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Marketing ethics is the study of right and wrong with
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Ethical Issue: Misleading advertisement

Marketing ethics is the study of right and wrong with respect to marketing policies, practices, and systems. Marketing ethics consist of principles and standards that guide appropriate conduct in organizations. The importance of ethics in marketing practices is a major consideration in whether markets achieve their promise relative to previous arrangements.

Business ethics can be said to be the non-supervised code of functioning of the company concerned although with the discovery of the emergencies of the profit and some ethically deviant cases oriented firms; government formally imposed some moral obligations, which has shown tremendous growth in considerate behavior of the organizations.

Attention to business ethics is on the rise across the world and many companies realize that in order to succeed, they must earn the respect and confidence of their customers. Like never before, corporations are being asked, encouraged and prodded to improve their business practices to emphasize legal and ethical behavior.

It is suggested that the ethics of truthfulness in an advertisement is premised upon what the audience knows or expects. The marketing department is expected neither to take any merit of the viewer ignorance, nor to fall short of a customer's expectation of "truthful information"

As it has been notice, a lot of companies that advertise their products and brands are usually deceptive. Jacoby & Small (2005) stated that the essence of a marketplace lies specifically on the willingness of sellers and buyers to enter commercial transactions. Anything that detracts from the satisfaction of the transaction produces a loss of activity that ultimately hurts both parties. If a product does not live up to its advertisements, dissatisfaction is what happens next and in the long run that is as harmful to the marketer as to the buyer.

For advertising to be effective, consumers must have confidence in it. Therefore, any type of deception not only does it detracts from the comprehensive information principle of free creativity but also risks being self-defeating. Even meaningless (but legal) puffery might be taken literally and therefore become deceptive. Puffery refers to exaggerated, subjective claims that can’t be proven true or false, such as “the best,” “premier,” or “the only way to fly.”

Under current advertising law, the only product claims implied or explicit that are considered deceptive are the ones, which are factually false or convey a false impression and therefore have the potential to deceive or mislead reasonable people. However, puffery is excluded from this requirement because regulators maintain that reasonable people do not believe it anyway. Jacoby & Small (2005) points out that since advertisers regularly use puffery and non-product facts to enhance the image of their products, they must think consumers do believe it. Non-product facts are not about the brand but about the consumer or the social context in which the consumer uses the brand.

The Coca-Cola Company has targeted young and sports loving individuals by claiming the ‘vitamin water’ as healthier enhanced nutrient product. That is “vitamins + water = all you need, vitamins + water = what’s in your hand and keep perky when you are feeling murky, however on the other hand it contained 33 grams of sugar similar to a can of coke which is the misleading factor of campaign hiding the sugar component of the product.

Jacoby & Small (2005) believes these kinds of problems can be avoided if marketers simply improve the kind of information they give in their advertising. They would need marketers to have a reasonable basis for any complaints they make, whether those complaints are true about the product, non-facts such as “Coke is it,” or non-product facts. This, they believe, would contribute positively to their free market system.

Company Background

For over 125 years, Coca-Cola has been refreshing the world. This is the remarkable story about the evolution of an iconic brand and the company that bears its name. Since its birth at a soda fountain in downtown Atlanta, Georgia, Coca-Cola has been a catalyst for social interaction and inspired innovation. These unique moments in history have helped create a global brand that provides billions of moments of refreshment every day.

It is a multinational company and the world’s leading manufacturer, marketer and distributor of non-alcoholic beverages. Coca Cola is Private Limited Company (Ltd). An Ltd company is a type of business ownership, which determines many operations of how the business is run.

The Coca-Cola Company started as a soda fountain beverage in the late 1880s by Dr. Pemberton’s partner and a store bookkeeper, Frank M. Robinson, naming the beverage “Coca-Cola” as well as designing the trademarked and distinct script.  The company progressed impressively from the introduction stage. The company bottling system developed in the same century and this resulted to the company being one of the most successful and world famous favored product. Dr. Pemberton decided to sell part of his business to a group of investors in Atlanta. Under a new leadership of Mr. Candler, distribution of Coca-Cola expanded to soda fountains beyond Atlanta.

In 1894, impressed by the growing demand for Coca-Cola and the desire to make the beverage portable, Joseph imported a bottling machinery in the rear of his Mississippi soda fountain. Large scale bottling was made possible in just five years later, in 1899, three enterprising businesspersons in Chattanooga, Tennessee secured special rights to bottle as well as sell Coca Cola beverage. Candler sold the bottling rights to the three entrepreneurs for just $1. The contoured Coca-Cola bottle was trademarked in 1977. Over the years, the Coca-Cola bottle has been inspiration for artists across the globe a sampling of which can be viewed at the World of Coca-Cola in Atlanta. The 1980s featured such memorable slogans, as “Coke is it!” “Catch the Wave” and “Can’t Beat the Feeling”.

