Ethical Criticisms of Marketing• High prices• Deceptive practices• High-pressure selling• Harmful, or unsafe products• Planned obsolescence• Poor service to disadvantagedconsumers
High Prices• Caused by:• High costs ofdistribution• High advertisingand promotioncosts• Excessivemarkups(greed & profit pressures)Why do branded products cost more thangenerics (i.e. store brand)?The cost of advertising?
Deceptive Practices• Deceptive Pricing• Falsely advertising “factory”, “wholesale”, “clearance” orother seemingly large reductions from a phony highoriginal retail (list) price.• Deceptive Promotion• Overstating a product’s features or performance, runningrigged or fraudulent contests.• “Bait-and-Switch” advertising• Deceptive Packaging• Exaggerating package contents through slick design,misleading quantity or quality imagery and misleadinglabeling
High-Pressure Selling• Salespeople are trained to deliversmooth, canned talks to entice purchase.• High-pressure selling persuades people tobuy goods they neither need nor want.• Driven by compensation structures (i.e. highbonus potentials).• High-pressure selling ultimately destroyscustomer relationships and goodwill.
• Includes• Poorly made products• Products that do not perform well• Products that deliver little benefit• Harmful products (cause bodily harm, illness,even death)• How it happens• Undue focus on profit, increased productioncomplexity, poorly trained labor, and poor qualitycontrol• New products without safety track records• Outsourcing of production often leads to qualityissuesUnsafe Products
McDonald’s and ObesityA 2002 lawsuit unsuccessfully sued McDonald’s on behalf of obese genration,claiming McD’s marketed food that is high in “fat, salt, sugar, and cholesterol.”
• Examples• The poor are forced to shop in smaller storeswhere they pay more for inferior goods.• The poor receive worse service (or noservice) at stores.• “Redlining” by national chain stores indisadvantaged neighborhoods.• Poor are targeted for “rapid refunds” andother “quick-money” swaps.Poor Treatment of DisadvantagedConsumers
Marketing’s Impact on Society as aWhole• Marketing creates false wantsand needs• Marketing makes peoplematerialistic• Marketing promotes poor qualityproducts
ConsumerismConsumerism is an organizedmovement of citizens andgovernment agencies to improvethe rights and power of buyers inrelation to sellers.
• Sustaining the environment whileproducing profits for the company.• The “Triple Bottom Line”• Levels of environmental sustainability:• Pollution prevention• Product stewardship• New environmental-friendly technologies• Sustainability visionEnvironmental Sustainability
Global Marketing Ethics• Business standards and practices varygreatly between countries.• Bribery and kickbacks are illegal in the U.S., but arelegal and even standard business practice in othercountries.Companies should maintain a consistent set ofethical standards to be used worldwide.