MARK301 Midterm: Chapter 3 - MARK301
13 Jan 2017
School
Department
Course
Professor
Chapter 3 – Sustainable Marketing
Price advertising – Makes
consumers MORE price
sensitive (Newspaper)
Image advertising – makes
consumers LESS price
sensitive (TV/Magazine)
VitaminWater being sued
for false advertising. It is
actually a non-carbonated
soft drink containing 33g of
sugar, but labels imply it is
a healthy drink comprised
of vitamins and water.
FDA’s “Jellybean rule”
states that an advertiser of
sugar-based products
cannot claim products are
good for the heart because
they are low in fat and
contain no cholesterol.
Business Ethics – Principles of conduct within organizations that guide decision-making and
behaviour.
Code of Business Ethics – Document that provides guidelines covering daily activities and
decisions within the organization.
Marketing and Consumers
Without Ethics, Marketing can have some negative impacts on individual consumer welfare:
High Prices
o Critics and consumers claim that high prices are the result of expensive
advertising, excessive distribution margins, and outrageous markups.
▪ In answer, marketers carefully deliver value to consumers rather than
reducing prices and profits.
Deceptive Practices (False Advertising)
o Deceptive Pricing
▪ Falsely advertising “factory” or “wholesale” prices or large reductions
from phony high retail list prices.
▪ Price fixing – agreement between competitors to maintain prices at a
specific level.
o Deceptive Promotion
▪ Overstating a product’s features or performance.
o Deceptive Packaging
▪ Exaggerating package contents through subtle design, using misleading
labels, etc.
Shoddy or Unsafe Products
o Products not made well or service not performed well.
o Products deliver little benefit or can be harmful.
o Unsafe products due to manufacturer indifference, increased production
complexity, poorly trained labour, and poor quality control.
Planned Obsolescence
o Products needing replacement before they should be obsolete (Electronics)
o Producers change consumer concepts of acceptable styles (Clothing)
o Intentionally holding back attractive functional features, then introducing them
later to make old model obsolete (Does Apple do this? Is it ethical?)
Materialism / Creating False Wants
o Charges that we suffer from over-concern with status.
o Creates a covetous society
▪ Do we truly need extreme luxury goods?
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Price advertising makes consumers more price sensitive (newspaper) Image advertising makes consumers less price sensitive (tv/magazine) It is actually a non-carbonated soft drink containing 33g of sugar, but labels imply it is a healthy drink comprised of vitamins and water. Fda"s jellybean rule states that an advertiser of sugar-based products cannot claim products are good for the heart because they are low in fat and contain no cholesterol. Business ethics principles of conduct within organizations that guide decision-making and. Code of business ethics document that provides guidelines covering daily activities and. Without ethics, marketing can have some negative impacts on individual consumer welfare: decisions within the organization. High prices: critics and consumers claim that high prices are the result of expensive advertising, excessive distribution margins, and outrageous markups. In answer, marketers carefully deliver value to consumers rather than reducing prices and profits.
