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3.1 INFOTAB WORKSHOP, WASHINGTON, September 19-22, 1983 Address given by Mr. Paul P. de WIN Director Secretary General I.U.A.A. PROTECTING MARKETING FREEDOM ! Kotler's definition of Marketing is simple and direct : "by Marketing we mean all human activities that are aimed at facilitating and effecting trade". Let's develop this definition in five points Point 1 Marketing is a question of exchange and has nothing to do with the old concept that supply creates demand, nor does it signify an economy based on production. Point 2 "All human activitieg'meansthat there exists a certain solidarity among all members of an enterprise : each one at his particular level contributes to the healthy development of the company and each one at his particular level bears his share of responsibility. Point 3 The facilitating and effecting of trade and exchange depend on knowledge of the parties concerned and of the circumstances in which these exchanges take place. Point 4 Such knowledge can only be obtained by study and analysis of the market whose central element is the consumer. It is essential to know what product to offer to the consumer, at what price, and how to distribute the product. It is therefore a matter of adapting products to consumers and not consumers to products. Point 5 This idea is fundamental and it brings out not only the social role Marketing has to play but also the great responsibility of business executives. This responsibility extends not only to products, their price and distribution, but also to information about them, advertising.

2. All of you know what advertising is : a technique of mass communication to inform a particular group of consumers with a view to acquiring, increasing and keeping a clientele. Advertising is the link between producer and consumer : it is the means enabling the one to sell and the other to buy. But effective advertising depends not only on the relevance of the message, on knowing precisely at what group of consumers the message is directed and on the the choice of Media, it also depends on studying the product, studying the market, cheCkinq on production, sales and distribution. The definition of advertising with its connotation of communication and information presupposes in fact the existence o-f a market economy based on free competition. It presupposes therefore that the consumer has a choice of products and that he is and feels free to make that choice. This is the whole concept of the free market place and I strongly believe that by advocating the freedom defends the basic principle f reedom. to advertise, one also of free enterprise and of marketing The International Union of Advertisers Associations has this objective since 1953, having started in Europe, being to-day present and effective in 25 countries around the world. And we feel that we have to increase membership to make more and more effective with more and more weight. our voice When defending a case, one has to define a number of principles. The International Union 's first principle is that where products are legally authorized to be manufactured and sold, those products should be legally authorized to be advertised on a legal,decent, honest and truthful basis. This principle is a legitimate right for the industry, for all industries.

No marketing policy or strategy is feasible if advertising is made impossible in a way or another Freedom to advertise is a vital part, if not the vital part of the Marketing concept : where there is no freedom to advertise there is no marketing freedom either. Freedom to advertise is an integral part of the freedom of expression and information. Such freedom is seen as an essential element of a truly democratic and pluralistic society by the Committee of Ministers of Foreign Affairs of the Council of Europe. The declaration goes further in saying that the freedom of expression and information is the precondition for the progress and social, economic, cultural and political development of both the individual and the nation, as well as of the international community. On the other hand, the second paragraph of Art. 10 of the convention for the protection of liuman rights and Fundamental Freedom states "the exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the Judiciary. We do share this idea as we have always said that freedom has its natural borders to prevent anarchy : my freedom ceases when yours starts, and vice versa. 3

But I oppose strongly the idea that to protect freedom of expression, commercial advertising should be regulated and that the level of protection to statements of commercial nature may be less than that accorded to the expression of political ideas. I really do not see why we should be more protected for our political expression and less for our commercial and economic expression. If responsible people, like the Ministers for Foreign Affairs of the 21 countries of the Council of Europe, state that the freedom of expression is the precondition for the progress and inter alia economic and political development of the individual, I do not see any reason why this individual should not be informed totally and accurately so to exert his right to choice as well on the political level as on the economic and commercial one. Translated in marketing terms, this means that the consumer confronted with a variety of products on the market place must be sufficiently informed so to be able to decide what product and what brand to choose according to his decided standards. own There is no freedom of choice if there is no freedom of expression and of information. If you reduce or over regulate information, you automatically reduce the choice. If you ban or over regulate advertising, you immediatelly reduce marketing freedom, making your marketing policy and strategy inoperative and inefficient. The marketing concept has created a new kind of society our so-called capitalist or neo-liberal system. And it is I think necessary the recall that this society has always been contested. We have had in the past and still have the sectarian socialists, the anarchists, the corporatists, the syndicalists, the marxists, the anarcho-syndicalists, a N ©

5. the associationists, the neo-corporatists, we have to-day the consumerists and activists. There was a time when the opponents to our kind of society made the reproach that this society was producing to~,little, maintaining the population in poverty,not permitting the satisfaction of the most elementary needs felt by classes which are economically less favoured, maintaining shortages, slowing down consumption, always enriching the same people and making the others constantly poorer. To-day we are accused of doing the contrary. We are accused of attaching too much importance to the economy and to production. We are accused of having increased everyone's incate to such an extent that our civilization has become a consumer society. Since years the opponents are trying to change the society, they have succeeded in sane parts of tne world, and it is significant to note that in countries such as those of Eastern block and Cuba freedom of communication, of information and of expression have been reduced to their minimum if not even eliminated. In those countries there has been a transfer from individual freedom to collective freedom. A good example of this is the Cuban Constitution in force since 1976 which article 52 states : "citizens may enjoy the freedom of speech and of press in conformity with the objectives of the socialist community. The material conditions of holding good these liberties do exist thanks to the fact that the press, the broadcasting, the television, the cinema and the other mass media means N CJ'i are state owned and the community's property and that, by ~ no means, they may become private property, keeping them Q r exclusively into the worker's and the conanunity's interest tt~ O service;" ~D

