MEMO
To:Don Washington, Director of Marketing, Rewards Membership
Alva Ramirez, Director of Sales, Rewards Membership
Anne Hernandez, Chief Executive Officer
From:Billie J. Foster, Sales and Marketing Internal Consultant
Subject:Addressing Legal Team Concerns on Low-Income Marketing and Sales Plan
Executive Summary
The sales and marketing team has evaluated the legal department's memo, which outlines legal and
ethical concerns and potential risks of non-compliance with federal laws and regulations in the current
rewards membership program proposal. Following our analysis, the team has developed creative,
ethical, and mutually beneficial strategies to attract and keep customers from the low-income
population to the program, in line with the legal team's advice. Our recommendations aim to address
each concern while aligning with the organization's mission, vision, and values.
Addressing the Two Legal Requirements
Truth in advertising: Analysis and recommendations
Truth in advertising: Analysis and recommendations
The legal department outlined two legal requirements for the sales and marketing team. As we address
legal concerns related to "Truth in Advertising," our marketing practices must align with legal and ethical
standards. Let us delve into an analysis and propose actionable recommendations to support
compliance. The legal team's memo states that the U.S. Federal Trade Commission requires all
advertising to be truthful and evidence-based. According to legal's interpretation of the law, the ABC
Rewards Membership marketing materials must meet specific conditions:
Be precise in making statements about the program’s benefits
Ensure commercial speech is non-deceptive
Substantiate direct or implied superiority claims
At this planning stage, the proposed themes drafted in the Ad Lines for the Marketing and Sales
Campaign section of the Sales and Marketing Proposal need to meet the conditions given by the legal
department. The current ad lines need to say the benefits of the program precisely. The tag line
“Membership pays for itself” is very ambiguous. The tagline "Membership pays for itself" is very
ambiguous. It suggests that the membership has financial benefits but needs to show how or offer
concrete details. Although the lines show a connection between purchases and rewards, there is a lack
of clarity on what those rewards involve. The lines "There is no better way to give" and "The best way to
help your neighbor is to help yourself to our loyalty membership" are deceptive in speech because one
implies that the ultimate way to contribute is through the rewards program without concrete evidence.
The second line is manipulation because it suggests that helping oneself through the program indirectly
helps the community. Therefore, the sales and marketing department recommends rewriting the
themes to avoid any ambiguous claims that could be misleading, prevent any misleading information in
our advertisements, and ensure that we have the evidence to back up any claims we make in our
advertisement for the program. The revisions to the themes to meet the legal requirements are:
With a rewards membership, earn savings on day-to-day purchases
With a rewards membership, earn 5% ABC Rewards on every purchase
With a rewards membership, 25% of your purchases will go towards a school, community
initiative, or local charity of your choice
Enjoy exclusive membership rewards while supporting your community
With an ABC loyalty membership, invest in yourself and your community
With these revisions, the sales and marketing team delivers a more straightforward message on the
tangible benefits of the rewards program, avoids deceptive language, and ensures substantiation of any
claims of superiority with solid evidence of the program's impact and benefits. We want to offer rewards
that align with our target segment, the low-income population, which makes the rewards program
attractive. The revisions of the proposed ad lines align with our mission to be credible and have a
meaningful purpose.
Data collection and privacy: Analysis and recommendations
The legal department’s memo also highlights a second essential requirement related to “Data Collection
and Privacy.” Because the ABC Rewards Membership will be national, it must follow the most restrictive
laws on data collection and privacy. California has the most restrictive laws governing data collection
and privacy. According to California’s Office of the Attorney General, the California Consumer Privacy Act
(CCPA) of 2018 and Proposition 24, the CPRA, are laws granting state residents privacy rights to protect
their sensitive personal information (California Consumer Privacy Act, 2024).
Right to know about personal information collected and how it is used and shared.
Right to remove personal data collected from them by a business.
Right to opt-out of personal information sale or sharing.
Right to non-discrimination for exercising rights covered under the landmark law.
Right to correct personal data that is inaccurate.
Right to limit disclosure and use of sensitive personal information collected.
