Module 9 MBA 500 Project Three Response Memo

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Southern New Hampshire University *

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500-C

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Marketing

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Feb 20, 2024

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MEMO To : Don Washington, Director of Marketing, Rewards Membership Alva Ramirez, Director of Sales, Rewards Membership Anne Hernandez, Chief Executive Officer From : xxx Subject : Addressing Legal Team Concerns on Low-Income Marketing and Sales Plan Executive Summary Our legal team brought forth concerns regarding concerns about truth in advertising as well as with data collection and privacy. They also brought up concerns about marketing the loyalty program to low- income communities. The legal team would like us to come up with a solution for these legal and ethical concerns. Addressing the Two Legal Requirements Truth in advertising: Analysis and recommendations Truth in advertising is regulated by The U.S. Federal Trade Commission. All advertising must be truthful and supported by evidence. The requirements set by our legal team are that we need to be precise about statements made about the loyalty programs benefits, we cannot use deceptive speech and advertisers must be able to substantiate direct or implied superiority claims. The legal team found some themes outlined in the “Ad Lines” section do not adhere to their requirements. My recommendation would be to rework our advertisements and before we release any new advertisements, we should be running them by the legal department to ensure we are in compliance. We make great products, there is no need to lie or oversell them with false information. Data collection and privacy: Analysis and recommendations With data collection and privacy, the legal team is concerned we are collecting more information than needed from customers. The legal department also wishes to add an option for customers to easily opt out of data sharing, without any hassle. Another concern is regarding marketing to children under 18 years old. Some of our biggest customers are high school students, but they are not legal adults, and they are unable to sign contracts for a loyalty program. With that said, a concern is that we are collecting data from minors. My recommendation would be for us to stop marketing to people under 18. We should focus on marketing to their parents instead. The adults can create accounts and sign up for the loyalty program for their children to use.

Addressing the Three Ethical Concerns Direct marketing to low-income populations: Analysis and recommendations The legal department is concerned about how we market directly to low-income populations. The communities we are targeting are financially vulnerable and the legal department wants to make sure we can add value to their lives. The concern is that customers will end up not getting enough points to compensate for the price of the membership. The legal department is also concerned about under- redemption. The concern is that we are risking negative public relations. We do not want to take advantage of low-income communities and we do not want to receive any backlash regarding the loyalty program. Another concern is the auto-renew feature. My recommendation would be to allow customers to opt-out of the auto-renew feature at the time of signing up for the loyalty program. Another recommendation is that we bulk up the regards within the loyalty program for customers in low-income communities. Maybe they can earn points more quickly, or maybe we can provide the loyalty program for ½ price to these consumers. Transparency in language: Analysis and recommendations The ethical concern regarding transparency in language which was brought up by the legal department is that we want to make sure we are using proper verbiage and ensuring that consumers understand the loyalty program completely. The legal department would like us to change the language we use when marketing to low-income populations. The legal department believes low-income communities have less experience with making personal finance choices. We need to ensure we are writing our terms in a transparent way for low-income populations so they can understand exactly what it is we are signing up for. The legal department is also concerned about the plans for donations and would like more information about how it will work. My recommendation would be for us to go back and create more spreadsheets with data and our plans for marketing and for donations. A SMART goal sheet might be a good way for us to outline the goal and plans for donations. Collection and use of consumer data: Analysis and recommendations The legal department is concerned that collecting data from low-income communities may put them at risk or create vulnerabilities. The fear is that we may contribute to behavioral profiling for these communities. Price discrimination can happen, where companies are setting prices for goods differently depending on who they are being sold to. There is also a concern about collecting data regarding members’ families as well (children and grandchildren, etc.). The legal department is suggesting we only collect the minimal amount of data needed—name, age, address, and payment information. We are allowed to ask birthdays, but we need to be straight forward with how the data we collect is used. My suggestion would be to let consumers decide which information they are comfortable with sharing. They should be able to opt out of providing information if they do not wish to. I might also suggest we do not share this data outside the company unless legally required to. It seems the data may cause more harm than good if other companies had access to it.

Organizational Parameters The legal department brought up some great points in their recent memo. The overall goal is for us to succeed as a company, but not at the expense of others. If we can manage to roll out the loyalty program while taking the ethical and legal issues into account from the legal department, I do believe we can reach great heights. In order to make sure we are legally compliant; we need to ensure we are advertising truthfully and handling data collection and privacy properly. To remain ethical, we need to be sure to take extra consideration when marketing to low-income populations, we need to make sure we are being transparent with our language and tread carefully when it comes to collection and use of consumer data. If we can manage to get these things right, we will be on the right path. Some suggestions I made were to offer a discount on the loyalty program to low-income consumers, avoid collecting more data than we need and to not share our data with other companies if not legally required to do so. Our vision is to become the global leader in business-to-consumer sales while producing products and initiatives which sustain the health of our people and our planet. Tweaking the loyalty program for low-income communities is a great way for us to help people. Our mission is to provide high-quality health and beauty products as well as exceptional customer service. Like I said earlier, there is no need to falsely advertise, we know our products are great. If we take care of people and the planet the only way we can go is up when it comes to profit.

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References Memo From Legal Department Marketing and Sales Executive Summary Vision, Mission, and Values Statements

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