Marketing Ethics Case Study

The role of marketing is to increase market share by creating a positive relationship between the customer and business which is greatly influenced by government regulation and ethical behaviour. The Competition and Consumer Act 2010 is a form of governmental regulation introduced to regulate marketing and businesses practises to protect consumers from deceptive and misleading advertising and businesses that fail to satisfy implied conditions. Ethical behaviour imposes significant benefits to businesses such as attracting customers to the business through publicity in the media and increasing customer loyalty due to the positive reputation created; while the contrary is possible in the case of unethical behaviour. In the cases of Kettle, Walmart,

If a business engages in unethical practices such as untruthful and inaccurate advertising, the business’ reputation is damaged and customer loyalty will decrease as consumers become skeptical of the business’ products as undesirable qualities may remain hidden. In the case of Coca cola, truthful and accurate claims of their product incurs the cost of sales and revenue; if Coca-cola does not exaggerate a product to entice a large portion of the market to purchase the product, potential sales and customers is decreased. Coca Cola launched an advertisement that undermined the health risks their product could cause by making untruthful statements such as “Coke doesn’t make you fat” with contents proving otherwise. After receiving negative media feedback, Coca-cola stated the intended message was to convey that ‘there can be a place for Coca-cola in a balanced, sensible diet’ (p.157 HSC Textbook 2015). Ethical behaviour is important; practices such as inaccurate and untruthful advertising will result in a business receiving negative media coverage of a product’s faults and the severity of these flaws will impact consumer confidence due to the information being further publicised; decreasing the market share of a

Businesses such as Victorian Bitter create controversial advertisements that are targeted towards their primary market; avid alcohol drinkers while the remaining portion of consumers are prone to be offended. In the case of Victorian Bitter, an insensitive phrase to the health implications of alcohol was used “I wish I could trade in my heart for a liver. Then I could drink more and care less.” (Wells, 2013) Victorian Bitter’s attempt to encourage loyal customers to purchase more alcohol did not consider the damage alcohol has caused much of the market share and pushes the boundaries of what is societally acceptable. Victorian Bitter exercised the right to produce creative advertisements in an attempt to increase sales and profitability. However, such advertisements are considered unethical as the message encourages irresponsible behaviour; which is not in the best interest of society, thus failing to attract new customers as a result of the business’ reputation being damaged from negative media