Within the section “Selling and Implementing the Program” of the proposed marketing plan, we
suggested tailoring the membership application to collect valuable engagement data; however, it does
not state receiving permission beforehand to collect sensitive personal information. Because of the
feedback from the legal team, we now realize that the proposal does not comply with California
consumer privacy laws. As we re-evaluated restructuring our rewards loyalty program for the low-
income market, we examined various industry loyalty programs to understand the essential data needed
from customers signing up for the program. In the legal memo, the guidance was to ensure we are
collecting only the required data to contact consumers and ship merchandise. We determined that the
essential personal information includes full name, gender, and email address (Kecsmar, 2024). If we wish
to collect optional information such as mailing address, phone numbers, and age, it needs to happen
when the customer signs up. With ABC collecting this sensitive information, we need safeguards to
protect the information and consumers’ privacy. To ensure ABC compliance with the most stringent
federal or state laws, the marketing team recommends:
Obtain explicit consent which ensures that customers agree to provide their personal
information
Work with our IT department to develop a secure data storage for consumer data, with
measures implemented to protect consumer data from unauthorized access or breaches
At the time of sign up, customers can opt out of data collection or request deletion of their data
Be transparent and communicate clearly how their personal data will be used and shared
By following these recommendations and getting consent, ABC can collect valuable engagement data,
enhance the protection of consumer information, build trust, and show a commitment to safeguarding
privacy in compliance with federal laws.
Addressing the Three Ethical Concerns
Direct marketing to low-income populations: Analysis and recommendations
Our plan to target low-income populations through direct marketing raises ethical questions from the
legal team. We must address the concerns outlined in the legal department's memo, which are:
Adding value to lives
Program Relevance to Low-Income Desires and Diversity within the Low-Income Market
Protecting Reputation and Cost Considerations
Engaging Local Business Owners and Preventing Incentive Abuse
Store Owners vs. Employee Rewards
Legality of Discounted Memberships for High School Students
It is possible to conduct direct marketing to low-income families successfully. ABC must approach it in a
way that will counter and correct the ethical concerns emphasized by the legal team. To address these
concerns, we recommend the following actions.
1. We can add value to the lives of our low-incomes families by creating educational opportunities
such as scholarships as a part of their membership benefits, which can help the families improve
their skills and knowledge.
2. There is diversity within the low-income community, so we get involved in areas the families
desire to improve, such as a new park with functional playground equipment or a new
recreation center that offers affordable childcare so mothers may focus on self-care. By
appealing to their diverse desires, we construct a program right for the community’s cultural,
economic, and social needs.
3. We offer exclusive discounts, cashback, or points for redemption on future purchases or instant
savings at the time of purchase, which may help low-income families save on essential high-
quality goods. Only low-income consumers can buy quality goods or services exclusively created
for them (Gabris, 2022). Approaching the program this way shows we are mindful of the
program membership costs for our low-income families and protects our reputation.
4. Dropping the offer of free memberships to store owners and incentives to influential high school
students will help prevent abuse of incentives.
5. We partner with local business owners according to the original plan; however, instead of selling
the membership program, we allow ABC sales representatives to set up inside the store to
promote and sell it. This action ensures ethical sales practices and removes the possibility of
owners falsely claiming sales done by store owners.
By addressing these concerns, our rewards program can provide meaningful benefits to our low-income
customers, help improve their overall quality of life and increase our community engagement in
initiatives designed for these families. We also reduce barriers to participation and offer exclusive
incentives to help families stay engaged, thereby increasing the membership’s value for this market
segment.
Transparency in language: Analysis and recommendations
After reviewing the legal team’s memo, we realized that our language regarding the current proposal to
reach our new market and implement the program may need to be more straightforward. We realize it
is important that all customers, especially the low-income consumers, understand what they will receive
from their rewards membership prior to signing up for the program. So, we must use transparency in
our wording. Transparency is openly sharing information with our customers and the foundation for
building trusting and strong relationships with our low-income customers (Skortcheva, 2023).
