form of corporate social awareness, shifted into the community strategy
for holding companies and making "cash cow".
Toxins.
CSR was to establish a corporate image and improve the welfare of the people, turned
into a poison that not only damages the reputation of the company. But also destroy
social capital, local knowledge and community independence.
IV. Competitive Advantage Obtained by the Company after Doing CSR

CSR offers more development concept to "doing with the community" as opposed to
"doing for the community". The method for doing work will make people become passive, less
creative and helpless, even educate people dependent on government assistance or voluntary aid
organizations. In contrast, the working methods of doing will stimulate the community to be
active and dynamic and able to identify where the needs are real needs, felt needs and expected
needs.

CSR is the responsibility of the company that does not have a direct economic value, but
it has a great influence for going concern and the existence of the company. The feedback
obtained from this CSR activities not directly can be enjoyed after this activity. But it has long-
term effects are very important for the existence of the company.

CSR will be a business strategy that is inherent in the company to maintain or improve
competitiveness through reputation and brand loyalty (loyalty). Both of these will be a
competitive advantage and difficult to be imitated by competitors. On the other hand, the growth
of the desire of consumers to buy a product based on criteria values and ethics will change
consumer behavior in the future. Implementation of CSR policy is a process that continuously
and sustained. Thus, it will create a situation that would benefit all parties (win-win situation).
Where, consumers get superior products and friendly environmental, while producers get the
corresponding profit.

When talking about the reputation, definitely it is inseparable from the brand image of the
company. A company should be able to build a positive image. As this present time, the
companies are not only creating prosperity of society and corporate profits. They have to able as
a supplier of human values (human values) for the community where the companies are located.
Companies are challenged to contribute more than just improve the quality of products / services
at affordable prices. Companies are required daring do "social contract" with the communities in
which they operate. Surrounding communities is a major community enterprise. When they get
the advantage and considered as part of the company, then they will assume that they have a
sense of ownership of the company. This is certainly a very good impact for the growth and
development of the company in the future.
 When companies are not only think of profit, but also pay attention to social welfare
benefits. Mutual beneficial relationship is certainly bringing the community to have a higher
awareness and positive image in its assessment of the company's reputation. Good reputation in
line with customer brand loyalty. Destructive deeds will definitely lower the reputation of the
company; on the contrary positive contribution will definitely boost the positive image and
reputation of the company. So that it can support the success of the company. People will tend to
be loyal to a company that has a good image and have a high sense of social responsibility,
which they are not used as the object to get the maximum profit, but the company will make
them as part of the company itself. So the welfare of the people is the main focus for the
company in addition to benefit itself. Loyalty cannot be accepted instantly, but through a process
that eventually the public will be the assessor for the company. Surely reputation and loyalty are
two important things that cannot be imitated by other companies. Both of these will be formed
naturally when consumers really feel the benefits received from the company, with an awareness
of the social responsibility, the company will be on the integrity of the living conditions of
mankind in the future. Consumer expectation will enhance the reputation of the company and
high fidelity to create a competitive advantage for the company.

Success in building and creating a good reputation and customer loyalty to the company
can create sustainability. How does the company in considering the sustainability of action in the
future. This requires a strong commitment, caring, full support and active participation of all the
elements that exist within the company itself makes CSR program has a value that can give a
special meaning for the company.
V. The Reason Company Tends To Use a Misleading Advertisement

Advertising is a whole paid non-personal presentation and promotion of the idea of a

good or service from the identified sponsor (Kotler, 2007; 363). Thus, advertising is one of the
marketing tools which quite widely used by businesses to introduce a variety of products that
they produce to consumers and increase consumer awareness of the products. Every business can
certainly expect that advertising in certain effects give rise to the intended consumer, this effect
becomes the purpose of communication of an advertisement. Advertising is not designed to
create immediate sales, but the effects of long-term advertising (Sandage, 1968).

