Ethical Issues In Marketing: Woolworth And Coles Case Studies
Answer:
Introduction:
Ethics in business, especially in the marketing field, is one of the contentious and complicated discipline in the history of business. The relationship between achieving the profits by acting ethically has been studied by both business experts and academics for a significant number of years with very little consensus (Ferrel, 2008, p. 2). This essay explores what entails to do the right thing or the wrong thing while marketing. Ethical marketing is more of the marketers’ philosophy rather than a marketing strategy (Vassilikopoulou, et al., 2008). The major elements of ethical marketing entail responsibility, fairness and a high degree of integrity in all business advertising. However, the practice of ethics in marketing among many business marketers becomes difficult because to be ethical it is a subjective judgment of determining what is right or wrong (Caner & Banu, 2014, p. 153). This subjective judgment among the marketers has led to the establishment of rules and guidelines that the companies should follow while undertaking their marketing activities. To discuss ethical issues in marketing elaborately the paper uses two case studies of Woolworths and Coles companies in Australia that are faced by issues of unethical marketing.
In the recent past, the issues of ethical marketing have been in the hot debate. This has been majorly attributable to the economic downturns which sometimes threaten the profits of the companies. To be able to survive in the market in the periods of economic recession some companies engage in unscrupulous business practices. However, some companies have realized the importance of maintaining good ethical practices. Companies practicing ethical marketing practices have become aware that by advertising and promoting their products ethically, they enhance their reputation from the perception of their customers as well as that of the general public (Ferrell, et al., 2005). The research findings have indicated some of the companies which engage in unethical marketing practices they do it unaware. They don't know what it entails ethical and unethical marketing practices. For example, the survey conducted by Ethics Resource Center in 2011 found that forty-three percent of the marketers lacked ethical integrity (Marketing-Schools.Org, 2012). This just a mere example of how the unethical practices have been rampant among the businesses.
Despite ethical marketing being good for the company, it has some advantages and disadvantages (Ferrell, et al., 2005). For example, a company practicing an ethical behavior in marketing will end up building a robust public image. On the other side, it may reduce the company profits as well as competitive advantage in the market. Since, there is no law governing unethical marketing, the majority of the companies prefer adopting the same as the way of increasing their competitive advantage both in the market and in their industry. There are some products to be sold they need a lot of appealing and exaggeration among the customers so that they prefer them when making a buying decision. Otherwise, the ethical marketing practices will kick the company out of the business. However for the companies that aim to enhance their brand image as well as develop a long-term relationship with their customers will prefer adopting an ethical behavior (Gellert & Schalk, 2012, p. 102). This because acting otherwise it may lead to the failure. Customers hate being exploited for the brands they prefer. Additionally, companies acting ethically in their advertisement practices promote an element of trust among their customers. For example, if the product or service translates to the aspects mentioned in its advertising, it builds trust among the customers that the company truly invested on the value and quality of the product.
The distinction whether the company is acting in ethically or unethically it is very difficult to establish (Caner & Banu, 2014, p. 155). This is because the majority of the companies adopt marketing behavior depending on the economic environment prevailing in the market. This leads many companies to act ethically in a certain aspect and unethically in some other aspects while undertaking their marketing campaigns. This explains how difficult it is for the businesses to act ethically in all situations while in the pursuance of the profits. Either to act ethically or unethically it is an open opportunity for all the companies (Carrigan, et al., 2005, p. 485). The company may decide to either engage in ethical or unethical marketing practice depending on the goals of the company. The company which anticipates building credibility and trust among its stakeholders both in the short run and long run will strive to adopt ethical marketing practice. On the other hand, the business which aims to maintain high profits, as well as competitive advantage in the market, will end up adopting unethical marketing. For further explanation and understanding of the ethical issues in marketing this essay uses the two case studies of the Woolworth and Coles companies in Australia.
The aspects of unethical practices among the Australian business are very common both at macro and micro levels. According to (Nationalist Alternative, 2011) some of the common characteristics of the firms in Australia are, entering into corrupt dealings with the Local Government Councilors to authorize development projects that do not reflect the interests of the people they represent. Second, insider trading among the companies' top management as well as the corporate board. Third, pollution covers without engaging in the adequate social responsibility as the way of compensating the society for the social damage caused. Fourth, selling the country’s minerals to the foreign Governments without the approval from relevant government agencies. Fifth, giving cheap foreign workers priority in employment opportunities instead of the Australian workers. Finally, engaging in unethical marketing practices. These are some of the unethical issues that are very dominant among the Australian businesses. Therefore, Woolworths and Coles are just representatives of so many companies practicing unethical business behavior in Australia.
