HI5004: Marketing Management - Ethical Issues - Assessment Answer

Marketing Management Assignment

Assignment Task

Explain the ethical issues in marketing field and identify and discuss about two companies in Australia who has been having some issues regarding the way they pursue their business. You can elaborate on any aspects of marketing where these companies had some issues.

Discuss how companies are changing their focus from typical selling approach to societal marketing. Identify any two companies in Australia who has been very active in following societal marketing approach. Discuss in which way they are claiming about their contribution towards the wellbeing of Australian society.

Segmentation, targeting and positioning are interrelated activities which are important to achieving asuccessful Marketing Mix. Discuss any two brands from two different industries who have been successful in using these concepts in pursuit of their business. You are not allowed to discuss fast food or soft drinks industries for this essay. You need to choose these brands from the following industries:

- Furniture

- Pharmaceutical

- Baby products

- Health and fitness

- Health drinks

Labelling and packaging has been becoming a very important aspect of marketing. Identify some of the recent issues in labelling, packaging and country of origin in Australia. Students need to go through the current news and media to get the information about this area.

Introduction

Ethics play a very important role in business practices. Every company is expected to behave in an ethical manner. All the functions such as marketing, accounting, human resource, etc. are bound by ethics(Ali & Talwar 2013). But many companies are indulging into unethical practices these days. This report aims at analysing unethical practices in marketing in two companies operating in Australia. The two companies that are selected for analysis are Toyota and Walmart. These companies are very renowned companies but they indulged into unethical practices to remain competitive and profitable. The report will focus on how these companies have affected the interest of stakeholders. The report is based on the evidences from literature and media sources.

Ethical issues in marketing

Marketing is a very significant aspect of a company. Marketing is an aspect that includes many activities such as advertising, selling, promotion, etc. These days a number of companies are indulging into unethical practices in marketing. The unethical practices in marketing involve making exaggerated claims, false claims, unethical advertising, confusing potential customers, distortion of facts for the purpose of misleading the customers, bad-mouthing of competitor’s products, concealing side effects of a service or product, exploitation of customers, plagiarism of messages , spamming (Corey, Corey & Callahan 2011). A number of unethical practices can be seen in advertisements that the companies use to attract the customers. There are a number of unethical practices involved with advertisements that are exaggeration, surrogate, puffery, using children in advertisements, using women as symbol of sex, vulgar advertisements and comparative advertisements. Thus a company that is using any of the above listed aspect of advertisements is said to have indulged into unethical marketing practice.

A brief discussion on unethical marketing practices is undertaken in below sections by using the examples from two famous companies that are Ford and Toyota. The analysis will help in knowing how unethical marketing practices of these two companies have affected customers, environment and the society(Robin, 2013).

Ethical issue in marketing with Walmart

Walmart is a very renowned and popular grocery chain in the world. The company has a very strong and good reputation among its customers. But, in past few months the image of the company got affected negatively due to its unethical practices. The company is indulged into a number of unethical practices. The major unethical practices which were part of Walmart are related to environmental threat and exploitation of the suppliers. The marketing functions that is affected here is supply chain (Chen 2015).

A few days back it has been reported that the relations of Walmart with the suppliers of bread, seafood, bananas and poultry are questionable and they are raising serious concerns over environmental and labour practices. Sustainable marketing practices are a major part of marketing activities and this is something that plays a huge role in making a company ethical. In the case of Walmart, it failed to adopt sustainable marketing practices. A case study revealed that, only because of its unethical marketing practices Walmart is able to sell goods at low prices. It shall be noted that Walmart is famous for selling goods at cheap prices. It is also depicted that Walmart took resort to hyperinflated marketing. This also included unethical practices such as misusing agricultural subsidies and commodity exchange that are financilaized. The company claims to sell goods at cheap prices and it also sticks to this promise but for this to happen the company takes resort to hyperinflated marketing practices. Hyperinflated marketing refers to the goods that are extremely rapid or out of control(Hanssens 2013). Under this the prices inflation of products are out of control and they are in such a way that the entire concept of inflation becomes meaningless. This is not supported by Gross Domestic Product (GDP) because this happens at the time of large supply of money. Under such situation the value of currency deteriorates and it results into imbalance of supply and demand of the money. It further results in causing huge damage to the company and the economy of the region where it happens. Along with that the marketing practices of the company are not environmental friendly(Sullivan 2015).The wastage after marketing campaigns causes much damage to the environment. The company shall focus on making its waste management system strong. In one of its advertisements the company claims that it is following all the sustainable measures and ethical norms to run its marketing practices but it is misleading. After probing into this it has been identified that the company has made false claim. Besides the fact that Walmart is accused of breaking several laws such as clean Air Act, Clean water Act and federal safety rules and threatening public health as well as habitats. In this way numerous unethical marketing practices are adopted by Walmart.

Ethical issue in marketing with Toyota

Toyota is a very renowned and famous brand in automobile sector. Toyota is now facing legal suits due to its unethical marketing practices and this also resulted in disloyalty among its customers. The company had to recall millions of cars because of its non – compliance with ethical practices that affected the quality of its cars(Levin 2010). The company promised to provide superior quality of products to its customers and could not stick to the promised quality. The company could not keep the quality as per the customer’s expectations and to meet the desired quality it indulged into unethical marketing practices.

The unethical marketing practices that have been adopted by the company are concealing side effects of a product or service, misleading the customers and false promise to the customers in the name of quality. Thus unethical marketing practices in Toyota revolved around advertising issues. Due to unethical advertising a number of customers got deceived and some customers even got harmed. A number of models of Toyota had safety concerns. Toyota is also accused of withholding a number of cases of rollover deaths and injury. These incidents took place because of malfunction of the vehicle. This is the biggest concern faced by Toyota. The most significant issue with marketing function with Toyota is dealt with irresponsible behaviour of marketing department. Biller who was working with marketing department of Motor sales was held liable for defending the number of deaths and injuries in the company. He was not even returning to the phone calls and he also fabricated the data. The major issue is that the company kept all these information confidential and did not publicize this information to anyone(Plantes 2010). This is indeed an act of unethical marketing practices by the company. This is how Toyota has been misleading its potential customers with the help of false information about the cars and its products. The faulty parts of the cars have affected a number of customers and it also took the lives of a number of people. The advertisements of Toyota have always showed that it is using the best quality parts in its cars but that is not true. Thus, the major unethical marketing issues that company faced are concealing side effects of a product or service, misleading the customers and false promise to the customers in the name of quality. Due to all these the customers got convinced as well as confused about the quality.

Conclusion

The unethical practices in marketing are increasing gradually. This is due to the increasing competition among the companies. Every company wants to remain competitive and for that they are ready to pay any cost. The companies are striving to make more money and for that they usually take resort to unethical practices. The analysis of the two companies above suggests that Toyota and Walmart in Australia have taken resort to unethical marketing practices. The reason of adopting unethical marketing practices by the two companies is very clear. It is only because of the profit that they want to earn. The analysis suggests that their unethical practices have affected stakeholders of the company. The major stakeholders that are getting affected are suppliers, customers, government, shareholders, retailer, etc. Due to the unethical practices of marketing people are also losing their lives.

Unethical practices are increasing immensely and there is a very high need to check these practices. It is important to prevent unethical practices in marketing and protect the interest of the customers. The government shall take strict actions against the companies that are doing unethical marketing practices. Along with that customers and public are also required to be aware about the unethical practices to that they can be safe from such practices. Companies shall also have internal code of ethics so that no employee or any other stakeholder of the company shall indulge into unethical marketing practices. In this way many customers can be saved from unethical marketing practices.