The strong theory of advertising assumes that advertising can influence the degree of
change, behavior, and beliefs target audience. So that advertising can influence someone to buy a
product they have never bought before. Advertising is also believed to increase sales of a brand
and increase the level of class brand. So ads are more attractive and more creative to attract
consumers. Advertising indirectly affect consumer behavior in the community and consumer
appeal include: emotional appeal, rational, sexual appeal, humorous appeal, fear appeal.
Advertising should get the attention to consumers because the first impression on the ads
determine the success of advertising when seen, raises the interest of consumers in order to be
the center of attention which is easy to remember and a good advertisement should make
consumers have a desire to what is conveyed by the advertisement, causing the desire to buy
these products.

Today the proliferation of views that display information misleading advertising cannot
be separated from the increasing competition among businesses. So they seek to attract
consumers as much as possible. Challenges faced by competing companies which are always
trying to get the best way to capture and maintain market share. Seize and maintain market share
in the competitive conditions like today's competitive, companies must be able to apply the right
marketing strategy. One of them is to apply the right strategy, namely the promotion of
advertising activities. However, they tend to violate the ethics of advertising and consumer
rights. Where, companies provide information through the media tends to excessive advertising,
misleading and deceiving consumers.
 False advertising is defined as "if the representation of facts in the ad is wrong, which
expected to induce the purchase of goods advertised, it is detrimental to the buyer purchases
persuasion, and it made on the basis of fraud or fraudulent acts (Handler, 1972; 475).

Forms of advertising violations by way of a claim includes a claim without proof

concrete products through price, quality, usability of goods, guarantee etc. goods or services is a
form of misinformation that is quite commonly found in the print and electronic media. Through
protrusion claims the product, the company seeks to inform excellence, usefulness or advantages
and benefits for consumers who sometimes compare with other products of competitors or made
dramatically. Some claim that a product is found tends to be subjective, such as "whiter, the best
and so on. Claims such as these tend to overestimate the abilities of product (puffery) rather than
the actual capabilities.

Successful advertising is advertising that is able to influence, attract and engage

consumers as much as possible. Competition in the businesses is increasingly stringent makes
companies have to compete to win the competition in order to survive amid competition. Puffery
is part of a sales presentation or advertising which give praise with a subjective opinion. It is
inevitable, when the target market segmentation in different, then the depiction will be different
ads. Like advertising to children, they do not understand that a commercial motive is to influence
and stimulate and they cannot differentiate commercial advertising or television program. As a
result, they tend to believe that commercial advertising message is a truth. These
opportunities are trying to be utilized by the company, they try to do a dramatization ads or
competing to create compelling ads, not even noticing the colored element that tends advertising
ethics could harm consumers, especially children. Surely this is a business strategy to attract the
consumer purchasing power to win the competition.

Moreover, not a few ads tend to use less precise choice of words so impressed with the
intent ambiguous message should be conveyed. In fact, many consumers do not understand
meaning to convey by these ads. In the current era of globalization, the business competition is
getting tighter and complex. In order to achieve the targets set by management, many companies
implement several ways, even though it should ignore ethics or business norms prevailing in
society.
VI. The benefits and weaknesses if the company broadcast the ads as in the case.

The benefits of advertisements

a. Brand Awareness and Exposure

An organizations main objective should be to keep its brand in the mind of its target
audience. Frequent advertising builds awareness, awareness builds familiarity, and
familiarity builds trust even though the ads not necessarily true as their promises. If a brand
stops advertising, prospects and current customers may think it is troubled or out of business.
It is also surprising how quickly the consumers can forget about brand if they dont see it
regularly. Advertising is even more important for brands undergoing major change, such as a
re-branding or establishing their independence from a parent corporation.

b. Win the competitive advantage

Todays marketplace is highly competitive and fragmented. It is difficult to stand out from
the clutter of brands offering similar services and making identical claims. To succeed, a
brand must differentiate and communicate that difference. A well thought out, integrated
marketing communications plan is critical for success, and advertising should still be a key
component of the media mix. Therefore, there are a lot companies have tricks to attract their
target audience such as untrue sales promotion or dishonesty advertising.

