Transcript Social Responsibility and Marketing Ethics

Social Responsibility and Marketing
Ethics
Part 2
Deceptive Practices
 Deceptive pricing, untrue statements in ads, false
promotions, and deceptive packaging are illegal in Canada
according to the Competition Act.
 Deceptive Pricing: ‘Reduced’ pricing, which is in fact the
regular retail price.
 Example: Sears Canada was fined $487 000 in 2005 for
misleading consumers about how much they would save on
certain tires.
 Untrue statements in ads: retailers cannot advertise a
product at a certain price and then refuse to sell to you at
that price, or not carry that item.
 Deceptive Packaging: Canadian law has strict regulations
and requirements about what information must be included
in packaging.
 Example: Dietary supplements must disclose all
ingredients, ‘May Contain Nuts’ warnings.
Unsafe Products
 Unsafe or shoddy products can result from manufacturer
indifference, increased production complexity, poorly trained
labour, or poor quality control.
 Example: Merck, a drug company, manufactured VIOXX an
arthritis drug. The drug also increased the risk of heart
attacks and strokes. Merck had to pay the cost of recall,
PLUS lawsuits. The company stock lost more than 25% of its
value the day the recall was announced.
 http://www.youtube.com/watch?v=gaMBt1z3Bj8
Planned Obsolescence
 Marketers are accused of holding back features, then introducing
them later to make older models obsolete, or intentionally
limiting a products life span.
 “The marvels of modern technology include the development of a
soda can which, when discarded, will last forever – and a car,
which, when properly cared for, will rust out in two to three
years”.
 An additional concern related to planned obsolescence are the
environmental impacts that come from the need to consistently
replace goods.
 http://www.youtube.com/watch?v=9VLQmN015Y&feature=fvst
Review Questions
 Think about your experiences as a consumer over the past
months (ads you’ve seen, stores you’ve shopped in, etc.)
What complaints or concerns do you have about the
marketing activities you’ve been exposed to?
 ‘The high cost of distribution, advertising and
promotion, and excessive markups lead to higher
than necessary costs for the consumer’. Agree or
disagree with the statement and in point form list your
reasons why.