Category: Promotion37eb4ea826

How Four Organizations Uniquely Fight Sex Trafficking

1/1/2026

by David Hagenbuch - professor of marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing -
author of Mindful Marketing: Business Ethics that Stick

Often lost in the news of who is or isn’t implicated in the Epstein files is the grievous nature of the acts against fellow human beings. Sex trafficking is an age-old issue, which makes it worth considering why it's wrong and why it still occurs but even more important, learning what some courageously caring organizations are doing to stop it.

The U.S. Department of Justice’s Office for Victims of Crime identifies sex trafficking as “the recruitment, harboring, transportation, provision, or obtaining of a person for the purposes of a commercial sex act in which the commercial sex act is induced by force, fraud, or coercion or in which the person induced is under 18.”

This definition points to the fact that not all human trafficking is sex trafficking. Besides sexual acts, people also are sometimes exploited for their labor in industries such as “housekeeping, childcare, construction, farming, and the food service.”

Using fraud, force, or coercion to get a person to do something they wouldn’t otherwise choose is never a good thing, but the exploitation is especially heinous when it involves the most intimate parts of individuals’ bodies and emotional beings. In other words, in the realm of moral depravity, sex trafficking has few equals.

Given its deplorable nature, why does sex trafficking occur? There seem to be three main structural reasons:

A market for commercial sex: As the sayings go, prostitution is the oldest profession and sex sells. People have been willing to pay for sex for millennia, which has allowed individuals to offer themselves for a fee.
Opportunistic others: Seeing the potential to expand the market, unprincipled people have long stepped in to help broker the sales of sex, bringing together buyers and sellers for a fee. In the process, traffickers have often broken laws and taken advantage of the service providers.
Vulnerable people: It’s unlikely that prostitution is an aspirational profession for anyone. Instead, most who make money selling themselves would much rather be doing something else, but they stay in the trade either because they’re kept from leaving or because they have no good alternatives.

According to Elijah Rising, a Houston-based organization aimed at ending sex trafficking in the city, human trafficking is “the fastest growing criminal enterprise,” one worth $236 billion, from which sex trafficking produces 73% of the profits. Women and girls are victims in 78% of sex trafficking cases, versus 22% for men and boys.

When the victim is a minor, the criteria of force, fraud, or coercion need not apply, as children’s naivety means that they don’t necessarily know what normal adult behavior is, so they may not even realize they’re being exploited. Often these young victims are still going to school and living at home while being trafficked by parents or other family members.

So, although Epstein’s extreme exploitation deserves the infamy it’s gained, it can be misleading to think that all sex traffickers look like him. Instead, according to the U.S. Department of Homeland Security and in keeping with the previous paragraph, “Traffickers are men and women of all ages. They can be relatives, romantic partners, or close family friends” as well as individuals “behind an employment ad or a new friend on social media or online gaming.”

Those managing larger scale sex trafficking often operate out of apartment complexes, bars, hotels, massage parlors, and truck stops. Notwithstanding all the differences, the common denominator among traffickers is their desire to “profit at the expense of others.”

Although the breadth and depth of sex trafficking is daunting, thankfully there are organizations that embrace the challenge through unique missions and special strategies aimed at combatting the industry, or demarketing the selling of sex.

There certainly are others, but here are four best practices from four exemplary organizations:

1. Help people see the problem: It’s hard to motivate individuals toward a solution if they don’t recognize the problem. Mentioned earlier, Elijah Rising helps potential partners gain awareness of the gravity of sex trafficking in Houston by taking them on discreet van tours of where the illicit activities occur, while sharing an educational video featuring survivors, experts, and others.

Since 2011, more than 11,000 people have taken the tour, which has helped a variety of organizations, including law enforcement agencies, identify signs of sex trafficking.

2. Go to where the trafficking happens: It’s difficult to fix a problem from afar. The most effective approach is usually to go to where the issue occurs, which is what Truckers Against Trafficking (TAT) does.

TAT’s multifaceted mission to dismantle trafficking networks, bring perpetrators to justice, and restore dignity to survivors, is based on the belief that “every truck driver can be a crucial ally in the fight against human trafficking.” Sex trafficking often involves truckers, so TAT enlists them as partners in the battle and takes the fight to their home turf.

3. Recognize your unique role: Other places where sex trafficking often occurs are hotels. The few times a year many of us stay in hotels doesn’t give us much leverage against trafficking, but hotel chains can wield great impact on the illicit activity, if they choose. One hotel group that does is Accor, which owns 45 hotel brands, including Fairmont and Ibis, and operates 5,700 locations around the world.

Accor has been fighting against sexual exploitation of children since 2001 by “informing and training employees, raising awareness among customers and suppliers, developing relations with public authorities, and facilitating the integration of minors.” The group parters with the NGO ECPAT (End Child Prostitution Child Pornography & Trafficking of Children for Sexual Purposes) to train its 70,000-plus hotel employees to identify and respond to instances of child abuse.

4. Give survivors a good exit: It can seem impossible to extract oneself from challenging circumstances when there appears to be no way out. Peace Promise offers attractive exits for women ensnared in the oppressive world of prostitution.

The nonprofit organization partners with survivors of sex trafficking by aiding their healing process and providing for practical needs such as housing and employment. However, Peace Promise doesn’t just help these women with often sparse employment histories find stable jobs, it also provides gainful work through its sister companies, Good Ground Coffee and Soaps by Survivors, which employ women who come from trafficking.

Peace Promise’s Director of Economic Empowerment, Rachel Beatty, offers this helpful additional detail of the organization’s multidimensional mission:

“The work is important because there are many misconceptions about what trafficking and exploitation actually look like. There are broader and more complex issues than what is often portrayed, and the needs of survivors run deep. Without support, it can be difficult to address all the physical and emotional needs simultaneously. Peace Promise provides the stability survivors need to address skills deficits and complex trauma, and ultimately to escape the cycle of exploitation.”

Although the Epstein files have given sex trafficking more exposure in our news feeds, a danger is the impression that the heinous actions are only ones perpetrated by social elites on an exotic island when the reality is that sex traffic is happening nearby many of us, perhaps even by people we’ve seen or know.

Fortunately, that troubling reality is tempered by the fact that there are organizations that embrace the physically and emotionally draining work of combatting sex trafficking. We can be grateful for these organizations’ uplifting missions, and we should keep watch for ways to support their Mindful Marketing.

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Check out the book, Mindful Marketing: Business Ethics that Stick

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Suspending Belief Because of AI

12/2/2025

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by David Hagenbuch - professor of marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing -
author of Mindful Marketing: Business Ethics that Stick

Throughout human history, “seeing is believing” likely has been central to individuals’ interpretation of truth. We’re more apt to believe what we can see with our own eyes, but that trust comes with a caution: “Don’t believe everything you see.” Thanks to the realism of AI, that caveat seems to be evolving into a troubling new norm: “Don’t believe anything you see.”

A few months ago, a cringingly cute TikTok video went viral. In what seemed to be low resolution surveillance video from someone’s backyard, a collection of fun-loving bunnies playfully bounced on a large trampoline. Few things could be more wholesomely entertaining . . . or contrived.

The problem was that the rabbit roundup never really happened. Especially observant viewers recognized some non-lifelike video peculiarities, e.g., a pair of ears protruding from one bunny’s backside and another rabbit disappearing mid bounce. No, the video wasn’t real, rather it was the product of Google’s Veo 3, a realistic, AI-driven video generator.

Most of us are familiar with deepfake videos, which have become more and more ubiquitous on social media. Based on my viewing habits, YouTube sends me a steady stream of short videos featuring animals that include crocodiles, snakes, gorillas, and sharks, which I find fascinating. Some clips are real, but occasionally interspersed are ones that are too far-fetched to be actual animals, and, like the bunnies, there are sometimes video abnormalities that point to fabrication.

For me, these animal videos are just entertainment, which may make the deceptive ones less problematic. In fact, for the purpose of entertainment, people often want to be deceived – every time we go to a movie, play, or musical we pay to watch actors pretend to be people they’re not, in situations and settings that aren’t real. Most consider those kinds of mutual deceits morally acceptable.

However, to be “mutual,” the deceit should involve informed consent, meaning that the viewer A) knows what they’re seeing is imaginary, and B) they agree to watch it. For me, I believe YouTube’s animal videos uphold #2 but not #1, i.e., I certainly agree to watch them, but I don’t feel I always know what’s true.

