After being merged in 2007 by the Principle. Com, one of the largest online travel-related services providers, Goad. Com was on its way of rapid expanding globally however, with its controversial marketing strategy of pricing, which is under heated debate. Therefore, this essay intends to examine the reasonableness and unethically of its pricing promotion.
With the support of advanced customer database, Goad. Com could efficiently promote their “attractive prices” to individual customers according to their demands differently. For example, once a consumer has searched or booker some hotels within a target location, Goad. Com will send promotion email to those consumers with “special offers” according to the consumer’s searching history. This promotion practices seems to be consistent with the customer-driven marketing strategy since this allows the company to explore differentiated market segmentations with different consumers’ needs for efferent hotels (Woodruff, 1997).
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However, behind the successful strategy, it is likely to be ignored that the contents of its promotion should be considered as unethical issues, which would violate the code of AMA These controversial issues in those promotion emails mainly involve two aspects, misleading information and failure to disclose the full information. Firstly, Goad. Com will not disclose the full amount of charge in its promotion email. When one clicks the link in those emails to select a specific hotel, Goad is going to show you the original price after their “discount”, which loud be attractive enough to induce consumers to book.
However, it will show you the additional amount of charge when you decide to pay for the reservation. And the extra charges are less likely to be noticed by users since they are shown at the bottom of the website. Besides that, this additional amount is described by the company as a sum of “hotel taxes”, “tips”, and the “service fee” in percentage, but without any disclose the proportion of each item. In most cases, Goad is going to charge different extra fees for hotels in efferent places. For example, the additional amount in Beijing is 15 percentages, which is higher than the 10 percentages in Hong Kong.
But Tao and Lieu (2005) argue that most of the hotels in China do not have the additional service charges for reservations. Therefore, the 1 5 percentage of charge should be skeptical since Goad does not disclose any specific information about this difference in their Term of Use (http:// www. Goad. Com/info/Goad-tremendous. HTML). In the perspectives of marketing, Goad fail to bring reasonable notices to heir customers of its additional charge, which is considered misleading. This practice leads Goad to the position of violating the ethical value of fairness published by AMA.
Firstly, Goad should be responsible for its unethical behaviors by modifying their price terms and conditions as well as improving on their price notice. On the other hand, legislation should also consider legislate more specific regulation on marketing behaviors which makes it possible to enforce. To ensure the efficiency of marketing and consuming both corporations and authorities should bear their own responsibility to avoid the unethical marketing behavior.