The Dove Campaign for Real Beauty - Pearson

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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
Part 1 Marketing nowhazardous, and people were unhappy with Western institutions. Ralph Nader appeared on thescene in the 1960s to force many issues, and other well-known writers accused big business ofwasteful and unethical practices. President John F. Kennedy and other Western politiciansdeclared that consumers have the right to safety and to be informed, to choose and to be heard.The consumer movement has spread internationally and has become very strong in Europe. 26Consumerism—Anorganised movement ofcitizens and governmentagencies to improve therights and power ofbuyers in relation tosellers.“. . . equating personal happiness with purchasing material possessions andconsumption.But what is the consumer movement? Karl Marx and Thorstein Veblen used consumerismto describe the effects of equating personal happiness with purchasing material possessions andconsumption. Consumerism is now more often used to describe an organised movement ofcitizens and government agencies to improve the rights and power of buyers in relation tosellers. Traditional sellers’ rights include:●●●●●The right to introduce any product in any size and style, provided it is not hazardous topersonal health or safety; or, if it is, to include proper warnings and controls.The right to charge any price for the product, provided no discrimination exists amongsimilar kinds of buyer.The right to spend any amount to promote the product, provided it is not defined as unfaircompetition.The right to use any product message, provided it is not misleading or dishonest in contentor execution.The right to use any buying incentive schemes, provided they are not unfair or misleading.Traditional buyers’ rights include:●●●The right not to buy a product that is offered for sale.The right to expect the product to be safe.The right to expect the product to perform as claimed.Comparing these rights, many believe that the balance of power lies on the sellers’ side. True, thebuyer can refuse to buy. But critics feel that the buyer has too little information, education andprotection to make wise decisions when facing sophisticated sellers. Consumer advocates call forthe following additional consumer rights:●●●The right to be well informed about important aspects of the product.The right to be protected against questionable products and marketing practices.The right to influence products and marketing practices in ways that will improve the‘quality of life’.Each proposed right has led to more specific proposals by consumerists. The right to be informedincludes the right to know the true interest on a loan (truth in lending), the true cost per unit of abrand (unit pricing), the ingredients in a product (ingredient labelling), the nutrition in foods(nutritional labelling), product freshness (open dating) and the true benefits of a product (truth inadvertising). Proposals related to consumer protection include strengthening consumer rights incases of business fraud, requiring greater product safety, ensuring information privacy and givingmore power to government agencies. Proposals relating to quality of life include controlling theingredients that go into certain products and packaging, reducing the level of advertising ‘noise’ andputting consumer representatives on company boards to protect consumer interests.Consumers have not only the right but also the responsibility to protect themselves instead ofleaving this function to someone else. Consumers who believe that they got a bad deal have“86
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The Dove Campaign for Real Beauty - Pearson

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