AI is an incredible tool with an ever-growing assortment of applications for individuals and organizations, including the creation of visuals like complex graphics, realistic photos, and convincing videos.

With any tool, especially one as powerful as AI, comes the duty to wield it responsibly. While many use AI with discernment others don’t. Individuals in the latter group may have one or more of the following motivations, which range from relatively benign to troublingly malicious:

Experimenting with the new tech
Looking to gain likes and shares
Charting a quick and path to monetization
Seeking to deceive and mislead

Unfortunately, the latter categories seem to be producing new examples continually. For instance, deepfake investment schemes, which often combine forged images, voice, and video, already have become so pervasive that many prominent organizations and institutions have issued warnings and guidance including JP Morgan, the Securities and Exchange Commission, and the state of New York.

As troubling as these carefully orchestrated schemes of the criminally minded are, the democratized use of deception by ordinary people in their daily lives is just as disturbing. One such broad-based indiscretion is employees’ use of AI to create fake receipts for meals or entire business trips they never experienced but that they submit for reimbursement.

The use of AI to visually deceive is increasingly a temptation for everyone.

What can be done to stem the tide of misleading machine-generated optics? There’s no one solution, rather individuals and organizations should embrace the following two approaches to start.

1. Set Standards: Rather than ‘figuring things out after the fact, it’s almost always better to establish guidelines that proactively steer behavior in positive directions. In almost every area of life, we experience such rules that inform us of things from how fast we can drive to what tax deductions we can claim. Why should AI use be any different?

In “Questions are the Key to AI and Ethics,” an article I wrote in May of 2024, a suggested several specific standards for AI use including acknowledging and compensating the human creators from whose work AI borrows, protecting privacy, avoiding racial and gender bias, and respecting relationships. I also encouraged transparency in terms of informing people when AI is being used.

A leader in encouraging standards for visual creations is a company renowned for digital design, Adobe. The firm’s Content Authenticity Initiative (CAI) has been the impetus behind an open system for attaching provenance metadata to digital media, which over 4,500 organizations have embraced. Adobe explains how its Content Authenticity app works:

“Like a nutrition label for digital content, Content Credentials provide creation information about who made the content and when, and what type of edits happened along the way. Unlike other provenance solutions, they’re built on a trust model wherein they’re securely attached to content and validated by the tool used to attach them. They create a verifiable record of the creative process, bring information to the forefront, and help people understand the origins of digital content.”

2. Use Labeling: As the Adobe example suggests, one particularly important standard for AI-generated visuals is labeling. As with food, there’s not necessarily anything wrong with including hot and spicy ingredients in a dish, but a menu should provide an appropriate alert, so diners know what they’re going to consume.

Adobe’s Content Credentials encourage optional labeling. As of September 1, 2025, China has made AI labeling mandatory. The Chinese law means audio and visual content distributed on Chinese platforms must contain both technical identifiers (e.g., metadata, watermarks) and visible labels (i.e., ones evident to average consumers).

Should AI labeling be law? Ideally self-regulation happens outside the legal process. That’s the kind of responsibility Pinterest showed last March when it decided to start labeling generative AI content. Given that Pinterest showcases many human-made items like food and crafts, it’s especially helpful to know that what’s pictured on its site is real.

As I’ve said before, ethics is a team sport that plays out best when all stakeholders commit themselves to do what’s right and to support others in doing the same. In terms of AI-created visuals, two of the most important things team members can do is to 1) proactively set AI standards, and particularly to 2) label AI-generated content so consumers know when they’re seeing it. That labeling might occur through a visible watermark or through provenance metadata stored in a data file header, separate metadata file, etc.

People shouldn’t believe everything they see. They also shouldn’t need to suspend belief each time they see something new. Individuals and organizations that help consumers understand what’s real and what’s not are critical team players for creating Mindful Marketing.

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Learn more about the Mindful Matrix.
Check out the book, Mindful Marketing: Business Ethics that Stick

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Can Competition Promote Moral Progress?

10/8/2025

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by David Hagenbuch - professor of marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing -
author of Mindful Marketing: Business Ethics that Stick

How is it possible to improve ethics in a field that seems beset by moral issues? What about actively engaging emerging marketers on topics that matter to them and using competition to provide positive, memorable experiences they can revisit when encountering moral issues in their future careers? That was the goal of the inaugural Mindful Marketing Ethics Challenge.

Competition is captivating. It’s a main reason sports are so popular to play and to watch. Only occasionally does academics include contests (e.g., spelling bees, quiz bowls). Competition involving ethics seems almost like a contradiction, but why not an ethics competition?

Since creating Mindful Marketing 11 years ago, I’ve envisioned different initiatives that might improve moral decision-making in the field. One of those recently came to be with the publishing of Mindful Marketing: Business Ethics that Stick. Another dream has been to see a student-based ethics competition.

For many years, I made the long drive to Western Pennsylvania with students in our capstone marketing course to participate in the American Marketing Association (AMA) Pittsburgh Chapter’s marketing plan competition. Although it was big commitment in many ways, it was a great learning opportunity and very helpful to see how our marketing program’s work compared to some of the best in the state. Moreover, it was exciting to compete.

With the creation of AMA Central PA three years ago, the dream of an ethics competition became more realistic; however, to make it happen, it took the support of a group of like-minded educators and marketing practitioners – fellow AMA Central PA leaders who saw the value in ethics for emerging marketers and who backed the proposal not just verbally but by championing the competition at their own universities and elsewhere. Thanks to that collective commitment to students and to moral progress, the Mindful Marketing Ethics Challenge was born.

Two months before students returned to campuses for the fall semester, I drafted a short ethics-focused case about one of the field’s biggest and most controversial promotional trends: influencer marketing. As August began, I began emailing faculty at other schools, inviting them to share with their students the case and the unique competition benefits described in a specially designed promotional flyer:

Team prizes: 1st place $500; 2nd place $300; 3rd place $200
Presentation opportunities
Food and networking

Ten teams submitted 1,500-word written responses to the influencer marketing case, which described a pitch that a hypothetical marketing firm, Impact, made to Widerquest, a fictitious maker of outdoor sporting equipment and apparel that sought to use influencers responsibly.

Although Impact’s proposal was good in many ways, it included moral concerns such as transparency about influencer compensation, respect for competitors, physical stereotypes, and product embellishment. A panel of six accomplished marketing practitioners evaluated the responses in a double-blind review process.

On October 1, eight teams from four different universities participated in the finale at Messiah University, where each team had five minutes to summarize its recommendations for ensuring that the influencer marketing in the case was both effective and ethical. The judges evaluated the presentations, and the combined written and oral scores were tallied to determine the top three place winners, whose school identities were then revealed:

Those were the logistics and timeline of the competition, which were important, but what did students learn about marketing ethics that they might carry into their future careers?

Teams’ written and oral responses to the influencer marketing case were very insightful. Some identified implications I hadn’t considered. The ethics case and the first-place team’s written response are available on the Mindful Marketing Ethics Challenge webpage. Here are several highlights of the winning team’s analysis:

“Impact’s expectations raise serious ethical concerns that conflict with Wilderquest’s values. By requiring embellishment of features and forbidding negative feedback, the proposal undermines honesty and risks deceiving consumers.”

“Encouraging influencers to disparage competitors manipulates buyer choice and fails to treat other brands fairly.”

“Respect is also compromised by messaging that portrays consumers’ lives as ‘lacking without Wilderquest,’ exploiting insecurities rather than affirming worth.”

“Responsibility is neglected by allowing influencers to promote products they have not used, stripping audiences of genuine evaluations and reviews.”

“Encouraging technology to enhance photos or videos without disclosure risks misleading consumers. Collectively, these practices jeopardize consumer trust and contradict Wilderquest’s commitment to authenticity.”

First-Place Team, Susquehanna University

In these thorough and thoughtful analyses of the case’s many moral issues, team members aptly identified several specific values that marketing firm Impact appeared to neglect, e.g., fairness, honesty, respect, and responsibility. Both the teams’ case analysis and oral presentation indicated a desire to embrace rather than avoid moral responsibility.

These analyses were affirming, but what was participants’ overall experience in the Ethics Challenge? Did they feel that the competition, aimed at increasing moral conscience, will benefit them in the future?

