Unethical Behavior in Marketing
Before going through the examples of unethical behavior in marketing, let’s define what ethical marketing is. Shewan (2020), defined ethical marketing as the company’s process to sell their products and services by fixating not only on the benefits of their products for the customers but also the environmental and social responsibilities.
Companies that implement ethical marketing, evaluate their decision from a business as well as a moral perspective (Shewan, 2020).
Now let’s talk about unethical behavior in general. According to Duff (2019), unethical behavior includes any action that violates the law such as theft, violence, and violation of company policies. From a marketing perspective, unethical behavior is mostly related to false advertising. Martins (n.d.) stated that unethical marketing might include customers manipulation, using fear tactics, targeting disadvantaged customers, or tricking the customers.
Marketing managers also often face some problems related to unethical behaviors in their job from customers’ unethical requests (such as disclosure of confidential information or asking for discounts) to the unfair staff recruitment process (University of Minnesota, 2015).
Examples of Unethical Behavior in Marketing
Deceiving Customers by Falsifying Product Information
The Infographics Show (2018) mentioned in their video that one of the most common unethical marketing practices is deceiving customers by falsifying product information. For example, some cup noodle companies claimed that their products are healthy, natural, and high nutritious despite that in reality during the production process of those products they added a lot of chemical substances that are not good for the human body if consumed in a long-term.
Brand Bullying
Brand bullying can be defined as an attempt to make advertising in which disparages other competitors’ products (The Infographic Show, 2018). Some companies accentuate the disadvantages of their rival’s products to turn potential customers into theirs (Martins, n.d.). For example, Samsung posted an ad mocking Apple for not including a charger for their iPhone 12 (Clark, 2020). This case was backfired when The Samsung Galaxy S21 also doesn’t come with a charger that forced Samsung to delete the ad that mocks Apple as they are doing the same thing as Apple.
Price Fixing
This is the illegal agreement between industry competitors to “fix” the price of a product at an inflated level (The Infographics Show, 2018). Some industries such as pharmacy do the price-fixing to protect their market shares. One of the most notable cases is the Nelson pharmacy in New Zealand that was fined $344,000 due to price-fixing. The arrangement resulted in customers paying $6 instead of $5 for their prescription items (Commerce Commission New Zealand, 2020).
Price Standardization
Companies that are involved in price standardization set their product at the same price across the world (The Infographics Show, 2018). For example, Starbucks set the same prices for their products for their coffee shop in the USA and Indonesia. This can be considered an unfair practice since the operational cost in Indonesia is much lower compared to the USA.
Recommendations
In my opinion, rather than trying to seize the market aggressively, companies should think about their honest value of proposition. What is the thing that makes their customers loyal to them? What is the benefit of their products offer to the customers? Keeping customers’ trust is the most crucial thing for the future of the companies. According to Digital Resource (2021), preventing any exaggeration, false promises, and keeping the advertisement honest are the best way to keep the marketing practices ethical.
Conclusion
Based on the research conducted by Digital Resource (2021), it was known that 56% of Americans stop buying from brands they believe are unethical and 75% of consumers said that they would take action against unethical companies. Therefore, companies need to keep their marketing practices ethical. Preventing any unethical marketing practice will keep the companies to protect their customers’ faith and loyalty and any other bad consequences (Wroblewski, 2018).
References
Clark, M. (2020, December 23). Samsung’s deleting ads that mocked Apple for not including a charger in the box. The Verge. https://www.theverge.com/2020/12/23/22197394/samsung-deletes-ads-mocking-apple-charger
Commerce Commission New Zealand. (2020, June 8). Nelson pharmacy fined $344,000 and director $50,000 for price-fixing. Commerce Commission. https://comcom.govt.nz/news-and-media/media-releases/2020/nelson-pharmacy-fined-$344,000-and-director-$50,000-for-price-fixing
Digital Resource. (2021, March 30). Unethical marketing is hurting your business, here’s how to change it. West Palm Beach Digital Marketing | South Florida SEO Company. https://www.yourdigitalresource.com/post/key-to-ethical-marketing
Duff, V. (2019, February 5). Examples of unethical behavior in the workplace. Small Business — Chron.com. https://smallbusiness.chron.com/examples-unethical-behavior-workplace-10092.html
Martins, A. T. (n.d.). 10 Examples of Unethical Marketing Practices That Ruin Reputation. Profitable Venture Magazine. https://www.profitableventure.com/examples-unethical-marketing-practices/
Principles of marketing. (2015). University of Minnesota Libraries Publishing.
Shewan, D. (2020, February 25). Ethical marketing: 5 examples of companies with a conscience. WordStream: Online Advertising Made Easy. https://www.wordstream.com/blog/ws/2017/09/20/ethical-marketing
The Infographics Show. (2018, May 20). Unethical practices companies use to scam us that should be (or are) illegal [Video]. YouTube. https://youtu.be/HNTA7kyNU18
Wroblewski, M. T. (2018, November 27). Ethical dimensions of advertisements. Small Business — Chron.com. https://smallbusiness.chron.com/ethical-dimensions-advertisements-34908.html
Note:
This article is written based on University of The People Marketing Management (BUS 5112) written assignment by Fristy Tania in October 2021