Advertising has always been one of the steady marketing activities. It has created many
household names and been responsible for the successful delivery of thousands of marketing
campaigns. However, in tough business ethics, advertising is one of the first things to be cut.
Rightly so, ads are an expensive marketing luxury and the companies also have some tricks
to attract their target audiences with ads looks promising even though not necessarily true.
But if the companies are not advertising their products or services, there is a good chance
their competitors arent either and there are many advantages to advertising when others
dont. When competitors reduce or minimize dishonesty advertising and marketing, a
resourceful and smart marketer can capitalize on the opportunities by increasing dishonesty
advertising and marketing activities, then gaining competitive advantage ready for a
recovering economy.
The weaknesses of unethical advertisements

There is nothing intrinsically good or intrinsically evil about advertising. It is a tool, an

instrument: it can be used well, and it can be used badly by the company. If it used badly, it will
give a negative and harmful impact on individuals and society.

a) Economic Harms of Advertising

Advertising can betray its role as a source of information by misrepresentation and by

withholding relevant facts. Sometimes, too, the information function of media can be subverted
by advertisers' pressure upon publications or programs not to treat of questions that might prove
embarrassing or inconvenient.

More often, though, advertising is used not simply to inform but to persuade and motivate to
convince people to act in certain ways: buy certain products or services, patronize certain
institutions, and the like. This is where particular abuses can occur.

The practice of "brand"-related advertising can raise serious problems. Often there are only
negligible differences among similar products of different brands, and advertising may attempt to
move people to act on the basis of irrational motives ("brand loyalty," status, fashion, "sex
appeal," etc.) instead of presenting differences in product quality and price as bases for rational
choice.

This is a serious abuse, an affront to human dignity and the common good when it occurs in
affluent societies. But the abuse is still more grave when consumerist attitudes and values are
transmitted by communications media and advertising to developing countries, where they
exacerbate socio-economic problems and harm the poor. "It is true that a judicious use of
advertising can stimulate developing countries to improve their standard of living. But serious
harm can be done them if advertising and commercial pressure become so irresponsible that
communities seeking to rise from poverty to a reasonable standard of living are persuaded to
seek this progress by satisfying wants that have been artificially created. The result of this is that
they waste their resources and neglect their real needs, and genuine development falls behind.
Similarly, the task of countries attempting to develop types of market economies that serve
human needs and interests after decades under centralized, state-controlled systems is made more
difficult by advertising that promotes consumerist attitudes and values offensive to human
dignity and the common good. The problem is particularly acute when, as often happens, the
dignity and welfare of society's poorer and weaker members are at stake. It is necessary always
to bear in mind that there are "goods which by their very nature cannot and must not be bought
or sold" and to avoid "an idolatry of the market" that, aided and abetted by advertising, ignores
this crucial fact.

b) Cultural Harms of Advertising

Advertising also can have a corrupting influence upon culture and cultural values. Consider also
the cultural injury done to these nations and their peoples by advertising whose content and
methods, reflecting those prevalent in the first world, are at war with sound traditional values in
indigenous cultures. Today this kind of "domination and manipulation" via media rightly is "a
concern of developing nations in relation to developed ones," as well as a "concern of minorities
within particular nations."

The indirect but powerful influence exerted by advertising upon the media of social
communications that depend on revenues from this source points to another sort of cultural
concern. In the competition to attract ever larger audiences and deliver them to advertisers,
communicators can find themselves tempted in fact pressured, subtly or not so subtly to set
aside high artistic and moral standards and lapse into superficiality, tawdriness and moral
squalor.

Communicators also can find themselves tempted to ignore the educational and social needs of
certain segments of the audience the very young, the very old, the poor who do not match
the demographic patterns (age, education, income, habits of buying and consuming, etc.) of the
kinds of audiences advertisers want to reach. In this way the tone and indeed the level of moral
responsibility of the communications media in general are lowered.
VII. The Consumers In Indonesia Keep Buying Products Even though Show
Dishonest Ads.

Most people believe that the choices they make result from a rational analysis of available
alternatives. In reality, however, emotions greatly influence and, in many cases, even determine
consumers decisions. Therefore, advertisement influences emotional of their target audience
such as in Indonesia. Even though most of Indonesians are realize that most of advertisements in
televisions, magazines, internets and others are less dishonesty, they keep buying that products
because the advertisements are necessarily success to influence their emotional.