At the finale and afterward, those involved in the Challenge provided much positive feedback. One of the students, Moriah Goiran, a member of the second-place team from Shippensburg University, gave this assessment:

“Overall, it was a fantastic experience! Everyone was very welcoming, which made it a generally stress-free environment. I really enjoyed everything about it but what I most appreciated was the group discussion. It was really refreshing to have an intellectually diverse and driven conversation. I enjoyed hearing everyone's thoughts and opinions and interacting with people in the business field. This was my first time at a networking event so knowing how it works and how I operate in those situations will really help me in the future with what to discuss, etc.”

Similarly, Ruby Calabrese, a member of the first-place Susquehanna University team, shared her reflections:

“The project helped me develop keen insights into what I want to do with my career in marketing but also how important it is for companies to have ethical marketing practices . . . . The Mindful Marketing project, I feel, will help me in my future career goals when constructing my path and increase my knowledge of digital marketing advertising. Thank you for such a wonderful opportunity. I’m excited to see how the competition progresses.”

When you think about ethics, competition may be one of the last words that comes to mind. I’ve called ethics “a team sport,” meaning, to make significant moral impact, it often takes a group of people with shared commitments to do what’s right.

In the Mindful Marketing Ethics Challenge, teams competed against each other for place recognition, but they all competed against forces much greater and more perilous – moral apathy and acrimony.

That’s the competition we all need to realize were in and resolve to approach proactively, ideally with strong teams of like-minded moral champions.

The inaugural Mindful Marketing Ethics Challenge was a meaningful step in the right direction of encouraging new and experienced marketers to compete against indifference and engage their field’s moral challenges with the goal of Mindful Marketing.

Subscribe to Mindful Matters blog.
Learn more about the Mindful Matrix.
Check out the book, Mindful Marketing: Business Ethics that Stick

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Cracks in the Branding Barrel

9/1/2025

43 Comments

by David Hagenbuch - professor of marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing -
author of Mindful Marketing: Business Ethics that Stick

When you write about current ethical issues in marketing, there are sometimes trending topics you feel compelled to discuss. That’s the case with Cracker Barrel, which has stirred up two hot questions: 1) Is the company’s rebranding as unpalatable as some say, and 2) Has the “Old Country Store” cooked up something unethical?

To call the current conversation surrounding the half-century-old restaurant known for downhome southern atmosphere and comfort food a “controversy” is a bit of a misnomer. True controversies are pretty evenly split between proponents and detractors. Looking online and talking with people about Cracker Barrel’ rebranding, it’s hard to find many who like the restaurant chain’s new direction.

A basic Google search of “Cracker Barrel rebrand” produces these kinds of harsh responses:

“So Arrogant”
“The Worst Rebrand of All Time?
“How Cracker Barrel’s Rebrand Went So Wrong”

Even one of the restaurant’s co-founders, 93-year-old Tommy Lowe, has called the logo resign “pitiful.”

When I asked a couple of my classes for their thoughts, responses to the rebrand were also chilly. Most of the students are in Gen Z, not the stereotypical Cracker Barrel customer, and only a few had visited the restaurant recently, but many still voiced strong negative reactions. One student suggested the whole thing might be a PR stunt.

Although anything’s possible, I doubt the company would have 1) expected such backlash and 2) been willing to risk the long-term repercussions of things going sideways. That’s not a risk many companies would be willing to assume, particularly a restaurant as traditional as Cracker Barrel.

So, why did it decide to do such a bold rebranding? The company needed to reverse a downward slide and better position itself for the future.

On April 9, 2021, Cracker Barrel stock (CBRL on NASDAQ) traded at a high of $175.09. Since then, the stock has charted a rather consistent downward path.

About a year ago on September 6, 2024, its stock reached a low of $37.33, a decrease of $137.76, or 78.7% of the stock’s value from the April 2021 high.

The precipitous loss of equity would be concern enough, but demographics also suggest a challenging future for the restaurant chain that for many years has targeted Baby Boomers and older adults. As those customers keep aging, their restaurant visits decrease and will eventually dry up. Like any organization, Cracker Barrel must ensure there are new, younger consumers to replace the ones who age out of its products/services.

Although this generation-to-generation transition is a perennial challenge for restaurants and other businesses, significant industry changes have made life even harder for Cracker Barrel. Fast casual chains like Panera, Chipotle, and Cava are now the eateries of choice for many consumers, including Gen Ys and Zs, who often would rather not spend the time and money on a more traditional table-service meal.

In addition, food tastes have changed considerably over recent years. Comfort food for millennials is more likely to be a bowl with brown rice and falafel than a plate of mashed potatoes and meat loaf.

These trends have already severely impacted sit-down dining restaurants such as Applebee’s, Red Lobster, and TGI Fridays. Cracker Barrel likely has lasted longer because its older and more loyal customers helped insulate the company from the trends, but that insulation is now wearing very thin.

To its credit, Cracker Barrel’s rebranding has involved much more than just revising its logo, or graphic icon.

Earlier this year, the restaurant chain began updating the interiors of its dining rooms, which has included brighter colors and more comfortable seating. It also revamped its country stores to make the floorspace less cluttered and the merchandise more attractive. Finally, it added a variety of new menu items that both fit the old southern comfort food theme and appeal to more modern palettes, e.g., Nashville Hot and Honey Butter Fried Chicken.

Big market challenges usually demand bold solutions, which Cracker Barrel’s A-to-Z rebranding seems to represent. To be fair, it didn’t just slap a bandage (a more modern logo) on deeply seated problems. However, that general evaluation doesn’t mean the specific tactics it’s used are the right ones.

Since I’m Gen X, not one of the younger age cohorts that Cracker Barrel is most interested in for survival and future growth (Gen Y and Z), I spoke with a couple of people who are.

The first conversation was my son Daniel Hagenbuch, a doctoral student at Cincinnati College-Conservatory of Music, who has a great ear for sound and eye for design. Although he hadn’t visited a Cracker Barrel store since the renovations, he’s liked what he’s seen online of the new design elements. He said the fresher paint colors and new wall décor looked more tasteful and should appeal more to younger customers, who would appreciate a more modern look. He also thought one of the restaurant’s new seasonal items, OREO Stuffed Cheesecake Pancakes looked promising. He wasn’t, however, a fan of the new logo.

Neither was the second Gen Z member with whom I spoke, Daniel Smith, a thoughtful senior graphic design major and marketing minor at Messiah University. On one hand, he understood reasons for replacing the old logo, such as its fine detail posing challenges for scaling to small sizes like those required for pens and business cards. However, his design sense also went against the new logo:

“The rebranded logo uses a modern and minimalist approach, which is not at all related to Cracker Barrel’s ‘old country store’ aesthetic. The type is surrounded by a massive, blank margin space, making it feel like it lacks character. Also, the yellow space behind the type is supposed to be a barrel on its side but is barely recognizable, making the new logo worse than the iconic original.”

His evaluation aligns with my own analysis and likely with those of other professionals. Logos shouldn’t be pictures, partly because they need to be adaptable to a variety of surfaces and imprint sizes. The first article I ever wrote made that case: “Logos Should Work on Paper, Products,” which the American Marketing Association published in Marketing News in 2001.

Nostalgia is often a complicated thing to market. Sometimes what people want isn’t exactly the ‘way it used to be’, rather it’s a blend of the past and present. For instance, some new turntables for vinyl records have Universal Serial Bus (USB) outputs even though USB didn’t exist during the golden age of turntables. USB was first introduced in 1996. By that time CDs had replaced cassettes, which had replaced vinyl records a decade or more before.

A metaphor for people’s mixed appreciation for nostalgia might be American’s tastes for international food. Although many of us say we really like Mexican food or Chinese food, individuals from those nations sometimes point out that the food in their home countries is considerably different than the versions served in the U.S., which may be blander, have less heat, etc.

To survive, Cracker Barrel’s value proposition probably needs to become a fusion of past and present in order to satisfy the desires of younger generations whose lives are increasing far removed from the restaurant’s old country era. For that reason, refreshing the dining area, renovating the store, and revamping the menu are likely good things.

Revising its logo was also a good idea; however, the company’s execution fell short. The new logo was lacking in many ways. There likely could have been more input into its development and better communication ahead of its release.

Change can be hard for any of us to accept, including when it’s related to an iconic restaurant. However, it’s hard to argue that Cracker Barrel’s changes were unethical. For these reasons, the restaurant’s less-than-satisfying recipe for change tastes like Simple-Minded Marketing.