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6. When Madame Frangoise GIROUX was Secretary of State in France she stated one day : "Since the only alternatives are a society with advertising and one with propaganda, I will always choose the former". She made that choice and was free to do so because she lived in a country which has a government. She was not a member of a government which had a country. Institutions, national and international, have to be at the service of the people. Not the country ! And if we want our marketing freedom to remain a reality then we have to make every effort to make all these institutions aware that they are at the service of all, of each single individual, not at their own service or at the service of a minority. Consumer Organisations pretend to represent the Consumers, all consumers. I'm not so convinced and believe that they only represent a very tiny minority. Here is the latest example. Early July 1983, a Conference organized bythe National Consumer Council of Spain took place in Santander. It was claimed by the 7 national organizations, gathering 213 associatic that there would be around 280.000 organized consumers in Spain. But the actual and real number is just over 100.000 which represents less than 0,3 i. Consumerists and activists pretend to protect the consumer because, they say, the unbalanced means a buyer has in comparison with those of a seller. But the consumer, the individual, is never asked if he agrees or not with a consumer protection policy. I'm deeply convinced that the best protection a consumer may have is free and fair competition. And the only proof of the effectiveness of a marketing policy is the response made by the consumer to the advertising message : does or doesn't his reply take the form of a purchase, does he or doesn't he accept a product, or service, as it is presented by the advertisement ? The whole marketing concept starts with the consumer and ends with the consumer. We are in favour of consumer protection. The best proof is that all our efforts and all our self-regulatory codes are focused on the consumer. But we are against overprotection the one which tells the consumer what to do, what to think, what to say, how to live and what to buy. 2501021510

8. I have heard several speakers and people talking about corporate image, very long speeches, very long lessons. Everybody has his own formula to develop corporate image outside the company. But please, if you want that image to be a succes outside, start to build it properly inside. Let's start to communicate inside not only our companies but inside the whole industry. Do never forget that information means power, and we need that power to maintain our freedom alive. There are three main points on which I should like to capitalize : UNITY INFORMATICN RESPONSIBILITY L'nitv is to speak with one single voice when we have to explain, to inform, to defend advertising and marketing freedom. Unity is an absolute must if we want to develop in the conte_Yt of a free market a quality of life which everybody may adapt to its own requirements and in total freedom, anarchy. not in total Unity is also essential if we want to succeed in opposing the attacks against marketing and advertising. And this unity is as necessary on national level as on international level, because our opponents do not work isolated. Consumer organizations have joined worldwide. So did the Trade Unions, political parties and States. Information as I said is power. It is also duty. If we need to be informed about what is going on worldwide for or against marketing and especially in our own product categories, our duty is to inform the individual consumer. That individual has the basic right to be informed accurately honestly and decently. He has the right to the means to choose a product the most suitable to his personality,

9. to his resources and to the satisfaction he expects from the products he is offered. Responsibility : each member of a company from the lowest level up to the top level has his share of responsibility. And the highest your rank is, the bigger your responsibility. I incline to consider that the development of marketing and advertising depends essentially upon the guidance it will be given by the top management of the companies. Top management should be in the total scope of the marketing concept aware of what advertising is allowed to do, what it is not allowed to do and especially what it should not do. Our responsibility is also to educate the consumer about what marketing is and to start within aur own circles. It should be a real pitv if at the end of the day the employees and workers of our offices and factories go back home still thinking that what is good for business is bad for the consumers. In their words and at their level : what is good for the company is bad for them. May I resume by showing you some slides : 1. The most important person in the world is Mister Bill Smith, he is married with two children. He has a car, a television set and likes to spend his holidays at the sea-side. He is a member of a political party, of a Family Organisation, of a consumer Association and of a Trade Union. He always carries his membership cards witn him. But he forgetssometimes that he also is member of Company XYZ. 2. Objectives : develop the concept of the free market place, improve free competition, maintain marketing freedom. 3. Means UNITY INFORMATION AND EDUCATION RESPflNSIBILITY N CJ'I a ~ Q N ~ LF1 N

10. Chairman, Ladies and Gentlemen, what is happening to-day in the Tobacco field may happen tomorrow in other fields. You are under pressure, you are attacked from all sides, in many countries all the aspects of marketing are regulated you are not free to price your products, you are not free to distribute your products, you are not free to advertise your products. The only freedom you have is to produce and to be taxed. I'm really convinced that by defending the market against threats to tobacco is the best way of defending marketing freedom and advertising freedom. The International Union of Advertisers Associations is defending your case, as it defends the case of alcohol, of pharmaceuticals, of confectionery and of others, not because of particular interests but because we feel it is our duty to defend the basic principle of individual liberty and of marketing freedom all over the world. The objectives are not only valid for your industry, they are valid for all industries, and if some feel that to-day they should notbe.part of the game, they definitively already are part of the problem. Thank you for your attention. P.P. de WIN Director General Secretary of the I.U.A.A. IUAA/PPDW/KL/Infotab/24.08.83