Ethical – truth, accuracy and good taste in advertising, products that may damage health, engaging in fair competition, sugging
- Being honest about a product’s functions, features
- Marketers expected to engage in fair and honest behavior when developing marketing campaigns.
- Failure to do so is a breach of the Competition and Consumer Act.
- Facts and claims about a product or service must be true
- Must avoid to concealed facts, exaggerated claims, vague statements and invasion of privacy.
Good taste in advertising – What is considered good taste varies between consumers so creating general guidelines for good taste in advertising is difficult. Some may see an ad as offensive, others may not.
Products that may damage health
- the marketing of products such as junk food and cigarettes, are often criticised because they damage the health of people.
- Health warnings must be displayed on cigarette packs, they cannot be advertised or displayed in stores
Engaging in fair competition
- Businesses compete against each other to increase their sales revenue and profit.
- Australian Competition and Consumer Commission (ACCC) is a federal government independent authority that ensures businesses engage in fair, legally acceptable competition and enforces the Competition and Consumer Act
- Unfair competitive behavior includes:
- Price-fixing between competitors
- Long-term loss leader: undercutting smaller competitors and forcing them to engage in price war
- Misleading advertising regarding the products of a competitor
– A sales technique where consumers are asked to complete a survey and then find that the person is trying to sell them something.
Extract from Business Studies Stage 6 Syllabus. © 2010 Board of Studies NSW.