The Dove Campaign for Real Beauty - Pearson

www.pearson.co.uk/kotlerChapter 2 Sustainable marketing: marketing ethics and social responsibilityA well-managed company may take over a poorly managed company and improve its efficiency.An industry that was not very competitive might become more competitive after the acquisition.But acquisitions can also be harmful and are therefore closely regulated by some governmentsand competition (or mergers and monopolies) commissions. Badly implemented, they can alsodamage the reputation of a well-respected company and write off a huge amount of wealth, asdid the Daimler Chrysler merger. 23Critics have also claimed that marketing practices bar new companies from entering anindustry. The use of patents and heavy promotion spending can tie up suppliers or dealers tokeep out or drive out competitors. Those concerned with antitrust regulation recognise thatsome barriers are the natural result of the economic advantages of doing business on a largescale. Other barriers could be challenged by existing and new laws. For example, some criticshave proposed a progressive tax on advertising spending to reduce the role of selling costs as asubstantial barrier to entry.Finally, some firms have in fact used unfair competitive marketing practices with the intentionof hurting or destroying other firms. They may set their prices below costs, threaten to cut offbusiness with suppliers, or discourage the buying of a competitor’s products. Various laws workto prevent such predatory competition. It is difficult, however, to prove that the intent or actionwas really predatory.Recently, Microsoft felt the impact of EU antitrust regulators seeking to balance theinterests of their scale and influence. The EU threatened Microsoft Corporation with fines ofup to €3m a day, claiming the software giant had failed to live up to promises for providinginformation that could help rivals make servers compatible with Windows. 24Although competitors and governments charge that the actions of companies are predatoryand illegal, others question whether this is unfair competition or the healthy competition of amore efficient company against the less efficient ones. 25Citizen and public actions toregulate marketingKEY CONCEPTBecause some people view business as the cause of many economic and social ills, grassrootsmovements have arisen from time to time to keep business in line. The two main movementshave been consumerism and environmentalism.Consumer movementsWestern business firms have been the targets of organised consumer movements on three occasions.The first has its origins in the early 1900s, fuelled by rising prices and Upton Sinclair’s 1906novel, The Jungle, that was an exposé of the dreadful conditions in the Chicago meat industry thatprovide branded canned food across the world. A drug scandal and price increases during the1930s Great Depression sparked the second consumer movement. The third began in the 1960s.Consumers had become better educated, products had become more complex and potentially85