Subscribe to Mindful Matters blog.
Learn more about the Mindful Matrix.
Check out the book, Mindful Marketing: Business Ethics that Stick

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Whether to Work in Multilevel Marketing

6/1/2025

12 Comments

by David Hagenbuch - professor of marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing -
author of Mindful Marketing: Business Ethics that Stick

Marketing ethics demands special care for vulnerable consumers – individuals who are at greater risk of being deceived or treated unfairly because they have less life experience, diminished senses, reduced cognitive skills, etc. While children, people with disabilities, and older adults are often considered vulnerable, one group that’s rarely included is college students; however, these young people are particularly susceptible to the practices of a specific category of employment: multi-level marketing.

I was glad to receive an email a few weeks ago from a student who had recently completed my business ethics course, “Morality in the Marketplace.” Rachel Sealover was an excellent participant who continually asked good questions, made insightful comments, and challenged my own thinking. However, my gladness turned to sadness as Rachel shared she had endured two very uncomfortable interviews with individuals attempting to recruit her for multilevel marketing (MLM). She then asked if I had ever written a Mindful Marketing article about MLM.

Having authored more than 320 ethics pieces during the last decade, I sometimes forget which issues I have/haven’t addressed. MLM seemed like one I had treated, but when a search of my master file produced no hits, I realized my recollection wasn’t from a Mindful Marketing article but from an email exchange I had with a fellow Messiah University professor more than ten years earlier.

In January of 2015, Professor of Philosophy Tim Schoettle contacted me after one of his former students asked to meet with him to talk about the multilevel marketer Primerica. Tim was troubled because he had seen several other MLM companies target recent college grads with unrealistic promises of clear paths to success and wealth. What’s more, just before his wife entered college, some of her mother’s Amway “upline,” higher-ups in the pyramid, told his wife that she would be more financially successful if she skipped college in favor of a career as an Amway “Independent Business Owner” (IBO).

Coincidentally, just a few days after I received Rachel’s email, I was seated at a table with Tim for an end-of-year “Ethics and the Common Good” retreat, as we each teach an ethics course in our university’s new general education curriculum. Without prompting or remembering our correspondence ten years earlier, Tim again brought up the topic of MLM. I was happy he did and told him that I planned to write a long overdue article on MLM and would invite his input. This, of course, is the article!

If you’re unfamiliar with the term, multilevel marketing refers to business models that sell directly to end consumers through independent distributors (i.e., non-employees). Moreover, the distributors are sometimes highly incentivized not just to sell products but to recruit others to do the same, as a portion of the earnings from their “downline” gets paid to those above them in the hierarchy.

Selling directly to end-consumers is not uncommon, for instance, thousands of automotive salespeople and real estate agents rightfully earn commissions on the cars and houses they sell to new buyers each day; however, those agents don’t typically try to recruit other agents in order to increase their earnings through passive income, which is a primary objective in much multilevel marketing.

Still, there’s not necessarily anything wrong with someone who loves what they do recruiting others to do the same work. What becomes problematic, though, is when new recruits are promised income streams that are unrealistic for anyone far down in the expansive triangular organizational structures. It’s in such situations that MLM can become a pyramid scheme.

In pyramid schemes, a small number of initial, top-level ‘investors’ earn above average returns on their investments, which are funded by the contributions of a larger number of newer second-tier investors. However, each subsequent level of the pyramid requires more investors to support the level above it, all while returns become increasingly difficult to deliver. Eventually, it becomes impossible for those in the lower levels of the pyramid to recoup their investments, and the pyramid collapses.

Some distinguish pyramid schemes from Ponzi schemes. Both share the triangular hierarchy. The main difference is that Ponzi schemes rely specifically on a continual flow of lower-level financial investors while pyramid schemes require the perpetual onboarding of new recruits who must pay significant entry fees to join the organization. In that sense MLM that prioritizes recruiting new representatives over the sale of products can rightly be called a pyramid scheme.

Such objective descriptions and definitions are useful; however, what’s even more meaningful is to hear from people who have experienced MLM firsthand. For that close-up perspective we turn to Rachel and Tim.

Given the multitude of moral issues that exist in business and marketing, we unfortunately didn’t discuss MLM in our ethics class; still, when Rachel interviewed for positions with MLM firms, her moral foundation informed her that things were not right.

A first red flag was the ease at which interviews were granted – She received an invitation to apply through the mail with minimal requirements: “No experience necessary, just apply using the QR code.”

Similarly, Tim has been alarmed by MLM firms’ aggressiveness in recruiting college students. In fact, he was so concerned by what he heard from former students, he decided to attend an Amway recruitment meeting so he could see the tactics himself. The meeting’s leader leveraged rhetoric in promising a path to wealth and independence, while avoiding any meaningful discussion of tangible business metrics like costs, customer demand, or return on investment. To Tim, the gathering felt more like “a motivational rally” than any kind of serious business seminar.

Rachel likewise observed a lack of financial transparency: “MLMs are usually not upfront with what employees are making for their first few paychecks, or how much you’ll make once you start.” Yet, when they do talk about results it’s “hyping up outcomes by highlighting the small percentage of people who do really well.”

For Tim, who maintains that “approximately 99% of participants in MLM lose money,” this practice of presenting the few best cases to prospective distributors is clearly deceptive.

In her interviews, Rachel also was unnerved by the firms’ “sketchy” emphasis on recruiting other distributors over selling their products:

“Selling the product to your target market is what every business does, but not every business is encouraging you to bring people in from your network or asking you to handover people's numbers.”

Tim’s many observations of MLM firms concur:

“The vast majority of profits in MLMs come not from selling products to customers, but from recruiting others and expanding one’s ‘downline.’ In practice, this model closely resembles a pyramid scheme.”

Rachel learned firsthand that MLM firms make much of their money from new recruits who they ask to pay “some sort of fee or startup cost” as a condition of employment. In that way, it doesn’t really matter how long new distributors last – the companies realize significant revenue just from what the recruits pay to sign-on.

Perhaps what troubled both Rachel and Tim most was seeing MLM firms make college students and recent grads their target market. As someone who knows this group better than most, Rachel acknowledged that many in the demographic are “vulnerable to get rich quick opportunities,” given their low economic means, their great desire to be hired, and their limited experience reasoning about vocational pros and cons.

Concerned about the lure of MLM on his students – past, present, and future – Tim laments, “The incentives to mislead are strong and baked into the system, making the bankruptcy of MLM difficult to detect, especially for those drawn in by the promise of personal success.” It’s not surprising, therefore, that he calls the business model “predatory.”

Are all MLM firms morally deficient? Probably not, but to synthesize Rachel’s and Tim’s reflections, ones that do one or more of the following five things offer reason for ethical pause:

Incentivize the recruitment of new distributors over selling products
Paint vague and/or unrealistic pictures of participant success
Use rhetoric to play on prospects’ emotions, e.g., fear, excitement, unrealistic optimism
Charge new enrollees significant nonrefundable startup fees
Require new distributors to share contact information of individuals in their networks

In keeping with the fifth point, even if someone is successful in MLM, a downside is the potential strain their work can place on relationships with family members and friends who feel continual pressure to support their loved one’s sales and/or recruitment goals.

Regrettably, there will always be new moral issues for Mindful Marketing to analyze. It’s also regrettable that it took me over ten years to tackle multilevel marketing. However, thanks to Rachel’s and Tim’s insights, this article should provide a helpful rubric for determining when MLM firms are only looking out for themselves and, therefore, are guilty of Single-Minded Marketing.

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Who will be the Adult in the Room with AI?

4/1/2025

19 Comments

by David Hagenbuch - professor of marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing -
author of Mindful Marketing: Business Ethics that Stick

“Like a kid in a candy store” – If you’ve ever experienced unlimited access to your most desired indulgences, you may have appreciated someone stepping in to help you ‘know when to say when.’ AI quickly has become that candy store for many whose mouths are open wide to the technology’s amazing treats but who entertain few thoughts of the actions’ broader impacts. So, who will help AI users ‘know when to say when’?

Individuals and organizations are rapidly embracing AI to enhance productivity, from personalizing emails, to providing customer service, to optimizing delivery routes, to predicting machine maintenance, to trading stocks. In fact, several of the AI examples in the last sentence came courtesy of ChatGPT.

A financial sign of AI’s rocketing popularity is the report that OpenAI, ChatGPT’s parent, expects its revenue to triple this year to $12.7 billion. That expectation likely stems in part from the current U.S. administration’s promised $500 billion investment in AI infrastructure in an industry partnership called Stargate.