Thus, we recommend simplifying our marketing materials. We will remove all jargon and complex
wording in the marketing campaign (Gendusa, 2024). For transparency, we will print clear descriptions
of the rewards program, provide honesty in our pricing, and implement straightforward policies on how
to use the program.
We recommend scheduling focus groups with low-income community members to get their feedback on
the program. We will partner with research marketing to schedule research panels with a diverse mix of
the population to gather information on which charities they are interested in and how they would like
to generate charitable donations. After the focus groups, we will send group participants home with a
unique gift bag holding samples of our products and a program leaflet. The leaflet will use terms and
language easily understood. We will give them time, which is essential, to decide if the membership
program meets their needs and adds value to their already hectic lives.
Using creativity and sensitivity, focus groups help us understand their central needs and the trials they
face (Gendusa, 2024). Achieving transparency in our language with our customers is crucial to the
rewards program.
Collection and use of consumer data: Analysis and recommendations
The legal department has highlighted data collection and usage as legal and ethical issues. Upon
reviewing of our executive summary, data collection is a concern for achieving program goals: collection
personal data, incentive and rewards, our marketing strategies, partnership data sharing, and the
student ambassador program. These areas each involve the use of data in one way or another. We must
revamp the marketing proposal to ensure that consumer data collection and usage does not create
vulnerabilities for our low-income customers or the company.
First, the sales and marketing department received training on data ethics, which Harvard Business
School defines as the moral requirements of collecting, guarding, and using personal data and its impact
on individuals (Cote, 2021). The fundamental principles of data ethics are ownership, transparency,
security, purpose, and outcomes (Data Ethics Unveiled: Principles & Frameworks Explored, 2023).
To protect our low-income consumers, we recommend engaging in data ethics to avoid unethical tactics
like behavioral profiling and price discrimination. Ethical data collection requires building consumer trust
by obtaining explicit consent for the collecting, storing, using, and sharing of personal data. We further
secure trust by ensuring compliance with data protection regulations. Participation in the rewards
membership program must be voluntary, and we must not coerce or pressure our vulnerable customers
into sharing data.
Additionally, we recommend forming a corporate Institutional Review Board (IRB) comprised of six
members: the chief compliance officer, business intelligence officer, digital marketing officer, chief sales
officer, chief marketing officer, and chief legal officer. The IRB will review the proposal and ensure
adherence to data ethics (Seglla & Rouzies, 2023). The IRB can play a vital role in ensuring data ethics by
providing independent oversight to ensure data collection, usage, and sharing practices follow ethical
standards and regulations such as the Federal Data Strategy Data Ethics Framework. This framework will
ensure a corporation’s data practices comply with the core principles of transparency, non-
discriminatory practices, trustworthiness, honesty, protection of individual identities, adhering to legal
requirements, and serving the good of the public (Hand, 2018).
Finally, we recommend implementing Culturally and Linguistically Appropriate Services (CLSA) to
address cultural beliefs, preferred languages, literacy levels, and other communication needs to provide
effective, equitable, understandable, and respectful quality of goods and services (Thalheimer, 2009).
This approach will ensure that proper marketing and design messaging considers the socio-economic
barriers facing the low-income customers. CLSA will also help relieve consumer anxiety about becoming
targets for data abuse.
Our recommendations regarding data collection and usage uphold the principles of fairness,
transparency, and respect for consumer privacy.
Organizational Parameters
Implementing all recommendations addressing the legal and ethical concerns raised by the legal
department can align our marketing campaign with our organizational parameters. We strengthen our
brand by adding value to our low-income customers by providing affordable quality products and
services to support their health while reinforcing our dedication to our vision, our mission, and our core
values.
References
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Cote, C. (2021, March 16). Data Privacy: 4 Things Every Business Professional Should Know. Retrieved
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Data Ethics Unveiled: Principles & Frameworks Explored. (2023, November 28). Retrieved from
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Federal Data Strategy 2020 Action Plan. (2019, December). Retrieved from
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Gabris, M. (2022, July 20). Why and How You Should Market to Low-Income Communities. Retrieved
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