16.2 Social Criticisms of Marketing Flashcards
What are the concerns consumers have about the marketing system serving their interests?
Consumers have concerns about
high prices,
deceptive practices,
high-pressure selling,
shoddy or unsafe products,
planned obsolescence, and
poor service to disadvantaged consumers in the marketing system.
What are the three factors critics point to as reasons for high prices in marketing?
Critics point to high costs of distribution, high advertising and promotion costs, and excessive markups as reasons for high prices in marketing.
What is the argument of resellers against the accusation of marking up prices beyond the value of their services?
Resellers argue that intermediaries perform work that would otherwise have to be done by manufacturers or consumers. Their prices reflect services that consumers want, such as more convenience, larger stores and assortments, more service, longer store hours, return privileges, and others. They also argue that retail competition is intense, leading to low margins, and that discounters pressure competitors to operate efficiently and keep prices down.
How do marketers respond to the accusation of pushing up prices to finance unneeded advertising, sales promotion, and packaging?
Marketers respond that although advertising adds to product costs, it also adds value by informing potential buyers about the availability and merits of a brand. Brand name products may cost more, but branding assures buyers of consistent quality.
They also argue that consumers are willing to pay more for products that provide psychological benefits, making them feel wealthy, attractive, or special.
What is the marketers’ response to the accusation of excessive markups in some industries?
Marketers respond that most businesses try to price fairly to consumers because they want to build customer relationships and repeat business.
They assert that consumers often don’t understand the reasons for high markups, such as in the pharmaceutical industry, where markups help cover the costs of making and distributing existing medicines and the high costs of developing and testing new medicines.
What are the three groups of deceptive practices in marketing?
The three groups of deceptive practices in marketing are deceptive promotion, deceptive packaging, and deceptive pricing.
What are some examples of deceptive promotion?
Deceptive promotion includes practices such as misrepresenting the product’s features or performance, or luring customers to the store for a bargain that is out of stock.
What are some examples of deceptive packaging?
Deceptive packaging includes exaggerating package contents through subtle design, using misleading labeling, or describing size in misleading terms.
Question: What are some examples of deceptive pricing?
Deceptive pricing includes practices such as falsely advertising “factory” or “wholesale” prices, or a large price reduction from a phony high retail “list price.”
How do marketers argue against the criticism of high-pressure selling?
Marketers argue that in most cases, they have little to gain from high-pressure selling. While such tactics may work in one-time selling situations for short-term gain, most selling involves building long-term relationships with valued customers. High-pressure or deceptive selling can seriously damage such relationships, and companies understand that profitable customer relationships are built on a foundation of value and trust.
What are the three main complaints regarding poor product quality or function in marketing?
The three main complaints regarding poor product quality or function in marketing are: products and services not being made well or not performing well, product safety issues, and products delivering little benefit or even being harmful.
What is the purpose of the Canada Consumer Product Safety Act (CCPSA)?
The purpose of the Canada Consumer Product Safety Act (CCPSA) is to set new requirements for the industry to help protect Canadians from unsafe consumer products. It requires manufacturers to report any health and safety incidents related to consumer products to Health Canada, and retailers to keep detailed records about suppliers to enable product recalls if necessary.
What is planned obsolescence, and what are some examples of industries accused of this practice?
Planned obsolescence is a practice where companies cause their products to become obsolete before they actually need replacement, either by using materials and components that wear out or break prematurely or by introducing a stream of new products that make older models obsolete.
Examples of industries accused of this practice include the fast-fashion industry and the consumer electronics industry.
How do marketers respond to accusations of planned obsolescence?
Marketers respond to accusations of planned obsolescence by stating that consumers like style changes and the latest high-tech innovations, even if older models still work. They argue that no one is forced to buy a new product, and if too few people like it, it will simply fail.
Most companies do not design their products to break down earlier, as they do not want to lose customers to other brands. Instead, they focus on constant improvement to ensure products consistently meet or exceed customer expectations.
What are the consequences for companies selling poor-quality or unsafe products?
Companies selling poor-quality or unsafe products risk damaging conflicts with consumer groups and regulators, product liability suits and large awards for damages, and damage to their reputation. Moreover, unhappy customers may avoid future purchases and discourage others from buying the company’s products.
In today’s social media and online review environment, word of poor quality can spread quickly, which is not consistent with sustainable marketing.