It’s not surprising that AI has come so swiftly into widespread use. Criteria that predict how fast consumers adopt new products, or how quickly they diffuse into the market, suggest rapid acceptance of AI:

Relative advantage: Compared to the time and effort it takes to draft a report, create a complex image, etc., AI is much quicker, giving it a great economic advantage.
Compatibility: AI tools like ChatGPT work well with many of the productivity tools we already use, such as our smartphones’ apps, and the new technology is increasingly integrated directly into other tools.
Observability: AI is easy to see around us, from voice assistants (Siri, Alexa), to autocomplete functions (Messages, Word), to map apps (route optimization and traffic updates). We can often observe friends, family, and coworkers using those tools. The challenge, if any, is to realize that those commonplace applications are AI.
Complexity and Triability: Although AI is among the most sophisticated technologies humans have ever created, it is very easy to use, e.g., as simple as typing or speaking a command. It’s also easy to experiment with many basic AI tools, e.g., several chatbots, offer free versions, including ChatGPT, Claude, and Copilot.

In sum, AI helps individuals and organizations accomplish two of life’s most prized goals: to work more effectively and efficiently. Beyond that practicality, many AI applications are exciting and fun. Some possess a jaw-dropping wow-factor that makes one wonder how the technology can do something so challenging so fast.

But just as too much candy can be bad for one’s teeth, too much AI is proving problematic for some of its users, as well as for individuals who barely know about it.

Even as many individuals and organizations dive headlong and uninhibited into AI, many others feel some, if not much, dissonance about its use. In a recent survey of knowledge workers that included 800 C-suite leaders and 800 lower-level employees, Writer/Workplace found a wide disparity in perceptions of generative AI, for instance:

77% of employees using AI indicated that they were an “AI champion” or had potential to become one.
71% of executives indicated there were challenges in adopting AI.
More than 33% of executives said AI has been “a massive disappointment.”
41% of Gen Z employees were “actively sabotaging their company’s AI strategy.”
About 67% of executives reported that adoption of AI has led to “tension and division.”
42% of executives indicated that AI adoption was “tearing their company apart.”

Why did AI produce so much angst for these research participants? Unfortunately, the article summarizing the study’s findings didn’t identify the causes; however, I have good guesses of what some of the reasons were.

In May 2024, I wrote “Questions are the Key to AI and Ethics” which identified a dozen areas of moral concern related to AI use: Ownership, Attribution, Employment, Accuracy, Deception, Transparency, Privacy, Bias, Relationships, Skills, Stewardship, and Indecency.

Looking back 10 months later, a long time in the life of technology, it seems the list has aged well, unfortunately. There are increasingly pressing concerns in each of the areas, such as:

Ownership, Attribution, Employment: Google and Open AI recently asked the White House “for permission to train AI on copyrighted content.” Over 400 leading artists, including Ron Howard and Paul McCartney, signed a letter voicing their disapproval.
Stewardship: AI is notoriously an “energy hog” whose data centers require far more electricity than that of their predecessors. Jesse Dodge, a research analyst at the Allen Institute for AI, shared that “One query to ChatGPT uses approximately as much electricity as could light a lightbulb for about 20 minutes.” Energy production for AI is the reason Microsoft has signed a deal to reopen the infamous nuclear power plant Three Mile Island.
Bias, Indecency: In his article, “Grok 3: The Case for an Unfiltered AI Model,” Shelly Palmer compares AI models that learn from sanitized datasets to xAI’s Grok 3, which has an “unhinged” mode that doesn’t restrict “harmful content—adult entertainment, hate speech, extremism.” Using the opening metaphor, Grok 3 seems like a wide-open candy shop with no adult supervision.

Certainly, some people have practical inhibitions about AI because they’re not sure how, when, or why to use it. Others, though, likely have moral concerns, including the ones above. I believe much of that AI dissonance stems from values embedded in every person, regardless of their worldview: principles that include decency, fairness, honesty, respect, and responsibility.

Granted, we don’t see these values in everyone all the time, but they’re there. Rational people know it’s indecent to show sexually explicit material in public, it’s dishonest to lie, it’s unfair to steal, etc. So when they see AI generating indecent content, creating misleading deepfakes, or appropriating others’ intellectual property, those innate values rightly spur feelings of unease.

So, back to the question that opened this piece: Who will keep rapidly advancing AI in moral check? Here are those influencers in reverse order of impact:

5) AI Itself: Over time and if trained on the right types of data, AI may become better at identifying and addressing moral issues. However, from my experience, although the technology is good at answering questions, it’s ill-equipped to ask them, especially ones involving ethical issues.

4) Laws: Clear-thinking senators and representatives often enact legislation that’s in the public’s best interest. However, given the time it takes to envision, propose, and pass such laws, they inevitably lag behind the behavior they aim to constrain, especially when the actions involve fast-moving tech.

3) Industry Associations: These organizations play useful roles in identifying opportunities and challenges that face their members. It takes time, but they often craft values statements and related documents that can help guide moral decision-making. Unfortunately, though, their edicts usually can’t be enforced the ways governments’ laws can, so compliance may be minimal.

2) Organizations: When they want to, business and other types of organizations can make decisions quickly. Morally grounded leaders can create policies to promote ethical behavior. The challenge is that even this guidance may not be specific enough for new or very nuanced moral dilemmas, and it’s usually impossible to speak into every action as it occurs.

1) Individuals: They are able to address issues as they occur and can be specially equipped for those ethical challenges. When moral issues arise, they are the ones who can and must hit pause and ask, “Yes, AI can do this, but should it?”

Rational principle-driven people, who embrace their innate senses of decency, fairness, honesty, respect, and responsibility, can quickly question AI's potential ethical encroachment as they see it and pump the brakes on strategies that seem likely to violate one or more of these values.

In the candy store that is AI, each of us needs to be the adult in the room. While we need to understand and encourage the many good things AI offers, we also need to know when to say, “That’s enough.” Ensuring that AI rightly serves humanity makes for Mindful Marketing.

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What Sales AI Can and Can't Do

3/1/2025

4 Comments

by David Hagenbuch - professor of marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing -
author of Mindful Marketing: Business Ethics that Stick

From writing a simply reply email to creating an $8 million Super Bowl ad, AI is impacting virtually every element of marketing. But what about the area that relies more heavily on human interaction than any other – sales? How much should personal selling embrace machine learning?

I received some helpful answers to this question a few weeks ago when I attended a symposium on AI in Sales, hosted by Penn State University, Harrisburg. Although I’ve worked in sales, taught a Personal Selling class for more than 20 years, and given my own presentations about AI, I hadn’t considered many of the potential uses of AI in sales that I learned at the symposium – I took several pages of notes!

The event’s keynote speaker was Dr. Michael Rodriguez, an accomplished sales professional who in recent years has transitioned to academia and into his current role as an assistant professor of marketing in East Carolina University’s College of Business.

I appreciated how Rodriguez considered the entire sales process, from Prospecting to Follow Up & Nurture, providing examples that distinguished traditional AI use from generative AI and hybrid applications.

Rodriguez also offered some useful specific suggestions for how human sales professionals might lean on AI in their daily work, such as by using the technology to:

Aid in prospecting and effectively identifying potential new clients
Personalize emails, which Rodriguez said can increase response rates by 70%
Help prepare for sales calls so one enters such meetings better informed
Identify potential client objections and receive recommendations for overcoming them
Customize proposals to a potential client’s specific needs

As I listened to these and other recommendations I imagined how they may have helped me when I sold professionally, as well as how they might serve my students as they learn to sell.

However, as the symposium neared its close, during a time of Q & A with Rodriguez and a panel of other sales professionals, it was interesting to hear a countervailing theme emerge:

Despite the considerable benefits that AI offers sales, salespeople will gain the greatest competitive advantages for the foreseeable future from their unique human inputs.

The idea behind this thesis, which seemed to gain widespread agreement among panelists and audience members, was that over time AI will act like many new technologies, first offering advantages to early adopters but eventually entering almost everyone’s repertoire and leveling the playing field for most competitors.

Or, to use a poker metaphor, AI will become table stakes – something everyone must have just to get in the game. Determining who ‘wins’ will be the unique intellectual and emotional skills that people bring to the game.