In 1993, Coca-Cola experimented with computer animation, and the famous “Always Coca Cola” campaign was introduced into the market in a series of advertisements featuring animated polar bears. Each animated ad in the “Always Coca-Cola” series took 12 weeks to produce from beginning to end. The bear were, and still they are, a huge hit with customers because of their embodiment of characteristics like fun, mischief and innocence. A favorite feature at the World of Coca-Cola is the ability to have your photo taken with the beloved 7′ tall Coca-Cola Polar Bear. To this day, Coca-Cola is written the same way.  In the first year, Pemberton sold just nine glasses of Coca-Cola a day.

A century later, The Coca-Cola Company has manufactured more than eleven billion gallons of syrup. Between the period of about four years, between 1888-1892, Atlanta businessperson Griggs Candler secured rights to the business for a total of about $2,300. Later on Candler would become Coca Cola’s first president and the first to bring real vision to the business and the brand. The company has an independent registered public accounting firm, PricewaterhouseCoopers LLP.  Coca-Cola is listed under the New York Stock Exchange, also known as the NYSE. They work with the world’s leading large and medium size companies. Their job is to achieve and stick to the overall highest listing standards.

 

Company Policy

Coca Cola should ensure its advertisements are legal, decent and truthful. Every advertisement should be prepared with a due sense responsibility and should follow the principles of fair competition, as commonly accepted in business. No advertisement should be such as to impair public confidence in advertising.

The company should ensure the following standards are fulfilling in all of their advertisements.

  1. Decency: Advertisements should not contain statements or visual presentations, which offend prevailing standards of decency.
  2. Honesty: Advertisements is supposed to be framed so that it does not abuse the trust of customers or exploit their lack of knowledge or experience.
  3. Social Responsibility: Advertisement should not allow some sort of discrimination, including that based on the religion, race, sex, national origin or age. It should also not undermine human dignity in any way. It should not (without justifiable reason) play on fear. It should not play on superstition. Advertisement should not incite or condone violence, or to encourage unlawful or reprehensible behavior.
  4. Truthful Presentation: Advertisement is expected to not to have any visual or statement presentation that are directly or by omission, implication, exaggerated or ambiguity claim that is likely to mislead the consumer, in particular with regard to.
  5. Safety and Health: Advertisement should not without reason, justifiable on education or social grounds, contain any visual presentation or any description of dangerous practices or of situations, which show a disregard for safety or health.

The role of Coca Cola's reputation plays to it employees is to provide not only a great place to work but also inspire them to use innovation means to provide a portfolio of brands meeting customer needs in the entire world. At the same time striving to ensure the business is strongly tied to the community through implementing different scholarships and educational programs as well as focusing on the issues concerning the health, environment and recycling programs.

The company should use their strengths when marketing their products to the market. Some of its strengths includes are its resources and capabilities that provide the company with a competitive advantage in the market place, and help the firm achieve its strategic objective. The company’s strengths might include:

  • Strong product brand names,
  • Big number of successful drink brands,
  • Good reputation among consumers,
  • Low manufacturing cost, and
  • An efficient and large distribution network.

 

 

 

 

 

 

Managerial Implications

Planning is one of the major function of management and coca cola should plan proper methods of advertising, which not false or improper to the consumers. This new kind of idea it is as an attempt of creating educative advertisement, which tells their customers the truth about their products.

Directing the subordinates and influencing their ideas on this war against false advertisement should be the next step of Coca Cola. The idea here is to get more and more people on board with Coca cola standard and accurate advertisement side in order to produce hirer profits.

Organizing this plan is about the setup and how they are going to delegate the task of implementing these new standard advertising ethics. Following up the adverts and growing through it before it released to the relevant Medias.

Now the overall effect of Coca cola’s war against false advertisement needs to be watched and monitored. The company needs to ensure its consumers are provided with accurate information. So that they can consume knowing very well what is composed of as well as its side effect if possible. 

There are 4 main types of management styles that Coca Cola might use. The firm has four main principles of citizenship, which they can incorporate into their management style:

*      Provide Quality in the marketplace

*      Enrich the workplace

*      Preserve the environment

*      Strengthen the community

The Coca Cola marketing department located in Atlanta, which is the headquarters would need to develop core strategies for company brands to ensure that all communication are consistent in every market. With this cohesive effort, the Coca-Cola system maximizes its resources for market leadership and profitable growth. The marketing departments are responsible for advertising the products, marketing, and promoting the products that are being produced. If all these departments perform their duty firmly then the objectives of The Coca-Cola Company will meets.

 

 

 

 

 

 

 

 

 

 

 

 

References

Carrigan, M., & Szmigin, I. (2000). The ethical marketing covenant: Controlling ageism in UK advertising. International Journal of Advertising,19(4), 509-528.

Chadwick, Murphy, P. E., Laczniak, G. R., Bowie, N. E., & Klein, T. A. (2007). Ethical marketing.

Jacoby, J., & Small, C. (2005). The FDA approach to defining misleading advertising. The Journal of Marketing, 65-68.

Martin Jr, C. R. (1994). Ethical advertising research standards: Three case studies. Journal of Advertising23(3), 17-29.

             Jacoby, J., & Small, C. (2005). The FDA approach to defining misleading advertising. The Journal of Marketing, 65-68.

 

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