Woolworth, a giant supermarket in Australia, has been receiving criticism and condemnations from various groups in the country due to its unethical practices. Woolworth usually does the extensive promotional and advertisement campaigns to promote their products. However, their products, especially the foodstuff products, do not appropriately meet the consumers' needs. The findings have shown that the company products sometimes end up harming the health of the consumers. For example, in 2010 Woolworth was sued by Australian Competition and Consumer Commission (ACCC) for offering to customers substandard products. This lawsuit forced Woolworth to compensate the infants after it violated the standards of burn-free infant pajamas. Again, in 2013 the Australian Consumer and Competition Commission (ACCC) had found Woolworth guilty for fixing price involving Unilever and Colgate-Palmolive. Alternatively, in 2014 Jamie Oliver advertising received a lot of nationwide condemnation (Knox, 2014). This resulted to Woolworth recalling many of the defective Oliver-branded vegetable-modified toys. Still, in 2014, there arose allegations that the company dairy products did not meet the ethical standards. This was against the marketing campaigns that depicted a label of a cow in their products feeding on grass. However, the cows that produced the dairy products for the company never fed on natural grass (Caroline, 2014). Again, in 2015 there was a heated debate whether the Woolworth marketing strategy was unethical practice or a genius act (Henriquez & Russell, 205)t. This was because the company targeted the buyers through the children. After shopping the customers were offered with free dominos and this caused the children to persuade and influence their parents to shop in Woolworth.
Similarly, the same unethical marketing practices have encountered Coles. Coles also known as Wesfarmers has found itself in conflicts with ACCC due to unacceptable marketing strategies. In 2014, Coles was fined by court for availing misleading information on some of their products that had indicated they had been manufactured in Australia. Again, in the same year Coles was fined by the court for the misleading information on its marketing campaign about Coles Bakery and Cuisine Royale. The slogan on these two products which indicated that “Baked Today, Sold today’ and in specific scenarios ‘freshly Baked In-Store” were deceptive and misleading (Austrlian Competition and Consumer Commission, 2014). However, these products were not even made in Australia as it had been indicated. For example, products resulting from bread were partially prepared by a separate supplier. On the other side, Cuisine Royale was not even being prepared in Australia but in the foreign nation whereby it was partially prepared and finished in the stores of Coles’ supermarkets. In addition to Woolworths and Coles engaging in the retails stores, it seems the companies want own everything. They have engaged in other business such as petrol stations which is totally different from their sole purpose (Knox, 2014). From the analysis of the two companies’ unethical marketing practices, it is clear that competition among the two giant supermarkets has resulted in the unethical business behavior.
Conclusion
Ethical marketing is the fundamental aspect of the business anticipating to operate in the market in the long run. Businesses that act ethically in their marketing campaigns tend to establish a good and long-lasting relationship with their customers. In addition to reliable relations with their existing customers, they also influence the new pool of potential customers through their robust reputation. However, despite ethical marketing practice having advantages it also has some disadvantages. For example, the business may end up failing if the competition in the market is tough and it may require a lot of appellation and exaggeration to sell. On another side, acting unethically among the marketers may help the company attain a competitive advantage. However, this competitive advantage is not sustainable and therefore short-lived. Unethical marketing practice has many drawbacks that supersede the benefits companies should highly focus on eliminating them.
References
Australian Competition and Consumer Commission, 2014. Federal Court finds Coles’ ‘Freshly Baked’ and ‘Baked Today’ marketing claims misleading. [Online]
Available at: www.accc.gov.au//media-release/Federal- Court -finds- Coles’ ‘Freshly Baked’ and ‘Baked Today’ marketing claims misleading
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Caner, D. & Banu, D., 2014. An Overview and Analysis of Marketing Ethics. International Journal of Academic Research in Business and Social Sciences, 4(11), pp. 151-158.
Caroline, 2014. Are we being milked?. [Online]
Available at: https://www.travelwrite.co.za/milking-consumers-over-dairy-claims/
[Accessed 17 August 2016].
Carrigan, M., Marinova, S. & Szmigin, I., 2005. Ethics and international marketing. International Marketing Review, 22(5), pp. 481-493.
Ferrel, L., 2008. Marketing Ethics, Wyoming: University of Wyoming.
Ferrell, O. C., Fraedrich, J. & Linda, F., 2005. Business Ethics: Ethical Decision Making and Cases. Boston: Houghton Mifflin.
Gellert, F. & Schalk, R., 2012. Age-related: Attitudes the influence on relationships and performance at work. Journal of Health Organization and Management, 26(1), p. 98–117.
Henriquez, M. S. & Russell, E. L., 205. Is Woolworth’s targeting strategy Genius or Unethical?. [Online]
Available at: https://mpk732.wordpress.com/2015/04/06/mauricio/
[Accessed 17 August 2016].
Knox, M., 2014. Supermarket Monsters: Coles, Woolworths and the Price We Pay for their Domination.. [Online]
Available at: https://www.themonthly.com.au/issue/2014/august/1406815200/malcolm-knox/supermarket-monsters
[Accessed 17 Agust 2016].
Marketing-Schools.Org, 2012. Ethical Marketing. [Online]
Available at: https://www.marketing-schools.org/types-of-marketing/ethical-marketing.html
[Accessed 17 August 2016].
Nationalist Alternative, 2011. Ethics for Australian Business. [Online]
Available at: https://www.natalt.org/2010/01/29/ethics-for-australian-business/
[Accessed 18 August 2016].
Vassilikopoulou, A., Siomkos, G. & Souvlaki, C., 2008. The Ethical and Unethical Dimensions of Marketing. Management Review: An International Journal, 3(2), pp. 49-60.
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