As a flesh-and-blood being, I like the idea of people playing the pivotal role. But more objectively, it does seem like there are several selling activities that AI can’t reliably replicate, at least not now and possibly ever. Based on my experience working in sales and teaching it, these are some of those exclusively anthropic actions:

Hold a Real Conversation: AI can be very effective at helping salespeople practice selling dialogue by serving as a roleplay partner. However, as the old adage goes, “You can’t take it with you,” meaning in this case, when it comes to an actual selling situation, the salesperson must fly solo, relying on their own experience, intellect, and emotional intelligence to help move the conversation productively forward.
Tell a Story: In communication situations, storytelling is one of the most effective ways of gaining and retaining attention and for deducing key learning points that people will remember. Although AI is great at retrieving stories others have shared and compiling “new” ones, it can’t share original anecdotes from lived experience because, of course, it has none. That limitation is unfortunate for AI because personal stories are often the best ones.
Interpret Contextual Cues: Does the customer’s facial expression show that they’re happy, sad, or angry? Does their body language suggest that they’re reluctant to proceed or eager to move forward? At some point Meta AI Glasses or other wearable tech may make these inferences and share them in real-time, but at least one communication expert believes they’ll still be inferior: Megan Madsen, Chief Officer, Strategic Communications at Bravo Group in Harrisburg, PA, says, “I don’t think AI will ever replace contextual thinking on a human level.”
Find Common Ground: People like identifying things they have in common with others, whether they’re individuals they know, places they’ve visited, sports they follow, or restaurants they enjoy. Shared experiences and affinities help us know others better and relate to them on a more personal level – engagement that isn’t possible for virtual beings.
Feel and Express Emotion: How should a salesperson respond when their client mentions that their spouse just lost their job or that their daughters’ soccer team won the state championship? People are uniquely wired to feel empathy (e.g., sadness or joy) and to return emotionally appropriate responses based not just on what was shared but on the client’s emotional state and how well the salesperson knows them.
Laugh: I was at a networking event recently, talking with a marketing professional, when a well-intentioned college student abruptly broke into our conversation held out his hand and said, “Hi, I’m Bob, a junior marketing major at State; what do you do?” I quickly grasped his hand and as I shook it replied, “Not much.” We all laughed. I’m not sure what led me to say that – perhaps it was understanding the context and knowing that the line, which I probably heard someone else say years ago, would offset the awkwardness. Anyway, it seemed like the right humor at that moment, with no assist from AI.
Socialize: A very small percentage of all sales are made on golf courses or in stadium club boxes, but it is common for salespeople to get to know customers and discuss business over a meal, in order to save time but more importantly to build relationships. Good things often happen when people break bread together.
Identify Moral Concerns: From my experience, AI is not on the lookout for possible ethical infractions, and as several of the preceding bullets have suggested, it usually can’t be present to help make real-time choices. So, if a purchasing agent asks a salesperson to increase their proposal by $500 so the purchasing agent can pocket the excess, what should the salesperson do? Their human knowledge should alert them that they’re being asked to pay a bribe and prompt them to reject the appeal outright.

AI applications are redefining the ways marketing is done. Salespeople should use those technological tools to work more efficiently and effectively while also remember that it’s their uniquely human aptitudes that ultimately set them apart. Technological proficiency paired with a genuine personal touch is the best approach for Mindful Marketing.

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Check out the book, Mindful Marketing: Business Ethics that Stick

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Birkin vs. Wirkin: Are Knockoff Products Ethical?

2/1/2025

59 Comments

by David Hagenbuch - professor of marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing -
author of Mindful Marketing: Business Ethics that Stick

If “Imitation is the sincerest form of flattery,” should one of the world’s most renowned luxury brands feel honored that an upstart company created a knockoff product and sold it to the masses through a full-line discount retailer for a fraction of the price?

Such was the “flattery” paid recently to Hermès, the French fashion house known for finely tailored leather and silk goods and other exquisitely crafted, high-priced items. The specific focus of the emulation was one of Hermès most prestigious products, its Birkin handbag, “the epitome of luxury and style, a true icon in the realm of high fashion.” Surprisingly, the flattery came through . . . Walmart.

In choosing a retail strategy, marketers often consider three levels of distribution intensity, or selectivity:

Intensive: a product is available virtually everywhere in a very wide variety of retail outlets (e.g., many snack foods are intensively distributed).
Selective: the product’s manufacturer more carefully chooses specific retailers that align with the item’s brand image and positioning (e.g., brand-named athletic apparel is often selectively distributed)
Exclusive: there are only one or two retail options for purchasing the product (e.g., new cars usually can only be purchased through the manufacturer’s own dealerships)

Birkin bags, which sell for $10,000 and up, introduce a whole new level of distribution intensity, even more restrictive than exclusive, that might be called elusive distribution.

First, Birkins can’t be purchased through Hermès own website; they must be acquired in-store, and even then, they are very difficult to obtain. Apparently, the bags are not displayed. Someone wanting to buy a Birkin first needs to establish themself as a brand-loyal customer by purchasing a significant dollar value of other Hermès products and by building a relationship with a Hermès sales associate. Only then, the strictly qualified customer might be given the privilege of buying a Birkin.

That’s the context that inspired a Chinese firm to create a knockoff bag bearing a striking resemblance to a genuine Birkin, likely with less of the fine craftsmanship and also for a small percentage of Hermès’ price. The company successfully sold many of the bags on Walmart’s website until the page suddenly disappeared, replaced by a "no-longer available" message.

However, before the knockoffs were knocked out, many people purchased the Walmart-distributed bags and posted their shrewd finds on social media, leading to a multitude of lookalike likes and shares and to the coining of the clever name: Walmart + Birkin = “Wirkin.”

Helping fuel the knockoff bags’ viral rise was a phenomenon some have dubbed “dupe culture,” which describes the trending consumer tendency of buying less expensive product facsimiles in favor of more prestigious and pricey originals.

Saving money and being content with less are often good consumer outcomes, but do they make it right for one organization to cash-in on another’s’ innovation and hard-earned reputation? To answer the moral question, it’s helpful to ask a few factual and legal questions:

Q1: Are knockoff products the same as counterfeit products?
No, while knockoff products bear some or even a close resemblance to the originals, counterfeits are designed to be as indistinguishable as possible from the real thing, including specific logos and other proprietary branding. Consequently, counterfeit products typically infringe on companies’ trademarks, making them illegal.

Knockoff products, in contrast, are not illegal, in fact, they are commonly found in all types of retail stores, including on supermarket shelves where private label, or store, brands are often placed right next to the manufacturers’ brands they emulate.

Some may argue that the intent of both product types is to deceive, but that argument is more tenable for counterfeits, whose creators want consumers to believe they’re purchasing the authentic product. While a knockoff certainly banks on perceived similarities, it’s not pretending to be the original.

Q2: Can a handbag be patented?

Of the three patent types, utility, design, and plant, a design patent is the one most applicable to a bag. Given that handbags of all types and sizes have been used for centuries for similar purposes, it’s not easy for a bag’s design to meet the criteria for “ornamentality,” which requires that “no alternative designs could have served the same function.”

Despite that challenge, Hermès does have a patent claiming unique “ornamental design” for a handbag that appears to be its Birkin.

Q3: Can a handbag be trademarked?

Trademarks can be secured for a unique word, phrase, symbol, or design used to identify an organization’s products or services. As might be expected, Hermès has trademarked the Birkin name. However, knockoffs like the “Wirkin” bag intentionally avoid using trademarked names, which shifts the question to the product itself.

Fortunately for Hermès, it also has for its Birkin bag the less often referenced trademark design coverage called trade dress protection, which is used “to protect the overall appearance of a product or company” and can include “features like color, shape, design, packaging, and more.” Like other types of trademarks, trade dress ultimately helps consumers distinguish one company’s product from another’s.

More specific to the Birkin bag, trade dress offers protection for the handbag’s overall distinct design and its unique elements, including the bag’s rectangular sides, rectangular bottom, dimpled triangular profile, and “rectangular flap having three protruding lobes, between which are two keyhole-shaped openings that surround the base of the handles.” Furthermore, “Over the flap is a horizontal rectangular strap having an opening to receive a padlock eye. A lock in the shape of a padlock forms the clasp for the bag at the center of the strap.”

Handbags have a virtually limitless number of design possibilities, but legally, no bag can combine the elements identified above, unless it is a genuine Birkin by Hermès. That’s what the law says, but what about ethics?

We always should be careful not to assume that what’s legal is ethical or what’s illegal is unethical. Historically, there have been plenty of exceptions to complete moral/legal overlap, e.g., slavery, segregation.

However, in the case of counterfeit and knockoff products, U.S. laws have considerable moral sensibility.