Descartes Error and Antonio Damasio, professor of neuroscience at the University of Southern
California, argues that emotion is a necessary ingredient to almost all decisions. When
consumers are confronted with a decision, emotions from previous, related experiences affix
values to the options they are considering. These emotions create preferences which lead to their
decision. Damasios view is based on his studies of people whose connections between the
thinking and emotional areas of the brain had been damaged. They were capable of
rationally processing information about alternative choices; but were unable to make decisions
because they lacked any sense of how they felt about the options.

The influential role of emotion in consumer behavior is well documented:

fMRI neuro-imagery shows that when evaluating brands, consumers primarily use emotions
(personal feelings and experiences) rather than information (brand attributes, features, and
facts).
Advertising research reveals that emotional response to an ad has far greater influence on a
consumers reported intent to buy a product than does the ads content by a factor of 3-to-1
for television commercials and 2-to-1 for print ads.
Research conducted by the Advertising Research Foundation concluded that the emotion of
likeability is the measure most predictive of whether an advertisement will increase a
brands sales.
Studies show that positive emotions toward a brand have far greater influence on consumer
loyalty than trust and other judgments which are based on a brands attributes.
Emotions are the primary reason why consumers prefer brand name products. Therefore, many
Indonesians are attracting to buy products that available as generic and store brands with the
same ingredients and at cheaper prices. They decide to pay more for brand name products even
though brands are not necessarily true in their advertisement. Because most of Indonesians are so
conscious about their status and they prefer to use branded products to show off their status
symbol.

A nationally advertised brand has power in the marketplace because it creates an emotional
connection to the consumer. A brand is nothing more than a mental representation of a product in
the consumers mind. If the representation consists only of the products attributes, features, and
other information, there are no emotional links to influence consumer preference and action. The
richer the emotional content of a brands mental representation, the more likely the consumer
will be a loyal user.

While emotion can be communicated effectively in a print ad or television commercial, there are
other important components of a brand which have emotional dimensions. For example:

Rich and powerful mental representations of a brand include its personality. Research reveals
that consumers perceive the same type of personality characteristics in brands as they do in other
people. And just like with people, they are attracted more to some personality types than others
attractions which are emotion based, not rational. Brand personality is communicated by
marketers through packaging, visual imagery, and the types of words used to describe the brand.

Another important foundation for a brands emotions can be found in its narrative the story
that communicates who it is, what it means to the consumer, and why the consumer should
care. This narrative is the basis for brand advertising and promotion.

But for consumers, perhaps the most important characteristic of emotions is that they push
consumers toward action. In response to an emotion, humans are compelled to do something. In
a physical confrontation, fear forces us to chose between fight or flight to insure our self-
preservation. In our daily social confrontations, insecurity may cause us to buy the latest iPhone
to support our positive self-identity.
Over time, marketers have developed theories about why consumers buy. Most of these err by
viewing the consumer through the lens of the product. Marketers start with the features and
benefits of a product and conduct consumer research to find matching needs and motivations.
More recently, Internet and digital media companies added a new layer of suppositions to
explain and predict consumer behavior. Their approach views the consumer through the lens of
digital technology. However, they misinterpret data about the activity of online users as being a
valid insight into the consumer decision-making process.

Consumers do not have a Pavlovian response to products and to their marketing programs. Nor
do the fundamentals of consumer behavior change to accommodate the latest innovation in
digital technology. An understanding of consumer purchase behavior must be based on
knowledge of human emotion and include the paramount influence that emotions have on
decision-making.
Conclusion

Nowadays, business is rapidly changing globally. Companies are challenged to contribute more
broadly as an institution that not only creating prosperity of society and corporate profits. They
also must be able to function as a supplier of human values (human values) for the communities
where the company is located. Companies are challenged to contribute more than just improve
the quality of products / services at affordable prices. Companies are required daring do "social
contract" with the communities in which it operates, namely to build, plan and implement
Corporate Social Responsibility (CSR) which are effective in accordance with the Social Core
Value Society.

Consumers rights must be met in order to obtain accurate and complete information on the safe
products, adequate and do not harm the environment. Without considering the rights of
consumers, businesses can easily get caught in the abuse as deceptive advertising which does not
provide complete product content information, develop unsafe products or burdening consumers
with unreasonable price.
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