Of the five universal values Mindful Marketing routinely applies (decency, fairness, honesty, respect, and responsibility), the operant ones here appear to be honesty and fairness. It’s dishonest for a counterfeit product to pretend it’s the authentic item – Like someone claiming a reproduction of a painting is the artist’s original work.

In addition, counterfeit products are unfair because their sellers benefit from the original designer’s hard work and creativity with relatively little effort of their own. Counterfeit products also can be considered unfair in that their typically lower quality can tarnish the image, or reputation, of the original brand, particularly among people who thought they had purchased the real thing.

In terms of responsibility, one also might argue that counterfeit products enact a broader cost on society as a whole because they disincentivize innovation and entrepreneurship.

As mentioned above, knockoff products are usually legal, unless the item walks too close to the line of the original, in which case it essentially becomes a counterfeit. However, the legality of knockoffs doesn’t make them moral; again, it’s important to view them through the lenses of the five values.

Knockoffs tend to uphold honesty in that they don’t pretend to be originals but maintain some visual/verbal separation from them. Shoppers who buy the grocery store brand of chocolate chip cookies know that they’re not getting Nabisco’s Chips Ahoy!

Fairness is more complicated and shouldn’t be evaluated as if one-size-fits all. In the case of chocolate chip cookies, even though the supermarket makes its store brand loosely resemble Chips Ahoy! by way of product name and package design, Nabisco also benefits by being allowed to sell its cookies in the store, which might represent legal consideration.

However, in many cases there is no express benefit-sharing, and to some extent, sales of the knockoff product come at the expense of the original. In these common situations, though, several other factors should be considered.

Different Target Markets: Knockoff products often cater to a distinct target market, e.g., people who want slightly different product features or a lower price point, or they don’t want to buy the name brand or what everyone else has.
Product Category Growth: The markets for most products start small and grow as more people realize the benefits the products bring. Competing products, including knockoffs, often accelerate that growth and expand primary demand, i.e., they make the market larger than it could become with just one company.
Insufficient Supply: When a product category becomes very popular and really blossoms, the market’s first mover often can’t meet all the demand by itself, so it helps to have competitors’ product offerings.
Increased Exclusivity: The presence of knockoff products tends to increase awareness of the product category and accentuate the original product’s exclusivity, e.g., Kia’s production of luxury vehicles, some of which resemble those of Lexus, probably encroaches little on Lexus’ sales but rather helps to enhance Lexus’ exclusive image.
Makes Companies Better: Few companies would say they want competition, but all benefit from it, maybe for the reasons mentioned above and certainly because competition forces them to become better. As the adage goes, “Iron sharpens iron.”

Counterfeits and knockoff products are not the same but are closely connected. The “Wirkin” bag likely disappeared quickly because it flew too close to the sun, legal and morally, i.e., it was a knockoff that too closely resembled a counterfeit Birkin. In an age of rapidly advancing AI and increasingly sophisticated 3D printing, it’s a good reminder that it’s never right to deepfake, or counterfeit, another’s intellectual or physical property.

Although there are exceptions, knockoff products can bring a variety of benefits, including ones for the original products their imitation “flatters.” Increased supply, more variety, and fair competition tend to be good things that make for Mindful Marketing.

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Check out the book, Mindful Marketing: Business Ethics that Stick

59 Comments

Can AI Advertising be the Real Thing?

12/1/2024

16 Comments

by David Hagenbuch - professor of marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Coca-Cola has a long history of very memorable holiday ads, from its iconic Coke-swigging Santa to the surprisingly peaceful polar bears. This year’s campaign seeks to capture similar feelings of goodwill, warmth, and cheer but with AI-generated output, which raises the question: Should the company that’s touted its product as the real thing for more than a century now be creating advertising that’s not?

Longer-tenured consumers like me remember Coca-Cola’s longstanding tagline “The Real Thing,” which the company leaned on heavily in the 1970s following its successful 1969 campaign, “Can’t Beat The Real Thing.” Actually, the company had articulated the theme even earlier, e.g., on painted signs in the 1940s.

The notion that Coke is the real thing, or the original cola, can be traced to the late 1800s: Coke came to market in 1886, 12 years before its archrival Pepsi, giving Coca-Cola not only first-mover advantage but the right to boast that any cola coming after it was a mere facsimile.

The word real hasn’t appeared in all the company’s advertising, yet Coca-Cola has always sought to position itself as authentic and genuine – distinct branding threads that have woven their way through the company’s varied promotion, particularly in its holiday ads.

For instance, the look of the Santa Claus character that many know and love is largely a Coca-Cola creation. In 1931, the company and D'Arcy Advertising Agency tapped Haddon Sundblom, a Michigan-born Illustrator, to create images of Santa Claus for the firm’s ads.

Before then, Santa Claus was often depicted as “everything from a tall gaunt man to a spooky-looking elf.” Sundblom, however, took inspiration from Clement Clark Moore's 1822 poem "A Visit From St. Nicholas" (aka “Twas the Night Before Christmas”) to transform Santa’s image into what’s typical today – “a warm, friendly, pleasantly plump and human Santa.” Such an inviting persona meshed seamlessly with Coca-Cola’s wholesome brand image and helped to further propagate its portrayal as the real thing.

Beside his appealing personality, Sundblom Santa’s bright red hat and coat, their white trim, and his full white beard also placed him squarely on-brand in terms of colors, and the company used the holiday character heavily over the next several decades.

In 1993, Coca-Cola introduced another endearing creation – animated polar bears. Although the company had used a polar bear in a French print ad in 1922, the bears that Coca-Cola creator Ken Stewart designed in the early 1990s developed a much longer-lasting legacy.

In their first television commercial, about sixteen furry white polar bears, each holding a bottle of Coke, sat contently on the artic tundra, oohing and ahhing as they watched the aurora borealis (northern lights). Near the end of the 30-second spot, they sipped their sodas, smacked their lips, and let out one more collective ahh. The commercial culminated with a close-up of one particularly pleasant bear with plump cheeks and friendly eyes that seemed to smile for the camera as it held its frosty soda bottle high.

In another 90-second spot from around 2005, the bears crashed the Christmas party of a pack of penguins that were dancing to the Beach Boys’ holiday favorite “Little Saint Nick.” At first the penguins were startled, but after one of their chicks shared a bottle of Coke with a bear cub, everyone smiled and happily joined the festivities. Leave it to Coca-Cola to make even one of the world’s fiercest predators fit its brand.

Even as the polar bears’ popularity grew, in 1995 the company unfurled another memorable campaign called “Holidays are Coming” that featured a seemingly endless caravan of light-bedazzled and ornately decorated 18-wheel big rigs sporting Coca-Cola’s trademark script lettering and larger-than-life images of its affable Santa Claus.

The spectacular line of long haulers rolled down country roads to the chant of “holidays are coming,” lighting up forests and bridges as they passed and pleasantly surprising a variety of delighted onlookers. Although certain parts of these mid-1990s ads leveraged special effects, much of what viewers saw was real, including the people in the spots.

Thirty years later, these “Holidays are Coming” ads are the inspiration for the company’s new AI-generated campaign, which carry the same name and decked-out trucks but haven’t engendered the same warm response as the original ads.

Produced by three different AI studios, the three new AI-generated ads, have received some very frosty reviews. As the New York Times has reported, one critic called the ads “slop” that “ruins the Christmas spirit,” while another claimed the company has significantly lowered its standards with the “heartbreaking” campaign, and a third, Alan Hirsch, the creator of the animated TV show Gravity Falls, suggested Coca-Cola’s signature red represents “the blood of out-of-work artists.”

So, why risk messing with a good thing and the Real Thing by using AI to produce the new ads? A main motivation was likely money, as Garrett Sloan writing for AdAge suggested: “Backers of the technology are excited about how it could bring more creative tools to more people, more cheaply.”

It’s easy to imagine that Coca-Cola’s original “Holidays are Coming” ads, with their elaborately decorated trucks, remote outdoor settings, and abundant special effects, were very expensive to produce – probably millions of dollars – and took a long time to script, schedule, shoot, and edit. Why shouldn’t the company leverage technology’s cutting edge to save time and trim expenses?

Asking that question seems to fly in the face of the conclusion of my last Mindful Marketing article, “Does Human Made Matter?” in which I deduced, Yes, it matters. So, why was AI use out-of-bounds a few weeks ago but in-play now?

While some suggest that AI shouldn’t be used for anything and others argue that all AI use is acceptable, I stand between the two extremes. I’m firmly in the middle but will lean a little closer to one side or the other based on the efficacy of the application and the ethics of the situation.

As the last Mindful Marketing article suggested, many value originality in art and appreciate a sense of personal connection with the art’s creator, such as ones stemming from shared life experiences. Human connections and true originality are both things that are difficult if not impossible for AI to replicate.

On the other hand, most people probably don’t mind if AI generated a promotional email they received or was used to create a billboard they read.

The ultimate purpose of most advertising is to sell products, so although advertising is part science and part art, it doesn’t have the same thresholds for originality and personal connection as pure art does. Most people probably feel a deeper human connection with a favorite painting or song than they do with a Coca-Cola promotional piece. The notion that there’s a different standard for commercial content opens the door for AI use in advertising.

Someone who sees firsthand the effective and ethical use that marketing can make of AI is Matt Caylor, Account Director with Martin Communications, Inc., located near Harrisburg, PA. While he warns against blindly accepting AI output, which can be dangerous because it’s not always correct, Caylor also has experienced many productive uses of the technology including copy iteration, data analysis, and design assistance, as he explains:

“The technology can save time in editing and design, taking some of the mundane or tedious work off our plates. It can work as a partner in the initial iteration of messaging, often acting as an agent to bounce ideas off. It can be an agile assistant that reviews and analyzes large data sets, crunches numbers, or helps develop new queries.”

Does human input matter to Caylor and others at Martin Communications? It surely does, and like many others working in marketing, Caylor and his colleagues are continually learning how to effectively integrate their own insights with the technology tools – just as humans have done for millennia.

So, does it matter if Coca-Cola’s “Holidays are Coming” ads aren’t the Real Thing. Yes and no.

It matters in that consumers’ perceptions, whether correct or not, are their reality. For instance, some viewers seem to believe that all the people in the ads are AI-generated, even though Pratik Thakar, Coca-Cola’s VP and global head of generative AI, says at least some are not. Still, when people perceive a little AI in an ad, their tendency is to extrapolate that everything in it is AI.

On the other hand, Coca-Cola is only doing what Caylor and individuals in many other fields do each day – use AI selectively and responsibly to leverage their own time and talents. As Thakar explains: “Our human creatives make decisions and use AI as a tool.”

There’s nothing inherently wrong with Coca-Cola’s using AI as a tool to help create its new “Holidays are Coming” ads. However, given individuals’ current impressions of AI, because people have special expectations for authenticity around the Holidays, and since Coca-Cola has built a reputation for realism, the company’s AI use in the ads may have been too much too soon, or a case of Simple-Minded Marketing.

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A Decade of Very Demure, Very Mindful Marketing

10/1/2024

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by David Hagenbuch - professor of marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

It’s hard to believe that Mindful Marketing has been shining a light on ethics in the field for ten years! TikTok didn’t exist in September 2014, when I wrote “CVS Quits Smoking,” the very first article on MindfulMarketing.org. Likewise, the appetite for influencer content, such as Jools Lebron’s “Very demure, very mindful” viral videos, was just starting to grow. The world looked different in many ways during the fall of 2014:

Barrack Obama was a year-and-a-half into his second term as president.
Prince Harry was still single and part of the British royal family.
Tom Brady had won just three of his seven Super Bowls.
Instagram was only six years old.
Apple’s newest phones were the iPhone 6 and 6 Plus.
On May 23, Tesla stock closed at a mere $13.82 a share.
Russia had invaded Crimea just a half year earlier.
George Floyd was still alive.
The #MeToo movement was several years away.
The world didn’t know what a global pandemic would be like.
It was still a year before Volkswagen’s notorious Dieselgate.
The URL MindfulMarketing.org was still available.
I had less gray hair

When I created the Mindful Marketing concept and Mindful Matrix ten years ago, I dreamed of doing the impossible: moving the needle on ethics in my field. As most people realize, marketing unfortunately has a reputation for being among the most morally suspect professions.

Each year Gallup conducts a poll in which it asks respondents to rate the honesty and ethical standards of 20 or so occupations. Inevitably, at the top of the list are jobs like doctor, nurse, and pharmacist, while near the bottom are several marketing occupations such as telemarketer, advertising practitioner, and car salesperson.

High-profile morale lapses like Volkswagen developing a defeat-device to trick emission tests, Wells Fargo employees creating fake accounts, and Turing Pharmaceutical’s CEO Martin Shkreli increasing the price of a life-saving drug by 5,000%, have suggested that marketing ethics are easily forgotten.

Several other fields like accounting and law have continuing education requirements that include focus on ethics. Unfortunately, marketing does not. Consequently, a main aim of Mindful Marketing has always been to make ethics sticky.

A research paper I coauthored by Laureen Mgrdichian, published in Marketing Education Review, explains how Mindful Marketing utilizes a common analytical tool, a 2 x 2 matrix akin to the Boston Consulting Group’s portfolio matrix, to encourage conversations about ethical issues. The article also describes how Mindful Marketing leverages branding – a tool that organizations large and small use to differentiate their products from those of competitors and make them more memorable, i.e., stickier.

Admittedly, in ten years Mindful Marketing hasn’t come close to grabbing the incredible social media attention that Jools Lebron has gained in a few months – 2.2 million followers on TikTok – but it has received other significant recognition and exposure including:

Dozens of articles republished on CommPro.biz
Interviews by The New York Times, Fast Company, U.S. News & World Report, National Public Radio, and The Boston Globe
Many speaking opportunities such as at the American Marketing Association’s annual Leadership Summit, the Marketing & Public Policy conference, the Marketing Management Association conference, and a special AI-focused conference of the British Academy of Management.

The most exciting new development is that there will soon be a Mindful Marketing book!

I’ve signed an agreement with Kendall Hunt to write “Mindful Marketing: Business Ethics that Stick,” which should be published this December. I am grateful to have been granted a sabbatical from teaching this fall to work on the book, which is now 80 percent complete.

Over the years, several people have asked me whether I might write a book on Mindful Marketing. Initially, I brushed off the suggestions, but as the site’s marketing ethics content continued to grow and gain traction, I began to give the idea more serious consideration.

A few years ago, I traveled back in the Mindful Marketing archives to September 2014, reviewed all the articles from that time forward, and curated them into specific categories to match topics I teach in my business ethics class. There are now over 320 Mindful Marketing articles, which provide a wealth of choices for engaging real-world applications to almost any ethical issue in marketing imaginable.

The articles have served my business ethics students well for discussions of topics ranging from utilitarianism, to economic and social justice, to decency. So, I thought if Mindful Marketing works for my course, it might work for others' classes. Moreover, a book seemed like the logical way to extend Mindful Marketing’s reach.

Some may wonder why marketing should be the focus of a business ethics book. Among other strong support, there are the arguments that marketing:

“Is the distinguishing, unique function of business”
“Is the lifeblood of any company”
Touches every business area
Directly impacts consumers many times a day
Is used by business leaders (e.g., CEOs, VPs, partners)
Is used by everyone (e.g., market their ideas, themselves)
Is replete with moral issues to which students can readily relate

While students are the primary audience, I believe the book also will have value for marketing practitioners, who are the ones making the moral decisions that ultimately determine the ethical perceptions and realities of the field. Of course I’m biased, but I believe the book also will be an interesting read for anyone who is intrigued by, or concerned about, marketing’s unique impact on our world.

Most important, my hope is that the book will encourage more students-turned-marketing-professionals to hit pause and ask if the strategies they see or plan to use are Mindful Marketing.

Our world will be a better place when there are more professionals like Kaylee Enck, who even when hearing about a rom-com’s unconventional promotional approach, remembered the Mindful Marketing conversations she engaged in a few years earlier as a student, felt moral dissonance, and questioned the film producer’s strategy. Kaylee’s experience and others like hers show that Mindful Marketing’s stickiness offers strong hope for making an impact on ethics in the field.

It’s interesting to see how much more often the word mindful is used now than it was a decade ago. Sometimes the contexts are physical health, or mental well-being, or even demure attire. Although those uses are different, they’re complementary – they’re all about being thoughtful and principled.

It’s good for us to be mindful in many different ways. Given the breadth and depth of marketing’s reach, our world will especially benefit from more Mindful Marketing.

Subscribe to Mindful Matters blog.
Learn more about the Mindful Matrix.
Check out Mindful Marketing Ads and Vote your Mind!

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A Decade of Very Demure, Very Mindful Marketing

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